Document:

<PAGE>   1
                                                                   EXHIBIT 10.20

                         PROFESSIONAL SERVICES AGREEMENT

         THIS AGREEMENT, made as of this 1st day of May, 2000, between Patric
Judge, an individual residing in the United Kingdom ("Provider"), Pet Quarters,
Inc., an Arkansas corporation whose principal place of business is located at
720 East Front Street in Lonoke, Arkansas 72086 ("Customer").

                                   WITNESSETH:

         WHEREAS, Customer desires to acquire consulting services from Provider
upon the terms, conditions and provisions as hereinafter set forth, and Provider
desires to provide such consulting services as Customer desires upon the terms,
conditions and provisions as hereinafter set forth;

         NOW, THEREFORE, in consideration of the premises and mutual
undertakings of the parties herein contained and for other good and valuable
consideration, the receipt of which the parties hereby acknowledge, intending to
be legally bound Provider and Customer hereby agree as follows:

         1. Duties of Provider. Customer hereby contracts with Provider as a
consultant to foster, develop and finalize beneficial relationships with
"Content Providers", as hereinafter defined, and European and global
veterinarian societies and associations such as WSAVA and BSAVA ("Veterinarian
Associations"), to assist Customer's management in the development of
"Customer's Website", as hereinafter defined, and create a charitable trust for
the benefit and care of pets. In addition to such described duties, Customer
anticipates that it will request Provider to perform additional consulting and
managerial tasks for Customer and Provider shall accept such reasonable
additional assignments without additional compensation unless otherwise agreed
upon by Customer. Provider agrees to perform all such services in a prompt,
professional and workmanlike manner consistent with generally accepted
professional and business practices and standards. As payment for all such
services, including any reasonable additional tasks as contemplated above,
Provider shall receive the amounts described in paragraph 3 hereof. As used
herein, "Content Providers" shall mean respected veterinarians and authors who
agree to write articles and provide scholarly advice regarding pets, pet care
and other relevant topics to provide useful information to professionals and
consumers who visit Customer's Website. As used herein, "Customer's Website"
shall mean Customer's internet homepage, currently located at petquarters.com,
but subject to change, that Customer utilizes to market and sell its pet
supplies and services.

         Provider shall devote sufficient time and resource to fulfill the
Duties set out above with a view to assisting the Customer's business of
developing the premier Internet pet supply, information and resource site,
expanding Customer's relationship with the Content Providers, and the
Veterinarian Associations, and assuring Customer's Website is well placed,
located and known for effective sales and marketing in the European economic
community. Provider shall exert his best efforts to discharge the
responsibilities reasonably assigned to him by Customer. Provider shall
discharge his responsibilities to Customer in such a manner and he shall not at
anytime do anything which may cause or tend or be likely to cause any loss or
damage to Customer in business, reputation or otherwise.

<PAGE>   2

         2. Term. The term of this Agreement shall commence on May 1, 2000, and
shall continue for a period of two (2) years, until April 30, 2002 (the "Initial
Period"). Thereafter, this Agreement shall continue on an annual basis until
terminated by either party. After the Initial Period, Customer may terminate
this Agreement at the end of any annual period by at least one months written
notice. After the Initial Period, Provider may terminate this Agreement by
giving Customer at least one (1) months written notice of Provider's intent to
stop performing the services to be provided pursuant to this Agreement.

         3. Compensation. For all the services to be rendered by Provider in
accordance with clause 1 of this Agreement, Customer agrees to pay Provider at
the end of each monthly period, commencing May 31, 2000, an amount equal to
$7,500, in U.S. dollars. Although Provider is not and is not intended to become
an employee of Customer, the Board of Directors of Customer, as and when deemed
appropriate by them, may include Provider in any of Customer's stock option
plans or issue options to Provider as additional compensation

In addition to the compensation set out above Provider shall be entitled to
receive payment of all invoices to Customer currently outstanding for work
carried on for Customer prior to the date hereof as provided by Provider and set
forth on Exhibit A hereto.

         4. Identification of Strategic Partners. Customer also recognizes that
Provider is in a unique situation to assist Customer in identifying and
successfully negotiating terms of an agreement of acquisition or merger with
appropriate strategic partners worldwide. Therefore, in addition to the
compensation referred to in paragraph 3 hereof, as Customer identifies strategic
partners suitable for commercial strategic alliances, partnerships, joint
ventures, takeover, merger or acquisition by Provider, Provider will be entitled
to negotiate with Customer for additional compensation as a referral fee to be
paid in stock of Customer. Unless otherwise agreed by the parties, the transfer
of stock shall occur upon the closing of the strategic alliance, partnership,
joint venture, takeover, merger or acquisition of the strategic partner with
Customer.

         5. Independent Contractor. In its performance of services pursuant to
this Agreement, Provider shall at all times act in its own capacity and right as
an independent contractor, and nothing herein may be construed to make Provider
an agent, partner, or joint venturer of Customer. Neither Provider nor its
Providers will have any claim to Customer's revenues. Provider shall be solely
responsible for all taxes due upon or as a result of Provider's receipt of the
compensation contemplated herein, and Customer shall not be responsible in any
manner, except as required by the income tax laws of the United States, for
withholding or payment of taxes related to any amounts paid by Customer to
Provider.

         6. Office and Business Expense Reimbursement. Customer shall provide
Provider with an additional amount not to exceed $1,500 per month, in U.S.
dollars, to reimburse Provider for office and overhead expenses which are
suitable to his position and appropriate to the performance of his duties. This
office expense reimbursement shall be paid on the last day of

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<PAGE>   3

each month. Customer shall also reimburse Provider for all extraordinary travel,
entertainment and business expenses ("Extraordinary Expenses"). Prior to
incurring any Extraordinary Expense which Provider shall seek reimbursement from
Customer, Provider shall obtain prior approval from Customer in writing for such
Extraordinary Expense. Customer shall reimburse Provider for the approved
Extraordinary Expenses on the last day of the month in which Provider submits
its request for reimbursement.

         7. Termination Of Agreement. This Agreement, and Provider's services
hereunder, upon Thirty (30) days written notice shall be terminated immediately
upon the happening of any of the following events:

                  A. The death or disability of Provider.

                  B. Provider's being convicted for the commission of a felony
         under any federal or state law.

                  C. For purposes of this Agreement, "disability" shall mean a
         physical or mental disability of Provider which prevents the
         performance by Provider of his duties, with or without reasonable
         accommodation, for One Hundred Twenty (120) days during any Six (6)
         month period.

                  D. By Customer with "good cause" upon the giving of 3 days
         written notice. For the purpose of this Agreement, "good cause" shall
         include, substance abuse, proven dishonesty, theft, fraud,
         embezzlement, conviction of a felony, or other actions by Provider
         which cause material harm to, or publicly defame the name of, Customer.

         Upon any such termination of this Agreement, Provider shall not be
entitled to receive any severance pay or other additional compensation, unless
Customer, in the sole discretion of the Board of Directors, shall so elect.

         In the event of such termination, Provider shall immediately pay any
indebtedness owed to Customer, and shall reimburse Customer for any unearned
prepaid expenditures incurred on behalf of or for the benefit of Provider.
Customer may, in its sole discretion, deduct or offset any such amounts owed to
it by Provider from any amounts that may otherwise be due to Provider from
Customer. Following termination, Provider shall fully cooperate with Customer
and all matters relating to the winding up of his pending work on behalf of
Customer and the orderly transfer of any such pending work to other consultants
of Customer.

         8. Confidentiality And Nondisclosure Agreement. Provider acknowledges
that, as a consultant to Customer, Provider has been and will be in a position
to receive or have access to confidential information (as hereafter defined)
regarding the business carried on by Customer. Confidential Information
includes, but is not limited to, all information regarding Customer's: (a)
customers and customer lists, including all names, addresses, phone numbers and
any other pertinent information; (b) sources of supply, price lists and costs;
(c) marketing strategies and procedures, advertising strategies and sales
methods; (d) corporate strategies, plans and goals; (e) information contained in
training manuals; (f) technical information; (g) prospective and executed

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<PAGE>   4

contracts, financial information and other business arrangements; (h) all other
proprietary knowledge or data acquired or obtained through Provider's
relationship with Customer. Provider hereby agrees that, except with the prior
written consent of Customer, Provider will not, during the course of his
association with Customer or at any time thereafter, directly or indirectly use,
disclose or disseminate (in any manner) to any other person (including any
individual or entity) any Confidential Information. In the event Provider's
contract with Customer terminates or is terminated for any reason, Provider
agrees to return to Customer all documentation pertaining or relating to any
Confidential Information.

         Provider also recognizes and agrees that in the event of Provider's
breach or violation of any provisions of this paragraph, Customer may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Customer shall have the immediate right to obtain a preliminary
or final injunction against Provider issued by a court of competent jurisdiction
enjoining any breach or violation of this paragraph.

         Customer recognises and agrees that in the course of identifying and
introducing prospective strategic partners in accordance with clause 4 of this
Agreement that information will be provided about potential strategic partners
which will be confidential and agrees to keep confidential any such information
disclosed to it in whole or in part; to obtain the prior specific written
authorisation of Provider to disclosure of such information to a third party and
to require such third party to sign a Confidentiality Agreement with the
Provider in like terms to this clause; not to use such information in whole or
in part for any purpose other than the business of the consideration of the
strategic alliance proposed ("the Relevant Business"); to restrict access to
such information disclosed to it to those of its officers, employees or
professional advisers who need to know the same for the purpose of the Relevant
Business; to ensure that any of its officers, employees or professional advisers
to whom such information is disclosed are aware of the terms of this Agreement
and the confidential nature of the information and to procure their observance
of the terms of this Agreement. Customer also agrees not to copy such
information disclosed to it under this Agreement in whole or in part except as
reasonably necessary for the purpose of the Relevant Business.

         9. Fair Competition Agreement. To induce Customer to retain Provider,
Provider agrees, commencing on the date of Provider's termination of services to
Customer for any reason except if this Agreement is terminated by Customer,
without good cause, and continuing for a period of three months, Provider shall
not provide the services as set out clause 1 of this Agreement to any other
person which in any way competeS with Customer, whether on his own account or as
a shareholder, partner, joint venturer, employee, consultant, advisor and/or
agent of any person, firm, corporation or other entity engaged in the business
of providing pet products, supplies, services or advice to third-parties on the
internet or by mail order catalogues anywhere in the world. Provider
acknowledges, represents and warrants to Customer that the covenant of Provider
hereunder is reasonably necessary for the protection of Customer's interest and
is not unduly restrictive upon Provider.

         Provider also recognizes and agrees that in the event of Provider's
breach or violation of any provisions of this paragraph, Customer may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Customer shall have the immediate right to

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obtain a preliminary or final injunction against Provider issued by a court of
competent jurisdiction enjoining any breach or violation of this paragraph.

         10. Benefit. This Agreement shall bind all parties, the respective
heirs, executors, administrators and assigns, but nothing contained herein shall
be construed as an authorization or right of any party to assign his rights or
obligations hereunder.

         11. Assignment. Neither Customer nor Provider may assign this Agreement
without the prior written consent of the other party.

         12. Waiver Of Breach Or Violation Not Deemed Continuing. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.

         13. Notices. Any and all notices required or permitted to be given
under this Agreement will be sufficient if furnished in writing and sent by
registered mail to the respective parties at the addresses given on the last
page of this Agreement or later provided in writing to the applicable party.

         14. Governing Law. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Arkansas.

         15. Survival. The covenants contained in or liabilities accrued under
this Agreement which, by their terms, require their performance after the
expiration or termination of this Agreement shall be enforceable notwithstanding
the expiration or other termination of this Agreement.

         16. Paragraph Headings. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as part
of this Agreement.

         17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         18. Entire Agreement. This instrument contains the entire agreement of
the parties and may not be changed except by a writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge is
sought.

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<PAGE>   6

         IN WITNESS WHEREOF, Customer has hereunto caused this Agreement to be
executed by its duly authorized officers and Provider has hereunto set his hand,
all being done in duplicate originals with One (1) original being delivered to
each party on the day and year first above written.

                                       CUSTOMER:

                                       PET QUARTERS, INC.
                                       720 East Front Street
                                       Lonoke, Arkansas 72056
                                       USA

Attest:
                                       By:
                                          --------------------------------------
                                       Steve Dempsey, President
----------------------------------
Gregg Rollins, Assistant Secretary

                                       PROVIDER:

                                       PATRIC JUDGE

                                       23 High Street
                                       Tring, Hertfordshire
                                       HP235AH, UK

                                       -----------------------------------------
                                       Patric Judge

                                       6<PAGE>   1
                                                                     EXHIBIT 4.3

                                 [FACE OF NOTE]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY 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.(1)

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.(2)

<TABLE>
<CAPTION>
REGISTERED                                  CUSIP No.:                            PRINCIPAL AMOUNT:
<S>                                         <C>                                   <C>
No. FLR-___                                 ________                              ______________
</TABLE>

                             HOMESIDE LENDING, INC.
                                MEDIUM-TERM NOTE
                                 (Floating Rate)

<TABLE>
<CAPTION>
INTEREST RATE BASIS                         ORIGINAL ISSUE DATE:                  STATED MATURITY DATE:
OR BASES:

<S>                                         <C>                                   <C>
   IF LIBOR:                                                                      IF CMT RATE:
    [  ] LIBOR Reuters                                                            Designated CMT Telerate
           Page:                                                                  Page:
    [  ] LIBOR Telerate                                                           If Telerate Page 7052:
           Page:                                                                  [  ] Weekly Average
    Designated LIBOR                                                              [  ] Monthly Average
    Currency:                                                                             Designated CMT Maturity
                                                                                          Index:

INDEX MATURITY:                             INITIAL INTEREST RATE:   %            INTEREST PAYMENT DATE(S):

SPREAD (PLUS OR                             SPREAD MULTIPLIER:                    INITIAL INTEREST RESET
MINUS):                                                                           DATE:
</TABLE>

------------------
(1)  This paragraph applies to global Notes only.

(2)  This paragraph applies to global Notes only.

<PAGE>   2

<TABLE>
<CAPTION>
<S>                                         <C>                                   <C>
MINIMUM INTEREST RATE:   %                  MAXIMUM INTEREST RATE:   %            INTEREST RESET DATE(S):

INITIAL REDEMPTION                          INITIAL REDEMPTION                    ANNUAL REDEMPTION
DATE:                                       PERCENTAGE:    %                      PERCENTAGE REDUCTION:   %

OPTIONAL REPAYMENT                          CALCULATION AGENT:                    [  ] CHECK IF DISCOUNT NOTE
DATE(S):

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            .
[  ] Original Issue Discount Note           Applicable Interest Rate Basis:
          Issue Price:    %

AUTHORIZED DENOMINATION:
[ ] $1,000 and integral multiples
         thereof
[ ] Other:

ADDENDUM ATTACHED
[ ] Yes
[ ] No

OTHER/ADDITIONAL PROVISIONS:
</TABLE>

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<PAGE>   3

     HOMESIDE LENDING, INC., a Florida corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ______________, on the Stated Maturity Date specified above
(or any Redemption Date or Repayment Date, each as defined on the reverse
hereof) (each such Stated Maturity Date, Redemption Date or Repayment Date being
hereinafter referred to as the "Maturity Date" with respect to the principal
repayable on such date) and to pay interest thereon (and on any overdue
principal, premium and/or interest to the extent legally enforceable) at a rate
per annum equal to the Initial Interest Rate specified above until the Initial
Interest Reset Date specified above and thereafter at a rate determined in
accordance with the provisions specified above and on the reverse hereof or in
an Addendum hereto with respect to one or more Interest Rate Bases specified
above until the principal hereof is paid or duly made available for payment. The
Company will pay interest in arrears on each Interest Payment Date, if any,
specified above (each, an "Interest Payment Date"), commencing with the first
Interest Payment Date next succeeding the Original Issue Date specified above,
and on the Maturity Date; PROVIDED, HOWEVER, that if the Original Issue Date
occurs between a Record Date (as defined below) and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date next succeeding the Original Issue Date to the holder of this Note on the
Record Date with respect to such second Interest Payment Date.

     Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined on the reverse hereof) immediately preceding such
Interest Payment Date (the "Record Date"); PROVIDED, HOWEVER, that interest
payable on the Maturity Date will be payable to the person to whom the principal
hereof and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for on any Interest Payment Date other than the
Maturity Date ("Defaulted Interest") shall forthwith cease to be payable to the
holder on the close of business on any Record Date, and shall be paid to the
person in whose name this Note is registered at the close of business on a
special record date (the "Special Record Date") for the payment of such
Defaulted Interest to be fixed by the Trustee hereinafter referred to, notice
whereof shall be given to the holder of this Note by the Trustee not less than
10 calendar days prior to such Special Record Date or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which this Note may be listed, and upon such notice as may be
required by such exchange, all as more fully provided for in the Indenture.

     Payment of principal, premium, if any, and interest in respect of this Note
due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, upon delivery of a duly completed election form as
contemplated on the reverse hereof) at the corporate trust office of the Trustee
maintained for that purpose in the Borough of Manhattan, The City of New York,
currently located at 101 Barclay Street, Floor 21 West, New York, New York
10286, or at such other paying agency in the Borough of Manhattan, The City of
New York, as the Company may

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<PAGE>   4

determine; PROVIDED, HOWEVER, that if the Specified Currency specified above is
other than United States dollars and such payment is to be made in the Specified
Currency in accordance with the provisions set forth below, such payment will be
made by wire transfer of immediately available funds to an account with a bank
designated by the Holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note is presented and surrendered at the aforementioned office or agency
maintained by the Company in time for the Trustee to make such payment in such
funds in accordance with its normal procedures. Payment of interest due on any
Interest Payment Date other than the Maturity Date will be made at the
aforementioned office or agency maintained by the Company or, at the option of
the Company, by check mailed to the address of the person entitled thereto as
such address shall appear in the Note Register maintained by the Trustee;
PROVIDED, HOWEVER, that a Holder of U.S. $10,000,000 (or, if the Specified
Currency is other than United States dollars, the equivalent thereof in the
Specified Currency) or more in aggregate principal amount of Notes (whether
having identical or different terms and provisions) will be entitled to receive
interest payments on such Interest Payment Date by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received in
writing by the Trustee not less than 15 calendar days prior to such Interest
Payment Date. Any such wire transfer instructions received by the Trustee shall
remain in effect until revoked by such Holder.

     If any Interest Payment Date other than the Maturity Date would otherwise
be a day that is not a Business Day, such Interest Payment Date shall be
postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and/or
interest shall be made on the next succeeding Business Day with the same force
and effect as if made on the date such payment was due, and no interest shall
accrue with respect to such payment for the period from and after the Date to
the date of such payment on the next succeeding Business Day.

     Unless otherwise specified on the face hereof, as used herein, "Business
Day" means any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which commercial banks are authorized or required by law,
regulation or executive order to close in The City of New York; PROVIDED
HOWEVER, that, with respect to Foreign Currency Notes, such day is also not a
day on which commercial banks are authorized or required by law, regulation or
executive order to close in the Principal Financial Center (as defined herein)
of the country issuing the Specified Currency or, if the Specified Currency is
the Euro, the day is also a day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (target) System is open; PROVIDED, FURTHER,
that, with respect to Notes as to which LIBOR is an applicable Interest Rate
Basis, such day is also a London Business Day (as defined herein). "London
Business Day" means a day on which commercial banks are open for business,
including dealings in the Designated LIBOR Currency (as defined herein) in the
London interbank market. "Principal Financial Center" means (i) the capital city
of the country issuing the Specified Currency or (ii) the capital city of the
country to which the Designated LIBOR Currency relates, as applicable, except,
in each case, that with respect to United States dollars, Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, Portuguese
escudos, South African rand and Swiss francs, the "Principal Financial Center"
shall be The City of New York,

                                       4
<PAGE>   5

Sydney and (solely in the case of the Specified Currency) Melbourne, Toronto,
Frankfurt, Amsterdam, Milan, Johannesburg and Zurich, respectively.

     The Company is obligated to make payment of principal, premium, if any, and
interest in respect of this Note in the Specified Currency (or, if the Specified
Currency is not at the time of such payment legal tender for the payment of
public and private debts of the country issuing such currency or, in the case of
the Euro, in the member states of the European Union that have adopted the
single currency in accordance with the Treaty Establishing the European
Community, as amended by the Treaty on European Union, such other currency which
is then such legal tender). If the Specified Currency is other than United
States dollars, except as otherwise provided below, any such amounts so payable
by the Company will be converted by the Exchange Rate Agent specified above into
United States dollars for payment to the Holder of this Note.

     If the Specified Currency is other than United States dollars, the Holder
of this Note may elect to receive any amount payable hereunder in such Specified
Currency. If the Holder of this Note shall not have duly made an election to
receive all or a specified portion of any payment of principal, premium, if any,
and/or interest in respect of this Note in the Specified Currency, any United
States dollar amount to be received by the Holder of this Note will be based on
the highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 A.M., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all Holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the Holder of this Note by deductions from such payments. If
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.

     If the Specified Currency is other than United States dollars, the Holder
of this Note may elect to receive all or a specified portion of any payment of
principal, premium, if any, and/or interest in respect of this Note in the
Specified Currency by submitting a written request for such payment to the
Trustee at its corporate trust office in The City of New York on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Such written request may be mailed or hand delivered or sent
by cable, telex or other form of facsimile transmission. The Holder of this Note
may elect to receive all or a specified portion of all future payments in the
Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.

         If the Specified Currency is other than United States dollars and the
Holder of this Note shall have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, but the Specified Currency is
not available due to the imposition of exchange controls or other

                                       5
<PAGE>   6

circumstances beyond the control of the Company, the Company will be entitled to
satisfy its obligations to the Holder of this Note by making such payment in
United States dollars on the basis of the Market Exchange Rate (as defined
below) determined by the Exchange Rate Agent on the second Business Day prior to
such payment date or, if such Market Exchange Rate is not then available, on the
basis of the most recently available Market Exchange Rate. The "Market Exchange
Rate" for the Specified Currency means the noon dollar buying rate in The City
of New York for cable transfers for the Specified Currency as certified for
customs purposes (or, if not so certified, as otherwise determined) by the
Federal Reserve Bank of New York. Any payment made in United States dollars
under such circumstances shall not constitute an Event of Default (as defined in
the Indenture).

     All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof and, if so specified on the face hereof, in an Addendum
hereto, which further provisions shall have the same force and effect as if set
forth on the face hereof.

     Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions."

     Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

                                       6
<PAGE>   7

     IN WITNESS WHEREOF, HOMESIDE LENDING, INC. has caused this Note to be duly
executed by one of its duly authorized officers.

                                            HOMESIDE LENDING, INC.
[SEAL]

                                            By__________________________________
                                               Title:

                                                    Attest:

                                                    By:_________________________
                                                    Name:
                                                    Title:

Dated:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.

THE BANK OF NEW YORK,
as Trustee

By____________________________
     Authorized Signatory

                                       7
<PAGE>   8

                                [REVERSE OF NOTE]

                             HOMESIDE LENDING, INC.
                                MEDIUM-TERM NOTE
                                 (Floating Rate)

     This Note is one of a duly authorized series of Debt Securities (the "Debt
Securities") of the Company issued and to be issued under an Indenture, dated as
of May 15, 1997, as amended, modified or supplemented from time to time (the
"Indenture"), between the Company and The Bank of New York, as Trustee (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 Debt
Securities, and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered. This Note is one of the series of Debt Securities
designated as "Medium-Term Notes Due Nine Months or More From Date of Issue"
(the "Notes"). All terms used but not defined in this Note or in an Addendum
hereto shall have the meanings assigned to such terms in the Indenture or on the
face hereof, as the case may be.

     This Note is issuable only in registered form without coupons in minimum
denominations of U.S. $1,000 and integral multiples thereof or the minimum
Authorized Denomination specified on the face hereof.

     This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.

     This Note will be subject to redemption at the option of the Company on any
date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S. $1,000 or
the minimum Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S. $1,000 or such minimum Authorized
Denomination), at the Redemption Price (as defined below), together with unpaid
interest accrued thereon to the date fixed for redemption (each, a "Redemption
Date"), on written notice given no more than 60 nor less than 30 calendar days
prior to the Redemption Date and in accordance with the provisions of the
Indenture. The "Redemption Price" shall initially be the Initial Redemption
Percentage specified on the face hereof multiplied by the unpaid principal
amount of this Note to be redeemed. The Initial Redemption Percentage shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof until the
Redemption Price is 100% of unpaid principal amount to be redeemed. In the event
of redemption of this Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same terms as this Note shall
be issued in the name of the holder hereof upon the presentation and surrender
hereof.

     This Note will be subject to repayment by the Company at the option of the
holder hereof on the Optional Repayment Date(s), if any, specified on the face
hereof, in whole or in part in increments of U.S. $1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S. $1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,

                                       8
<PAGE>   9

together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.

     If the Interest Category of this Note is specified on the face hereof as an
Original Issue Discount Note, the amount payable to the holder of this Note in
the event of redemption, repayment or acceleration of maturity of this Note will
be equal to the sum of (1) the Issue Price specified on the face hereof
(increased by any accruals of the Discount, as defined below) and, in the event
of any redemption of this Note (if applicable), multiplied by the Initial
Redemption Percentage (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) and (2) any unpaid interest on this Note accrued from
the Original Issue Date to the Redemption Date, Repayment Date or date of
acceleration of maturity, as the case may be. The difference between the Issue
Price and 100% of 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 Redemption Date, Repayment Date or date of acceleration of maturity of this
Note, such Discount will be accrued so as to cause an assumed yield on the Note
to be constant. The assumed 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 (with ratable accruals within a compounding period), a
constant coupon rate equal to the initial interest rate applicable to this Note
and an assumption that the maturity of this Note will not be accelerated. If the
period from the Original Issue Date 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 interest rate borne by this Note will be determined as follows:

          (i)  Unless the Interest Category of this Note is specified on the
          face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
          Floating Rate Note" or as otherwise specified as Other/Additional
          Provisions on the face hereof or in an Addendum hereto, this Note
          shall be designated as a "Regular Floating Rate Note" and, except as
          set forth below or specified on the face hereof or in an Addendum
          hereto, shall 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 on the face hereof. Commencing on the Initial
          Interest Reset Date, the rate at which interest on this Note shall be
          payable shall be reset as of each Interest Reset Date specified on the
          face hereof; PROVIDED, HOWEVER, that the interest rate in effect for

                                       9
<PAGE>   10

          the period, if any, from the Original Issue Date to the Initial
          Interest Reset Date shall be the Initial Interest Rate.

          (ii) If the Interest Category of this Note is specified on the face
          hereof as a "Floating Rate/Fixed Rate Note," then, except as set forth
          below or specified on the face hereof or in an Addendum hereto, this
          Note shall 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.
          Commencing on the Initial Interest Reset Date, the rate at which
          interest on this Note shall be payable shall 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 shall 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 shall be the Fixed Interest Rate specified on the face hereof 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 on the face
          hereof as an "Inverse Floating Rate Note," then, except as set forth
          below or specified on the face hereof or in an Addendum hereto, this
          Note shall 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; PROVIDED, HOWEVER, that, unless otherwise
          specified on the face hereof or in an Addendum hereto, the interest
          rate hereon shall not be less than zero. Commencing on the Initial
          Interest Reset Date, the rate at which interest on this Note shall be
          payable shall 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 shall be
          the Initial Interest Rate.

     Except as set forth above or specified on the face hereof or in an Addendum
hereto, the interest rate in effect on each day shall be (i) if such day is an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date. If any Interest Reset Date would otherwise be a day
that is not a Business Day, such Interest Reset Date shall be postponed to the
next succeeding Business Day, except that if LIBOR is an applicable Interest
Rate Basis and such Business Day falls in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day. In
addition, if the Treasury Rate is an applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
such Interest Reset Date will be postponed to the next succeeding Business Day.

     The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be determined by the Calculation Agent as
of the applicable Interest Determination Date and will be calculated by the
Calculation Agent on or prior to the Calculation Date (as defined below), except
with respect to the LIBOR and the Eleventh District

                                       10
<PAGE>   11

Cost of Funds Rate, which will be calculated on such Interest Determination
Date. The "Interest Determination Date" with respect to the Federal Funds Rate
and the Prime Rate will be the Business Day immediately preceding the applicable
Interest Reset Date; the "Interest Determination Date" with respect to the CD
Rate, the CMT Rate and the Commercial Paper Rate will be the second Business Day
immediately preceding the applicable Interest Reset Date; the "Interest
Determination Date" with respect to the Eleventh District Cost of Funds Rate
shall be the last working day of the month immediately preceding the applicable
Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the
"FHLB of San Francisco") publishes the Index (as defined below); and the
"Interest Determination Date" with respect to LIBOR shall be the second London
Business Day immediately preceding the applicable Interest Reset Date, unless
the Designated LIBOR Currency is British pounds sterling, in which case the
"Interest Determination Date" will be the applicable Interest Reset Date. The
"Interest Determination Date" with respect to the Treasury Rate shall be the day
in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held 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 applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday; and PROVIDED, FURTHER, that if an auction falls
on any Interest Reset Date, then the applicable Interest Rest 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 specified
on the face hereof, the "Interest Determination Date" pertaining to this Note
shall be the most recent Business Day which is at least two Business Days prior
to the applicable Interest Reset Date on which each Interest Rate Basis is
determinable. Each Interest Rate Basis shall be determined as of such date, and
the applicable interest rate shall take effect on the related Interest Reset
Date.

     Unless otherwise specified on the face hereof or in an Addendum hereto, the
rate with respect to each Interest Rate Basis will be determined in accordance
with the applicable provisions below.

     CD RATE. If an Interest Rate Basis for this Note is specified on the face
hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published in H.15(519)
under the heading "CDs (secondary market)," or, if not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such CD
Rate Interest Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity as published in H.15 Update (as
defined herein), or such other recognized electronic source used for the purpose
of displaying such rate, under the caption "CDs (secondary market)." If such
rate is not yet published in either H.15(519), H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on the related
Calculation Date, then the CD Rate on such CD Rate Interest Determination Date
will be calculated by the Calculation Agent specified on the face hereof and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Rate 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

                                       11
<PAGE>   12

dollar certificates of deposit with a remaining maturity closest to the Index
Maturity in an amount that is representative for a single transaction in that
market at that time; PROVIDED, HOWEVER, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
determined as of such CD Rate Interest Determination Date will be the CD Rate in
effect on such CD Rate Interest Determination Date.

     "H.15(519)" means the weekly statistical release designated as such, 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.

     CMT RATE. If an Interest Rate Basis for this Note is specified on the face
hereof as the CMT Rate, the CMT Rate shall be determined as of the applicable
Interest Determination Date (a "CMT Rate Interest Determination Date") as the
rate displayed on the Designated CMT Telerate Page (as defined below) under the
caption "...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is
7051, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the weekly or monthly average, as
specified on the face hereof, for the week or the month, as applicable, ended
immediately preceding the week or the month, as applicable, in which the related
CMT Rate Interest Determination Date falls. If such rate is no longer displayed
on the relevant page or is not so displayed by 3:00 P.M., New York City time, on
the related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published or is not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate on such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in
H.15(519). If such information is not provided by 3:00 P.M., New York City time,
on the related Calculation Date, then the CMT Rate on the CMT Rate 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 offered
rates as of approximately 3:30 P.M., New York City time, on such CMT Rate
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such 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 the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will

                                       12
<PAGE>   13

be a yield to maturity based on the arithmetic mean of the secondary market
offered rates as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date of three Reference Dealers in The City of New
York (from five such 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 Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least U.S. $100 million. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offered rates obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
mentioned herein, the CMT Rate determined as of such CMT Rate Interest
Determination Date will be the CMT Rate in effect on such CMT Rate Interest
Determination Date. If two Treasury Notes with an original maturity as described
in the second preceding sentence have remaining terms to maturity equally close
to the Designated CMT Maturity Index, the Calculation Agent will obtain
quotations for the Treasury Note with the shorter remaining term to maturity.

     "Designated CMT Telerate Page" means the display on Bridge Telerate,
Inc.(or any successor service) on the page specified on the face hereof (or any
other page as may replace such page on such service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) or, if no such
page is specified on the face hereof, page 7052.

     "Designated CMT Maturity Index" means the original period to maturity of
the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated or, if no such maturity is specified on the face hereof, 2 years.

     COMMERCIAL PAPER RATE. If an Interest Rate Basis for this Note is specified
on the face hereof as the Commercial Paper Rate, the Commercial Paper Rate shall
be determined as of the applicable Interest Determination Date (a "Commercial
Paper Rate Interest Determination Date") as the Money Market Yield (as defined
below) on such date of the rate for commercial paper having the Index Maturity
as published in H.15(519) under the caption "Commercial Paper-Nonfinancial" or,
if not so published by 3:00 P.M., New York City time, on the related Calculation
Date the rate on such Commercial Paper Rate Interest Determination Date for
commercial paper having the Index Maturity as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying such
rate, under the caption "Commercial Paper-Nonfinancial". If such rate is not yet
published in either H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on such Calculation Date,
then the Commercial Paper Rate on such Commercial Paper Rate Interest
Determination Date will be calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the offered rates at approximately
11:00 A.M., New York City time, on such Commercial Paper Rate 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 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 so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper

                                       13
<PAGE>   14

Rate Interest Determination Date will be the Commercial Paper Rate in effect on
such Commercial Paper Rate Interest Determination Date.

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

                                        D X 360
          Money Market Yield =          -------        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 applicable Interest Reset Period.

     ELEVENTH DISTRICT COST OF FUNDS RATE. If an Interest Rate Basis for this
Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on the display on Bridge Telerate,
Inc. (or any successor service) on page 7058 (or any other page as may replace
such page on such service) ("Telerate Page 7058") as of 11:00 A.M., San
Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.

     FEDERAL FUNDS RATE. If an Interest Rate Basis for this Note is specified on
the face hereof as the Federal Funds Rate, the Federal Funds Rate shall be
determined as of the applicable Interest Determination Date (a "Federal Funds
Rate Interest Determination Date") as the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" as such rate is displayed on Bridge Telerate, Inc. or any successor
service on page 120 (or any other page as may replace such page on such 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,
the rate on such Federal Funds Rate Interest Determination Date for United
States dollar federal funds as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate, under
the caption "Federal Funds/Effective Rate." If such rate does not appear on
Telerate Page 120 or is not yet published in H.15(519), H.15 Daily Update or
another recognized electronic source by 3:00 P.M., New York City time, on the
related Calculation Date, then the Federal Funds Rate on

                                       14
<PAGE>   15

such Federal Funds Rate Interest Determination Date shall 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 Federal Funds Rate Interest Determination Date; PROVIDED, HOWEVER,
that if the brokers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate determined as of such Federal
Funds Rate Interest Determination Date will be the Federal Funds Rate in effect
on such Federal Funds Rate Interest Determination Date.

     LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:

          (i) With respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference to
LIBOR (a "LIBOR Interest Determination Date"), LIBOR will be either: (a) if
"LIBOR Telerate" is specified on the face hereof or if neither "LIBOR Reuters"
nor "LIBOR Telerate" is specified on the face hereof as the method for
calculating LIBOR, the rate for deposits in the Designated LIBOR Currency having
the Index Maturity specified on the face hereof, commencing on such Interest
Reset Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London
time, on such LIBOR Interest Determination Date; or (b) if "LIBOR Reuters" is
specified on the face hereof, the arithmetic mean of the offered rates (unless
the Designated LIBOR Page by its terms provides only for a single rate, in which
case such single rate shall be used) for deposits in the Designated LIBOR
Currency having the Index Maturity specified on the face hereof, commencing on
the applicable Interest Reset 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 LIBOR Interest Determination Date. If fewer than two such
offered rates so appear, or if no such rate so appears, as applicable, LIBOR on
such LIBOR Interest Determination Date will be determined in accordance with the
provisions described in clause (ii) below.

          (ii) With respect to a LIBOR 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 (which may include affiliates of the Agents) in the London interbank
market, as selected by the Calculation Agent, to provide the Calculation Agent
with its offered quotation for deposits in the Designated LIBOR Currency for the
period of the Index Maturity specified on the face hereof, commencing on the
applicable Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in the
Designated LIBOR Currency in such market at such time. If at least two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., in
the applicable Principal Financial Center, on such LIBOR Interest Determination
Date by three major banks (which may include affiliates of the Agents) in such
Principal Financial Center selected by the Calculation Agent for loans in the

                                       15
<PAGE>   16

Designated LIBOR Currency to leading European banks, having the Index Maturity
specified on the face hereof and in a principal amount that is representative
for a single transaction in the Designated 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 as of such LIBOR
Interest Determination Date will be LIBOR in effect on such LIBOR Interest
Determination Date.

     "Designated LIBOR Currency" means the currency specified on the face hereof
as to which LIBOR shall be calculated or, if no such currency is specified on
the face hereof, United States dollars.

     "Designated LIBOR Page" means (a) if "LIBOR Telerate" is specified on the
face hereof or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the
face hereof as the method for calculating LIBOR, the display on Bridge Telerate,
Inc. (or any successor service) on the page specified on the face hereof (or any
other page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency, or (b) if "LIBOR Reuters" is specified on the face hereof, the display
on the Reuter Monitor Money Rates Service (or any successor service) on the page
specified on the face hereof (or any other page as may replace such page on such
service) for the purpose of displaying the London interbank rates of major banks
for the Designated LIBOR Currency.

     PRIME RATE. If an Interest Rate Basis for this Note is specified on the
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
caption "Bank Prime Loan" or, if not published by 3:00 P.M., New York City time,
on the related Calculation Date, the rate on such Prime Rate Interest
Determination Date as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate under the caption
"Bank Prime Loan." If such rate is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source by 3:00 P.M., New York City time,
on the related Calculation Date, then the Prime Rate shall be the arithmetic
mean of the rates of interest publicly announced by each bank that appears 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 Prime Rate
Interest Determination Date. If fewer than four such rates so appear on the
Reuters Screen US PRIME 1 Page for such Prime Rate Interest Determination Date,
then the Prime Rate shall 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 Prime Rate
Interest Determination Date by three major banks (which may include affiliates
of the Agents) in The City of New York selected by the Calculation Agent;
provided, however, that if the banks or trust companies so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate
determined as of such Prime Rate Interest Determination Date will be the Prime
Rate in effect on such Prime Rate Interest Determination Date.

     "Reuters Screen US PRIME 1 Page" means the display on the Reuter 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 such service) for the purpose
of displaying prime rates or base lending rates of major United States banks.

                                       16
<PAGE>   17

     TREASURY RATE. If an Interest Rate Basis for this Note is specified on the
face hereof as the Treasury Rate, the Treasury Rate shall be determined as of
the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face hereof
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 such page on
such service) ("Telerate Page 56") or page 57 (or any other page as may replace
such page on such service) ("Telerate Page 57") or, if not so published by 3:00
P.M., New York City time, on the related Calculation Date, the Bond Equivalent
Yield (as defined below) of the rate for such Treasury Bills as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High" or, if not so published by 3:00 P.M.,
New York City time, on the related Calculation Date, 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 the auction rate of Treasury Bills
having the Index Maturity on the face hereof is not so announced by the United
States Department of the Treasury, or if no such Auction is held, then the
Treasury Rate will be the Bond Equivalent Yield of the rate on such Treasury
Rate Interest Determination Date of Treasury Bills having the Index Maturity
specified on the face hereof as published in H.15(519) under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market" or, if not yet published
by 3:00 P.M., New York City time, on the related Calculation Date, the rate on
such Treasury Rate Interest Determination Date of such Treasury Bills as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet published
in H.15(519), H.15 Daily Update or another recognized electronic source, then
the Treasury Rate 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 Treasury Rate
Interest Determination Date, of three primary United States government
securities dealers (which may include the Agents or their affiliates) selected
by the Calculation Agent, for the issue of Treasury Bills with a remaining
maturity closest to the Index Maturity specified on the face hereof; provided,
however, that if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate determined as of such
Treasury Rate Interest Determination Date will be the Treasury Rate in effect on
such Treasury Rate Interest Determination Date.

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

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

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "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 foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the

                                       17
<PAGE>   18

maximum rate permitted by New York law, as the same may be modified by United
States law of general application.

     The "Calculation Date," if applicable, pertaining to any Interest
Determination Date shall be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if 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 the Maturity Date, as the case may be. At
the request of the Holder hereof, the Calculation Agent will provide to the
Holder hereof the interest rate hereon then in effect and, if determined, the
interest rate that will become effective as a result of a determination made for
the next succeeding Interest Reset Date.

     Accrued interest hereon shall be an amount calculated by multiplying the
principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only the Applicable
Interest Rate Basis specified on the face hereof applied.

     All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded to the nearest
cent (with one-half cent being rounded upwards).

     If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be accelerated in the manner and with
the effect provided in the Indenture.

     The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.

     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 Debt Securities at any time by the
Company and the Trustee with the consent of the holders of not less than a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority of the aggregate principal
amount of the outstanding Debt Securities of any series, on behalf of the
holders of all such Debt Securities, to waive compliance by the Company with
certain provisions of the Indenture. Furthermore, provisions in the Indenture
permit the holders of not less than a majority of the aggregate principal amount
of the outstanding Debt Securities of any series, in certain instances, to
waive, on behalf of all of the holders of Debt Securities of such series,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and

                                       18
<PAGE>   19

binding upon such holder and upon all future holders of this Note and other
Notes issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.

     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon 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 by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

     As provided in the Indenture and subject to certain limitations therein and
herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.

     No service charge shall 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
holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

     The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.

                                       19
<PAGE>   20

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                                      <C>
TEN COM       - as tenants in common                                     UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT       - as tenants by the entireties                                                (Cust)          (Minor)
JT TEN        - as joint tenants with right of                                        under Uniform Gifts to Minors
                survivorship and not as tenants                                            Act_____________________
                in common                                                                                   (State)
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                       ----------------------------------
                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

PLEASE INSERT SOCIAL SECURITY OR
           OTHER
IDENTIFYING NUMBER OF ASSIGNEE
------------------------------
|                             |
|                             |
 -----------------------------
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)

________________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing

________________________________________________________________________Attorney
to transfer this Note on the books of the Trustee, with full power of
substitution in the premises.

Dated:_____________________                    _________________________________

                                               _________________________________
                                               Notice: The signature(s) on
                                               this Assignment must correspond
                                               with the name(s) as written upon
                                               the face of this Note in every
                                               particular, without alteration
                                               or enlargement or any change
                                               whatsoever.

                                       20
<PAGE>   21

                            OPTION TO ELECT REPAYMENT

     The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at _________

___________________________________

         (Please print or typewrite name and address of the undersigned)

     For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, The City of New York, currently located at
__________________________________________, not more than 60 nor less than 30
calendar days prior to the Repayment Date, this Note with this "Option to Elect
Repayment" form duly completed.

     If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S. $1,000) which the
holder elects to have repaid and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Notes to be issued to the
holder for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).

Principal Amount
to be Repaid:  $

Date: ____________________                        Notice: The signature(s) on
                                                  this Option to Elect Repayment
                                                  must correspond with the
                                                  name(s) as written upon the
                                                  face of this Note in every
                                                  particular, without alteration
                                                  or enlargement or any change
                                                  whatsoever.

                                       21

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