Document:

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                                                                   Exhibit 10.28

                              [IRVING HUGHES LOGO]

                  ENGAGEMENT LETTER AND COMPENSATION AGREEMENT

        This Agreement is entered into May 6, 2002 (the "Effective Date") by and
        between AME TORREY VIEW, LLC ("Principal"), and IRVING HUGHES
        ("Broker"). In consideration of the mutual covenants contained herein,
        it is agreed as follows:

I.      ENGAGEMENT OF AGENT

        Broker shall cause Shaun Burnett to at all times be the principal agent
        for Broker working on Principal's behalf. Principal does hereby engage
        Broker to negotiate the purchase and development of real property
        ("Property") for a new facility ("Project") in San Diego and to perform
        the services in Section II. Broker shall have no authority to obligate
        Principal in any way.

II.     ACCEPTANCE OF ENGAGEMENT

        Broker does hereby accept the foregoing engagement and agrees to use its
        good faith efforts on behalf of Principal to perform the following
        services:

        -    Programming/needs assessment

        -    Market evaluations/surveys

        -    Locate and present sites

        -    Management of Architect, General Contractor and other Third Party
             Contractors and Vendors

        -    Assistance with City and County permitting process

        -    Assistance with establishing and maintaining a Project Budget and
             Construction Schedule

        -    Assistance with business terms, negotiations and structuring

        -    Financial analysis and comparisons

        -    Lease contract review

        -    Facilities planning

        -    Project management for the duration of the Project as Co-Project
             manager with Principal's Associate Director of Facilities and Jim
             Purvis of San Diego Realty Advisors

III.    COMPENSATION

        Principal shall pay to Broker the amount of $1,500,000 per the following
schedule:

<TABLE>
        <S>                                             <C>
        -    Close of Property:                         1st payment of $250,000 due and payable

        -    Issuance of a Certificate of Occupancy     2nd  payment of $1,250,000 due and
             for the Project authorizing use of the     payable
             Project for Principal's intended use:
</TABLE>

IV.     TERM AND TERMINATION RIGHTS

        A. TERM. The term of this agreement (this "Agreement") shall commence on
        the Effective Date and continue until the later of (i) twenty four (24)
        months after the Effective Date, or (ii) the issuance of the Certificate
        of Occupancy for the Project authorizing use of the Project for
        Principal's intended use.

        B. BROKER'S TERMINATION FOR CAUSE. If Principal believes that Broker has
        breached any of the representations and covenants made in this Agreement
        through fraud, gross negligence or willful misconduct, Principal shall
        provide Broker with written notice setting forth the nature of the
        alleged breach and evidence in support. Broker shall then have ten (10)
        days in which to correct the

<PAGE>

        problem to the satisfaction of Principal, or to provide a written
        explanation of the status of Broker's compliance. If, after Broker's
        response to such notice, the parties continue to disagree regarding
        Broker's compliance, the parties shall submit the issue for resolution
        to a jointly selected, neutral third party. If the jointly selected,
        neutral third party determines Broker has breached this Agreement or any
        of the representations or covenants made herein through fraud, gross
        negligence or willful misconduct, Principal shall compensate Broker only
        for those Phases that have been completed and satisfied as of the date
        of the termination of this Agreement, as more particularly set forth in
        the pro-rated compensation schedule below:

<TABLE>
        <S>                <C>                                                          <C>
        -    Phase One:    Close of Property                                            $375,000

        -    Phase Two:    Recordation Of Loan And Commencement Of Any Construction     $375,000

        -    Phase Three:  Completion of Shell Construction                             $375,000

        -    Phase Four:   Certificate of Occupancy for the Project by
                           the City of San Diego Authorizing Use of the
                           Project for Principal's Intended Purpose                     $375,000
</TABLE>

        In no event shall Broker be entitled to receive from Principal any
        compensation allocable to Phases that have not been completed and
        satisfied as of the date of the termination of this Agreement.

V.      ETHICS CLAUSE

        Broker does not accept any referral fees or compensation from any vendor
        including contractors, architects, moving companies, furniture vendors
        and other consultants.

VI.     INDEMNIFICATION

        Each party hereto ("Indemnitor") shall and hereby does agree to
        indemnify, defend and hold harmless the other party ("Indemnitee") and
        Indemnitee's partners, officers, employees, agents, successors and
        assigns from and against all demands, liabilities, causes of action,
        judgments, costs, claims, losses, and expenses, or any combination
        thereof, including attorneys' fees, of any nature, kind or description
        (collectively, "Liabilities") arising out of, or caused by, or resulting
        from the negligent or wrongful acts or omissions or failure to comply
        with the terms of this Agreement by Indemnitor or Indemnitor's officers,
        partners, agents, employees, successors or assigns. If any Liabilities
        arise or are made, asserted or threatened against Broker or Broker's
        officers, partners, agents, employees, successors or assigns, Principal
        shall have the right to withhold from any commission due an amount
        sufficient in Principal's judgment to protect against and satisfy such
        Liabilities.

VII.    DISPUTES

        In the event a claim or controversy arises concerning any provision of
        this Agreement, the parties hereby agree that such claim or controversy
        shall be settled by final, binding arbitration in accordance with the
        Commercial Arbitration Rules of the American Arbitration Association.
        Judgment upon the award rendered by the arbitrator may be entered in any
        court having jurisdiction thereof. In the event any legal action to
        enforce an arbitration award is commenced, or if other litigation is
        commenced regarding this Agreement, the prevailing party shall be
        entitled to recover its expenses and reasonable attorneys' fees incurred
        therein from the unsuccessful party.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
indicated above.

IRVING HUGHES                           AME TORREY VIEW, LLC
("BROKER")                              A CALIFORNIA LIMITED LIABILITY COMPANY
                                        ("PRINCIPAL")

By:  /s/ Craig Irving                   By:  APPLIED MOLECULAR
   --------------------------                EVOLUTION, INC.
Name:   Craig Irving                         a Delaware corporation
Title:  Principal                       Its: Manager

                                             By:  /s/ Lawrence E. Bloch M.D.
                                                -------------------------------
                                             Name:  Lawrence E. Bloch, M.D.
                                             Title: Chief Financial Officer

Date:   April 29, 2002                   Date:    May 6, 2002
      -----------------------                 --------------------FACE OF SECURITY
                             Fixed Rate Senior Note

REGISTERED                                                      REGISTERED
No. FXR - 17                                                    $15,000,000
                                                                CUSIP: 00079FAT9

     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.

<PAGE>

<TABLE>
                                                ABN AMRO BANK N.V.
                                     SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES A
                                                   (Fixed Rate)

                              11.50% Reverse Exchangeable Securities due May 8, 2003
                                   linked to common stock of Ford Motor Company
<S>                           <C>                           <C>                         <C>
===================================================================================================================
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION           INTEREST RATE:               MATURITY DATE:
    May 8, 2002                   DATE: N/A                    11.50% per annum             May 8, 2003
-------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL              INITIAL REDEMPTION           INTEREST PAYMENT             OPTIONAL
    DATE: May 8, 2002             PERCENTAGE: N/A              DATES: November 8,           REPAYMENT DATE:
                                                               2002 and May 8, 2003         N/A
-------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION            INTEREST PAYMENT             APPLICABILITY OF
    U.S. Dollars                  PERCENTAGE                   PERIOD: Semi-annually        MODIFIED
                                  REDUCTION: N/A                                            PAYMENT UPON
                                                                                            ACCELERATION:
                                                                                            N/A (But see "Alternate
                                                                                            Exchange Calculation in
                                                                                            case of an Event of
                                                                                            Default")
-------------------------------------------------------------------------------------------------------------------
IF SPECIFIED                  REDEMPTION NOTICE            APPLICABILITY OF             If yes, state Issue Price:
    CURRENCY                      PERIOD: N/A                  ANNUAL INTEREST              N/A
    OTHER THAN U.S.                                            PAYMENTS: N/A
    DOLLARS, OPTION
    TO ELECT
    PAYMENT IN U.S.
    DOLLARS: N/A
-------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE                                                                           ORIGINAL YIELD TO
    AGENT: N/A                                                                              MATURITY: N/A
-------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:
   (see below)

===================================================================================================================
</TABLE>

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Initial Price....................   $16.09 per Underlying Share divided by the
                                    Exchange Factor.

Underlying Shares ...............   Common stock of the Underlying Company, par
                                    value $0.01 per share.

Underlying Company ..............   Ford Motor Company

Minimum Denominations............   $1,000 and integral multiples thereof.

Payment at Maturity:.............   At maturity, the Issuer shall pay or deliver
                                    for each $1,000 principal amount of Notes,
                                    either (i) a cash payment equal to $1,000,
                                    if the Determination Price on the
                                    Determination Date of the Underlying Shares
                                    is at or above the Initial Price, or (ii)
                                    the number of Underlying Shares equal to
                                    the Stock Redemption Amount, if the
                                    Determination Price on the Determination
                                    Date of the Underlying Shares is lower than
                                    the Initial Price. The Issuer shall pay
                                    cash in lieu of delivering fractional
                                    Underlying Shares in an amount equal to the
                                    corresponding fractional Closing Price of
                                    the Underlying Shares as determined by the
                                    Calculation Agent on the Determination
                                    Date.

                                    If the Issuer is required to deliver
                                    Underlying Shares pursuant to the terms of
                                    the Notes, it shall, or cause the
                                    Calculation Agent to, provide written
                                    notice to the Trustee at its New York
                                    office, on which notice the Trustee may
                                    conclusively rely, of the Stock Redemption
                                    Amount, on or prior to the Issuer Notice
                                    Date. The Issuer shall, or shall cause the
                                    Calculation Agent to, deliver such
                                    Underlying Shares (and/or Exchange
                                    Property, if applicable) to the Trustee for
                                    delivery to the Holders.

Stock Redemption Amount:........    The Calculation Agent shall determine the
                                    Stock Redemption Amount for each $1,000
                                    principal amount of Notes on the
                                    Determination Date by dividing $1,000 by
                                    the Initial Price.

                                    The number of Underlying Shares to be
                                    delivered at maturity shall be subject to
                                    any applicable adjustments (i) to the
                                    Exchange Factor and (ii) in the Exchange
                                    Property, as

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                                    defined in paragraph 5 under "Adjustment
                                    Events" below, to be delivered instead of,
                                    or in addition to, such Underlying Shares
                                    in each case as a result of any corporate
                                    event described under "Adjustment Events"
                                    below.

Determination Date:..............   The third Business Day prior to the
                                    Maturity Date, or if such day is not a
                                    Trading Day, the immediately succeeding
                                    Trading Day; provided that the
                                    Determination Date shall be no later than
                                    the second scheduled Trading Day preceding
                                    the Maturity Date, notwithstanding the
                                    occurrence of a Market Disruption Event on
                                    such second scheduled Trading Day.

Determination Price:.............   The Closing Price per Underlying Share on
                                    the Determination Date, as determined by
                                    the Calculation Agent.

Closing Price....................   If the Underlying Shares (or any other
                                    security for which a Closing Price must be
                                    determined) are listed on a U.S. securities
                                    exchange registered under the Exchange Act
                                    is a security of The Nasdaq National Market
                                    or is included in the OTC Bulletin Board
                                    Service (the "OTC Bulletin Board"),
                                    operated by the National Association of
                                    Securities Dealers, Inc., the Closing Price
                                    for one Underlying Share (or one unit of
                                    any such other security) on any Trading Day
                                    means (i) the last reported sale price,
                                    regular way, in the principal trading
                                    session on such day on the principal
                                    securities exchange on which the Underlying
                                    Shares (or any such other security) are
                                    listed or admitted to trading or (ii) if
                                    not listed or admitted to trading on any
                                    such securities exchange or if such last
                                    reported sale price is not obtainable (even
                                    if the Underlying Shares (or other such
                                    security) are listed or admitted to trading
                                    on such securities exchange), the last
                                    reported sale price in the principal
                                    trading session on the over-the-counter
                                    market as reported on The Nasdaq National
                                    Market or OTC Bulletin Board on such day.
                                    If the last reported sale price is not
                                    available pursuant to clause (i) or (ii) of
                                    the preceding

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<PAGE>

                                    sentence, the Closing Price for any Trading
                                    Day shall be the mean, as determined by the
                                    Calculation Agent, of the bid prices for
                                    the Underlying Shares (or any such other
                                    security) obtained from as many dealers in
                                    such security (which may include AAI or any
                                    of the Issuer's other subsidiaries or
                                    affiliates), but not exceeding three, as
                                    will make such bid prices available to the
                                    Calculation Agent. A "security of The
                                    Nasdaq National Market" shall include a
                                    security included in any successor to such
                                    system and the term "OTC Bulletin Board
                                    Service" shall include any successor
                                    service thereto.

Issuer Notice Date...............   The Business Day immediately succeeding the
                                    Determination Date; provided that the
                                    Issuer Notice Date shall be no later than
                                    the second scheduled Trading Day preceding
                                    the Maturity Date, notwithstanding the
                                    occurrence of a Market Disruption Event on
                                    such scheduled Trading Day.

Trading Day:.....................   A day, as determined by the Calculation
                                    Agent, on which trading is generally
                                    conducted on the New York Stock Exchange,
                                    the American Stock Exchange Inc., the
                                    Nasdaq National Market, the Chicago
                                    Mercantile Exchange, and the Chicago Board
                                    of Options Exchange and in the over-the-
                                    counter market for equity securities in the
                                    United States and on which a Market
                                    Disruption Event has not occurred.

Market Disruption Event:.........   Means, with respect to the Underlying
                                    Shares:

                                         (i) a suspension, absence or material
                                      limitation of trading of the Underlying
                                      Shares on the primary market for the
                                      Underlying Shares for more than two hours
                                      of trading or during the one-half hour
                                      period preceding the close of trading in
                                      such market; or a breakdown or failure in
                                      the price and trade reporting systems of
                                      the primary market for the Underlying
                                      Shares that is, in the sole discretion of
                                      the Calculation Agent, material;

                                                         5

<PAGE>

                                      or the suspension, absence or material
                                      limitation on the primary market for
                                      trading in futures or options contracts
                                      related to the Underlying Shares, if
                                      available, during the one-half hour period
                                      preceding the close of trading in the
                                      applicable market, in each case as
                                      determined by the Calculation Agent in its
                                      sole discretion; and

                                         (ii) a determination by the Calculation
                                      Agent in its sole discretion that the
                                      event described in clause (i) above
                                      materially interfered with the Issuer's
                                      ability or the ability of any of the
                                      Issuer's affiliates to unwind or adjust
                                      all or a material portion of the hedge
                                      with respect to the Notes.

                                    For purposes of determining whether a
                                    Market Disruption Event has occurred: (1) a
                                    limitation on the hours or number of days
                                    of trading will not constitute a Market
                                    Disruption Event if it results from an
                                    announced change in the regular business
                                    hours of the relevant exchange; (2) a
                                    decision to permanently discontinue trading
                                    in the relevant futures or options contract
                                    will not constitute a Market Disruption
                                    Event; (3) limitations pursuant to New York
                                    Stock Exchange Inc. Rule 80A (or any
                                    applicable rule or regulation enacted or
                                    promulgated by the New York Stock Exchange
                                    Inc., any other self- regulatory
                                    organization or the Commission of similar
                                    scope as determined by the Calculation
                                    Agent) on trading during significant market
                                    fluctuations shall constitute a suspension,
                                    absence or material limitation of trading;
                                    (4) a suspension of trading in futures or
                                    options contracts on the Underlying Shares
                                    by the primary securities market trading in
                                    such futures or options, if available, by
                                    reason of (x) a price change exceeding
                                    limits set by such securities exchange or
                                    market, (y) an imbalance of orders relating
                                    to such contracts or (z) a disparity in bid
                                    and ask quotes relating to such contracts
                                    will constitute a suspension, absence or
                                    material

                                       6

<PAGE>

                                    limitation of trading in futures or options
                                    contracts related to the Underlying Shares;
                                    and (5) a suspension, absence or material
                                    limitation of trading on the primary
                                    securities market on which futures or
                                    options contracts related to the Underlying
                                    Shares are traded will not include any time
                                    when such securities market is itself
                                    closed for trading under ordinary
                                    circumstances.

                                    The Calculation Agent shall as soon as
                                    reasonably practicable under the
                                    circumstances notify the Issuer, the
                                    Trustee, the Depository Trust Company and
                                    the Agents of the existence or occurrence
                                    of a Market Disruption Event on any day
                                    that but for the occurrence or existence of
                                    a Market Disruption Event would have been
                                    the Determination Date.

Exchange Factor..................   The Exchange Factor shall initially be 1.0,
                                    but shall be subject to adjustment by the
                                    Calculation Agent upon the occurrence of
                                    certain corporate events affecting the
                                    Underlying Shares though and including the
                                    Determination Date. See "Adjustment Events"
                                    below.

Adjustment Events:...............   The Exchange Factor or the amount paid at
                                    maturity (in the case of paragraph 5 below)
                                    shall be adjusted as follows:

                                    1. If the Underlying Shares are subject to
                                    a stock split or reverse stock split, then
                                    once such split has become effective, the
                                    Exchange Factor shall be adjusted to equal
                                    the product of the prior Exchange Factor
                                    and the number of shares issued in such
                                    stock split or reverse stock split with
                                    respect to one Underlying Share.

                                    2. If the Underlying Shares are subject (i)
                                    to a stock dividend (issuance of additional
                                    Underlying Shares) that is given ratably to
                                    all holders of Underlying Shares or (ii) to
                                    a distribution of the Underlying Shares as
                                    a result of the triggering of any provision
                                    of the corporate charter of the Underlying
                                    Company, in each case other than a stock
                                    split described in paragraph 1, then once
                                    the dividend has become

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<PAGE>

                                    effective and the Underlying Shares are
                                    trading ex-dividend, the Exchange Factor
                                    shall be adjusted so that the new Exchange
                                    Factor shall equal the prior Exchange
                                    Factor plus the product of (i) the number
                                    of shares issued with respect to one
                                    Underlying Share and (ii) the prior
                                    Exchange Factor.

                                    3. There shall be no adjustments to the
                                    Exchange Factor to reflect cash dividends
                                    or other distributions paid with respect to
                                    the Underlying Shares other than
                                    Extraordinary Dividends as described below
                                    (except that distributions described in
                                    paragraph 2 above shall not be subject to
                                    this paragraph). A cash dividend or other
                                    distribution with respect to the Underlying
                                    Shares shall be deemed to be an
                                    "Extraordinary Dividend" if such dividend
                                    or other distribution exceeds the
                                    immediately preceding non-Extraordinary
                                    Dividend for the Underlying Shares by an
                                    amount equal to at least 10% of the closing
                                    price of the Underlying Shares (as adjusted
                                    for any subsequent corporate event
                                    requiring an adjustment hereunder, such as
                                    a stock split or reverse stock split) on
                                    the Trading Day preceding the ex-dividend
                                    date for the payment of such Extraordinary
                                    Dividend (the "ex-dividend date"). If an
                                    Extraordinary Dividend occurs with respect
                                    to the Underlying Shares, the Exchange
                                    Factor with respect to the Underlying
                                    Shares will be adjusted on the ex- dividend
                                    date with respect to such Extraordinary
                                    Dividend so that the new Exchange Factor
                                    will equal the product of (i) the then
                                    current Exchange Factor and (ii) a
                                    fraction, the numerator of which is the
                                    Closing Price on the Trading Day preceding
                                    the ex-dividend date, and the denominator
                                    of which is the amount by which the Closing
                                    Price on the Trading Day preceding the
                                    ex-dividend date exceeds the Extraordinary
                                    Dividend Amount. The "Extraordinary
                                    Dividend Amount" with respect to an
                                    Extraordinary Dividend for the Underlying
                                    Shares shall equal (i) in the case of cash

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<PAGE>

                                    dividends or other distributions that
                                    constitute regular dividends, the amount
                                    per share of such Extraordinary Dividend
                                    minus the amount per share of the
                                    immediately preceding non- Extraordinary
                                    Dividend for the Underlying Shares or (ii)
                                    in the case of cash dividends or other
                                    distributions that do not constitute
                                    regular dividends, the amount per share of
                                    such Extraordinary Dividend. To the extent
                                    an Extraordinary Dividend is not paid in
                                    cash, the value of the non-cash component
                                    will be determined by the Calculation
                                    Agent, whose determination shall be
                                    conclusive. A distribution on the
                                    Underlying Shares described in clause (i),
                                    clause (iv) or clause (v) of paragraph 5
                                    below that also constitutes an
                                    Extraordinary Dividend shall not cause an
                                    adjustment to the Exchange Factor pursuant
                                    to this paragraph 3.

                                    4. If the Underlying Company issues rights
                                    or warrants to all holders of the
                                    Underlying Shares to subscribe for or
                                    purchase Underlying Shares at an exercise
                                    price per share less than the Closing Price
                                    of the Underlying Shares on both (i) the
                                    date the exercise price of such rights or
                                    warrants is determined and (ii) the
                                    expiration date of such rights or warrants,
                                    and if the expiration date of such rights
                                    or warrants precedes the maturity of this
                                    Note, then the Exchange Factor shall be
                                    adjusted to equal the product of the prior
                                    Exchange Factor and a fraction, the
                                    numerator of which shall be the number of
                                    Underlying Shares outstanding immediately
                                    prior to the issuance of such rights or
                                    warrants plus the number of additional
                                    Underlying Shares offered for subscription
                                    or purchase pursuant to such rights or
                                    warrants and the denominator of which shall
                                    be the number of Underlying Shares
                                    outstanding immediately prior to the
                                    issuance of such rights or warrants plus
                                    the number of additional Underlying Shares
                                    which the aggregate offering price of the
                                    total number of shares of the Underlying
                                    Shares

                                       9

<PAGE>

                                    so offered for subscription or purchase
                                    pursuant to such rights or warrants would
                                    purchase at the Closing Price on the
                                    expiration date of such rights or warrants,
                                    which shall be determined by multiplying
                                    such total number of shares offered by the
                                    exercise price of such rights or warrants
                                    and dividing the product so obtained by
                                    such Closing Price.

                                    5. If a Reorganization Event (as defined
                                    below) occurs, each holder of Notes will
                                    receive at maturity, in respect of each
                                    $1,000 principal amount of each Note, the
                                    lesser of: (i) $1,000 in cash or (ii)
                                    Exchange Property (as defined below) in an
                                    amount with a value equal to the product of
                                    the stock redemption amount times the
                                    Transaction Value (as defined below). In
                                    the case of a Reorganization Event that is
                                    the result of any issuance of tracking
                                    stock by the Underlying Company or a
                                    Spin-off Event (as defined below), the
                                    Issuer may, at its sole option, in lieu of
                                    clause (ii) above, elect to deliver
                                    Exchange Property consisting solely of the
                                    reclassified Underlying Shares (in the case
                                    of an issuance of tracking stock) or the
                                    Underlying Shares with respect to which the
                                    spun-off security was issued (in the case
                                    of a Spin-off Event) and pay the cash value
                                    of such tracking stock or spun-off security
                                    as of the determination date. If the Issuer
                                    elects to deliver cash pursuant to the
                                    immediately preceding sentence, the Issuer
                                    will provide notice to holders of Notes as
                                    soon as practicable after the date of such
                                    Reorganization Event.

                                      "Reorganization Event means" (i) there
                                        has occurred any reclassification or
                                        change with respect to the Underlying
                                        Shares, including, without limitation,
                                        as a result of the issuance of any
                                        tracking stock by the Underlying
                                        Company; (ii) the Underlying Company or
                                        any surviving entity or subsequent
                                        surviving entity of the Underlying
                                        Company (an "Underlying

                                       10

<PAGE>

                                        Company Successor") has been subject to
                                        a merger, combination or consolidation
                                        and is not the surviving entity; (iii)
                                        any statutory exchange of securities of
                                        the Underlying Company or any
                                        Underlying Company Successor with
                                        another corporation occurs (other than
                                        pursuant to clause (ii) above); (iv)
                                        the Underlying Company is liquidated;
                                        (v) the Underlying Company issues to
                                        all of its shareholders equity
                                        securities of an issuer other than the
                                        Underlying Company (other than in a
                                        transaction described in clauses (ii),
                                        (iii) or (iv) above) (a "Spin-off
                                        Event"); or (vi) a tender or exchange
                                        offer or going- private transaction is
                                        consummated for all the outstanding
                                        Underlying Shares.

                                      "Exchange Property" means securities,
                                        cash or any other assets distributed
                                        to holders of the Underlying Shares in
                                        any Reorganization Event, including, in
                                        the case of the issuance of tracking
                                        stock, the reclassified Underlying
                                        Shares and, in the case of a Spin-off
                                        Event, the Underlying Shares with
                                        respect to which the spun-off security
                                        was issued.

                                      "Transaction Value", at any date, means
                                        (i) for any cash received in any
                                        such Reorganization Event, the amount
                                        of cash received per Underlying Share;
                                        (ii) for any property other than cash
                                        or securities received in any such
                                        Reorganization Event, the market value,
                                        as determined by the calculation agent,
                                        as of the date of receipt, of such
                                        Exchange Property received for each
                                        Underlying Share; and (iii) for any
                                        security received in any such
                                        Reorganization Event (including in the
                                        case of the issuance of tracking stock,
                                        the reclassified Underlying Shares and,
                                        in the case of a Spin-off Event, the
                                        Underlying

                                       11

<PAGE>

                                        Shares with respect to which the spun-
                                        off security was issued), an amount
                                        equal to the closing price, as of the
                                        determination date, per share of such
                                        security multiplied by the quantity of
                                        such security received for each
                                        Underlying Share.

                                      If Exchange Property consists of more
                                      than one type of property, holders of
                                      Notes will receive at maturity a pro rata
                                      share of each such type of Exchange
                                      Property in proportion to the quantity of
                                      such Exchange Property received in
                                      respect of each Underlying Share. If
                                      Exchange Property includes a cash
                                      component, holders will not receive any
                                      interest accrued on such cash component.
                                      In the event Exchange Property consists
                                      of securities, those securities will, in
                                      turn, be subject to the antidilution
                                      adjustments set forth in paragraphs 1
                                      through 5.

                                      For purposes of this paragraph 5, in the
                                      case of a consummated tender or exchange
                                      offer or going-private transaction
                                      involving Exchange Property of a
                                      particular type, Exchange Property shall
                                      be deemed to include the amount of cash
                                      or other property paid by the offeror in
                                      the tender or exchange offer with respect
                                      to such Exchange Property (in an amount
                                      determined on the basis of the rate of
                                      exchange in such tender or exchange offer
                                      or going-private transaction). In the
                                      event of a tender or exchange offer or a
                                      going-private transaction with respect to
                                      Exchange Property in which an offeree may
                                      elect to receive cash or other property,
                                      Exchange Property shall be deemed to
                                      include the kind and amount of cash and
                                      other property received by offerees who
                                      elect to receive cash.

                                    No adjustments to the Exchange Factor shall
                                    be

                                       12

<PAGE>

                                    required unless such adjustment would
                                    require a change of at least 0.1% in the
                                    Exchange Factor then in effect. The
                                    Exchange Factor resulting from any of the
                                    adjustments specified above shall be
                                    rounded to the nearest one hundred-
                                    thousandth with five one-millionths being
                                    rounded upward.

                                    No adjustments to the Exchange Factor or
                                    method of calculating the Exchange Factor
                                    shall be required other than those
                                    specified above. However, the Issuer may,
                                    at its sole discretion, cause the
                                    Calculation Agent to make additional
                                    changes to the Exchange Factor upon the
                                    occurrence of corporate or other similar
                                    events that affect or could potentially
                                    affect market prices of, or shareholders'
                                    rights in, the Underlying Shares (or other
                                    Exchange Property) but only to reflect such
                                    changes, and not with the aim of changing
                                    relative investment risk. The adjustments
                                    specified above do not cover all events
                                    that could affect the market price or the
                                    Closing Price of the Underlying Shares,
                                    including, without limitation, a partial
                                    tender or partial exchange offer for the
                                    Underlying Shares.

                                    The Calculation Agent shall be solely
                                    responsible for the determination and
                                    calculation of any adjustments to the
                                    Exchange Factor or method of calculating
                                    the Exchange Factor and of any related
                                    determinations and calculations with
                                    respect to any distributions of stock,
                                    other securities or other property or
                                    assets (including cash) in connection with
                                    any Reorganization Event described in
                                    paragraph 5 above, and its determinations
                                    and calculations with respect thereto shall
                                    be conclusive.

                                    The Calculation Agent will provide
                                    information as to any adjustments to the
                                    Exchange Factor or method of calculating
                                    the Exchange Factor upon written request by
                                    any Holder of this Note.

                                       13

<PAGE>

Alternate Exchange Calculation
in case of an Event of Default...   In case an Event of Default with respect to
                                    this Note shall have occurred and be
                                    continuing, the amount declared due and
                                    payable upon any acceleration of this Note
                                    shall be determined by the Calculation
                                    Agent, and shall be equal to the principal
                                    amount of this Note plus any accrued
                                    interest to but not including the date of
                                    acceleration.

Calculation Agent................   ABN AMRO Incorporated ("AAI").  All
                                    determinations made by the Calculation
                                    Agent will be at the sole discretion of the
                                    Calculation Agent and shall, in the absence
                                    of manifest error, be conclusive for all
                                    purposes and binding on the Holders and on
                                    the Issuer.

Additional Amounts...............   The Issuer shall, subject to certain
                                    exceptions and limitations set forth below,
                                    pay such additional amounts (the
                                    "Additional Amounts") to each holder of
                                    this Note as may be necessary in order that
                                    the net payment of the principal of this
                                    Note and any other amounts payable on this
                                    Note, after withholding for or on account
                                    of any present or future tax, assessment or
                                    governmental charge imposed upon or as a
                                    result of such payment by The Netherlands
                                    (or any political subdivision or taxing
                                    authority thereof or therein) or the
                                    jurisdiction of residence or incorporation
                                    of any successor corporation or any
                                    jurisdiction from or through which any
                                    amount is paid by the Issuer or a successor
                                    corporation, will not be less than the
                                    amount provided for in this Note to be then
                                    due and payable. The Issuer shall not,
                                    however, be required to make any payment of
                                    Additional Amounts to any such holder for
                                    or on account of:

                                      14
<PAGE>

                                    (a) any such tax, assessment or other
                                        governmental charge that would not have
                                        been so imposed but for (i) the
                                        existence of any present or former
                                        connection between such holder (or
                                        between a fiduciary, settlor,
                                        beneficiary, member or shareholder of
                                        such holder, if such holder is an
                                        estate, a trust, a partnership or a
                                        corporation) and The Netherlands and
                                        its possessions, including, without
                                        limitation, such holder (or such
                                        fiduciary, settlor, beneficiary, member
                                        or shareholder) being or having been a
                                        citizen or resident thereof or being or
                                        having been engaged in a trade or
                                        business or present therein or having,
                                        or having had, a permanent
                                        establishment therein or (ii) the
                                        presentation, where presentation is
                                        required, by the holder of this Note
                                        for payment on a date more than 30 days
                                        after the date on which such payment
                                        became due and payable or the date on
                                        which payment thereof is duly provided
                                        for, whichever occurs later;

                                    (b) any estate, inheritance, gift, sales,
                                        transfer or personal property tax or
                                        any similar tax, assessment or
                                        governmental charge;

                                    (c) any tax, assessment or other
                                        governmental charge that is payable
                                        otherwise than by withholding from
                                        payments on or in respect of this Note;

                                    (d) any tax, assessment or other
                                        governmental charge required to be
                                        withheld by any paying agent from any
                                        payment of principal of, or
                                        supplemental redemption amount on, this
                                        Note, if such payment can be made
                                        without such withholding by
                                        presentation of this Note to any other
                                        paying agent;

                                       15

<PAGE>

                                    (e) any tax, assessment or other
                                        governmental charge that would not have
                                        been imposed but for a holder's failure
                                        to comply with a request addressed to
                                        the holder or, if different, the
                                        beneficiary of the payment, to comply
                                        with certification, information or
                                        other reporting requirements concerning
                                        the nationality, residence or identity
                                        of the holder or beneficial owner of
                                        this Note, if such compliance is
                                        required by statute or by regulation of
                                        The Netherlands (or other relevant
                                        jurisdiction), or of any political
                                        subdivision or taxing authority thereof
                                        or therein, as a precondition to relief
                                        or exemption from such tax, assessment
                                        or other governmental charge; or

                                    (f) any combination of items (a), (b), (c),
                                        (d) or (e);

                                    nor shall Additional Amounts be paid with
                                    respect to any payment on this Note to a
                                    holder who is a fiduciary or partnership or
                                    other than the sole beneficial owner of
                                    such payment to the extent such payment
                                    would be required by the laws of The
                                    Netherlands (or other relevant
                                    jurisdiction), or any political subdivision
                                    thereof, to be included in the income, for
                                    tax purposes, of a beneficiary or settlor
                                    with respect to such fiduciary or a member
                                    of such partnership or a beneficial owner
                                    who would not have been entitled to the
                                    Additional Amounts had such beneficiary,
                                    settlor, member or beneficial owner been
                                    the holder of this Note.

     ABN AMRO Bank N.V., a public limited liability company incorporated under
the laws of The Netherlands and with corporate seat in Amsterdam (together with
its successors and assigns, the "Issuer"), for value received, hereby promises
to pay to CEDE & CO., or registered assignees, the principal sum of U.S.
$15,000,000 (UNITED STATES DOLLARS FIFTEEN MILLION), on the Maturity Date
specified above (except to the extent redeemed or repaid prior to maturity) and
to pay

                                       16

<PAGE>

interest thereon at the Interest Rate per annum specified above, from and
including the Interest Accrual Date specified above until the principal hereof
is paid or duly made available for payment weekly, monthly, quarterly,
semiannually or annually in arrears as specified above as the Interest Payment
Period on each Interest Payment Date (as specified above), commencing on the
Interest Payment Date next succeeding the Interest Accrual Date specified
above, and at maturity (or on any redemption or repayment date); provided,
however, that if the Interest Accrual 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 succeeding the Interest
Accrual Date to the registered holder of this Note on the Record Date with
respect to such second Interest Payment Date; and provided, further, that if
this Note is subject to "Annual Interest Payments," interest payments shall be
made annually in arrears and the term "Interest Payment Date" shall be deemed
to mean the first day of March in each year.

     Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until, but excluding the date the principal hereof has been paid or duly made
available for payment. 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 date 15
calendar days prior to such Interest Payment Date (whether or not a Business
Day (as defined below)) (each such date a "Record Date"); provided, however,
that interest payable at maturity (or any redemption or repayment date) will be
payable to the person to whom the principal hereof shall be payable. As used
herein, "Business Day" means any day, other than a Saturday or Sunday, (a) that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close (x) in The City of New
York or (y) if this Note is denominated in a Specified Currency other than U.S.
dollars, Australian dollars or euro, in the principal financial center of the
country of the Specified Currency, or (z) if this Note is denominated in
Australian dollars, in Sydney and (b) if this Note is denominated in euro, that
is also a day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer System ("TARGET") is operating (a "TARGET Settlement Day").

     Payment of the principal of this Note, any premium and the interest due at
maturity (or any redemption or repayment date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or
in part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent, as
defined on the reverse hereof, maintained for that purpose in the Borough of
Manhattan, The City of New York, or at such other paying agency as the Issuer
may determine, in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or on any date of redemption or repayment, will be
made by U.S. dollar check mailed to the address of the person entitled thereto
as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
payable in U.S. dollars, shall be entitled to receive payments of interest,
other than interest due at maturity or on any date of redemption or repayment,
by wire

                                       17

<PAGE>

transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.

     If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing, with
respect to payments of interest, on or prior to the fifth Business Day after
the applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be; provided that, if payment of
interest, principal or any premium with regard to this Note is payable in euro,
the account must be a euro account in a country for which the euro is the
lawful currency, provided, further, that if such wire transfer instructions are
not received, such payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register; and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.

     If so indicated on the face hereof, the holder of this Note, if
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the fifth
Business Day after such Record Date or at least ten Business Days prior to the
Maturity Date or any redemption or repayment date, as the case may be. Such
election shall remain in effect unless such request is revoked by written
notice to the Paying Agent as to all or a portion of payments on this Note at
least five Business Days prior to such Record Date, for payments of interest,
or at least ten days prior to the Maturity Date or any redemption or repayment
date, for payments of principal, as the case may be.

     If the holder elects to receive all or a portion of payments of principal
of and any premium and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent (as
defined on the reverse hereof) will convert such payments into U.S. dollars. In
the event of such an election, payment in respect of this Note will be based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest bid quotation in The City of New York received by such 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 which may be the Exchange Rate Agent unless such
Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the
quoting dealer of U.S. dollars for the Specified Currency for settlement on
such payment date in the amount of the Specified Currency payable in the
absence of such an election to such holder and at which the applicable dealer
commits to execute a contract. If such bid quotations are not available, such
payment will be made in the

                                       18

<PAGE>

Specified Currency. All currency exchange costs will be borne by the holder of
this Note by deductions from such payments.

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

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture, as defined on the reverse
hereof, or be valid or obligatory for any purpose.

                                       19

<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

DATED:                                         ABN AMRO BANK N.V.

                                               By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                               By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

TRUSTEE'S CERTIFICATE
   OF AUTHENTICATION

This is one of the Notes referred
     to in the within-mentioned
     Indenture.

JPMORGAN CHASE BANK,
     as Trustee

By:
    -----------------------------
    Authorized Officer

<PAGE>

                              REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Global Medium-Term Notes,
Series A, having maturities more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an Indenture, dated as of
November 27, 2000, between the Issuer and JPMorgan Chase Bank, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture) (as
may be amended or supplemented from time to time, 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 of the Issuer, the Trustee and holders of the Notes and the terms
upon which the Notes are, and are to be, authenticated and delivered. The
Issuer has appointed JPMorgan Chase Bank at its corporate trust office in The
City of New York as the paying agent (the "Paying Agent," which term includes
any additional or successor Paying Agent appointed by the Issuer) with respect
to the Notes. The terms of individual Notes may vary with respect to interest
rates, interest rate formulas, issue dates, maturity dates, or otherwise, all
as provided in the Indenture. To the extent not inconsistent herewith, the
terms of the Indenture are hereby incorporated by reference herein.

     Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof
in accordance with the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder prior to
maturity.

     If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof,
together with interest accrued and unpaid hereon to the date of redemption. If
this Note is subject to "Annual Redemption Percentage Reduction," the Initial
Redemption Percentage indicated on the face hereof will be reduced on each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction specified on the face hereof until the redemption price of this Note
is 100% of the principal amount hereof, together with interest accrued and
unpaid hereon to the date of redemption. Notice of redemption shall be mailed
to the registered holders of the Notes designated for redemption at their
addresses as the same shall appear on the Note register not less than 30 nor
more than 60 days prior to the date fixed for redemption or within the
Redemption Notice Period specified on the face hereof, subject to all the
conditions and provisions of the Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the unredeemed portion
hereof shall be issued in the name of the holder hereof upon the cancellation
hereof.

         If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments
of $1,000 or, if this Note is denominated in a Specified Currency other than
U.S. dollars, in increments of 1,000 units of such Specified Currency (provided
that any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of

<PAGE>

the holder hereof at a price equal to 100% of the principal amount to be
repaid, together with interest accrued and unpaid hereon to the date of
repayment. For this Note to be repaid at the option of the holder hereof, the
Paying Agent must receive at its corporate trust office in the Borough of
Manhattan, The City of New York, at least 15 but not more than 30 days prior to
the date of repayment, (i) this Note with the form entitled "Option to Elect
Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a
trust company in the United States setting forth the name of the holder of this
Note, the principal amount hereof, the certificate number of this Note or a
description of this Note's tenor and terms, the principal amount hereof to be
repaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Note, together with the form entitled "Option
to Elect Repayment" duly completed, will be received by the Paying Agent not
later than the fifth Business Day after the date of such telegram, telex,
facsimile transmission or letter; provided, that such telegram, telex,
facsimile transmission or letter shall only be effective if this Note and form
duly completed are received by the Paying Agent by such fifth Business Day.
Exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.

     Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise provided on
the face hereof, interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.

     In the case where the Interest Payment Date or the Maturity Date (or any
redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.

     This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured
and unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and, if denominated
in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of

<PAGE>

such Specified Currency), or any amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency, as determined by reference
to the noon dollar buying rate in The City of New York for cable transfers of
such Specified Currency published by the Federal Reserve Bank of New York (the
"Market Exchange Rate") on the Business Day immediately preceding the date of
issuance.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Trustee will not be
required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased, or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Indenture
with respect to the redemption of Notes. Notes are exchangeable at said office
for other Notes of other authorized denominations of equal aggregate principal
amount having identical terms and provisions. All such exchanges and transfers
of Notes will be free of charge, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and executed by the
registered holder in person or by the holder's attorney duly authorized in
writing. The date of registration of any Note delivered upon any exchange or
transfer of Notes shall be such that no gain or loss of interest results from
such exchange or transfer.

     In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note
of like tenor in exchange for this Note, but, if this Note is destroyed, lost
or stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.

     The Indenture provides that (a) if an Event of Default (as defined in the
Indenture) due to the default in payment of principal of, premium, if any, or
interest on, any series of debt securities issued under the Indenture,
including the series of Medium-Term Notes of which this Note forms a part,

<PAGE>

or due to the default in the performance or breach of any other covenant or
warranty of the Issuer applicable to the debt securities of such series but not
applicable to all outstanding debt securities issued under the Indenture shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of the debt securities of each affected series
(voting as a single class) may then declare the principal of all debt
securities of all such series and interest accrued thereon to be due and
payable immediately and (b) if an Event of Default due to a default in the
performance of any other of the covenants or agreements in the Indenture
applicable to all outstanding debt securities issued thereunder, including this
Note, or due to certain events of bankruptcy or insolvency of the Issuer, shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of all debt securities issued under the Indenture
then outstanding (treated as one class) may declare the principal of all such
debt securities and interest accrued thereon to be due and payable immediately,
but upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal (or premium,
if any) or interest on such debt securities) by the holders of a majority in
principal amount of the debt securities of all affected series then
outstanding.

     If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of
principal due and payable with respect to this Note shall be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Indenture prior to
the acceleration of payment of this Note, the principal amount hereof shall
equal the amount that would be due and payable hereon, calculated as set forth
in clause (i) above, if this Note were declared to be due and payable on the
date of any such vote and (iii) for the purpose of any vote of securityholders
taken pursuant to the Indenture following the acceleration of payment of this
Note, the principal amount hereof shall equal the amount of principal due and
payable with respect to this Note, calculated as set forth in clause (i) above.

     The Indenture permits the Issuer and the Trustee, with the consent of the
holders of not less than a majority in aggregate principal amount of the debt
securities of all series issued under the Indenture then outstanding and
affected (voting as one class), to execute supplemental indentures adding any
provisions to or changing in any manner the rights of the holders of each
series so affected; provided that the Issuer and the Trustee may not, without
the consent of the holder of each outstanding debt security affected thereby,
(a) extend the final maturity of any such debt security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption or repayment
thereof, or change the currency of payment thereof, or modify or amend the
provisions for conversion of any currency into any other currency, or modify or
amend the provisions for conversion or exchange of the debt security for
securities of the Issuer or other entities (other than as provided in the
antidilution provisions or other

<PAGE>

similar adjustment provisions of the debt securities or otherwise in accordance
with the terms thereof), or impair or affect the rights of any holder to
institute suit for the payment thereof without the consent of the holder of
each debt security so affected or (b) reduce the aforesaid percentage in
principal amount of debt securities the consent of the holders of which is
required for any such supplemental indenture.

     Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is
not available on such date, as of the most recent practicable date; provided,
however, that if the euro has been substituted for such Specified Currency, the
Issuer may at its option (or shall, if so required by applicable law) without
the consent of the holder of this Note effect the payment of principal of,
premium, if any, or interest on, any Note denominated in such Specified
Currency in euro in lieu of such Specified Currency in conformity with legally
applicable measures taken pursuant to, or by virtue of, the treaty establishing
the European Community (the "EC"), as amended by the treaty on European Union
(as so amended, the "Treaty"). Any payment made under such circumstances in
U.S. dollars or euro where the required payment is in an unavailable Specified
Currency will not constitute an Event of Default. If such Market Exchange Rate
is not then available to the Issuer or is not published for a particular
Specified Currency, the Market Exchange Rate 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 date of such payment from three recognized foreign exchange
dealers (the "Exchange Dealers") for the purchase by the quoting Exchange
Dealer of the Specified Currency for U.S. dollars for settlement on the payment
date, in the aggregate amount of the Specified Currency payable to those
holders or beneficial owners of Notes and at which the applicable Exchange
Dealer commits to execute a contract. One of the Exchange Dealers providing
quotations may be the Exchange Rate Agent unless the Exchange Rate Agent is an
affiliate of the Issuer. If those bid quotations are not available, the
Exchange Rate Agent shall determine the market exchange rate at its sole
discretion.

     The "Exchange Rate Agent," if any, shall be indicated on the face hereof.

     All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons.

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said

<PAGE>

Borough of Manhattan for the registration, transfer and exchange as aforesaid
of the Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated.

     With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting
in any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.

     No provision of this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise
agreed between the Issuer and the registered holder of this Note.

     Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.

     No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

     This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

     All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.

<PAGE>

                                 ABBREVIATIONS

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

      TEN COM - as tenants in common
      TEN ENT - as tenants by the entireties
      JT TEN  - as joint tenants with right of survivorship and not as tenants
                in common

    UNIF GIFT MIN ACT - __________________________ Custodian ___________________
                               (Minor)                             (Cust)

    Under Uniform Gifts to Minors Act__________________________
                                             (State)

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

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

<PAGE>

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

---------------------------------------
[PLEASE INSERT SOCIAL SECURITY OR OTHER
    IDENTIFYING NUMBER OF ASSIGNEE]

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

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   [PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.

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

NOTICE:   The signature to this assignment must correspond with the name as
          written upon the face of the within Note in every particular without
          alteration or enlargement or any change whatsoever.

<PAGE>

                           OPTION TO ELECT REPAYMENT

The undersigned hereby irrevocably requests and instructs the Issuer to repay
the within Note (or portion thereof specified below) pursuant to its terms at a
price equal to the principal amount thereof, together with interest to the
Optional Repayment Date, to the undersigned at

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

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

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

     If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
______________________; and specify the denomination or denominations (which
shall not be less than the minimum authorized denomination) of the Notes to be
issued to the holder for the portion of the within Note not being repaid (in
the absence of any such specification, one such Note will be issued for the
portion not being repaid): ____________________.

Dated:_______________________________    _______________________________________
                                         NOTICE: The signature on this Option
                                         to Elect Repayment must correspond
                                         with the name as written upon the face
                                         of the within instrument in every
                                         particular without alteration or
                                         enlargement.

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