Document:

Exhibit 4.3

THIS NOTE IS A GLOBAL SECURITY  WITHIN THE MEANING OF THE INDENTURE  HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE  DEPOSITARY OR A NOMINEE OF THE
DEPOSITARY.  THIS NOTE IS  EXCHANGEABLE  FOR NOTES  REGISTERED  IN THE NAME OF A
PERSON  OTHER  THAN  THE   DEPOSITARY   OR  ITS  NOMINEE  ONLY  IN  THE  LIMITED
CIRCUMSTANCES  DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE  DEPOSITARY  TO A NOMINEE OF THE  DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.

THIS  NOTE  IS A  BOOK-ENTRY  SECURITY  WITHIN  THE  MEANING  OF  THE  INDENTURE
HEREINAFTER  REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITARY  OR A
NOMINEE OF A DEPOSITARY.  THIS NOTE IS EXCHANGEABLE  FOR NOTES REGISTERED IN THE
NAME OF A PERSON  OTHER THAN THE  DEPOSITARY  OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES  DESCRIBED IN THE  INDENTURE,  AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER  OF THIS NOTE AS A WHOLE BY THE  DEPOSITARY  TO A NOMINEE OF THE
DEPOSITARY  OR BY A NOMINEE  OF THE  DEPOSITARY  TO THE  DEPOSITARY  OR  ANOTHER
NOMINEE  OF  THE   DEPOSITARY)   MAY  BE  REGISTERED   EXCEPT  IN  SUCH  LIMITED
CIRCUMSTANCES.

REGISTERED                                                            REGISTERED

                       SECURITY CAPITAL GROUP INCORPORATED
                           MEDIUM-TERM NOTE, SERIES B
                                 (Floating Rate)

                  FORM OF FACE OF FLOATING RATE REGISTERED NOTE

REGISTERED                                                      PRINCIPAL AMOUNT
No.:  _______                                                     $_____________

CUSIP No.:  81413

Unless this Note 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 Note 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

1051047.4  10201 928C  00692469
<PAGE>
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL  since the  registered  owner  hereof,
Cede & Co., has an interest herein.*

IF APPLICABLE,  THE "TOTAL AMOUNT OF OID", THE "ORIGINAL ISSUE DATE", THE "YIELD
TO  MATURITY,"  AS WELL AS THE METHOD  USED TO  DETERMINE  THE YIELD TO MATURITY
WHERE THERE IS A SHORT  ACCRUAL  PERIOD AND THE AMOUNT OF OID  ALLOCABLE TO SUCH
SHORT ACCRUAL PERIOD WILL BE SET FORTH BELOW.  THE  CALCULATION OF THE AMOUNT OF
OID UPON (A) OPTIONAL REDEMPTION OR (B) DECLARATION OF ACCELERATION IS DISCUSSED
ON THE REVERSE HEREOF.

ISSUE PRICE:                              INVERSE FLOATING RATE NOTE:
                                          [  ] YES [  ] NO
ORIGINAL ISSUE DATE:
                                          FIXED INTEREST RATE:
STATED MATURITY:
                                          OPTION TO ELECT REPAYMENT:
SPECIFIED CURRENCY:                       [  ] YES [  ] NO

BASE RATE:                                OPTIONAL REPAYMENT
     [  ] Commercial Paper Rate           DATE(S):
     [  ] CD Rate
     [  ] Federal Funds Rate              OPTIONAL REDEMPTION:
     [  ] LIBOR:                          [  ] YES  [  ] NO
            [  ] LIBOR REUTERS
                   PAGE:                  INITIAL REDEMPTION DATE:
            [  ] LIBOR TELERATE
                   PAGE:                  REDEMPTION PRICE:  [   ] 100%  of  the
     [  ] Prime Rate                      Principal  Amount  plus  a  Make-Whole
     [  ] Treasury Rate                   Amount  or [   ]  Initially _____ % of
     [  ] CMT Rate:                       Princpal   Amount  and   declining  by
            Designated CMT                _______% of  the  Principal  Amount on
            Telerate Page:                each anniversary  of  the  Initial Re-
            If Telerate Page              demption  Date  until  the  Redemption
            7052:                         Price is 100% of the Principal Amount.
             [  ] Weekly
                    Average               ORIGINAL ISSUE DISCOUNT SECURITY:
             [  ] Monthly                 [  ] YES [  ] NO
                    Average                    TOTAL AMOUNT OF OID:
Designated CMT        Maturity
Index:
     [  ]    Eleventh District            YIELD TO MATURITY:
             Cost of Funds Rate

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                                       -2-
<PAGE>

                                          INITIAL ACCRUAL PERIOD OID:
INITIAL INTEREST RATE:

INDEX MATURITY:

SPREAD (PLUS OR MINUS):                   AUTHORIZED DENOMINATION:
                                          [  ] $1,000 and integral
                                               multiples thereof
SPREAD MULTIPLIER:                        [  ] Other:

CALCULATION AGENT:                        EXCHANGE RATE AGENT:

MAXIMUM INTEREST RATE:                    AMORTIZING SECURITY:
                                          [  ] YES [  ] NO
MINIMUM INTEREST RATE:
                                              AMORTIZATION FORMULA:
INTEREST RESET PERIOD:
                                              AMORTIZATION PAYMENT
INTEREST RESET DATE(S):                       DATE(S):

INTEREST PAYMENT PERIOD:                  ADDENDUM ATTACHED:
                                          [  ] YES [  ] NO
INTEREST PAYMENT DATES:
                                          RENEWABLE NOTE:
                                          [  ] YES [  ] NO
FLOATING/FIXED RATE NOTE:
[  ] YES [  ] NO                              ELECTION DATE:

         FIXED INTEREST RATE:                 MINIMUM ELECTION DATE
                                              NOTICE:
         FIXED INTEREST RATE
         COMMENCEMENT DATE:

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                                       -3-
<PAGE>

OPTIONAL EXTENSION OF MATURITY:
 [  ] YES [  ] NO                             MAXIMUM ELECTION DATE
                                              NOTICE:
         LENGTH OF EXTENSION PERIOD:
                                              FINAL MATURITY DATE
         NUMBER OF EXTENSION PERIODS:
         FINAL MATURITY DATE:                 REDEEMABLE:
                                              [  ] YES [  ] NO

                                              INITIAL REDEMPTION DATE:
                                              INDEXED NOTE:
                                              [   ] YES [   ] NO

                                              REFERENCE INDEX OR RATE:

                                              OTHER/ADDITIONAL PROVISIONS:

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                                       -4-

<PAGE>
     Security Capital Group Incorporated,  a corporation  organized and existing
under the laws of the State of Maryland (hereinafter called the "Company," which
term shall include any successor under the Indenture  hereinafter  referred to),
for value received,  hereby promises to pay to Cede & Co. or registered assigns,
the  principal  sum  of  __________________________  ($_________)on  the  Stated
Maturity  specified  above (except to the extent redeemed or repaid prior to the
Stated  Maturity)  and to pay interest  thereon,  from the  Original  Issue Date
specified above at a rate per annum equal to the Initial Interest Rate specified
above until the first  Interest  Reset Date next  succeeding  the Original Issue
Date  specified  above,  and  thereafter  at a  rate  per  annum  determined  in
accordance  with the provisions  specified above and on the reverse hereof or in
an Addendum  hereto with respect to one or more Base Rates specified above until
the principal  hereof is paid or duly made  available  for payment.  The Company
will pay interest in arrears  monthly,  quarterly,  semiannually  or annually as
specified above as the Interest Payment Period on each Interest Payment Date (as
specified  above),   commencing  with  the  first  Interest  Payment  Date  next
succeeding the Original Issue Date specified  above,  and on the Stated Maturity
(or any redemption or repayment date);  provided,  however, that if the Original
Issue  Date  occurs  between  a Record  Date,  as  defined  below,  and the next
succeeding  Interest Payment Date, interest payments will commence on the second
Interest  Payment  Date  succeeding  the Original  Issue 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 an Interest  Payment Date or the
Stated  Maturity or redemption or repayment date would fall on a day that is not
a Business Day (this and certain other capitalized terms used herein are defined
on the reverse of this Note),  such Interest  Payment Date,  Stated  Maturity or
redemption or repayment  date shall be the following day that is a Business Day,
except that if the Base Rate Specified above is LIBOR and such next Business Day
falls in the next calendar month, the Interest Payment Date,  Stated Maturity or
redemption or repayment  date shall be the  immediately  preceding day that is a
Business Day.

     Payment of the principal of this Note,  any premium and the interest due at
the Stated Maturity (or any redemption or repayment  date), or any prior date on
which the principal or an  installment of principal of this Note becomes due and
payable,  whether by declaration of acceleration  or otherwise,  will be made in
immediately  available funds upon  presentation and surrender of this Note (and,
with respect to any applicable  repayment of this Note,  upon  presentation  and
surrender of this Note and a duly completed election form as contemplated on the
reverse  hereof) at the office or agency of such paying agent as the Company may
determine  maintained for that purpose in The City of Boston,  Massachusetts  (a
"Paying  Agent"),  or at the office or agency of such other  Paying Agent as the
Company  may  determine;  provided,  however,  that  if the  Specified  Currency
specified above is other than U.S. dollars and such payment is to be made in the
Specified Currency in accordance with the provisions on the reverse hereof, such
payment  will be made by wire  transfer  of  immediately  available  funds to an
account with a bank  designated  by the holder  hereof at least 15 calendar days
prior to Maturity,  provided that such bank has appropriate  facilities therefor
and that this Note (and, if  applicable,  a duly  completed  repayment  election
form) is  presented  and  surrendered  at the  aforementioned  office  or agency
maintained  by the Company in time for the Trustee to make such  payment in such
funds in accordance with its normal  procedures.  Payment of interest due on any
Interest  Payment Date other than  Maturity  will be made at the  aforementioned
office or agency maintained by the Company or, at the option of the Trustee,  by

1051047.4  10201 1256C  00692469

                                       -5-

<PAGE>
check mailed to the address of the person entitled thereto as such address shall
appear in the Security Register  maintained by the Trustee;  provided,  however,
that a holder of U.S.  $1,000,000  (or, if the Specified  Currency is other than
U.S.  dollars,  the  equivalent  thereof in the  Specified  Currency) or more in
aggregate principal amount of Notes (whether having identical or different terms
and provisions)  will be entitled to receive  interest  payments on any Interest
Payment Date other than Maturity by wire transfer of immediately available funds
if appropriate wire transfer  instructions  have been received in writing by the
Trustee not less than 15 calendar days prior to such Interest  Payment Date. Any
such wire transfer  instructions  received by the Trustee shall remain in effect
until revoked by such holder.

     If the Specified Currency shown above is other than U.S. dollars,  payments
of principal of (and premium,  if any) and interest on the Notes will be made in
the applicable Specified Currency, except as provided on the reverse hereof.

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

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

     Unless the  certificate of  authentication  hereon has been executed by the
Trustee or its Authenticating Agent, as defined 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.

1051047.4  10201 1256C  00692469

                                       -6-

<PAGE>
     IN WITNESS  WHEREOF,  the  Company has caused  this  instrument  to be duly
executed by the undersigned officer.

                                          SECURITY CAPITAL GROUP INCORPORATED

                                          By:________________________________
                                             Name:
                                             Title:

Attest:

By:_________________________
     Name:
     Its:

Dated:  _________________, _____

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

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

STATE STREET BANK AND TRUST
  COMPANY, as Trustee

By:________________________
     Authorized Officer

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                                       -7-
<PAGE>

                             FORM OF REVERSE OF NOTE

     General.  This Note is one of a duly authorized issue of Medium-Term Notes,
Series B,  having  maturities  nine  months or more from the date of issue  (the
"Notes") of the Company. The Notes are issuable under an Indenture,  dated as of
November 16, 1998, as supplemented by a Board Resolution dated as of December 1,
2000 (as so supplemented, the "Indenture"), between the Company and State Street
Bank and Trust Company,  as trustee  (herein  called the  "Trustee,"  which term
includes any successor trustee under the Indenture),  to which Indenture and all
indentures  supplemental thereto reference is hereby made for a statement of the
respective rights,  limitations of rights, duties and immunities of the Company,
the Trustee and holders of the Notes and the terms upon which the Notes are, and
are to be, authenticated and delivered.  State Street Bank and Trust Company has
been appointed  Authenticating  Agent and Calculation Agent (the "Authenticating
Agent" and "Calculation Agent," respectively,  which terms include any successor
authenticating  agent or calculation  agent, as the case may be) with respect to
the Notes, and State Street Bank and Trust Company at its corporate trust office
at 2 Avenue de Lafayette,  Boston, MA 02111 has been appointed the registrar and
a Paying Agent 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.

     This Note is unsecured  and ranks pari passu with all other  unsecured  and
unsubordinated  indebtedness  of the  Company  (excluding  subsidiary  debt) for
borrowed money.

     Interest  Rate  Calculations.  The  interest  borne by this  Note  shall be
determined as follows:

          (i) Unless designated as a Floating Rate/Fixed Rate Note or an Inverse
     Floating Rate Note,  this Note will be designated a "Regular  Floating Rate
     Note" and,  except as described below or in an Addendum  hereto,  will bear
     interest at the rate  determined  by reference to the Base Rate (i) plus or
     minus the Spread, if any, and/or (ii) multiplied by the Spread  Multiplier,
     if any.

          (ii) If designated as a Floating Rate/Fixed Rate Note, then, except as
     described  below or in an Addendum  hereto,  this Note will  initially bear
     interest at the rate  determined  by reference to the Base Rate (i) plus or
     minus the Spread, if any, and/or (ii) multiplied by the Spread  Multiplier,
     if any. The interest rate in effect commencing on, and including, the Fixed
     Rate  Commencement  Date to Maturity  shall be the Fixed  Interest Rate, if
     such  rate is  specified  on the  face of this  Note,  or if no such  Fixed
     Interest  Rate is so  specified  and the Floating  Rate/Fixed  Rate Note is
     still  outstanding  on such day, the interest rate in effect thereon on the
     day immediately preceding the Fixed Rate Commencement Date.

1051047.4  10201 1256C  00692469

                                       -8-

<PAGE>
          (iii) If designated as an Inverse Floating Rate Note, then,  except as
     described  below or in an  Addendum  hereto,  this Note will bear  interest
     equal to the Fixed  Interest Rate  specified on the face of this Note minus
     the rate  determined  by  reference  to the Base Rate (i) plus or minus the
     Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier,
     if any; provided,  however,  unless otherwise specified on the face of this
     Note or in an Addendum  hereto,  the interest rate thereon will not be less
     than zero.

     Commencing  with the first Interest Reset Date specified on the face hereof
following the Original  Issue Date,  the rate at which  interest on this Note is
payable shall be reset daily, weekly, monthly, quarterly, semiannually, annually
or  otherwise  as  shown on the  face  hereof  under  "Interest  Reset  Period";
provided, however, that the interest rate in effect from the Original Issue Date
to the first  Interest  Reset  Date  specified  on the face  hereof  will be the
Initial Interest Rate. Each such reset rate shall be applicable on and after the
Interest Reset Date to which it relates to but not including the next succeeding
Interest  Reset Date or until  Maturity,  as the case may be.  Unless  otherwise
specified on the face hereof,  the Interest  Reset Date will be, if the interest
rate on this Note is to be reset daily,  each Business Day; if the interest rate
on this Note is to be reset weekly, Wednesday of each week, unless the Base Rate
of this Note is the Treasury Rate, in which case the Interest Reset Date will be
Tuesday of each week  (except  that if in any week an auction of Treasury  bills
falls on a Tuesday,  the Interest Reset Date will be on Wednesday of that week);
if the interest rate on this Note is to be reset monthly, the third Wednesday of
each month;  if the  interest  rate on this Note is to be reset  quarterly,  the
third Wednesday of March, June, September and December;  if the interest rate on
this Note is to be reset semiannually, the third Wednesday of each of two months
specified on the face hereof;  and if the interest rate on this Note is to reset
annually,  the third Wednesday of the month specified on the face hereof. If any
Interest Reset Date  specified on the face hereof would  otherwise be a day that
is not a Market Day, such Interest Reset Date shall be postponed to the next day
that is a Market Day,  except that if the rate of interest on this Note shall be
determined in accordance  with the provisions of the heading  "Determination  of
LIBOR" below, and such Market Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately  preceding  Market Day.  Subject to
applicable  provisions of law and except as specified  herein,  on each Interest
Reset Date the rate of  interest  on this Note shall be the rate  determined  in
accordance with the provisions of the applicable heading below. In addition,  if
the Treasury Rate is an applicable Base Rate and the Interest Determination Date
would  otherwise fall on an Interest  Reset Date,  then such Interest Reset Date
will be postponed to the next succeeding Business Day.

     The Interest  Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note, for a Prime Rate Note, for a CD Rate Note, for a CMT
Rate Note,  for a Federal  Funds Rate Note and for an Eleventh  District Cost of
Funds Rate Note will be the second  Market Day  preceding  such  Interest  Reset
Date. The Interest Determination Date pertaining to an Interest Reset Date for a
LIBOR Note will be the second London  Business Day preceding such Interest Reset
Date. The Interest Determination Date pertaining to an Interest Reset Date for a
Treasury Rate Note will be the day of the week in which such Interest Reset Date

1051047.4  10201 1256C  00692469

                                       -9-

<PAGE>
falls on which Treasury  bills would  normally be auctioned.  If an auction date
shall  fall on any  Interest  Reset Date for a  Treasury  Rate  Note,  then such
Interest Reset Date shall instead be the first Market Day immediately  following
such auction date.

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

     "Market Day" means:  (a) with respect to any Note,  any Business Day in The
City of New York and the City of Boston; and (b) with respect to any LIBOR Note,
any  Business Day in The City of New York and The City of Boston which is also a
day on which  dealings in deposits in U.S.  dollars are transacted in the London
interbank market (a "London Business Day").

     Determination  of Commercial  Paper Rate. If the Base Rate specified on the
face hereof is the Commercial Paper Rate, the Commercial Paper Rate with respect
to this Note shall be determined on each Interest  Determination  Date and shall
be the Money Market Yield of the annual rate,  quoted on a bank discount  basis,
for the relevant  Interest  Determination  Date for commercial  paper having the
specified  Index  Maturity as published by the Board of Governors of the Federal
Reserve System in "Statistical Release H.15(519), Selected Interest Rates" under
the heading "Commercial Paper  --Nonfinancial." or any successor  publication of
the  Board of  Governors  of the  Federal  Reserve  System.  If such rate is not
published  before 3:00 p.m., New York City time, on the  Calculation  Date, then
the  Commercial  Paper Rate will be the Money  Market  Yield of such rate on the
such Interest Determination Date for commercial paper having the specified Index
Maturity as published in H.15 Daily Update or such other  recognized  electronic
source  used  for  the  purpose  of  displaying  such  rate  under  the  caption
"Commercial  Paper -- Nonfinancial." If by 3:00 p.m., New York City time, on the
Calculation  Date the rate is not  published  in either  H.15(519) or H.15 Daily
Update or another  recognized  electronic source, the Commercial Paper Rate will
be calculated by the Calculation Agent and will be the Money Market Yield of the
arithmetic  mean of the offered  rates as of 11:00 a.m.,  New York City time, on
such Interest  Determination  Date, of three leading dealers of commercial paper
in New York City  (which  may  include  any of the  Agents or their  affiliates)
selected by the  Calculation  Agent for commercial  paper of the specified Index
Maturity  placed for a  nonfinancial  issuer  whose bond  rating is "Aa," or the
equivalent,  from a nationally  recognized  rating  agency.  If fewer than three
dealers selected by the Calculation Agent are providing quotes, the rate will be
the same as the rate used in the prior interest period.

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

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

where "D"  refers  to the  annual  rate for  commercial  paper  quoted on a bank
discount basis and expressed as a decimal and "M" refers to the actual number of

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                                       -10-

<PAGE>
days in the period from the Interest  Reset Date to but  excluding  the day that
numerically  corresponds  to such  Interest  Rate  Date  (or,  if there is not a
numerically  corresponding  day, the last day) in the calendar month that is the
number of months  corresponding  to the specified Index Maturity after the month
in which such Interest Reset Date falls.

     Determination  of CD Rate. If the Base Rate specified on the face hereof is
the CD Rate,  the CD Rate with respect to this Note shall be  determined on each
Interest  Determination  Date and  shall be the rate for the  relevant  Interest
Determination Date for negotiable U.S. dollar certificates of deposit having the
specified  Index  Maturity as  published  in  H.15(519)  under the heading  "CDs
(secondary  market)." If the rate is not  published  before 3:00 p.m.,  New York
City time, on the relevant  Calculation  Date, then the CD Rate on such Interest
Determination  Date  will  be the  rate  for  negotiable  United  States  dollar
certificates of deposit having the specified Index Maturity as published in H.15
Daily Update or such other recognized  electronic source used for the purpose of
displaying  such rate,  under the caption "CDs  (secondary  market)." If by 3:00
p.m., New York City time, on the Calculation  Date, the rate is not published in
H.15(519),  H.15 Daily Update or another  recognized  electronic  source, the CD
Rate on such Interest  Determination  Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary  market offered rates, as
of 10:00  a.m.,  New York  City  time,  of three  leading  non-bank  dealers  of
negotiable United States dollar  certificates of deposit in New York City (which
may include any of the Agents or their  affiliates)  selected by the Calculation
Agent for  negotiable  United  States  dollar  certificates  of deposit of major
United  States  money market banks in the market for  negotiable  United  States
dollar  certificates  of  deposit  with  a  remaining  maturity  closest  to the
specified  Index  Maturity  in an  amount  that is  representative  for a single
transaction in that market at that time. If fewer than three dealers selected by
the Calculation Agent are quoting rates, the rate will be the same rate used for
the prior interest period.

     Determination of Federal Funds Rate. If the Base Rate specified on the face
hereof is the Federal  Funds Rate,  the Federal  Funds Rate with respect to this
Note shall be determined on each  Interest  Determination  Date and shall be the
rate on the relevant Interest  Determination Date for Federal Funds as published
in  H.15(519)  under the heading  "Federal  Funds  (Effective),  as such rate is
displayed on Bridge Telerate,  Inc. or any successor service on page 120, or any
other page as may replace that page on such service  ("Telerate  Page 120")." If
the rate is not  published  before  3:00 p.m.,  New York City time,  or does not
appear on Telerate Page 120 on the Calculation Date, then the Federal Funds Rate
for  the  Interest  Determination  Date  will  be  the  rate  on  such  Interest
Determination  Date as published  in H.15 Daily  Update,  or another  recognized
electronic  source  used for the  purpose of  displaying  such  rate,  under the
caption "Federal  Funds(Effective)." If by 3:00 p.m., New York City time, on the
Calculation  Date the rate does not  appear on  Telerate  Page 120 or is not yet
published  in  H.15(519),  H.15 Daily  Update or another  recognized  electronic
source,  the  Federal  Funds Rate for the  Interest  Determination  Date will be
calculated  by the  Calculation  Agent  and will be the  arithmetic  mean of the
rates, as of 9:00 a.m., New York City time, on such Interest Determination Date,
for the last  transaction  in overnight  Federal Funds arranged by three leading
brokers of Federal Funds transactions in New York City (which may include any of
the Agents or their affiliates)  selected by the Calculation Agent prior to 9:00
a.m.,  New  York  City  time.  If  fewer  than  three  brokers  selected  by the

1051047.4  10201 1256C  00692469

                                       -11-

<PAGE>
Calculation  Agent are providing  quotes,  the rate will be the same as the rate
used in the prior interest period.

     Determination  of LIBOR.  If the Base Rate  specified on the face hereof is
LIBOR,  LIBOR with  respect to this Note shall be  determined  on each  Interest
Determination Date as follows:

          if "LIBOR  Telerate" is specified  or if neither  "LIBOR  Reuters" nor
     "LIBOR Telerate" is specified as the method for calculating LIBOR, the rate
     for deposits in the Designated  LIBOR Currency  having the specified  Index
     Maturity,  commencing on the applicable Interest Reset Date that appears on
     the Designated LlBOR Page as of 11:00 a.m.,  London time, on the applicable
     Interest   Determination  Date;  if  "LIBOR  Reuters"  is  specified,   the
     arithmetic  mean of the offered rates for deposits in the Designated  LIBOR
     Currency having the specified Index Maturity,  commencing on the applicable
     Interest Reset Date, that appear on the specified  Designated LIBOR Page as
     of 11:00 a.m., London time, on the applicable Interest  Determination Date;
     provided, that, if the Designated LIBOR Page by its terms provides only for
     a single  rate,  then the  single  rate  will be used;  with  respect  to a
     Interest  Determination  Date on which fewer than two offered rates appear,
     or no rate  appears,  as the case may be, on the  Designated  LIBOR Page as
     specified  in  the  preceding  two  clauses,  the  rate  calculated  by the
     Calculation  Agent  as the  arithmetic  mean  of at  least  two  quotations
     obtained by the  Calculation  Agent after  requesting the principal  London
     offices of each of four major reference banks (which may include affiliates
     of any Agent) in the London  interbank  market to provide  the  Calculation
     Agent with its  offered  quotation  for  deposits in the  Designated  LIBOR
     Currency for the period of the specified Index Maturity,  commencing on the
     applicable  Interest  Reset Date,  to prime  banks in the London  interbank
     market at approximately 11:00 a.m., London time, on the applicable Interest
     Determination  Date and in a principal amount that is representative  for a
     single  transaction in the Designated LIBOR Currency in that market at that
     time; if fewer than two quotations  referred to in the preceding clause are
     so  provided,  the  rate  on the  applicable  Interest  Determination  Date
     calculated by the  Calculation  Agent as the  arithmetic  mean of the rates
     quoted at approximately  11:00 a.m., in the applicable  Principal Financial
     Center on the applicable  Interest  Determination Date by three major banks
     in such Principal Financial Center selected by the Calculation Agent (which
     may  include  affiliates  of any Agent) for loans in the  Designated  LIBOR
     Currency to leading European banks, having the specified Index Maturity and
     in a principal amount that is  representative  for a single  transaction in
     that market at that time;  or if the banks so  selected by the  Calculation
     Agent are not quoting as mentioned in the preceding clause, LIBOR in effect
     on the applicable Interest Determination Date.

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

1051047.4  10201 1256C  00692469

                                       -12-

<PAGE>
          (a) if "LIBOR  Telerate" is designated or neither "LIBOR  Reuters" nor
     "LIBOR  Telerate" is designated as the method for  calculating  LIBOR,  the
     display on Bridge Telerate,  Inc. or any successor service on the specified
     page or any page as may replace the specified  page on that service for the
     purpose of  displaying  the London  interbank  rates of major banks for the
     Designated LIBOR Currency; or

          (b) if "LIBOR Reuters" is specified, the display on the Reuter Monitor
     Money Rates Service or any successor  service on the specified  page or any
     other  page as may  replace  the  specified  page on that  service  for the
     purpose of  displaying  the London  interbank  rates of major banks for the
     Designated LIBOR Currency.

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

     Determination  of Prime Rate. If the Base Rate specified on the face hereof
is the Prime Rate,  the Prime Rate with respect to this Note shall be determined
on each  Interest  Determination  Date and  shall be the rate set  forth for the
relevant Interest  Determination Date in H.15(519) under the heading "Bank Prime
Loan." If the rate is not published before 3:00 p.m., New York City time, on the
Calculation  Date,  then  the  Prime  Rate  will be the  rate  on such  Interest
Determination  Date as published in H.15 Daily Update,  or such other recognized
electronic  source  used for the  purpose of  displaying  such  rate,  under the
caption "Bank Prime Loan." If such rate is not yet published in H.15(519),  H.15
Daily Update or another recognized electronic source by 3:00 p.m., New York City
time,  on the  related  Calculation  Date,  then  the  Prime  Rate  shall be the
arithmetic  mean of the rates of interest  publicly  announced by each bank that
appears on the display  designated  as page  "USPRIME1"  on the Reuters  Monitor
Money Rates Service ("Reuters Screen USPRIME1 Page") or any successor service as
the  bank's  prime  rate or base  lending  rate as in effect  for the Prime Rate
Interest Determination Date as quoted on the Reuters Screen USPRIME1 Page on the
Prime Rate Interest  Determination  Date. If fewer than four rates appear on the
Reuters Screen USPRIME1 Page on such Interest Determination Date, the Prime Rate
will be the arithmetic  mean of the prime rates or base lending rates (quoted on
the basis of the actual number of days in the year divided by a 360-day year) as
of the close of business on such Interest Determination Date by four major banks
in New York City selected by the Calculation Agent. If fewer than four banks are
providing quotes,  the rate will be the same rate as used for the prior interest
period.

     Determination  of Treasury  Rate.  If the Base Rate  specified  on the face
hereof is the Treasury  Rate,  the Treasury Rate with respect to this Note shall
be determined on each Interest  Determination Date and shall be the rate for the
auction on the relevant Interest Determination Date of Treasury bills having the
specified Index Maturity under the caption  "INVESTMENT  RATE" on the display on
the Bridge Telerate, Inc. or any successor service on page 56, or any other page
as may replace that page on such service ("Telerate Page 56), or page 57, or any
other page as may replace that page on such service ("Telerate Page 57"). If the

1051047.4  10201 1256C  00692469

                                       -13-

<PAGE>
rate is not  published  by 3:00  p.m.,  New  York  City  time,  on the  relevant
Calculation  Date, then the Treasury Rate will be the Bond  Equivalent  Yield of
the rate for such Treasury  bills as published in H.15 Daily Update,  or another
recognized electronic source used for the purpose of displaying such rate, under
the caption "U.S. Government Securities/Treasury  Bills/Auction High" or, if not
so published by 3:00 p.m., New York City time, on the related  Calculation Date,
the  Bond  Equivalent  Yield  of the  auction  rate of such  Treasury  bills  as
announced by the United States  Department of the Treasury.  If the auction rate
of Treasury bills having the specified Index Maturity is not so announced by the
United States  Department of the Treasury,  or if no such auction is held,  then
the Treasury Rate will be the Bond Equivalent Yield of the rate on such Interest
Determination  Date of Treasury  bills having the  specified  Index  Maturity as
published in H.15(519)  under the caption "U.S.  Government  Securities/Treasury
Bills/Secondary  Market" or, if not yet  published  by 3:00 p.m.,  New York City
time, on the related  Calculation Date, the rate on such Interest  Determination
Date of such  Treasury  bills as  published  in H.15  Daily  Update,  or another
recognized electronic source used for the purpose of displaying such rate, under
the caption "U.S.  Government  Securities/Treasury  Bills/Secondary  Market." If
such rate is not yet  published  in  H.15(519),  H.15  Daily  update or  another
recognized  electronic source,  then the Treasury Rate will be calculated by the
Calculation  Agent and will be the Bond Equivalent  Yield of the arithmetic mean
of the secondary market bid rates, as of approximately  3:30 p.m., New York City
time,  on such  Interest  Determination  Date,  of three  primary  United States
government  securities dealers (which may include the any of the Agents or their
affiliates)  selected by the Calculation  Agent, for the issue of Treasury bills
with a remaining  maturity  closest to the specified Index  Maturity;  provided,
however,  that if the  dealers  so  selected  by the  Calculation  Agent are not
quoting as mentioned in this sentence,  the Treasury Rate  determined as of such
Treasury Interest Determination Date will be the Treasury Rate in effect on such
Treasury Interest Determination Date.

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

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

where "D" refers to the applicable per annum rate for Treasury bills quoted on a
bank  discount  basis,  "N"  refers to 365 or 366,  as the case may be,  and "M"
refers to the actual number of days in the interest reset period.

     Determination of CMT Rate. If the Base Rate specified on the face hereof is
the CMT Rate, the CMT Rate with respect to this Note shall be determined on each
Interest  Determination  Date and shall be the rate  displayed on the Designated
CMT Telerate Page under the  caption".  . . Treasury  Constant  Maturities . . .
Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 p.m.," under
the column for the  Designated  CMT Maturity  Index for, if the  Designated  CMT
Telerate Page is 7051, the rate on the related Interest  Determination  Date; or

1051047.4  10201 1256C  00692469

                                       -14-

<PAGE>
if the Designated CMT Telerate Page is 7052, the weekly or monthly  average,  as
specified for the week or the month, as applicable,  ended immediately preceding
the week in which the related Interest Determination Date occurs. If the rate is
no longer  displayed on the relevant page or is not displayed by 3:00 p.m.,  New
York City time,  on the  related  Calculation  Date,  then the CMT Rate for such
Interest  Determination Date will be the treasury constant maturity rate for the
Designated  CMT Maturity  Index as published in the relevant  H.15(519).  If the
rate is no longer  published in H.15(519) or is not published by 3:00 p.m.,  New
York City time,  on the  Calculation  Date,  then the CMT Rate on such  Interest
Determination  Date  will  be  the  treasury  constant  maturity  rate  for  the
Designated  CMT Maturity  Index (or other United  States  Treasury  rate for the
Designated CMT Maturity Index) for such Interest Determination Date with respect
to the Interest  Reset Date as published by either the Board of Governors of the
Federal Reserve System or the United States  Department of the Treasury that the
Calculation Agent determines to be comparable to the rate formerly  displayed on
the  Designated  CMT Telerate Page and published in the relevant  H.15(519).  If
that  information  is not  provided  by 3:00 p.m.,  New York City  time,  on the
Calculation Date, then the CMT Rate on such Interest  Determination Date will be
calculated by the  Calculation  Agent and will be a yield to maturity,  based on
the arithmetic mean of the secondary market bid prices as of approximately  3:30
p.m.,  New  York  City  time,  on such  Interest  Determination  Date  reported,
according to their  written  records,  by three  leading  primary  United States
government  securities  dealers  (each,  a "Reference  Dealer") in New York City
(which  may  include  any of the  Agents or their  affiliates)  selected  by the
Calculation Agent (from five Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the event of equality,  one of the
highest)  and the lowest  quotation  (or, in the event of  equality,  one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of  the  United  States   ("Treasury   Notes")  with  an  original  maturity  of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than the  Designated  CMT  Maturity  Index  minus  one year.  If the
Calculation  Agent is unable to obtain three Treasury Note  quotations,  the CMT
Rate on such Interest  Determination  Date will be calculated by the Calculation
Agent  and  will be a yield to  maturity  based  on the  arithmetic  mean of the
secondary market bid prices as of  approximately  3:30 p.m., New York City time,
on such Interest  Determination Date of three Reference Dealers in New York City
(which  may  include  any of the  Agents or their  affiliates)  selected  by the
Calculation   Agent  (from  five  of  the  Reference  Dealers  selected  by  the
Calculation  Agent and  eliminating  the highest  quotation (or, in the event of
equality,  one of the  highest)  and the lowest  quotation  (or, in the event of
equality,  one of the lowest)),  for Treasury Notes with an original maturity of
the number of years  that is the next  highest to the  Designated  CMT  Maturity
Index and a remaining  term to maturity  closest to the  Designated CMT Maturity
Index and in an amount of at least U.S. $100 million.  If three or four (and not
five) of such Reference Dealers are providing quotes,  then the CMT Rate will be
based on the  arithmetic  mean of the offer  prices  obtained  and  neither  the
highest nor the lowest of such quotes will be eliminated.  If two Treasury Notes
with an original  maturity have remaining terms to maturity equally close to the
Designated  CMT  Maturity  Index,  the  Calculation  Agent will obtain from five
Reference  Dealers  quotations for the Treasury Note with the shorter  remaining
term to maturity  and will use those  quotations  to  calculate  the CMT Rate as
described above.

1051047.4  10201 1256C  00692469

                                       -15-

<PAGE>
"Designated CMT Telerate Page" means the display on the Bridge Telerate, Inc. or
any successor service on the specified page or any other page as may replace the
specified page on such service, for the purpose of displaying "Treasury Constant
Maturities" as reported in H.15(519). If a page is not specified, the Designated
CMT Telerate Page will be 7052 for the most recent week.

"Designated  CMT Maturity  Index"  means the original  period to maturity of the
U.S.  Treasury  securities  (1, 2, 3, 5, 7, 10, 20 or 30 years)  specified  with
respect to which the CMT Rate will be  calculated.  If no maturity is specified,
the Designated CMT Maturity Index will be 2 years.

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

     Notwithstanding  the  foregoing,  the  interest  rate  hereon  shall not be
greater  than the  Maximum  Interest  Rate,  if any,  or less  than the  Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent shall
calculate the interest rate hereon in accordance with the foregoing on or before
each Calculation Date. The interest rate on this Note will in no event be higher
than the maximum rate  permitted by New York law, as the same may be modified by
United States Federal law of general application.

     At the request of the holder hereof,  the Calculation Agent will provide to
the holder  hereof the interest  rate hereon then in effect and, if  determined,
the interest rate that will become effective as of the next Interest Reset Date.

     The Calculation  Agent's  determination  of any interest rate will be final
and binding in the absence of manifest error.

1051047.4  10201 1256C  00692469

                                       -16-

<PAGE>
     Payments.  Interest  payments on this Note will include interest accrued to
but  excluding  the Interest  Payment  Dates or the Stated  Maturity (or earlier
redemption or repayment  date), as the case may be; provided,  however,  that if
the Interest Reset Period with respect to this Note is daily or weekly, interest
payable on any Interest Payment Date, other than interest payable on any date on
which principal  hereof is payable,  will include  interest  accrued through and
including the Record Date next preceding the applicable  Interest  Payment Date.
Accrued  interest  hereon shall be an amount  calculated by multiplying the face
amount hereof by an accrued interest factor.  Such accrued interest factor shall
be computed by adding the interest factor  calculated for each day in the period
for which interest is being paid.  The interest  factor for each such date shall
be computed by dividing the interest  rate  applicable to such day by 360 if the
Base Rate is CD Rate,  Commercial  Paper Rate,  Federal Funds Rate,  Prime Rate,
LIBOR or Eleventh  District Cost of Funds Rate, as specified on the face hereof,
or by the  actual  number of days in the year if the Base  Rate is the  Treasury
Rate or the CMT Rate, as specified on the face hereof. All percentages resulting
from any  calculation  of the rate of interest on this Note will be rounded,  if
necessary,   to  the  nearest  one  hundred-thousandth  of  a  percentage  point
(.0000001),  with five  one-millionths of a percentage point rounded upward, and
all dollar amounts used in or resulting from such  calculation on this Note will
be rounded to the nearest cent (with one-half cent rounded upward). The interest
rate in effect on any Interest Reset Date will be the  applicable  rate as reset
on such date. The interest rate applicable to any other day is the interest rate
from the  immediately  preceding  Interest  Reset Date (or, if none, the Initial
Interest Rate).

     If an Interest  Payment Date (other than at Stated  Maturity,  a Redemption
Date or an repayment date at the option of the holder) would otherwise fall on a
day that is not a Market  Day with  respect  to this  Note  (and if this Note is
payable in a Specified  Currency other than U.S. dollars,  a Business Day in the
country  issuing  the  Specified  Currency  (or,  for Euros,  a day on which the
Trans-European  Automated  Real-Time Gross Settlement Express Transfer System is
open, or if LIBOR is the Specified Currency, a day on which commercial banks are
open for  business  (including  dealings in LIBOR) in  London)),  such  Interest
Payment Date will be on the next succeeding  Market Day (with interest  accruing
to but  excluding  the next  succeeding  Market Day) (or, in the case of a LIBOR
Note, if such day falls in the next calendar  month,  the next preceding  Market
Day (with interest accruing to but excluding the next preceding Market Day)). If
the Stated  Maturity,  Redemption  Date or  repayment  date at the option of the
holder falls on a day that is not a Market Day (and if this Note is payable in a
Specified  Currency  other  than U.S.  dollars,  a Business  Day in the  country
issuing the Specified Currency (or, for Euros, a day on which the Trans-European
Automated  Real-Time  Gross  Settlement  Express  Transfer System is open, or if
LIBOR is the Specified  Currency,  a day on which  commercial banks are open for
business  (including  dealings in LIBOR) in London)),  the  required  payment of
principal,  premium,  if any, and interest  will be made on the next  succeeding
Market Day as if made on the date such  payment was due,  and no  interest  will
accrue on such  payment  for the  period  from and after  the  Stated  Maturity,
Redemption  Date or repayment date at the option of the holder,  as the case may
be, to the date of such payment on the next succeeding Market Day.

     If the Specified Currency shown on the face of this Note is other than U.S.
dollars,  payments of  principal  of (and  premium,  if any) and interest on the

1051047.4  10201 1256C  00692469

                                       -17-

<PAGE>
Notes will be made in the applicable Specified Currency; provided, however, that
payments of principal (and premium, if any) and interest on Notes denominated in
other than U.S. dollars will nevertheless be made in U.S. dollars:

          (a) at the  option of the  holders of the Notes  under the  procedures
     described in the two following paragraphs; and

          (b) at the  Company's  option in the case of  imposition  of  exchange
     controls or other circumstances beyond the Company's control.

     Except as provided in the next paragraph,  if the Specified  Currency shown
on the face of this Note is other than U.S.  dollars,  payments of interest  and
principal (and premium,  if any) will be made in U.S.  dollars if the registered
holder of such Note on the relevant Record Date, or at Maturity, as the case may
be, has  transmitted a written  request for such payment in U.S.  dollars to the
Paying Agent at the office of the Paying Agent on or before such Record Date, or
the date 15 days before  Maturity,  as the case may be.  Such  request may be in
writing  (mailed  or hand  delivered)  or by cable or  other  form of  facsimile
transmission. Any such request will remain in effect for any further payments of
interest  and  principal  (and  premium,  if any) on such Note  payable  to such
holder,  unless such request is revoked on or before the relevant Record Date or
the date 15 days before Maturity, as the case may be.

     The U.S. dollar amount to be received by a holder of a Note  denominated in
other than U.S.  dollars who elects to receive  payment in U.S.  dollars will be
determined by the exchange rate agent,  or any successor  thereto (the "Exchange
Rate Agent"),  at  approximately  11:00 a.m.,  New York City time, on the second
Business Day preceding the applicable  Payment Date, by selecting the indicative
quotations  for  the  Specified  Currency  appearing  at such  time on the  bank
composite or  multi-contributor  pages of the Quoting  Source (as defined below)
for the first three banks, in descending  order of their appearance on a list of
banks to be agreed to by the Company and the  Exchange  Rate Agent prior to such
second  Business  Day,  which are  offering  quotes on the Quoting  Source.  The
Exchange  Rate Agent shall  select from among the  selected  quotations  the one
which will yield the largest number of U.S.  dollars upon  conversion  from such
Specified  Currency.  The "Quoting  Source" shall mean Reuters  Monitor  Foreign
Exchange Service,  or if the Exchange Rate Agent determines that such service is
not available,  Telerate Monitor Foreign Exchange Service.  If the Exchange Rate
Agent determines that neither Service is available, the Company and the Exchange
Rate Agent shall agree on a  comparable  display or other  comparable  manner of
obtaining quotations and such display or manner shall become the Quoting Source.

     In the case of a Specified  Currency  other than  Euros,  if (i) fewer than
three bid quotations are available at the time a determination  is to be made by
the  Exchange  Rate  Agent  pursuant  to the  preceding  paragraph,  or (ii) the
Exchange  Rate Agent  received no later than 12:00 noon,  New York City time, on
such second  Business Day preceding the applicable  Payment Date notice from the
Company that there exist  exchange  controls or other  circumstances  beyond the
Company's  control  rendering  such  Specified  Currency  unavailable,  then the
Exchange Rate Agent shall,  prior to such Payment  Date,  notify the Company and
the Trustee of the noon buying rate in New York City for cable transfers, in the
Specified Currency indicated in such notice, as certified for customers purposes

1051047.4  10201 1256C  00692469

                                       -18-

<PAGE>
by the Federal Reserve Bank of New York (the "Market  Exchange Rate") as of such
second  Business  Day.  If the  Market  Exchange  Rate for such date is not then
available,  the Exchange Rate Agent shall immediately notify the Company and the
Trustee of the most recently  available  Market Exchange Rate for such Specified
Currency.  In the case of Euros,  if: (i) fewer than  three bid  quotations  are
available at the time a  determination  is to be made by the Exchange Rate Agent
pursuant to the preceding paragraph, or (ii) the Exchange Rate Agent receives no
later than 12:00 noon, New York City time, on such second Business Day preceding
the  applicable  Payment  Date  notice  from the  Company  that (A) there  exist
exchange controls or other circumstances beyond the Company's control, rendering
Euros  unavailable  or (B)  Euros are no longer  used in the  European  Monetary
System,  rendering Euros unavailable,  then the Exchange Rate Agent shall, prior
to such  Payment  Date,  notify  the  Company  and the  Trustee  of the  rate of
conversion for Euros into U.S.  dollars,  determined as of such second  Business
Day on the  following  basis:  The  component  currencies  of the Euros for this
purpose (the "Components") shall be the currency amounts that were components of
the Euros as of the last date on which Euros were used in the European  Monetary
System.  The  equivalent  of  Euros  in U.S.  dollars  shall  be  calculated  by
aggregating  the U.S.  dollar  equivalent  of the  Components.  The U.S.  dollar
equivalent  of each of the  Components  shall be determined by the Exchange Rate
Agent on the basis of the most recently  available  Market Exchange Rate for the
Components, or as otherwise specified to the Exchange Rate Agent by the Company.

     If the  Specified  Currency  shown  on the face  hereof  is a  currency  or
currency  unit other  than U.S.  dollars,  and such  Specified  Currency  is not
available  due to the  imposition  of exchange  controls or other  circumstances
beyond the control of the Company,  the Company shall be entitled to satisfy its
obligations to the holder of this Note by making such payment in U.S. dollars on
the basis of the most recently available noon-buying rate for cable transfers in
The City of New York, as determined by the Federal Reserve Bank of New York. Any
payment made under such circumstances in U.S. dollars where the required payment
is other than U.S. dollars will not constitute an Event of Default.

     Sinking Fund. 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.

     Redemption.  Unless otherwise indicated on the face of this Note, this Note
may not be  redeemed  prior to the  Stated  Maturity.  If the face of this  Note
indicates  that this Note is subject to optional  redemption,  this Note will be
redeemable at the Company's  option,  as a whole or from time to time in part in
increments of U.S. $1,000 or the minimum Authorized  Denomination (provided that
any  remaining  principal  amount  hereof shall be at least U.S.  $1,000 or such
minimum  Authorized  Denomination) on and after the Initial  Redemption Date set
forth on the face of this Note,  on any date prior to the Stated  Maturity  at a
redemption  price (the  "Redemption  Price"),  as  specified on the face of this
Note, equal to either (i) the price specified as a percentage of the face amount
to be redeemed  plus accrued  interest to the  Redemption  Date  (subject to the
right of holders of record on the relevant  Record Date to receive  interest due
on an Interest  Payment Date that is on or prior to the Redemption Date) or (ii)
100% of the principal  amount  thereof plus accrued  interest to the  Redemption

1051047.4  10201 1256C  00692469

                                       -19-

<PAGE>
Date  (subject to the right of holders of record on the relevant  Record Date to
receive  interest  due on an  Interest  Payment  Date that is on or prior to the
Redemption Date), plus a Make-Whole Premium, if any.

     The  "Make-Whole  Premium"  in respect of this Note is  intended  to be the
amount,  if any, which,  when added to the then outstanding  principal amount of
this  Note,  would,  if  invested  on the  Redemption  Date of this Note in U.S.
Treasury  securities with  maturities  equal to the Remaining Life of this Note,
have a yield to maturity  equal to the original  yield to maturity of this Note,
based on the  initial  public  offering  price of this  Note.  The amount of the
Make-Whole  Premium  in  respect  of the  principal  amount of this Note will be
calculated by the Company and will be the excess,  if any, of (i) the sum of the
present  values,  as of the Redemption  Date of this Note, of (A) the respective
interest payments (exclusive of the amount of accrued interest to the Redemption
Date) on this Note that,  but for such  redemption,  would have been  payable on
their respective  Interest Payment Dates after such Redemption Date, and (B) the
payment of such principal amount that, but for such redemption,  would have been
payable on the Stated  Maturity  over (ii) the  amount of such  principal  to be
redeemed.  Such present  values will be determined in accordance  with generally
accepted  principles of financial  analysis by  discounting  the amounts of such
payments of interest and principal from their  respective  Stated  Maturities to
such Redemption Date at a discount rate equal to the Treasury Yield.

     The "Treasury  Yield" in respect of this Note shall be determined as of the
date on which notice of  redemption of this Note is sent to the holder hereof by
reference to the most recent Federal Reserve  Statistical  Release H.15(519) (or
successor  publication)  which has become  publicly  available not more than two
Business Days prior to such date (or, if such Statistical  Release (or successor
publication) is no longer  published or no longer contains the applicable  data,
to the  most  recently  published  issue  of The Wall  Street  Journal  (Eastern
Edition)  published  not more  than two  Business  Days  prior to such date that
contains such data or, if The Wall Street Journal (Eastern Edition) is no longer
published or no longer contains such data, to any publicly  available  source of
similar  market  data),  and shall be the most recent  weekly  average  yield on
actively traded U.S. Treasury  securities  adjusted to a constant maturity equal
to the  Remaining  Life of this Note and,  if  applicable,  converted  to a bond
equivalent  yield basis as described  below.  The "Remaining  Life of this Note"
shall equal the number of years from the Redemption  Date to the Stated Maturity
of this Note;  provided that if the Remaining  Life of this Note is not equal to
the constant  maturity of a U.S.  Treasury  security for which a weekly  average
yield is specified in the  applicable  source,  then the Remaining  Life of this
Note shall be rounded to the nearest  one-twelfth  of one year and the  Treasury
Yield shall be obtained by linear  interpolation  (computed to the fifth decimal
place (one  thousandth  of a  percentage  point) and then  rounded to the fourth
decimal  place (one  hundredth of a percentage  point)),  after  rounding to the
nearest  one-twelfth  of one year,  from the  weekly  average  yields of (a) the
actively traded U.S.  Treasury security with a maturity closest to and less than
the  Remaining  Life of this  Note and (b) the  actively  traded  U.S.  Treasury
security with a maturity  closest to and greater than the Remaining Life of this
Note,  except that if the Remaining Life of this Note is less than three months,
the weekly average yield on actively traded U.S. Treasury securities adjusted to
a constant  maturity of three months shall be used. The Treasury Yield shall, if

1051047.4  10201 1256C  00692469

                                       -20-

<PAGE>
expressed on a yield basis other than that equivalent to a bond equivalent yield
basis,  be converted to a bond  equivalent  yield basis and shall be computed to
the fifth decimal place (one thousandth of a percentage  point) and then rounded
to the fourth decimal place (one hundredth of a percentage point).

     Notice  of  redemption  will  be  provided  by  mailing  a  notice  of such
redemption to each holder by first class mail, postage prepaid, at least 30 days
and not  more  than 60 days  prior  to the  date  fixed  for  redemption  to the
respective  address  of each  holder as that  address  appears  in the  Security
Register.  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 presentation and cancellation hereof.

     Repayment.  Unless otherwise  indicated on the face of this Note, this Note
shall not be subject  to  repayment  at the  option of the  holder  prior to the
Stated  Maturity.  If so  indicated  on the face of this Note,  this Note may be
subject to repayment  at the option of the holder on the date or dates,  if any,
specified  on the face  hereof  (the  "Optional  Redemption  Date" or  "Optional
Redemption Dates") on the terms set forth herein.

     On any Optional  Repayment Date, this Note will be repayable in whole or in
part in increments of U.S. $1,000 or the minimum Authorized  Denomination of the
Specified  Currency  indicated on the face hereof  (provided  that any remaining
principal  amount  hereof  shall not be less than  U.S.  $1,000 or such  minimum
Authorized  Denomination  hereof) at the option of the holder  hereof at a price
equal to 100% of the  principal  amount to be  repaid,  together  with  interest
hereon payable to the date of repayment.  For this Note to be repaid in whole or
in part at the option of the holder  hereof,  the  Company  must  receive at the
corporate  trust office of the Paying Agent in the City of Boston,  Commonwealth
of  Massachusetts  or New York,  New York, at least 30 days but not more than 60
days prior to the  repayment,  (i) this Note with the form  entitled  "Option to
Elect  Repayment"  on the  reverse  hereof  duly  completed  or (ii) a telegram,
facsimile  transmission  or a letter  from a  member  of a  national  securities
exchange or a member of the National  Association  of Securities  Dealers,  Inc.
(the "NASD") or a commercial  bank or trust  company in the United  States which
must set forth the name of the holder of this Note, the principal amount of this
Note, the principal amount of this Note to be repaid,  the certificate number or
a description  of the tenor and terms of this Note, a statement  that the option
to elect repayment is being exercised  thereby and a guarantee that this Note to
be repaid,  together  with the duly  completed  form  entitled  "Option to Elect
Repayment" on the reverse hereof, will be received by the Paying Agent not later
than  the  third  Business  Day  after  the  date  of such  telegram,  facsimile
transmission or letter; provided, that such telegram,  facsimile transmission or
a letter from a member of a national securities exchange or a member of the NASD
or a  commercial  bank or trust  company  in the  United  States  shall  only be
effective if in such case, this Note and form duly completed are received by the
Paying Agent by such third 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 of like  tenor for the  amount of the unpaid
portion hereof and otherwise  having the same terms as this Note shall be issued
in the name of the holder hereof upon cancellation hereof.

1051047.4  10201 1256C  00692469

                                       -21-

<PAGE>
     Optional  Extension  of Maturity.  If so specified on the face hereof,  the
Stated  Maturity  of this Note may be  extended at the option of the Company for
the period or periods  of whole  years  specified  on the face  hereof  (each an
"Extension  Period")  up to but not beyond the date (the "Final  Maturity")  set
forth on the face hereof. If the Company exercises such option, the Paying Agent
will mail to the  holder of this Note not later than 40  calendar  days prior to
the old Stated Maturity a notice (the "Extension  Notice"),  first class postage
prepaid,  indicating (a) the election of the Company to extend the Maturity; (b)
the new Stated  Maturity;  (c) the interest  rate  applicable  to the  Extension
Period;  and (d) the  provisions,  if any, for  redemption  during the Extension
Period, including the date or dates on which, the period or periods during which
and the price or prices at which such  redemption may occur during the Extension
Period.  Upon the Paying  Agent's  mailing of the Extension  Notice,  the Stated
Maturity of this Note shall be extended automatically and, except as modified by
the Extension Notice and as described in the next paragraph, this Note will have
the same terms as prior to the mailing of such Notice.

     Notwithstanding  the  foregoing,  not later than 10:00 a.m.,  New York City
time, on the twentieth calendar day prior to the Maturity then in effect (or, if
such day is not a Business  Day, not later than 10:00 a.m.,  New York City time,
on the  immediately  succeeding  Business  Day), the Company may, at its option,
revoke the Spread and/or Spread Multiplier  provided for in the Extension Notice
and establish a higher  interest  rate for the  Extension  Period by causing the
Paying  Agent to send  notice of such Spread  and/or  Spread  Multiplier  to the
holder of such Note by first class mail, postage prepaid, or by such other means
as shall be agreed  between the Company and the Paying Agent.  Such notice shall
be  irrevocable.  All Notes with  respect to which the  Maturity  is extended in
accordance  with an  Extension  Notice  will  bear  such  Spread  and/or  Spread
Multiplier for the Extension Period, whether or not tendered for payment.

     If the Company  extends the Maturity of this Note, the holder will have the
option to require the Company to repay such Note on Maturity then in effect at a
price equal to the principal amount thereof plus all accrued and unpaid interest
to such date. In order to obtain  repayment on the old Stated  Maturity once the
Company has extended the Maturity hereof,  the holder must follow the procedures
set forth for  optional  repayment,  except that the period for delivery of this
Note or  notification to the Paying Agent shall be at least 25 but not more than
35 calendar days prior to the old Stated  Maturity and except that if holder has
tendered this Note for  repayment  pursuant to an Extension  Notice,  the holder
may, by written notice to the Paying Agent, revoke any such tender for repayment
until 3:00 p.m., New York City time, on the twentieth  calendar day prior to the
old Stated Maturity (or, if such day is not a Business Day, until 3:00 p.m., New
York City time, on the immediately succeeding Business Day).

     Renewable Notes. If this Note is a Renewable Note, this Note will mature at
Stated Maturity (the "Initial Maturity Date"), unless the Maturity of all or any
portion of the  principal  amount  thereof is  extended in  accordance  with the
procedures  described below. On Election Date (which must be an Interest Payment
Date),  the Maturity of this Note will be extended to the Interest  Payment Date
occurring  twelve months after such Election  Date,  unless the holder elects to
terminate the automatic extension of the Maturity of this Note or of any portion
thereof having a principal  amount of U.S. $1,000 or any multiple of U.S. $1,000

1051047.4  10201 1256C  00692469

                                       -22-

<PAGE>
in excess thereof,  provided that the principal  amount for which such option is
not  exercised is at least U.S.  $1,000 or any larger amount that is an integral
multiple of U.S.  $1,000,  by  delivering  a notice to such effect to the Paying
Agent not less than the Minimum  Election Date Notice days nor more than Maximum
Election  Date  Notice days prior to such  Election  Date.  Notwithstanding  the
foregoing,  the  Maturity  of this  Note may not be  extended  beyond  the Final
Maturity Date. If the holder elects to terminate the automatic  extension of the
Maturity of any portion of the  principal  amount of this Note and such election
is not revoked as described  below,  such portion will become due and payable on
the  Interest  Payment  Date  falling  six months (or such other time  specified
herein) after the Election Date prior to which the holder made such election.

     An election to terminate the automatic extension of Maturity may be revoked
as to any portion of this Note having a principal  amount of U.S.  $1,000 or any
multiple of U.S.  $1,000 in excess thereof by delivering a notice to such effect
to the Paying Agent on any day following  the effective  date of the election to
terminate  the  automatic  extension  of  Maturity  and  prior to the  fifteenth
calendar day before the date on which such portion would otherwise mature.  Such
a revocation may be made for less than the entire  principal amount of this Note
for which the  automatic  extension of Maturity has been  terminated;  provided,
however,  that the  principal  amount  of this  Note  for  which  the  automatic
extension of Maturity has been  terminated  and for which such a revocation  has
not been made is at least U.S.  $1,000 or any larger  amount that is an integral
multiple of U.S. $1,000.  Notwithstanding the foregoing, a revocation may not be
made during the period from and  including  a Record Date to but  excluding  the
immediately succeeding Interest Payment Date.

     An election to  terminate  the  automatic  extension of the Maturity of the
Renewable  Notes,  if not revoked as  described  above by the holder  making the
election or any subsequent holder, will be binding upon such subsequent holder.

     If this Note is a Renewable  Note, this Note may be redeemed in whole or in
part at the option of the Company on any Interest Payment Date,  commencing with
the Interest Payment Date specified on the face hereof or in an Addendum hereto,
at a  redemption  price  of  100% of the  principal  amount  of this  Note to be
redeemed,  together with accrued and unpaid  interest to the date of redemption.
Notice of redemption  will be provided by mailing a notice of such redemption to
each holder by first class mail, postage prepaid,  at least 30 and not more than
60 calendar days prior to the date fixed for redemption.

     Indexed  Notes.  If so stated on the face hereof,  the amount of principal,
premium  and/or  interest  payable in respect  hereof  will be  determined  with
reference to the price or prices of specific  commodities  or stocks,  or to the
exchange  rate  of  one  or  more  designated  currencies  (including  composite
currencies)  relative  to an  indexed  currency  or to such  other  price(s)  or
exchange rate(s), as specified on the face hereof.

     Registration  of  Transfer.  State  Street Bank and Trust  Company has been
appointed  registrar  for the Notes (the  "Registrar,"  which term  includes any
successor registrar  appointed by the Company),  and the Registrar will maintain
at its office at 2 Avenue de  Lafayette,  Boston,  MA 02111 a  register  for the

1051047.4  10201 1256C  00692469

                                       -23-

<PAGE>
registration  and  transfer  of  Notes.  This  Note  may be  transferred  at the
aforesaid  office of the Registrar by surrendering  this Note for  cancellation,
accompanied  by a  written  instrument  of  transfer  in  form  approved  by the
Registrar and duly executed by the registered  holder hereof in person or by the
holder's attorney duly authorized in writing,  and thereupon the Registrar shall
issue in the name of the transferee or transferees,  in exchange herefor,  a new
Note or Notes  having  identical  terms and  provisions  for an equal  aggregate
principal  amount  in  authorized  denominations,   subject  to  the  terms  and
conditions set forth herein;  provided,  however, that the Registrar will not be
required to register  the  transfer of or exchange any Note that has been called
for  redemption  in whole or in part,  or as to which  the  holder  thereof  has
elected  to cause  such  Note to be  repaid  in whole  or in  part,  except  the
unredeemed  or unpaid  portion of Notes being  redeemed or repaid in part, or 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 Company 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  approved  by the
Registrar  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  any  Note  shall  at any  time  become  mutilated,  defaced  or be
destroyed,  lost or stolen  and such  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  Registrar,  a new Note of like  tenor  will be  issued by the
Company in exchange for the Note so mutilated or defaced, or in lieu of the Note
so  destroyed  or lost or stolen,  but, in the case of any  destroyed or lost or
stolen Note, only upon receipt of evidence satisfactory to the Registrar and the
Company that such 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.

     This Note,  and any Note or Notes issued upon transfer or exchange  hereof,
is issuable only in fully registered form, without coupons,  in denominations of
U.S. $1,000 or any integral  multiple of U.S.  $1,000 or the minimum  Authorized
Denomination.  If the Specified Currency shown on the face of this Note is other
than U.S.  Dollars,  the  authorized  denominations  shall be the  amount of the
Specified Currency for such Note equivalent, at the noon buying rate in The City
of New York for cable  transfers  for such  Specified  Currency  (the  "Exchange
Rate")  on the  sixth  Business  Day in The City of New York and in the  country
issuing  such  currency  (or,  for  Euros,  a day on  which  the  Trans-European
Automated  Real-Time  Gross  Settlement  Express  Transfer System is open, or if
LIBOR is the Specified  Currency,  a day on which  commercial banks are open for
business  (including  dealings in LIBOR) in London) next  preceding  the date of

1051047.4  10201 1256C  00692469

                                       -24-

<PAGE>
issue of such Note, to U.S.  $1,000  (rounded to the nearest 1,000 units of such
Specified Currency) and any greater amount that is an integral multiple of 1,000
units of such Specified Currency.

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

     Original  Issue  Discount  Notes.  Notwithstanding  anything  herein to the
contrary,  if this Note is an Original  Issue  Discount Note as specified on the
face hereof, the amount payable in the event of redemption or repayment prior to
the Stated  Maturity  hereof in lieu of the  principal  amount due at the Stated
Maturity  hereof  shall be the  Amortized  Face  Amount  of this  Note as of the
Redemption Date or the date of repayment,  as the case may be, multiplied by the
Redemption  Price.  The "Amortized Face Amount" of this Note shall be the amount
equal to (a) the Issue  Price (as set  forth on the face  hereof)  plus (b) that
portion of the  difference  between  the Issue  Price and the  principal  amount
hereof  that has  accrued  at the  Yield to  Maturity  (as set forth on the face
hereof) (computed in accordance with generally accepted United States bond yield
computation  principles  using a constant  yield method) at the date as of which
the Amortized Face Amount is calculated but in no event shall the Amortized Face
Amount of this Note exceed its principal amount.

     The constant  yield will be calculated  using a 30-day month,  360-day year
convention, a compounding period that, except for the Initial Period (as defined
below),  corresponds to the shortest period between Interest Payment Dates (with
ratable accruals within a compounding period, a coupon rate equal to the initial
coupon rate  applicable to this Note and an assumption that the Maturity of this
Note will not be accelerated). If the period from the Original Issue Date to the
initial  Interest  Payment  Date (the  "Initial  Period")  is  shorter  than the
compounding  period for this Note,  a  proportionate  amount of the yield for an
entire compounding period will be accrued.  If the Initial Period is longer than
the  compounding  period,  then  such  period  will be  divided  into a  regular
compounding  period and a short  period,  with the short period being treated as
provided in the preceding sentence.

     Modifications  and  Waivers;   Obligation  of  the  Company  Absolute.  The
Indenture permits,  with certain  exceptions as therein provided,  the amendment
thereof and the  modification  of the rights and  obligations of the Company and
the rights of the holders of the  Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of the
holders  of a  majority  in  principal  amount  of the  Securities  at the  time
Outstanding  of  each  series  to  be  affected.  The  Indenture  also  contains
provisions  permitting the holders of specified  percentages in principal amount
of the  Securities  of each  series  at the time  Outstanding,  on behalf of the
holders of all  Securities  of such series,  to waive  compliance by the Company
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the holder of

1051047.4  10201 1256C  00692469

                                       -25-

<PAGE>
this Note shall be  conclusive  and binding upon such holder and upon all future
holders of this Note and of any Note  issued upon the  registration  of transfer
hereof or in exchange hereof or in lieu hereof,  whether or not notation of such
consent or waiver is made upon this Note.

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

     Registered  Holder Treated as Owner.  Prior to due presentment of this Note
for  registration  of  transfer,  the Company or any agent of the  Company,  the
Registrar  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 neither the Company, the Registrar,  the Trustee nor any such agent
shall be affected by notice to the contrary.

     No  Recourse  Against  Certain  Persons.  No  recourse  under  or upon  any
obligation, covenant or agreement contained in the Indenture or in this Note, or
because  of  any  indebtedness  evidenced  thereby,  shall  be had  against  any
promoter,  as such, or against any past, present or future shareholder,  officer
or trustee,  as such,  of the Company or of any  successor,  either  directly or
through  the  Company  or any  successor,  under  any  rule of law,  statute  or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise,  all such liability being expressly waived
and released by the  acceptance of this Note by the holder hereof and as part of
the consideration for the issue of this Note.

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

     CUSIP Number. Pursuant to a recommendation  promulgated by the Committee on
Uniform  Security  Identification  Procedures,  the Company  has caused  "CUSIP"
numbers  to be  printed  on  this  Note  as a  convenience  to the  holders.  No
representation  is made as to the  correctness or accuracy of such CUSIP numbers
as  printed  on  this  Note,  and  reliance  may be  placed  only  on the  other
identification numbers printed hereon.

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

     Defeasance. The Indenture contains provisions for defeasance at any time of
(a) the  entire  indebtedness  of the  Company  on  this  Note  and (b)  certain
restrictive  covenants and the related defaults and Events of Default applicable
to the  Company,  in each case,  upon  compliance  by the Company  with  certain
conditions set forth in the Indenture, which provisions apply to this Note.

1051047.4  10201 1256C  00692469

                                       -26-

<PAGE>

                                 ASSIGNMENT FORM

                   FOR VALUE RECEIVED, the undersigned hereby
                        sells, assigns and transfers unto

         PLEASE INSERT SOCIAL
         SECURITY OR OTHER IDENTIFYING
         NUMBER OF ASSIGNEE

======================================================================

======================================================================

 ................................................................................
              (Please Print or Typewrite Name and Address including
                              Zip Code of Assignee)

 ................................................................................
the within Security of Security Capital Group Incorporated and hereby does
irrevocably constitute and appoint

 ........................................................................Attorney
to transfer said Security on the books of the within-named Company with full
power of substitution in the premises.

Dated:         . . . . . .     . . . . . . . . . . . . . .

                                    . . . . . . . . . . . . . .

NOTICE:..The      signature to this  assignment must correspond with the name as
                  it appears on the first page of the within  Security  in every
                  particular,  without  alteration or  enlargement or any change
                  whatever.

1051047.4  10201 1256C  00692469

                                       -27-

<PAGE>
                        FORM OF OPTION TO ELECT REPAYMENT

     The undersigned hereby  irrevocably  request(s) and instruct(s) the Company
to repay the within Note (or portion  thereof  specified  below) pursuant to its
terms at a price equal to 100% of the  principal  amount to be repaid,  together
with unpaid interest to the 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 shall be increments of U.S. $1,000 (or if the Specified  Currency
is other than U.S. dollars, the minimum Authorized Denomination specified on the
face  hereof))  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.

1051047.4  10201 1256C  00692469

                                       -28-<PAGE>

                                                                    Exhibit 10.3

                          CHANGE IN CONTROL AGREEMENT

     This Change in Control Agreement (the "Agreement") dated December 1, 2000
is between Riverstone Networks, Inc. (the "Company") and Romulus Pereira,
President of the Company (the "Executive").

     The Company believes that it is desirable, in order to induce the Executive
to remain in the employ of the Company and its direct and indirect subsidiaries
(together, the "Employer") in the event of any actual or threatened change in
control of the Company and to remain in the employ of its parent, Cabletron
Systems, Inc. ("Cabletron") and its direct and indirect subsidiaries (together,
the "Cabletron Companies") in the event of any actual or threatened change in
control of Cabletron Systems, Inc., to provide certain benefits to the Executive
if his employment with the Employer or the Cabletron Companies terminates under
the circumstances described below.  Accordingly, the parties hereto agree as
follows:

     1.  Agreement of the Executive.  As a precondition to the receipt of any
         --------------------------
benefits under this Agreement, the Executive hereby agrees that once any Person
other than the Company, a direct or indirect subsidiary of the Company, or an
employee benefit plan of the Company or any such subsidiary begins a tender or
exchange offer or a solicitation of proxies from the Company's security holders
or takes other actions to effect a "Change in Control" or a "Cabletron Change in
Control," both as hereinafter defined, the Executive will not voluntarily
terminate his employment with the Employer (or the Cabletron Companies, in the
case of a Cabletron Change in Control) until such Person has abandoned or
terminated such efforts to effect a Change in Control (or a Cabletron Change in
Control) or until a Change in Control (or a Cabletron Change in Control) has
occurred.  (For purposes of the Agreement, a "Person" means any individual,
entity or other person, including a group within the meaning of  Sections 13(d)
or 14(d)(2) of the Securities Exchange Act of 1934 ("Exchange Act")).

     2.  Change in Control.  For purposes of the Agreement, a "Change in
         -----------------
Control" shall be deemed to have occurred upon the occurrence of any of the
events described in subsections (a) or (b) below:

         (a)  Prior to the date, if any, on which Cabletron shall have completed
     a distribution to the Cabletron stockholders of all of the shares of the
     Company held by Cabletron, whether or not preceded by an initial public
     offering of the Company's shares (a "spin-off"), Cabletron shall sell or
     otherwise dispose of (including, without limitation, by merger) all or
     substantially all of the stock of the Company that Cabletron owns, or the
     Company shall sell or otherwise dispose of all or substantially all of its
     assets, to an unrelated Person or to one or more unrelated Persons acting
     as a group; provided that, for the avoidance of doubt, none of the
     following shall constitute a Change in Control under this paragraph (a):
     (i) a spin-off; (ii) a liquidation or merger of the Company into Cabletron
     or into another subsidiary of Cabletron; (iii) any other reorganization of
     the Company or other transaction that results in Cabletron's continuing to
     own, directly or indirectly, a majority of the combined voting power of all
     outstanding shares of stock or other equity interests of the Company or of
     the entity resulting from such reorganization
<PAGE>

or other transaction; or (iv) a disposition by Cabletron of stock of the
Company, or by the Company of its stock, in a public offering.

     (b)  Following a spin-off by Cabletron of the Company,

          (i)  any Person acquires beneficial ownership (within the meaning of
     Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A)
     the then outstanding shares of common stock of the Company (the
     "Outstanding Company Common Stock") or (B) the combined voting power of the
     then outstanding voting securities of the Company entitled to vote
     generally in the election of directors (the "Outstanding Company Voting
     Securities"); provided, that for purposes of this subsection (b)(i) the
     following acquisitions shall not constitute a Change in Control: (1) any
     acquisition directly from the Company, (2) any acquisition by the Company,
     (3) any acquisition by an employee benefit plan (or related trust)
     sponsored or maintained by the Company, or (4) any Business Combination
     (but except as provided in subsection (iii) of this Section 2(b) a Business
     Combination may nevertheless constitute a Change in Control under Section
     2(b)(iii)); and provided further, that an acquisition by a Person of 30% or
     more but less than 50% of the Outstanding Company Common Stock or of the
     combined voting power of the Outstanding Company Voting Securities shall
     not constitute a Change in Control under this subsection (b)(i) if within
     15 days of the date the Board of Directors of the Company (the "Board") is
     advised that such ownership level has been reached, a majority of the
     "Incumbent Directors" (as hereinafter defined) then in office adopt a
     resolution approving the acquisition of that level of securities ownership
     by such Person; or

          (ii)  Individuals who, as of the first date following the spin-off
     (the "Spin Date"), constituted the Board (the "Incumbent Directors") cease
     for any reason to constitute at least a majority of the Board; provided,
     that any individual who becomes a member of the Board subsequent to the
     Spin Date and whose election or nomination for election was approved by a
     vote of at least two-thirds of the Incumbent Directors shall be treated as
     an Incumbent Director unless he or she assumed office as a result of an
     actual or threatened election contest with respect to the election or
     removal of directors; or

          (iii) There is consummated a reorganization, merger or consolidation
     involving the Company, or a sale or other disposition of all or
     substantially all of the assets of the Company (a "Business Combination"),
     in each case unless, following such Business Combination, (A) the Persons
     who were the beneficial owners, respectively, of the Outstanding Company
     Common Stock and of the combined voting power of the Outstanding Company
     Voting Securities immediately prior to the Business Combination
     beneficially own, directly or indirectly, more than 50% of, respectively,
     the then outstanding shares of common stock and the combined voting power
     of the then outstanding voting securities entitled to vote generally in the
     election of directors, as the case may be, of the entity resulting from
     such Business Combination in substantially the same proportions as their
     ownership immediately prior to such

                                      -2-
<PAGE>

     Business Combination of the Outstanding Company Common Stock and of the
     combined voting power of the Outstanding Company Voting Securities, as the
     case may be, (B) no Person (excluding any entity resulting from such
     Business Combination or any employee benefit plan (or related trust) of the
     Company or of such corporation resulting from such Business Combination)
     beneficially owns, directly or indirectly, 30% or more of, respectively,
     the then outstanding shares of common stock of the corporation resulting
     from such Business Combination or the combined voting power of the then
     outstanding voting securities of such corporation entitled to vote
     generally in the election of directors, except to the extent that such
     ownership existed prior to the Business Combination and (C) at least a
     majority of the members of the Board resulting from such Business
     Combination were Incumbent Directors at the time of the execution of the
     initial agreement, or of the action of the Board, providing for such
     Business Combination; or

          (iv)  The stockholders of the Company approve a complete liquidation
     or dissolution of the Company.

     3.  Severance Benefit. If, during the period of eighteen (18) months
         -----------------
following a Change in Control, either (i) the employment of the Executive is
terminated by the Employer for any reason other than for "Cause" (as defined in
Section 6 below), or (ii) the Executive terminates his employment with the
Employer for "Good Reason" (as defined in Section 7 below):

         (a) The Company shall pay to the Executive in cash, within five (5)
     days of the date of termination, the sum of (i) all salary earned by the
     Executive as of the date of termination but not yet paid, (ii) the
     Executive's accrued vacation earned through the date of termination, and
     (iii) an amount equal to the Executive's target incentive bonus, if any,
     for the fiscal year in which termination occurs, multiplied times a
     fraction, the numerator of which is the number of days elapsed between the
     beginning of such year and the date of termination reduced by any periods
     (expressed in days) for which amounts under such incentive bonus
     arrangement have already been paid in such year and the denominator of
     which is 365.

         (b) The Company shall also pay to the Executive in cash, within ten
     (10) days of the date of termination, the sum of the Executive's Base
     Salary and Bonus. "Base Salary" for this purpose means the Executive's
     annual rate of base salary as determined immediately prior to the date of
     termination (or, if higher, his annual rate of base salary as determined
     immediately prior to the Change in Control), and "Bonus" means the highest
     aggregate amount of bonus or incentive compensation paid in cash to the
     Executive (or that would have been so paid absent deferral) by the Company
     (or Cabletron) for any one of the three most recent fiscal years ended
     prior to such termination (or, if higher, the Executive's target incentive
     bonus for the fiscal year in which the Change in Control occurs).

         (c) The Executive, together with his dependents, will continue for the
     duration of the "coverage continuation period" (as hereinafter defined) to
     be eligible to participate at the Company's expense (subject to any
     applicable waiting periods or similar requirements to

                                      -3-
<PAGE>

     the extent such requirements had not been satisfied prior to the date of
     termination, and subject to the payment by the Executive or his dependents
     of premiums, co-pays or similar amounts at rates not greater than those
     applicable immediately prior to the Change in Control to active employees
     and their dependents) in all medical, dental and life insurance plans or
     programs maintained or sponsored by the Company immediately prior to the
     Change in Control; provided, that if such continued participation is
     impracticable, the Company may provide the Executive with the full value of
     the cost of such coverage paid promptly in cash. For purposes of this
     subsection, the "coverage continuation period" means the one (1) year
     period following the Executive's termination of employment; provided, that
     if the plan or program in question, or applicable law, provides for a
     longer period of coverage following termination of employment, such longer
     period shall constitute the "coverage continuation period" with respect to
     that plan or program. If the coverage continuation period with respect to a
     plan or program exceeds one (1) year following the Executive's termination
     of employment, the terms and conditions of coverage following the first-
     year anniversary of the date of the Executive's termination of employment
     shall be as set forth in the plan or program or as prescribed by applicable
     law. Notwithstanding the foregoing provisions of this subsection, if the
     Executive becomes reemployed by another employer and is eligible (together
     with his dependents) for medical, dental or life insurance coverage that is
     substantially equivalent to the coverage of the same type that he (and his
     dependents) were entitled to receive under this subsection, the Company's
     obligation to the Executive and his dependents under this subsection shall
     cease with respect to that type of coverage.

         (d) Each Company stock option or other stock-based award held by the
     Executive prior to the Change in Control (an "affected award") shall be
     vested (and, in the case of an award requiring exercise, exercisable)
     (vesting and exercisability of such awards being referred to for purposes
     of this subsection (d), without distinction, as "vesting"), immediately
     prior to the termination of employment, for the "applicable number of
     shares" as hereinafter defined. In the event the Executive holds an
     affected award requiring exercise, the Company shall give the Executive
     adequate notice and opportunity to exercise any portion of the affected
     award that becomes exercisable by reason of this subsection. For purposes
     of this subsection (d), the term "applicable number of shares" means, in
     the case of any award, that number of shares for which the award, but for
     the operation of any limitation deferring scheduled vesting until the date
     of a spin-off, would have been vested by the end of the seven (7) month
     period following the termination of employment had the Executive holding
     the award immediately prior to the termination of employment continued in
     service during such seven (7) month period.

     4.  Cabletron Change in Control. For purposes of the Agreement, a
         ---------------------------
"Cabletron Change in Control" shall be deemed to have occurred upon the
occurrence, prior to the earlier of a spin-off by Cabletron of the Company or a
Change in Control described in Section 2(a) above, of any of the events
described in subsections (a), (b), (c) and (d) below:

         (a) Any Person acquires beneficial ownership (within the meaning of
     Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i)
     the then outstanding shares of common stock of Cabletron (the "Outstanding
     Cabletron Common Stock") or

                                      -4-
<PAGE>

     (ii) the combined voting power of the then outstanding voting securities of
     Cabletron entitled to vote generally in the election of directors (the
     "Outstanding Cabletron Voting Securities"); provided, that for purposes of
     this subsection (a) the following acquisitions shall not constitute a
     Cabletron Change in Control: (I) any acquisition directly from Cabletron,
     (II) any acquisition by Cabletron, (III) any acquisition by an employee
     benefit plan (or related trust) sponsored or maintained by Cabletron or its
     subsidiary, or (IV) any Cabletron Business Combination (but except as
     provided in subsection (c) of this Section 4 a Cabletron Business
     Combination may nevertheless constitute a Cabletron Change in Control under
     that subsection); and provided further, that an acquisition by a Person of
     30% or more but less than 50% of the Outstanding Cabletron Common Stock or
     of the combined voting power of the Outstanding Cabletron Voting Securities
     shall not constitute a Cabletron Change in Control under this subsection
     (a) if within 15 days of being advised that such ownership level has been
     reached, a majority of the "Incumbent Directors" (as hereinafter defined)
     then in office adopt a resolution approving the acquisition of that level
     of securities ownership by such Person; or

         (b) Individuals who, as of the date of this Agreement, constituted the
     Cabletron Board of Directors (the "Cabletron Incumbent Directors") cease
     for any reason to constitute at least a majority of the Board; provided,
     that any individual who becomes a member of the Cabletron Board of
     Directors subsequent to the date of this Agreement and whose election or
     nomination for election was approved by a vote of at least two-thirds of
     the Incumbent Directors shall be treated as a Cabletron Incumbent Director
     unless he or she assumed office as a result of an actual or threatened
     election contest with respect to the election or removal of directors; or

         (c) There is consummated a reorganization, merger or consolidation
     involving Cabletron, or a sale or other disposition of all or substantially
     all of the assets of Cabletron (a "Cabletron Business Combination"), in
     each case unless, following such Cabletron Business Combination, (i) the
     Persons who were the beneficial owners, respectively, of the Outstanding
     Cabletron Common Stock and of the combined voting power of the Outstanding
     Cabletron Voting Securities immediately prior to the Cabletron Business
     Combination beneficially own, directly or indirectly, more than 50% of,
     respectively, the then outstanding shares of common stock and the combined
     voting power of the then outstanding voting securities entitled to vote
     generally in the election of directors, as the case may be, of the entity
     resulting from such Cabletron Business Combination in substantially the
     same proportions as their ownership immediately prior to such Cabletron
     Business Combination of the Outstanding Cabletron Common Stock and of the
     combined voting power of the Outstanding Cabletron Voting Securities, as
     the case may be, (ii) no Person (excluding any entity resulting from such
     Cabletron Business Combination or any employee benefit plan (or related
     trust) of Cabletron or its subsidiary or of such corporation resulting from
     such Cabletron Business Combination) beneficially owns, directly or
     indirectly, 30% or more of, respectively, the then outstanding shares of
     common stock of the corporation resulting from such Cabletron Business
     Combination or the combined voting power of the then outstanding voting
     securities of such corporation entitled to vote generally in the election
     of directors, except to the extent that such ownership existed prior to the
     Cabletron Business Combination and (iii) at least a

                                      -5-
<PAGE>

     majority of the members of the Cabletron Board of Directors resulting from
     such Cabletron Business Combination were Cabletron Incumbent Directors at
     the time of the execution of the initial agreement, or of the action of the
     Cabletron Board of Directors, providing for such Cabletron Business
     Combination; or

         (d) The stockholders of Cabletron approve a complete liquidation or
     dissolution of Cabletron.

     5.  Cabletron-related Severance Benefit.  If, in the eighteen (18) months
         -----------------------------------
following a Cabletron Change in Control, either (i) the employment of the
Executive is terminated by the Cabletron Companies for any reason other than for
"Cause" (as defined in Section 6 below), or (ii) the Executive terminates his
employment with the Cabletron Companies for "Good Reason" (as defined in Section
7 below):

         (a) The Company shall pay to the Executive in cash, within five (5)
     days of the date of termination, the sum of (i) all salary earned by the
     Executive as of the date of termination but not yet paid, (ii) the
     Executive's accrued vacation earned through the date of termination, and
     (iii) an amount equal to the Executive's target incentive bonus, if any,
     for the fiscal year in which termination occurs, multiplied times a
     fraction, the numerator of which is the number of days elapsed between the
     beginning of such year and the date of termination reduced by any periods
     (expressed in days) for which amounts under such incentive bonus
     arrangement have already been paid in such year and the denominator of
     which is 365.

         (b) The Company shall pay to the Executive in cash, within ten (10)
     days of the date of termination, the sum of the Executive's Base Salary and
     Bonus. "Base Salary" for this purpose means the Executive's annual rate of
     base salary as determined immediately prior to the date of termination (or,
     if higher, his annual rate of base salary as determined immediately prior
     to the Cabletron Change in Control), and "Bonus" means the highest
     aggregate amount of bonus or incentive compensation paid in cash to the
     Executive (or that would have been so paid absent deferral) by the Company
     (or Cabletron) for any one of the three most recent fiscal years ended
     prior to such termination (or, if higher, the Executive's target incentive
     bonus for the fiscal year in which the Cabletron Change in Control occurs).

         (c) The Executive, together with his dependents, will continue for the
     duration of the "coverage continuation period" (as hereinafter defined) to
     be eligible to participate at the Company's expense (subject to any
     applicable waiting periods or similar requirements to the extent such
     requirements had not been satisfied prior to the date of termination, and
     subject to the payment by the Executive or his dependents of premiums, co-
     pays or similar amounts at rates not greater than those applicable
     immediately prior to the Cabletron Change in Control to active employees
     and their dependents) in all medical, dental and life insurance plans or
     programs maintained or sponsored by the Company immediately prior to the
     Cabletron Change in Control; provided, that if such continued participation
     is impracticable, the Company may provide the Executive with the full value
     of the cost of such coverage paid promptly in cash. For purposes of this
     subsection,

                                      -6-
<PAGE>

     the "coverage continuation period" means the one (1) year period following
     the Executive's termination of employment; provided, that if the plan or
     program in question, or applicable law, provides for a longer period of
     coverage following termination of employment, such longer period shall
     constitute the "coverage continuation period" with respect to that plan or
     program. If the coverage continuation period with respect to a plan or
     program exceeds one (1) year following the Executive's termination of
     employment, the terms and conditions of coverage following the first-year
     anniversary of the date of the Executive's termination of employment shall
     be as set forth in the plan or program or as prescribed by applicable law.
     Notwithstanding the foregoing provisions of this subsection, if the
     Executive becomes reemployed by another employer and is eligible (together
     with his dependents) for medical, dental or life insurance coverage that is
     substantially equivalent to the coverage of the same type that he (and his
     dependents) were entitled to receive under this subsection, the Company's
     obligation to the Executive and his dependents under this subsection shall
     cease with respect to that type of coverage.

         (d) Each Company stock option or other stock-based award held by the
     Executive prior to the Cabletron Change in Control (an "affected award")
     shall be vested (and, in the case of an award requiring exercise,
     exercisable) (vesting and exercisability of such awards being referred to
     for purposes of this subsection (d), without distinction, as "vesting"),
     immediately prior to the termination of employment, for the "applicable
     number of shares" as hereinafter defined. In the event the Executive holds
     an affected award requiring exercise, the Company shall give the Executive
     adequate notice and opportunity to exercise any portion of the affected
     award that becomes exercisable by reason of this subsection. For purposes
     of this subsection (d), the term "applicable number of shares" means, in
     the case of any award, that number of shares for which the award, but for
     the operation of any limitation deferring scheduled vesting until the date
     of a spin-off, would have been vested by the end of the eighteen (18) month
     period following the termination of employment had the Executive holding
     the award immediately prior to the termination of employment continued in
     service during such eighteen (18) month period.

For purposes of this Section 5, a termination of the Executive's employment with
the Cabletron Companies shall not be deemed to have occurred solely by reason of
the fact that the Company ceases to be a direct or indirect subsidiary of
Cabletron, but a termination of the Executive's employment with the Company
(other than for "Cause"), or a termination by the Executive of his employment
with the Company for "Good Reason," in either case occurring within eighteen
(18) months following a Cabletron Change in Control, shall be treated as a
termination described in the first sentence of this Section 5 whether or not, at
the time of such termination, the Company is still a direct or indirect
subsidiary of Cabletron.

     6.  Cause. "Cause" means only: (a) the Executive's conviction of, or a plea
         -----
of nolo contendere with respect to, a crime involving moral turpitude or a
felony; (b) the Executive's refusal to perform, or gross negligence in the
performance of, his duties to the Employer; or (c) an act of willful misfeasance
by the Executive that is intended to result in substantial personal enrichment
of the Executive at the expense of the Employer.

                                      -7-
<PAGE>

     7.  Voluntary Termination for Good Reason.  The Executive shall be deemed
         -------------------------------------
to have voluntarily terminated his employment for Good Reason if he leaves the
employ of the Employer (or the Cabletron Companies, in the case of a Cabletron
Change in Control) for any of the following reasons:

         (a) Any action by the Company which results in a material diminution in
     the Executive's position, authority, duties or responsibilities immediately
     prior to the Change in Control (or Cabletron Change in Control), excluding
     for this purpose an isolated, insubstantial and inadvertent action not
     taken in bad faith and which is remedied by the Company promptly after
     receipt of notice thereof given by the Executive; provided, however, that a
     sale or transfer of some or all of the business of the Company or Cabletron
     or any of their subsidiaries or other reduction in their business or that
     of their subsidiaries, or the fact that the Company or Cabletron shall
     become a subsidiary of another company or the securities of the Company or
     Cabletron shall no longer be publicly traded, shall not constitute "Good
     Reason" hereunder; or

         (b) Any reduction in the Executive's rate of annual base salary for any
     fiscal year to less than the greater of 100% of the rate of annual base
     salary paid to him in the completed fiscal year immediately preceding the
     Change in Control (or Cabletron Change in Control) or 100% of the rate at
     which annual base salary was being paid to the Executive immediately prior
     to such reduction; or

         (c) Any failure of the Company to continue or cause to be continued in
     effect any retirement, life, medical, dental, disability, accidental death
     or travel insurance plan in which the Executive was participating
     immediately prior to the Change in Control (or Cabletron Change in Control)
     unless the Company provides the Executive with a plan or plans that provide
     substantially equivalent benefits, or the taking of any action by the
     Company that would adversely effect the Executive's participation in or
     materially reduce the Executive's benefits under any such plan or deprive
     the Executive of any material fringe benefit enjoyed by the Executive
     immediately prior to the Change in Control (or Cabletron Change in
     Control), other than an isolated, insubstantial and inadvertent failure not
     occurring in bad faith and which is remedied by the Company promptly after
     receipt of notice thereof given by the Executive; or

         (d) The Company requires the Executive to be based at any office or
     location that is more than 50 miles distant from his base office or work
     location immediately prior to the Change in Control (or Cabletron Change in
     Control).

     8.  Certain Tax-Related Payments.
         ----------------------------

         (a) If any "payment in the nature of compensation" (hereinafter
     "Payment") as that term is used in Section 280G of the Internal Revenue
     Code of 1986, as amended (the "Code"), including but not limited to
     payments and benefits under the Agreement (other than payments pursuant to
     this Section 8) and any "Cabletron CIC program" (as defined in Section 13
     below), made with respect to the Executive, is determined to be subject to
     the excise tax imposed by Section 4999 of the Code (the "Section 4999
     tax"), the

                                      -8-
<PAGE>

     Company will pay to the Executive an additional amount in cash (the "Gross-
     Up Payment") which, after reduction for all taxes (including, but not
     limited to, the Section 4999 tax with respect to such Additional Amount),
     is sufficient to pay the Section 4999 tax and all related interest and
     penalties, if any, with respect to the Payment. All determinations under
     this section shall be made at the Company's expense by a nationally
     recognized accounting firm selected by the Company.

         (b) If there is a determination by the Internal Revenue Service (the
     "IRS") with respect to the Executive that is inconsistent with a
     determination pursuant to Section 8(a) and that if sustained would result
     in a Section 4999 tax (or a greater Section 4999 tax) or in interest or
     penalties (or increased interest or penalties) with respect to any such tax
     (an "initial IRS determination"), the determination under Section 8(a)
     shall be deemed automatically modified to conform to the initial IRS
     determination and the Company, upon receipt from the IRS of the initial IRS
     determination or of written notice from the Executive setting forth the
     initial IRS determination, shall promptly pay to the Executive the
     additional Gross-Up Payment required by such modification (the "Additional
     Gross-Up Payment"). The Company may elect to contest at its expense any
     initial IRS determination in respect of which the Company has made an
     Additional Gross-Up Payment, in which case such Additional Gross-Up Payment
     shall be considered an interest-free loan (the "Loan") to Executive until
     such time as the IRS's determination is withdrawn or modified or otherwise
     becomes final (a "final IRS determination"). Upon a final IRS determination
     that is no longer subject to modification or judicial review and that
     results in a Section 4999 tax and related interest and penalties lower than
     those in respect of which the Additional Gross-Up Payment was made, the
     Executive shall repay to the Company so much of the Loan, if any, as shall
     leave the Executive on an after-tax basis in the same position he would
     have been in had the initial IRS determination never been made. The
     Executive shall cooperate reasonably with the Company in any effort by the
     Company to contest an IRS determination under this paragraph, including by
     the making of such filings and appeals as the Company may reasonably
     require, but nothing herein shall be construed as requiring Executive to
     bear any cost or expense of such a contest or in connection therewith to
     compromise any tax item (including without limitation any deduction or
     credit) other than the Section 4999 tax and related interest and penalties,
     if any, that are the subject of the contested IRS determination.

     9.  Binding Effect on Successor Entity.  If the Company is merged or
         ----------------------------------
consolidated into or with any other entity (whether or not the Company is the
surviving entity), or if substantially all of the assets of the Company are
transferred to another entity, the provisions of the Agreement will be binding
upon and inure to the benefit of the entity resulting from such merger or
consolidation or the acquirer of such assets (the "Successor Entity").  The
Company will require any such Successor Entity to assume expressly and agree to
perform the provisions of the Agreement in the same manner and to the same
extent that the Company would have been required to perform if no such
transaction had taken place.

     10. Payment Obligations Absolute.  Upon termination of employment described
         ----------------------------
in Section 3 or 5, the Company's obligations to pay the Severance Benefits
described in Section 3 or 5 shall be absolute and unconditional and shall not be
affected by any circumstances,

                                      -9-
<PAGE>

including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive. In no event shall
the Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of the Agreement and, except as otherwise provided in Section 3(c) or
5(c), in no event shall the amount of any payment hereunder be reduced by any
compensation earned by the Executive as a result of employment by another
employer.

     11. Limited Effect.  Nothing herein shall be construed as giving the
         --------------
Executive a right of continued employment or as limiting the Company's right to
terminate the Executive's employment, subject, in the case of any such
termination described in Section 3 or 5, to the payment of the benefits
described in Section 3 or 5.

     12. Amendment and Termination.  This Agreement may be amended at any time
         -------------------------
and from time to time and may be terminated at any time upon written consent of
both parties hereto.

     13. No Duplication of Benefits.  For the avoidance of doubt and
         --------------------------
notwithstanding any provision of the Plan to the contrary, under no
circumstances shall the Executive be entitled to receive cash severance benefits
under both Section 3(a), (b), and (c) and Section 5(a), (b), and (c). In any
case in which the Agreement might otherwise be construed to entitle the
Executive to receive cash severance benefits under both such sets of provisions,
the Executive shall be entitled to receive cash severance benefits only under
Section 3(a), (b), and (c). Also, the benefits and rights to benefits under this
Agreement are in lieu of any and all benefits (other than the acceleration of
stock options) that may become due to the Executive under any change in control
plan or program of Cabletron (any such plan or program, a "Cabletron CIC
program"), and the Executive, for himself and his heirs, beneficiaries and
assigns, hereby expressly waives and relinquishes any right that he may have to
any such benefits under any Cabletron CIC program. The parties hereto
acknowledge and agree that the Executive does not hereby waive any right or
entitlement to the acceleration of stock option awards to the extent such
acceleration may be provided under any Cabletron CIC program.

     14. Withholding.  All payments and benefits hereunder shall be subject to
         -----------
reduction for applicable tax withholdings.

     15. Indemnification.  The Company agrees to pay all costs and expenses
         ---------------
incurred by the Executive in connection with efforts to enforce his rights under
this Agreement and will indemnify and hold harmless the Executive from and
against any damages, liabilities and expenses (including without limitation
reasonable fees and expenses of counsel) incurred by the Executive in connection
with any litigation or threatened litigation, including any regulatory
proceedings, arising out of the making, performance or enforcement of this
Agreement.

     16. Source of Payment.  Nothing herein shall be construed as establishing a
         -----------------
trust or as requiring the Company to set aside funds to meet its obligations
hereunder.  Notwithstanding the foregoing, if the Board in its discretion so
determines the Company may establish a so-called "rabbi trust" or similar
arrangement to assist it in meeting any such obligations that it may have.

                                      -10-
<PAGE>

     17. Governing Law.  The Agreement shall be governed by the laws of the
         -------------
State of New Hampshire.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and the Executive has executed this Agreement as of
the date first written above.

                                          RIVERSTONE NETWORKS, INC.

                                          By:  /s/  Piyush Patel
                                             -----------------------------

                                          ROMULUS PEREIRA

                                             /s/  Romulus S. Pereira
                                             -----------------------------

                                      -11-

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