Document:

<PAGE>

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

--------------------------------------------------------------------------------

No. FRJ                      PACCAR Financial Corp.          Principal Amount
                             Medium-Term Note, Series J
CUSIP:                           (Floating Rate)          $

ORIGINAL ISSUE DATE:                           MATURITY DATE:

INITIAL INTEREST RATE:                         SPREAD:

INDEX MATURITY:                                SPREAD MULTIPLIER:

INTEREST RATE BASIS:

     IF LIBOR:                         IF CMT RATE:
         [ ] LIBOR Reuters                 [ ] CMT Telerate Page 7051
             Page:                         [ ] CMT Telerate Page 7052:
         [ ] LIBOR Telerate                         [ ] Weekly Average
             Page:                                  [ ] Monthly Average
         Designated LIBOR
         Currency:

INTEREST CATEGORY:                         DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note             [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note              from            to            .
     Fixed Rate Commencement Date:         [ ] Actual/360 for the period
     Fixed Interest Rate:    %                 from            to            .
[ ] Inverse Floating Rate Note             [ ] Actual/Actual for the period
     Fixed Interest Rate:    %                 from            to            .
                                           Applicable Interest Rate Basis:

MAXIMUM INTEREST RATE:                     INTEREST PAYMENT PERIOD:

MINIMUM INTEREST RATE:                     INTEREST RATE RESET PERIOD:

INITIAL INTEREST RESET DATE:

INTEREST RESET DATES:                      INTEREST PAYMENT DATES:

INTEREST DETERMINATION DATES:
(if different than provided below)

[   ] CHECK IF DISCOUNT NOTE
Issue Price:

HOLDER'S OPTIONAL REPAYMENT DATE(S):

                                      -1-
<PAGE>

OTHER PROVISIONS:

INITIAL REDEMPTION DATE:                  CALCULATION AGENT:

INITIAL REDEMPTION PERCENTAGE:

ANNUAL REDEMPTION PERCENTAGE REDUCTION:

         If an Initial Redemption Date is specified above, (i) the Redemption
Price will initially be the Initial Redemption Percentage specified above and
will decline at each anniversary of the Initial Redemption Date shown above by
the Annual Redemption Percentage Reduction specified above until the Redemption
Price is 100% of such principal amount, and (ii) this Note may be redeemed
either in whole or from time to time in part except if the following box is
marked, this Note may be redeemed in whole only [ ]. If no Initial Redemption
Date is specified above, this Note may not be redeemed prior to Maturity.

         PACCAR Financial Corp., a Washington corporation (herein called the
"Company," which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to

or registered assigns, the principal sum of                             DOLLARS
on the Maturity Date shown above, and to pay interest thereon from the most
recent Interest Payment Date to which interest has been paid or duly provided
for or, if no interest has been paid or duly provided for, from the Original
Issue Date shown above at the rate per annum determined by reference to the
Interest Rate Basis or Bases, if any, specified above and in accordance with the
provisions herein, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which will be the fifteenth calendar day (whether or not a Business
Day), next preceding such Interest Payment Date, and interest payable at
Maturity wilL be payable to the Person to whom the principal hereof is payable;
provided that if the Original Issue Date specified above follows a Regular
Record Date and precedes the next succeeding Interest Payment Date, the first
payment of interest on this Note will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the Holder of such Regular
Record Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof will be given to
the Holder of this Note not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange upon which the Securities of the series
shown above may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. Payment of the principal
and interest payable at Maturity of this Note will be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, and will be made in immediately available funds if this Note is
presented in time for payment to be made in such funds in accordance with the
normal procedures of Citibank, N.A., as paying agent (the "Paying Agent", which
term includes any successor paying agent under the Indenture). Unless otherwise
agreed between the Holder and the Company, payment of interest other than at
Maturity will be paid by check mailed to the address of the Person entitled
thereto as such address will appear in the Security Register.

         Reference is hereby made to the further provisions of this Note set
forth below, which further provisions will for all purposes have the same effect
as if set forth at this place.

         Unless the certificate of authentication hereon has been manually
executed by or on behalf of the Trustee under the Indenture, this Note will not
be entitled to any benefits under the Indenture or be valid or obligatory for
any purpose.

         IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.

Dated:                                          PACCAR FINANCIAL CORP.

CERTIFICATE OF AUTHENTICATION                   By
                                                  -----------------------------
                                                   President

                                      -2-
<PAGE>

This is one of the Securities of the
series designated herein issued under the       ATTEST:
within-mentioned Indenture.

                                                By
                                                       ------------------------
                                                       Secretary

CITIBANK, N.A., as Trustee

By
      -----------------------------------
      Authorized Signatory

         References herein to "the Note," "hereof," "herein" and comparable
terms will include an Addendum hereto if an Addendum is specified under "Other
Provisions" above.

         Any provision contained herein with respect to the calculation of the
rate of interest applicable to this Note, its payment dates or any other matter
relating hereto may be modified as specified in an Addendum relating hereto if
so specified above.

         This Note is one of a duly authorized issue of Securities of the
Company, issued and to be issued in one or more series under an indenture dated
as of December 1, 1983, as amended by a first supplemental indenture dated as of
June 19, 1989 (herein collectively called the "Indenture"), between the Company
and Citibank, N. A., as trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This Note
is one of the series of the Securities designated as the Medium-Term Notes of
the series designated above (herein called the "Notes"). The Notes may bear
different dates and mature at different times, may bear interest at different
rates and may otherwise vary, all as provided in the Indenture.

         This Note may be subject to repayment at the option of the Holder prior
to the Maturity Date specified above on the Holder's Optional Repayment Date(s),
if any, specified above. If no Holder's Optional Repayment Dates are specified
above, this Note may not be so repaid at the option of the Holder hereof prior
to the Maturity Date. On any Holder's Optional Repayment Date, this Note will be
repayable in whole or in part in an amount equal to $1,000 or integral multiples
thereof at the option of the Holder hereof at a repayment price equal to 100% of
the principal amount to be repaid (or, if this Note is an OID Note, as defined
below, such lesser amount as is provided below), together with interest thereon
payable to the date of repayment. For this Note to be repaid in whole or in part
at the option of the Holder hereof, this Note must be received, with the form
entitled "Option to Elect Repayment" available at the office of the Trustee set
forth below duly completed, by the Paying Agent at its office at 111 Wall
Street, 5th Floor, New York, New York, 10043; Attention: Securities Services, or
such address which the Company will from time to time notify the Holders of the
Notes, not more than 60 or less than 30 days prior to a Holder's Optional
Repayment Date. Exercise of such repayment option by the Holder hereof will be
irrevocable. In the event of payment of this Note in part only, a new Note for
the unpaid portion hereof will be issued in the name of the Holder hereof upon
the surrender hereof.

         Commencing with the Interest Reset Date specified above, first
following the Original Issue Date specified above, the rate at which interest on
this Note is payable will be adjusted daily, weekly, monthly, quarterly,
semi-annually or annually as shown above under Interest Reset Period; provided,
however, that the interest rate in effect for the period from the Original Issue
Date to the first Interest Reset Date will be the Initial Interest Rate
specified above. Each such adjusted rate will be applicable on and after the
Interest Reset Date to which it relates, to, but not including, the next
succeeding Interest Reset Date, or until Maturity, as the case may be. If any
Interest Reset Date is not a Business Day, such Interest Reset Date will be
postponed to the next SUCCEEDING day that is a Business Day, except, that if the
Interest Rate Basis specified above is LIBOR, and if such Business Day is in the
next succeeding calendar month, such Interest Reset Date will be the immediately
preceding Business Day. If the Interest Rate Basis specified above is the
Treasury Rate, and if such Interest Reset Date would otherwise be a day on which
Treasury Bills (as defined below) are auctioned, then such Interest Reset Date
will be the first Business Day immediately following such auction day. Subject
to applicable provisions of law and except as specified herein, on each Interest
Reset Date the rate of interest on this Note will be the rate determined in
accordance with the provisions of the applicable heading below.

         All percentages resulting from any calculations with respect to this
Note will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point being rounded
upwards; and all dollar amounts used in or resulting from such calculations will
be rounded to the nearest cent with one-half cent being rounded upwards.

                                      -1-
<PAGE>

         The interest rate borne by this Note will be determined as follows:

         (i) Unless the Interest Category of this Note is specified above as a
         "Floating Rate/Fixed Rate Note" or an "Inverse Floating Rate Note" or
         otherwise specified herein, this Note will be designated as a "Regular
         Floating Rate Note" and, except as set forth herein or specified above,
         will bear interest at the rate determined by reference to the
         applicable Interest Rate Basis or Bases (a) plus or minus the Spread,
         if any, and/or (b) multiplied by the Spread Multiplier, if any, in each
         case as specified above. Commencing on the Initial Interest Reset Date,
         the rate at which interest on this Note will be payable will be reset
         as of each Interest Reset Date specified above; provided, however, that
         the interest rate in effect for the period, if any, from the Original
         Issue Date to the Initial Interest Reset Date will be the Initial
         Interest Rate.

         (ii) If the Interest Category of this Note is specified above as a
         "Floating Rate/Fixed Rate Note", then, except as set forth herein or
         specified above, this Note will bear interest at the rate determined by
         reference to the applicable Interest Rate Basis or Bases (a) plus or
         minus the Spread, if any, and/or (b) multiplied by the Spread
         Multiplier, if any, in each case as specified above. Commencing on the
         Initial Interest Reset Date, the rate at which interest on this Note
         will be payable will be reset as of each Interest Reset Date; provided,
         however, that (y) the interest rate in effect for the period, if any,
         from the Original Issue Date to the Initial Interest Reset Date will be
         the Initial Interest Rate and (z) the interest rate in effect for the
         period commencing on the Fixed Rate Commencement Date specified on the
         face hereof to the Maturity Date will be the Fixed Interest Rate
         specified above or, if no such Fixed Interest Rate is specified, the
         interest rate in effect hereon on the day immediately preceding the
         Fixed Rate Commencement Date.

         (iii) If the Interest Category of this Note is specified above as an
         "Inverse Floating Rate Note", then, except as set forth herein or
         specified above, this Note will bear interest at the Fixed Interest
         Rate minus the rate determined by reference to the applicable Interest
         Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b)
         multiplied by the Spread Multiplier, if any, in each case as specified
         above; provided, however, that, unless otherwise specified above or
         herein, the interest rate hereon will not be less than zero. Commencing
         on the Initial Interest Reset Date, the rate at which interest on this
         Note will be payable will be reset as of each Interest Reset Date;
         provided, however, that the interest rate in effect for the period, if
         any, from the Original Issue Date to the Initial Interest Reset Date
         will be the Initial Interest Rate.

         Determination of CD Rate. If the Interest Reset Basis specified above
is the CD Rate, the interest rate with respect to this Note will be the CD Rate
plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if
any, as specified above. "CD Rate" means, with respect to any Interest
Determination Date, the rate on such date for negotiable United States dollar
certificates of deposit having the Index Maturity specified above as published
in H.15(519) (as defined below) under the caption "CDs (secondary market)" or,
if not so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate on
such Interest Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity specified above as published in
H.15 Daily Update (as defined below), or other recognized electronic source used
for the purpose of displaying the applicable rate, under the caption "CDs
(secondary market)". If such rate is not yet published in H.15(519), H.15 Daily
Update or other recognized electronic source by 3:00 P.M., New York City time,
on the Calculation Date pertaining to such Interest Determination Date, then the
CD Rate on such Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such Interest
Determination Date, of three leading non-bank dealers in negotiable United
States dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable United States dollar certificates of deposit of
major United States money center banks for negotiable United States dollar
certificates of deposit with a remaining maturity closest to the Index Maturity
specified above in an amount that is representative for a single transaction in
that market at that time; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate determined as of such Interest Determination Date will be
the CD Rate in effect on such Interest Determination Date.

         "H.15(519)" means the weekly statistical release designated as
H.15(519), or any successor publication, published by the Board of Governors of
the Federal Reserve System.

         "H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.

         Determination of CMT Rate. If the Interest Reset Basis specified above
is the CMT Rate, the interest rate with respect to this Note will be the CMT
Rate plus or minus the Spread, if any, or multiplied by the Spread Multiplier,
if any, as specified above. "CMT Rate" means with respect to any Interest
Determination Date:

                                      -2-
<PAGE>

         (i) If CMT Telerate Page 7051 is specified above, the percentage equal
         to the yield for United States Treasury securities at "constant
         maturity" having the Index Maturity specified above as published in
         H.15(519) under the caption "Treasury Constant Maturities", as the
         yield is displayed on Bridge Telerate, Inc., or any successor service,
         on page 7051, or any other page as may replace page 7051 on that
         service ("Telerate Page 7051"), for such Interest Determination Date.
         If such rate does not appear on Telerate Page 7051, the CMT Rate on
         such Interest Determination Date will be the percentage equal to the
         yield for United States Treasury securities at "constant maturity"
         having the Index Maturity specified above and for such Interest
         Determination Date as published in H.15(519) under the caption
         "Treasury Constant Maturities". If such rate does not appear in
         H.15(519), the CMT Rate on such Interest Determination Date will be the
         rate on such Interest Determination Date for the period of the Index
         Maturity specified above as may then be published by either the Federal
         Reserve System Board of Governors or the United States Department of
         the Treasury that the Calculation Agent determines to be comparable to
         the rate which would otherwise have been published in H.15(519). If the
         Federal Reverse System Board of Governors or the United States
         Department of the Treasury does not publish a yield on United States
         Treasury securities at "constant maturity" having the Index Maturity
         specified above for such Interest Determination Date, the CMT Rate on
         such Interest Determination Date will be calculated by the Calculation
         Agent and will be a yield to maturity based on the arithmetic mean of
         the secondary market bid prices at approximately 3:30 P.M., New York
         City time, on such Interest Determination Date of three leading primary
         United States government securities dealers in The City of New York
         (each, a "Reference Dealer") selected by the Calculation Agent from
         five Reference Dealers and eliminating the highest quotation (or, in
         the event of equality, one of the highest) and the lowest quotation
         (or, in the event of equality, one of the lowest) for United States
         Treasury securities with an original maturity equal to the Index
         Maturity specified above, a remaining term to maturity no more than 1
         year shorter than the Index Maturity specified above and in a principal
         amount that is representative for a single transaction in such
         securities in such market at such time. If fewer than five but more
         than two such prices are provided as requested, the CMT Rate on such
         Interest Determination Date will be calculated by the Calculation Agent
         and will be based on the arithmetic mean of the bid prices obtained and
         neither the highest nor the lowest of such quotations will be
         eliminated. If fewer than three prices are provided as requested, the
         CMT Rate on such Interest Determination Date will be calculated by the
         Calculation Agent and will be a yield to maturity based on the
         arithmetic mean of the secondary market bid prices as of approximately
         3:30 P.M., New York City time, on such Interest Determination Date of
         three Reference Dealers selected by the Calculation Agent from five
         Reference Dealers selected by the Calculation Agent and eliminating the
         highest quotation (or, in the event of equality, one of the highest)
         and the lowest quotation (or, in the event of equality, one of the
         lowest) for United States Treasury securities with an original maturity
         greater than the Index Maturity specified above, a remaining term to
         maturity closest to the Index Maturity specified above, and in a
         principal amount that is representative for a single transaction in
         such securities in such market at such time. If fewer than five but
         more than two such prices are provided as requested, the CMT Rate on
         such Interest Determination Date will be calculated by the Calculation
         Agent and will be based on the arithmetic mean of the bid prices
         obtained and neither the highest nor the lowest of the quotations will
         be eliminated; provided, however, that if fewer than three such prices
         are provided as requested, the CMT Rate determined as of such Interest
         Determination Date will be the CMT Rate in effect on such Interest
         Determination Date. If two such United States Treasury securities with
         an original maturity greater than the Index Maturity specified above
         have remaining terms to maturity equally close to the Index Maturity
         specified above, the quotes for the Treasury security with the shorter
         original term to maturity will be used.

         (ii) If CMT Telerate Page 7052 is specified above, the percentage equal
         to the one-week or one-month, as specified above, average yield for
         United States Treasury securities at "constant maturity" having the
         Index Maturity specified above as published in H.15(519) opposite the
         caption "Treasury Constant Maturities", as such yield is displayed on
         Bridge Telerate, Inc., or any successor service, on page 7052, or any
         other page as may replace page 7052 on that service ("Telerate Page
         7052"), for the week or month, as applicable, ended immediately
         preceding the week or month, as applicable, in which such Interest
         Determination Date falls. If such rate does not appear on Telerate Page
         7052, the CMT Rate on such Interest Rate Determination Date will be the
         percentage equal to the one-week or one-month, as specified above,
         average yield for United States Treasury securities at "constant
         maturity" having the Index Maturity specified above and for the week or
         month, as applicable, preceding such Interest Determination Date as
         published in H.15(519) opposite the caption "Treasury Constant
         Maturities". If such rate does not appear in H.15(519), the CMT Rate on
         such Interest Determination Date will be the one-week or one-month, as
         specified above, average yield for United States Treasury securities at
         "constant maturity" having the Index Maturity specified above as
         otherwise announced by the Federal Reserve Bank of New York for the
         week or month, as applicable, ended immediately preceding the week or
         month, as applicable, in which such Interest Determination Date falls.
         If the Federal Reserve Bank of New York does not publish a one-week or
         one-month, as specified above, average yield on United States Treasury
         securities at "constant maturity" having the Index Maturity specified
         above for the applicable week or month, the CMT Rate on such Interest
         Determination Date will be calculated by the Calculation Agent and will
         be a yield to maturity based on the arithmetic mean of the secondary
         market bid prices at approximately 3:30 P.M., New York City time, on
         such Interest Determination Date of three Reference Dealers selected by
         the Calculation Agent from five such Reference Dealers

                                      -3-
<PAGE>

         selected by the Calculation Agent and eliminating the highest quotation
         (or, in the event of equality, one of the highest) and the lowest
         quotation (or, in the event of equality, one of the lowest) for United
         States Treasury securities with an original maturity equal to the Index
         Maturity specified above, a remaining term to maturity no more than 1
         year shorter than the Index Maturity specified above and in a principal
         amount that is representative for a single transaction in such
         securities in such market at such time. If fewer than five but more
         than two such prices are provided as requested, the CMT Rate on such
         Interest Determination Date will be calculated by the Calculation Agent
         and will be based on the arithmetic mean of the bid prices obtained and
         neither the highest nor the lowest of such quotations will be
         eliminated. If fewer than three prices are provided as requested, the
         CMT Rate on such Interest Determination Date will be calculated by the
         Calculation Agent and will be a yield to maturity based on the
         arithmetic mean of the secondary market bid prices as of approximately
         3:30 P.M., New York City time, on such Interest Determination Date of
         three Reference Dealers selected by the Calculation Agent from five
         Reference Dealers selected by the Calculation Agent and eliminating the
         highest quotation (or, in the event of equality, one of the highest)
         and the lowest quotation (or, in the event of equality, one of the
         lowest) for United States Treasury securities with an original maturity
         greater than the Index Maturity specified above, a remaining term to
         maturity closest to the Index Maturity specified above and in a
         principal amount that is representative for a single transaction in
         such securities in such market at such time. If fewer than five but
         more than two such prices are provided as requested, the CMT Rate on
         such Interest Determination Date will be calculated by the Calculation
         Agent and will be based on the arithmetic mean of the bid prices
         obtained and neither the highest or the lowest of such quotations will
         be eliminated; provided, however, that if fewer than three such prices
         are provided as requested, the CMT Rate determined as of such Interest
         Determination Date will be the CMT Rate in effect on such Interest
         Determination Date. If two United States Treasury securities with an
         original maturity greater than the Index Maturity specified above have
         remaining terms to maturity equally close to the Index Maturity
         specified above, the quotes for the United States Treasury security
         with the shorter original remaining term to maturity will be used.

         Determination of Commercial Paper Rate. If the Interest Rate Reset
Basis specified above is the Commercial Paper Rate, the interest rate with
respect to this Note will be the Commercial Paper Rate plus or minus the Spread,
if any, or multiplied by the Spread Multiplier, if any, as specified above.
"Commercial Paper Rate" means, with respect to any Interest Determination Date,
the Money Market Yield (as defined below) of the rate on such Interest
Determination Date for commercial paper having the Index Maturity specified
above as published in H.15(519) under the caption "Commercial
Paper-Nonfinancial". In the event that such rate is not published by 3:00 P.M.,
New York City time, on the Calculation Date (as defined below) pertaining to
such Interest Determination Date, then the Commercial Paper Rate will be the
rate on such Interest Determination Date for commercial paper having the Index
Maturity specified above as published in H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable rate, under
the caption "Commercial Paper-Nonfinancial." If by 3:00 P.M., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519), H.15 Daily Update or other recognized electronic source, the
Commercial Paper Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the Money Market Yield of the arithmetic mean
of the offered rates at approximately 11:00 A.M., New York City time, on that
Interest Determination Date, of three leading dealers of United States dollar
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper having the Index Maturity specified above placed for industrial
issuers whose bond rating is "AA," or the equivalent, from a nationally
recognized statistical rating organization; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate determined as of such
Interest Determination Date will be the Commercial Paper Rate in effect on such
Interest Determination Date.

         "Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:

                 Money Market Yield =     D X 360        x 100
                                     --------------------
                                        360 - (D x M)

where "D" refers to the applicable per annum rate for commercial paper, quoted
on a bank discount basis and expressed as a decimal; and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.

         Determination of Federal Funds Rate. If the Interest Rate Basis
specified above is the Federal Funds Rate, the interest rate with respect to
this Note will be the Federal Funds Rate plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, as specified above. "Federal Funds
Rate" means, with respect to any Interest Determination Date, the rate on that
day for United States dollar federal funds as published in H.15(519) under the
caption "Federal Funds (Effective)" as displayed on Bridge Telerate, Inc. or any
successor service on page 120 or any other page as may replace the applicable
page on that service ("Telerate Page 120") or, if such rate does not appear on
Telerate Page 120 or is not so published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, the Federal
Funds Rate will be the rate on such Interest Determination Date as published in
H.15 Daily Update, or other recognized electronic source used for the purpose of

                                      -4-
<PAGE>

displaying the applicable rate, under the caption "Federal Funds/Effective
Rate." If such rate is not yet published in H.15(519), H.15 Daily Update or
other recognized electronic source by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Federal
Funds Rate for such Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight United States dollar federal funds arranged by three
leading brokers of United States dollar federal funds transactions in The City
of New York selected by the Calculation Agent prior to 9:00 A.M., New York City
time, on such Interest Determination Date; provided, however, that if the
brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate will be the Federal Funds
Rate determined as of such Interest Determination Date in effect on such
Interest Determination Date.

         Determination of LIBOR. If the Interest Rate Basis specified above is
LIBOR, the interest rate with respect to this Note will be LIBOR plus or minus
the Spread, if any, or multiplied by the Spread Multiplier, if any, as specified
above. "LIBOR" will be determined by the Calculation Agent in accordance with
the following provisions:

         (i) With respect to any Interest Determination Date, LIBOR will be
either: (a) if "LIBOR Telerate" is specified above, the rate for deposits in the
LIBOR Currency (as defined below) having the Index Maturity specified above
commencing on the Interest Reset Date immediately following such Interest
Determination Date that appears on the Designated LIBOR Page (as defined below)
as of 11:00 A.M., London time, on that Interest Determination Date, or (b) if
"LIBOR Reuters" is specified above, the arithmetic mean of the offered rates
(unless the specified Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate will be used) for deposits in the
LIBOR Currency having the Index Maturity specified above, commencing on the
Interest Reset Date immediately following such Interest Determination Date, that
appear (or, if only a single rate is required as aforesaid, appears) on the
Designated LIBOR Page as of 11:00 A.M., London time, on such Interest
Determination Date. If fewer than two offered rates appear, or no rate appears,
as applicable, LIBOR in respect of the related Interest Determination Date will
be determined as if the parties had specified the rate described in clause (ii)
below.

         (ii) With respect to an Interest Determination Date on which fewer than
two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as specified in clause (i) above, the Calculation Agent
will request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotation for deposits in the LIBOR
Currency for the period of the Index Maturity specified above, commencing on the
Interest Reset Date immediately following such Interest Determination Date, to
prime banks in the London interbank market at approximately 11:00 A.M., London
time, on such Interest Determination Date and in a principal amount that is
representative for a single transaction in such LIBOR Currency in such market at
such time. If at least two such quotations are provided, LIBOR determined on
such Interest Determination Date will be calculated by the Calculation Agent and
will be the arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR determined on such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M., in the applicable Principal Financial Center
(as defined below), on such Interest Determination Date by three major banks in
such Principal Financial Center selected by the Calculation Agent for loans in
the LIBOR Currency to leading European banks, having the Index Maturity
specified above and in a principal amount that is representative for a single
transaction in such LIBOR Currency in such market at such time; provided,
however, that if the banks so selected by the Calculation Agent are not quoting
as mentioned in this sentence, LIBOR determined on such Interest Determination
Date will be LIBOR in effect on such Interest Determination Date.

         "LIBOR Currency" means the currency specified above as the currency for
which LIBOR will be calculated. If no such currency is specified above, the
LIBOR Currency will be United States dollars.

         "Designated LIBOR Page" means either (a) if "LIBOR Telerate" is
specified above, the display on Bridge Telerate, Inc. (or any successor
service), on the page specified above, (or any page as may replace the specified
page on that service) for the purpose of displaying the London interbank rates
of major banks for such applicable LIBOR Currency, or (b) if "LIBOR Reuters" is
specified above, the display on the Reuters Monitor Money Rates Service (or any
successor service) on the page specified above (or any page as may replace the
specified page on that service) for the purpose of displaying the London
interbank rates of major banks for such LIBOR Currency. If neither LIBOR
Telerate nor LIBOR Reuters is specified above, LIBOR for the applicable LIBOR
Currency will be determined as if LIBOR Telerate had been specified.

         "Principal Financial Center" will generally be the capital city of the
country to which the LIBOR Currency relates, except that with respect to United
States dollars, Canadian dollars, Deutsche marks, Dutch guilders, Portuguese
escudos, South African rand and Swiss francs, the "Principal Financial Center"
will be The City of New York, Toronto, Frankfurt, Amsterdam, London,
Johannesburg and Zurich, respectively.

         Determination of Prime Rate. If the Interest Rate Basis specified above
is the Prime Rate, the interest rate with respect to this Note will be the Prime
Rate plus or minus the Spread, if any, or multiplied by the Spread Multiplier,
if any, as specified above.

                                      -5-
<PAGE>

"Prime Rate" means, with respect to any Interest Determination Date, the rate on
such Interest Determination Date as published in H.15(519) under the caption
"Bank Prime Loan." If such rate is not published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the Prime Rate for such Interest Determination Date will be the rate published
in H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate under the caption "Bank Prime Loan."
If such rate is not published by 3:00 P.M., New York City time, in H.15(519),
H.15 Daily Update or such other recognized electronic source on the related
Calculation Date, the Prime Rate for such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
of interest publicly announced by at least four banks that appear on the Reuters
Screen US PRIME 1 Page (as defined below) as such bank's prime rate or base
lending rate as of 11:00 A.M., New York City time, on such Interest
Determination Date, or, if fewer than four such rates appear by 3:00 P.M., New
York City time, on the related Calculation Date on Reuters Screen US PRIME 1
Page for such Interest Determination Date, the rate will be calculated by the
Calculation Agent and will be the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Interest
Determination Date by three major banks in The City of New York selected by the
Calculation Agent; provided, however, that if the banks so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate
with respect to such Interest Determination Date will be the Prime Rate in
effect on such Interest Determination Date.

         "Reuters Screen US PRIME 1 Page" means the display on the Reuters
Monitor Money Rates Service (or any successor service) on the "US PRIME 1" page
(or such other page as may replace the "US PRIME 1" page on that service) for
the purpose of displaying prime rates or base lending rates of major United
States banks.

         Determination of Treasury Rate. If the Interest Rate Basis specified
above is the Treasury Rate, the interest rate with respect to this Note will be
the Treasury Rate plus or minus the Spread, if any, or multiplied by the Spread
Multiplier, if any, as specified above. "Treasury Rate" means, with respect to
any Interest Determination Date, the rate from the auction held on such Interest
Determination Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified above as published under
the caption "INVESTMENT RATE" on the display on Bridge Telerate, Inc. or any
successor service on page 56 or any other page as may replace page 56 on that
service ("Telerate Page 56") or page 57 or any other page as may replace page 57
on that service ("Telerate Page 57"), or if not so published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Bond Equivalent Yield (as defined below) of the rate for
such Treasury Bills as published in H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying such rate, under the
caption "U.S. Government Securities/Treasury Bills/Auction High". If such rate
is not so published by 3:00 P.M., New York City time in Telerate Page 56,
Telerate Page 57, H.15 daily Update or other recognized electronic source, on
the related Calculation Date, the Treasury Rate on such Interest Determination
Date will be the Bond Equivalent Yield of the auction rate of such Treasury
Bills as announced by the United States Department of the Treasury. In the event
that such auction rate is not so announced by the United States Department of
the Treasury on such Calculation Date, or if the Auction is not held, the
Treasury Rate on such Interest Determination Date will be the Bond Equivalent
Yield of the rate on such Interest Determination Date of Treasury Bills having
the Index Maturity specified above as published in H.15(519) under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market", or if such rate is
not published by 3:00 P.M., New York City time, on the related Calculation Date,
the rate on such Interest Determination Date of such Treasury Bills as published
in H.15 Daily Update, or other recognized electronic source used for the purpose
of displaying the rate, under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market". If such rate is not published in H.15(519), H.15 Daily
Update, or other recognized electronic source by 3:00 P.M., New York City time,
on such Calculation Date, the Treasury Rate on such Interest Determination Date
will be calculated by the Calculation Agent and will be the Bond Equivalent
Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Interest Determination
Date, of three primary United States government securities dealers selected by
the Calculation Agent, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified above; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate determined as of such Interest
Determination Date will be the Treasury Rate in effect on such Interest
Determination Date.

         "Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:

          Bond Equivalent Yield =              D X N
                                  ------------------------------ X 100
                                            360 - (D X M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, N refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
Interest Reset Period.

         Notwithstanding the determination of the interest rate as provided
above, the interest rate on this Note for any interest period will not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified above.

                                      -6-
<PAGE>

The interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application. The Calculation Agent will calculate the interest rate on
this Note in accordance with the foregoing on or before each Calculation Date.

         The "Calculation Date," where applicable, pertaining to an Interest
Determination Date is the earlier of (i) the tenth calendar day after such
Interest Determination Date or if any such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity Date, as the case may be.

         The Paying Agent will notify the Company of each determination of the
interest rate applicable to this Note promptly after such determination is made
by the Calculation Agent. Citibank, N. A., will act as Paying Agent, through its
Corporate Trust Office in The City of New York. The Paying Agent will, upon the
request of the Holder of this Note, provide the interest rate then in effect
and, if determined, the interest rate which will become effective as a result of
a determination made with respect to the most recent Interest Determination Date
with respect to this Note. The Paying Agent will not be responsible for
determining the interest rate applicable to this Note.

         If any Interest Payment Date specified above would otherwise be a day
that is not a Business Day, such Interest Payment Date will be postponed to the
next day that is a Business Day, except that if the Interest Rate Basis
specified above is LIBOR, and if such Business Day is the next succeeding
calendar month, such Interest Payment Date will be the immediately preceding
Business Day. "Business Day" means any day, other than a Saturday or Sunday,
that is not a legal holiday or a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York
and, if the applicable Interest Rate Basis specified above is LIBOR, is also a
London Business Day. As used herein, "London Business Day" means day on which
commercial banks are open for business including dealings in the LIBOR currency
in London.

         If the Interest Rate Basis specified above is the CD Rate, the CMT Rate
or the Commercial Paper Rate, the Interest Determination Date pertaining to an
Interest Reset Date will be the second Business Day next preceding such Interest
Reset Date. If the Interest Rate Basis specified above is the Federal Funds Rate
on the Prime Rate, the Interest Determination Date pertaining to an Interest
Reset Date will be the Business Day immediately preceding such Interest Reset
Date. If the Interest Rate Basis specified above is LIBOR, the Interest
Determination Date pertaining to an Interest Reset Date will be the second
London Business Day next preceding the Interest Reset Date. If the Interest Rate
Basis specified above is the Treasury Rate, the Interest Determination Date
pertaining to an Interest Reset Date will be the day of the week in which such
Interest Reset Date falls on which Treasury Bills of the Index Maturity
specified above are auctioned. Treasury Bills are normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that such auction may
be held on the preceding Friday; provided, however, that if an auction is held
on the Friday of the week preceding the Interest Reset Date, the Interest
Determination Date will be the preceding Friday; and provided, further, that if
an auction falls on any Interest Reset Date, then such Interest Reset Date will
instead be the first Business Day following the auction If the interest rate of
this Note is determined with reference to two or more interest rate bases, the
Interest Determination Date pertaining to this Note will be the latest Business
Day which is at least two Business Days prior to the Interest Reset Date on
which each Interest Rate Basis will be determinable. Each Interest Rate Basis
will be determined on such date and the applicable interest rate will take
effect on the related Interest Reset Date.

         Interest payments on this Note (unless the Interest Reset Period
specified above is a daily or weekly period) will include accrued interest from
and including the Original Issue Date or from and including the next preceding
Interest Payment Date in respect of which interest has been paid, as the case
may be, to, but excluding, the Interest Payment Date. If the Interest Reset
Period is a daily or weekly period, interest payments will include accrued
interests from and including the Original Issue Date or from, but excluding, the
last date in respect of which interest has been paid or duly provided for, as
the case may be, to and including the Regular Record Date immediately preceding
the applicable Interest Payment Date, except that at Maturity, the interest
payable will include accrued from and including the Original Issue Date or from,
but excluding, the last date in respect of which interest has been paid or duly
provided for, as the case may be, to, but excluding, the Maturity Date. Accrued
interest will be calculated by multiplying the principal amount of this Note by
an accrued interest factor. The accrued interest factor will be computed by
adding the interest factors calculated for each day in the period for which
accrued interest is being calculated. The interest factor (expressed as a
decimal) for each such day will be computed by dividing the interest rate
applicable to such day by 360, if the Interest Rate Basis specified above is the
CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or the Prime Rate, or
by the actual number of days in the year if the Interest Rate Basis specified
above is the CMT Rate or the Treasury Rate.

         If an Event of Default (as defined in the Indenture) with respect to
the Notes will occur and be continuing, the principal of all the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture.

         If the Discount Note box is checked above, the amount payable to the
Holder of this Note in the event of redemption, repayment or acceleration of
maturity will be equal to the sum of (i) the Issue Price specified above
(increased by any accruals of

                                      -7-
<PAGE>

Discount, as defined below, and reduced by any amounts of principal previously
paid) and, in the event of any redemption of this Note (if applicable),
multiplied by the Initial Redemption Percentage Reduction, specified above (as
adjusted by the Annual Redemption Percentage Reduction specified above) and (ii)
any unpaid interest accrued hereon to the date of such redemption, repayment or
acceleration of maturity, as the case may be. The difference between the Issue
Price specified above and the Principal Amount of this Note is referred to
herein as the "Discount".

         For purposes of determining the amount of Discount that has accrued as
of any date on which a redemption, repayment or acceleration of maturity occurs
for this Note, such Discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year convention,
a compounding period that, except for the Initial Period (as defined below),
corresponds to the shortest period between Interest Payment Dates specified
above (with ratable accruals within a compounding period), an interest rate
equal to the Initial Interest Rate specified above and an assumption that the
maturity of this Note will not be accelerated. If the period from the Original
Issue Date specified above to the initial Interest Payment Date (the "Initial
Period") is shorter than the compounding period for this Note, a proportionate
amount of the yield for an entire compounding period will be accrued. If the
Initial Period is longer than the compounding period, then such period will be
divided into a regular compounding period and a short period with the short
period being treated as provided in the preceding sentence.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series under the
Indenture to be affected at any time by the Company with the consent of the
Holders of a majority in principal amount of the Securities at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note will
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor and in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.

         As provided in the Indenture, the Company will be discharged from its
obligations under the Notes if at any time (a) the Company has irrevocably
deposited with the Trustee, in trust, (i) sufficient funds to pay the principal
of, and premium, if any, and interest to the Maturity Date("Stated Maturity" in
the Indenture) on, the Notes, or (ii) to the extent the Notes are payable in
United States dollars only, such amount of direct obligations of, or obligations
the principal and interest on which are fully guaranteed by, the United States
of America as will, together with the predetermined and certain income to accrue
thereon without consideration of any reinvestment thereof, be sufficient to pay
when due the principal of, and premium, if any, and interest to the Maturity
Date on, the Notes, and which are not subject to prepayment, redemption or call,
(b) the Company has paid all other sums payable with respect to the Notes and
(c) unless the Notes are to become due and payable at their Maturity Date within
one year, the Trustee has received an opinion of recognized tax counsel to the
effect that such deposit and discharge will not result in recognition by the
Holders of the Notes of income, gain or loss for federal income tax purposes
(other than income, gain or loss which would have been recognized in like amount
and at a like time absent such deposit and discharge). Upon such discharge, the
Holders of the Notes will no longer be entitled to the benefits of the
Indenture, except for the purposes of registration of transfer and exchange of
Notes, and will look only to such deposited funds or obligations for payment.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture will alter or impair the obligation of the Company which is
absolute and unconditional to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein and in the
Indenture prescribed; subject, however, to the provisions for the discharge of
the Company from its obligations under the Notes upon satisfaction of the
conditions set forth in the preceding paragraph and in the Indenture.

         This Note may be redeemed at the option of the Company on any date on
or after the Initial Redemption Date, if any, specified above, and prior to the
Maturity Date specified above, upon mailing a notice of such redemption not more
than 60 days nor less than 30 days prior to the date fixed for redemption to the
Holder of this Note at such Holder's address appearing in the Security Register,
all as provided in the Indenture, at the Redemption Price, if any, specified
above (expressed as percentage of the principal amount) together in each case
with accrued interest to the date fixed for redemption, provided, however, that
the first two paragraphs of Section 1103 of the Indenture will not apply to this
Note, and if less than all of the Notes are to be redeemed, the Company may
select, from Notes that are subject to redemption pursuant to the terms thereof,
the Note or Notes, or portion or portions thereof, to be redeemed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company in any place where the principal of and interest on this Note are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized

                                      -8-
<PAGE>

in writing, and thereupon one or more new Notes of the same series in authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.

         The Notes are issuable only in registered form without coupons and, if
payable in United States dollars, only in denominations of $1,000 and any
integral multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, Notes of this series are exchangeable for a like
aggregate principal amount of Notes of this series of a different authorized
denomination, as requested by the Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent will be affected by notice to the contrary.

         As provided in the Indenture, no recourse for the payment of the
principal of or interest on any Note, or for any claim based thereon, and no
recourse upon any obligation of the Company in the Indenture or in any Note will
be had against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation.

         All terms used in this Note which are defined in the Indenture will
have the meanings assigned to them in the Indenture.

         This note will be governed by and construed in accordance with the laws
of the State of New York, without regard to principles of conflicts of laws.

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
|                     |
|                     |

--------------------------------------------------------------------------------
      (Name and address of assignee, including zip code, must be printed or
                                  typewritten)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing

_______________________________________________________________________Attorney
to transfer said Note on the books of the within Company, with full power of
substitution in the premises.

Dated:
------------------------              ---------------------------------

                                      ---------------------------------

         NOTICE: The signature to this assignment must correspond with the name
as it appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever and must be guaranteed by a
commercial bank or trust company having its principal office or a correspondent
in The City of New York or by a member of the New York Stock Exchange.

                                      -9-<PAGE>

                                     [LOGO]

               BOOK-ENTRY-ONLY MEDIUM-TERM NOTE, DEPOSIT NOTE, OR
                              MEDIUM-TERM BANK NOTE
                [MASTER NOTE AND/OR GLOBAL CERTIFICATES] PROGRAM

                            LETTER OF REPRESENTATIONS
          (To be Completed by Issuer, Issuing Agent, and Paying Agent)

                  PACCAR Financial Corp.
-------------------------------------------------------------------------------
                                [Name of Issuer]

                  Citibank, N.A.  2790
-------------------------------------------------------------------------------
               [Name and DTC Participant Number of Issuing Agent]

                  Citibank, N.A.  2790
-------------------------------------------------------------------------------
               [Name and DTC Participant Number of Issuing Agent]

                                                            -------------------
                                                                  [Date]

Attention:   General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041--0099

         PACCAR Financial Corporation Medium Term Notes
Re:      -----------------------------------------------------------------------
         $1 Billion Series I
         -----------------------------------------------------------------------

         -----------------------------------------------------------------------
         [Description of Note Program, including, as applicable, (i) series
         designator; (ii) rank of indebtedness; and (iii) reference to the
         provision of the Securities Act of 1933, as amended, pursuant to which
         Note Program is exempt from registration]

Ladies and Gentleman:

This letter sets forth our understanding with respect to certain matters
relating to the issuance by Issuer from time to time of notes under its note
program described above (the "Securities"). Issuing Agent will act as issuing
agent with respect to the Securities. Paying Agent will act as paying agent with
respect to the Securities. The Securities will be issued pursuant to a
prospectus supplement, private placement memorandum, or other such document
authorizing the issuance of the Securities, dated as of SEPTEMBER 10, 1998.

Paying Agent has entered into a Money Market Instrument Master Note and/or
Global Certificates Certificate Agreement, or a Medium--Term Note Certificate
Agreement, with The Depository Trust Company ("DTC") dated as of OCTOBER 31,
1988, pursuant to which Paying Agent will act as custodian of a Master Note
Certificate and/or

                                     - 1 -
<PAGE>

Global Certificates evidencing the Securities, when issued. Paying Agent will
amend Exhibit A to such Certificate Agreement to include the note program
described above, prior to issuance of the Securities.

To induce DTC to accept the Securities as eligible for deposit at DTC and to act
in accordance with its Rules with respect to the Securities, Issuer, Issuing
Agent, and Paying Agent make the following representations to DTC:

          1.   All or certain issues of the Securities shall be evidenced by one
               Master Note Certificate, or by one or more Global Certificates
               for each issue, in registered form registered in the name of
               DTC's nominee, Cede & Co., and such Certificate or Certificates
               shall represent 100% of the principal amount of the Securities
               issued through DTC. The Master Note Certificate, if any, shall
               include the substance of all material provisions set forth in the
               appropriate DTC model Master Note for the note program described
               above, a copy of which previously has been furnished to Issuing
               Agent and Paying Agent, and may include additional provisions as
               long as they do not conflict with the material provisions set
               forth in the DTC model. If the principal amount of an issue of
               the Securities to be evidenced by one or more Global
               Certificates, if any, exceeds $200,000,000, one Global
               Certificate shall be issued with respect to each $200,000,000 of
               principal amount and an additional Global Certificate shall be
               issued with respect to any remaining principal amount. Paying
               Agent shall cause each Global Certificate to be stamped with the
               following legend:

               Unless this certificate is presented by an authorized
               representative of The Depository Trust Company, a New York
               corporation ("DTC"), to Issuer or its agent for registration of
               transfer, exchange, or payment, and any certificate issued is
               registered in the name of Cede & Co. or in such other name as is
               requested by an authorized representative of DTC (and any payment
               is made to Cede & Co. or such other entity as is requested by an
               authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER
               USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
               inasmuch as the registered owner hereof, Cede & Co., has an
               interest herein.

          2.   Issuer or Issuing Agent has obtained from the CUSIP Service
               Bureau a written list of approximately 900 nine-character numbers
               (the basic first six characters of which are the same and
               uniquely identify Issuer and the Securities to be issued under
               its note program described above). The CUSIP numbers on such list
               have been reserved for future assignment to issues of the
               Securities. At any time when fewer than 100 of the CUSIP numbers
               on such list remain unassigned, Issuer or Issuing Agent shall
               promptly obtain from the CUSIP Service Bureau an additional
               written list of approximately 900 such numbers.

          3.   When Securities are to be issued through DTC, Issuing Agent shall
               give notice to Paying Agent and issuance instructions to DTC in
               accordance with DTC's Procedures, including DTC's Final Plan for
               DTC Money Market Programs, and DTC's Issuing/Paying Agent General

                                     - 2 -
<PAGE>

               Operating Procedures and Participant Terminal System Procedures
               for Medium-Term Notes (MTNs) Including Deposit Notes and
               Medium-Term Bank Notes (the "Procedures"), a copy of which
               previously has been furnished to Issuing Agent and Paying Agent.
               The giving of such issuance instructions, which include delivery
               instructions, to DTC shall constitute: (a) a representation that
               the Securities are issued in accordance with applicable law; and
               (b) a confirmation that a Master Note Certificate, or a Global
               Certificate (or Certificates), evidencing such Securities, in the
               form described in Paragraph 1, has been issued and authenticated.

          4.   Issuer recognizes that DTC does not in any way undertake to, and
               shall not have any responsibility to, monitor or ascertain the
               compliance of any transactions in the Securities with any
               exemptions from registration under the Securities Act of 1933 or
               of any other state or federal securities laws.

          5.   If issuance of Securities through DTC is scheduled to take place
               one or more days after Issuing Agent has given issuance
               instructions to DTC, Issuing Agent may cancel such issuance by
               giving a cancellation instruction to DTC in accordance with the
               Procedures.

          6.   At any time that Paying Agent has Securities in its DTC accounts,
               it may request withdrawal of such Securities from DTC by giving a
               withdrawal instruction to DTC in accordance with the Procedures.
               Upon DTC's acceptance of such withdrawal instruction, Paying
               Agent shall reduce the principal amount of the Securities
               evidenced, as the case may be, by the Master Note Certificate, or
               by one or more Global Certificates, accordingly.

          7.   In the event of any solicitation of consents from or voting by
               holders of the Securities, Issuer, Issuing Agent, or Paying Agent
               shall establish a record date for such purposes (with no
               provision for revocation of consents or votes by subsequent
               holders) and shall, to the extent possible, send notice of such
               record date to DTC not less than 15 calendar days in advance of
               such record date. If delivered by hand or sent by mail or
               overnight delivery, such notice shall be sent to:

                               Supervisor:  Proxy
                               Reorganization Department
                               The Depository Trust Company
                               7 Hanover Square; 23rd Floor
                               New York, NY 10004-2695

               If sent by telecopy, such notice shall be sent to (212) 709--6896
               or (212) 709--6897. Issuer, Issuing Agent, or Paying Agent shall
               confirm DTC's receipt of such telecopy by telephoning (212)
               709-6870.

          8.   Notices of reorganization events (corporate actions) with respect
               to the Securities, including full or partial redemptions (calls),
               repayments (puts), extensions of maturities, resets of interest

                                     - 3 -
<PAGE>

               rates or spreads, mandatory tenders, and consolidations of
               individual issues, shall be given to DTC by Paying Agent in
               accordance with the Procedures.

          9.   Paying Agent may override DTC's determination of interest and
               principal payment dates, in accordance with the Procedures.

          10.  Notice regarding the amount of variable interest and principal
               payments on the Securities shall be given to DTC by Paying Agent
               in accordance with the Procedures.

          11.  All notices sent to DTC shall contain the CUSIP number of the
               Securities.

          12.  Paying Agent shall confirm with DTC daily by CUSIP number the
               face value of the Securities outstanding, and Paying Agent's
               corresponding interest and principal payment obligation, in
               accordance with the Procedures.

          13.  DTC may direct Issuer, Issuing Agent, or Paying Agent to use any
               other number or address as the number or address to which notices
               may be sent.

          14.  Payments on the Securities, including payments in currencies
               other than the U.S. Dollar, shall be made by Paying Agent in
               accordance with the Procedures.

          15.  In the event that Issuer determines that beneficial owners of
               Securities shall be able to obtain certificated Securities,
               Issuer or Paying Agent shall notify DTC of the availability of
               certificates. In such event, Issuer or Paying Agent shall issue,
               transfer, and exchange certificates in appropriate amounts, as
               required by DTC and others.

          16.  DTC may discontinue providing its services as securities
               depository with respect to the Securities at any time by giving
               reasonable notice to Issuer or Paying Agent (at which time DTC
               will confirm with Issuer or Paying Agent the aggregate amount of
               Securities outstanding by CUSIP number). Under such circumstance,
               at DTC's request Issuer and Paying Agent shall cooperate fully
               with DTC by taking appropriate action to make available one or
               more separate certificates evidencing Securities to any DTC
               Participant having Securities credited to its DTC accounts.

          17.  Issuer: (a) understands that DTC has no obligation to, and will
               not, communicate to its Participants or to any person having an
               interest in the Securities any information contained in the
               Master Note Certificate, if any, or the Global Certificates, if
               any; and (b) acknowledges that neither DTC's Participants nor any
               person having an interest in the Securities shall be deemed to
               have notice of the provisions of such Certificate or Certificates
               by virtue of submission of such Certificate or Certificates to
               DTC.

          18.  Issuer authorizes DTC to provide to Issuing Agent or Paying Agent

                                     - 4 -
<PAGE>

               listings of DTC Participants' holdings with respect to the
               Securities from time to time at the request of Issuing Agent or
               Paying Agent. Issuer authorizes Issuing Agent and Paying Agent to
               provide DTC with such signatures, exemplars of signatures, and
               authorizations to act as may be deemed necessary by DTC to permit
               DTC to discharge its obligations to DTC Participants and
               appropriate regulatory authorities.

          19.  Nothing herein shall be deemed to require Issuing Agent or Paying
               Agent to advance funds on behalf of Issuer.

NOTE:                                                Very truly yours,
Schedule A contains statements
that DTC believes accurately describe               PACCAR Financial Corp.
DTC, the method of effecting book-             ---------------------------------
entry transfers of securities distri-                     (Issuer)
buted through DTC, and certain
related matters.                           By:
                                               ---------------------------------
                                               (Authorized Officer's Signature)

                                                 Citibank, N.A.
                                             -----------------------------------
                                                        (Issuing Agent)

                                           By:
                                               ---------------------------------
                                               (Authorized Officer's Signature)

                                                 Citibank, N.A.
                                             -----------------------------------
                                                      (Paying Agent)

                                           By:
                                               ---------------------------------
                                               (Authorized Officer's Signature)

Received and Accepted:
THE DEPOSITORY TRUST COMPANY

By:
    ---------------------------------

                                     - 5 -
<PAGE>

                                                                      SCHEDULE A

                        SAMPLE OFFERING DOCUMENT LANGUAGE
                       DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
  (Prepared by DTC-bracketed material may be applicable only to certain issues)

1.   The Depository Trust Company ("DTC"), New York, NY, will act as securities
     depository for the securities (the "Securities"). The Securities will be
     issued as fully--registered securities registered in the name of Cede & Co.
     (DTC's partnership nominee). One fully-registered Security certificate will
     be issued for [each issue of] the Securities, [each] in the aggregate
     principal amount of such issue, and will be deposited with DTC. [If,
     however, the aggregate principal amount of [any] issue exceeds $200
     million, one certificate will be issued with respect to each $200 million
     of principal amount and an additional certificate will be issued with
     respect to any remaining principal amount of such issue.]

2.   DTC is a limited-purpose trust company organized under the New York Banking
     Law, a "banking organization" within the meaning of the New York Banking
     Law, a member of the Federal Reserve System, a "clearing corporation"
     within the meaning of the New York Uniform Commercial Code, and a "clearing
     agency" registered pursuant to the provisions of Section 17A of the
     Securities Exchange Act of 1934. DTC holds securities that its participants
     ("Participants") deposit with DTC. DTC also facilitates the settlement
     among Participants of securities transactions, such as transfers and
     pledges, in deposited securities through electronic computerized
     book--entry changes in Participants' accounts, thereby eliminating the need
     for physical movement of securities certificates. Direct Participants
     include securities brokers and dealers, banks, trust companies, clearing
     corporations, and certain other organizations. DTC is owned by a number of
     its Direct Participants and by the New York Stock Exchange, Inc., the
     American Stock Exchange, Inc., and the National Association of Securities
     Dealers, Inc. Access to the DTC system is also available to others such as
     securities brokers and dealers, banks, and trust companies that clear
     through or maintain a custodial relationship with a Direct Participant,
     either directly or indirectly ("Indirect Participants"). The Rules
     applicable to DTC and its Participants are on file with the Securities and
     Exchange Commission.

3.   Purchases of Securities under the DTC system must be made by or through
     Direct Participants, which will receive a credit for the Securities on
     DTC's records. The ownership interest of each actual purchaser of each
     Security ("Beneficial Owner") is in turn to be recorded on the Direct and
     Indirect Participants' records. Beneficial Owners will not receive written
     confirmation from DTC of their purchase, but Beneficial Owners are expected
     to receive written confirmations providing details of the transaction, as
     well as periodic statements of their holdings, from the Direct or Indirect
     Participant through which the Beneficial Owner entered into the
     transaction. Transfers of ownership interests in the Securities are to be
     accomplished by entries made on the books of Participants acting on behalf
     of Beneficial Owners.  Beneficial Owners

                                     - 6 -
<PAGE>

     will not receive certificates representing their ownership interests in
     Securities, except in the event that use of the book-entry system for the
     Securities is discontinued.

4.   To facilitate subsequent transfers, all Securities deposited by
     Participants with DTC are registered in the name of DTC's partnership
     nominee, Cede & Co. The deposit of Securities with DTC and their
     registration in the name of Cede & Co. effect no change in beneficial
     ownership. DTC has no knowledge of the actual Beneficial Owners of the
     Securities; DTC's records reflect only the identity of the Direct
     Participants to whose accounts such Securities are credited, which may or
     may not be the Beneficial Owners. The Participants will remain responsible
     for keeping account of their holdings on behalf of their customers.

5.   Conveyance of notices and other communications by DTC to Direct
     Participants, by Direct Participants to Indirect Participants, and by
     Direct Participants and Indirect Participants to Beneficial Owners will be
     governed by arrangements among them, subject to any statutory or regulatory
     requirements as may be in effect from time to time.

[6.  Redemption notices shall be sent to Cede & Co. If less than all of the
     Securities within an issue are being redeemed, DTC's practice is to
     determine by lot the amount of the interest of each Direct Participant in
     such issue to be redeemed.]

7.   Neither DTC nor Cede & Co. will consent or vote with respect to Securities.
     Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as
     soon as possible after the record date. The Omnibus Proxy assigns Cede &
     Co.'s consenting or voting rights to those Direct Participants to whose
     accounts the Securities are credited on the record date (identified in a
     listing attached to the Omnibus Proxy).

8.   Principal and interest payments on the Securities will be made to DTC.
     DTC's practice is to credit Direct Participants' accounts on payable date
     in accordance with their respective holdings shown on DTC's records unless
     DTC has reason to believe that it will not receive payment on payable date.
     Payments by Participants to Beneficial Owners will be governed by standing
     instructions and customary practices, as is the case with securities held
     for the accounts of customers in bearer form or registered in "street
     name," and will be the responsibility of such Participant and not of DTC,
     the Agent, or the Issuer, subject to any statutory or regulatory
     requirements as may be in effect from time to time. Payment of principal
     and interest to DTC is the responsibility of the Issuer or the Agent,
     disbursement of such payments to Direct Participants shall be the
     responsibility of DTC, and disbursement of such payments to the Beneficial
     Owners shall be the responsibility of Direct and Indirect Participants.

[9.  A Beneficial Owner shall give notice to elect to have its Securities
     purchased or tendered, through its Participant, to the [Tender/Remarketing]
     Agent, and shall effect delivery of such Securities by causing the Direct
     Participant to transfer the Participant's interest in the Securities, on
     DTC's records, to the [Tender/Remarketing] Agent. The requirement for
     physical delivery of Securities in connection with a demand for purchase or
     a mandatory

                                     - 7 -
<PAGE>

     purchase will be deemed satisfied when the ownership rights in the
     Securities are transferred by Direct Participants on DTC's records.]

10.  DTC may discontinue providing its services as securities depository with
     respect to the Securities at any time by giving reasonable notice to the
     Issuer or the Agent. Under such circumstances, in the event that a
     successor securities depository is not obtained, Security certificates are
     required to be printed and delivered.

11.  The Issuer may decide to discontinue use of the system of book-entry
     transfers through DTC (or a successor securities depository). In that
     event, Security certificates will be printed and delivered.

12.  The information in this section concerning DTC and DTC's book-entry system
     has been obtained from sources that the Issuer believes to be reliable, but
     the Issuer takes no responsibility for the accuracy thereof.

                                 BOUND BY RIDER

     The Issuer and the Agent acknowledge that DTC is not a party to the Trust
Deed and that no obligations or liabilities shall be deemed to accrue to DTC
with regard to the Trust Deed.

                                     - 8 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]