8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT



                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934



                Date of Report (Date of earliest event reported):
                                January 24, 1997



                            MORGAN STANLEY GROUP INC.

             (Exact name of registrant as specified in its charter)



       DELAWARE                      1-9085                13-2838811

       (State or other               (Commission           (I.R.S. Employer
       jurisdiction of               File Number)          Identification
       incorporation)                                      Number)


                     1585 BROADWAY, NEW YORK, NEW YORK 10036
           (Address of principal executive offices including zip code)


                                 (212) 761-4000
                         (Registrant's telephone number
                              including area code)








ITEM 5.   OTHER EVENTS

         Attached and incorporated herein by reference (a) as Exhibit 1-a is the
Form of U.S. Distribution Agreement, (b) as Exhibit 1-b is the Form of Euro
Distribution Agreement, (c) as Exhibit 4-a is the Warrant Agreement for the
Universal Warrants, dated as of January 24, 1997, between Morgan Stanley Group
Inc. and The Chase Manhattan Bank, as Warrant Agent, together with forms of put
warrant and call warrant, (d) as Exhibit 4-b is the Unit Agreement, dated as of
January 24, 1997, among Morgan Stanley Group Inc., The Chase Manhattan Bank, as
Unit Agent, as Collateral Agent, as Trustee and Paying Agent under the Indenture
referred to therein and as Warrant Agent under the Warrant Agreement referred to
therein and the holders from time to time of the Units, together with forms of
Purchase Contract and (e) as Exhibits 8-a, and 23-a, respectively, the opinion
and consent of Shearman & Sterling, in connection with the issuance from time to
time by Morgan Stanley Group Inc. of Global Medium-Term Notes, Series C and
Global Units, Series C and of Global Medium-Term Notes, Series D and E and
Global Units, Series D and E.

ITEM 7(C).   EXHIBITS

1-a.     Form of U.S. Distribution Agreement.
1-b.     Form of Euro Distribution Agreement.
4-a.     Warrant Agreement for the Universal Warrants dated as of January 24,
         1997, between Morgan Stanley Group Inc. and The Chase Manhattan Bank,
         as Warrant Agent.
4-b.     Unit Agreement, dated as of January 24, 1997, among Morgan Stanley
         Group Inc., The Chase Manhattan Bank, as Unit Agent, as Collateral
         Agent, as Trustee and Paying Agent under the Indenture referred to
         therein and as Warrant Agent under the Warrant Agreement referred to
         therein and the holders from time to time of the Units.
4-c.     Form of Put Warrant (included in Exhibit 4-a).
4-d.     Form of Call Warrant (included in Exhibit 4-a).
4-e.     Form of Purchase Contract (Issuer Sale) (included in Exhibit 4-b).
4-f.     Form of Purchase Contract (Issuer Purchase) (included in Exhibit 4-b).
8-a.     Opinion of Shearman & Sterling.
23-a.    Consent of Shearman & Sterling (included in Exhibit 8-a).


                                        2






                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                              MORGAN STANLEY GROUP INC.
                                              (Registrant)


Date:    February 4, 1997                     By:   /s/ Patricia A. Kurtz
                                                  --------------------------
                                                     Patricia A. Kurtz
                                                     Assistant Secretary

                                        3




                                  EXHIBIT INDEX


Exhibit
Number        Description
- ------        -----------

1-a.     Form of U.S. Distribution Agreement.
1-b.     Form of Euro Distribution Agreement.
4-a.     Warrant Agreement for the Universal Warrants dated as of January 24,
         1997, between Morgan Stanley Group Inc. and The Chase Manhattan Bank,
         as Warrant Agent.
4-b.     Unit Agreement, dated as of January 24, 1997, among Morgan Stanley
         Group Inc., The Chase Manhattan Bank, as Unit Agent, as Collateral
         Agent, as Trustee and Paying Agent under the Indenture referred to
         therein and as Warrant Agent under the Warrant Agreement referred to
         therein and the holders from time to time of the Units.
4-c.     Form of Put Warrant (included in Exhibit 4-a).
4-d.     Form of Call Warrant (included in Exhibit 4-a).
4-e.     Form of Purchase Contract (Issuer Sale) (included in Exhibit 4-b).
4-f.     Form of Purchase Contract (Issuer Purchase) (included in Exhibit 4-b).
8-a.     Opinion of Shearman & Sterling.
23-a.    Consent of Shearman & Sterling (included in Exhibit 8-a).


                                        4

EX-1.A

                           MORGAN STANLEY GROUP INC.

                                 $______________

                      Global Medium-Term Notes, Series C

                            Global Units, Series C

                          U.S. DISTRIBUTION AGREEMENT



                                                         ____________, ____


Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Dear Sirs:

               Morgan Stanley Group Inc., a Delaware corporation (the
"Company"), confirms its agreement with you with respect to the issue and sale
from time to time by the Company of up to $_____________ (or the equivalent
thereof in one or more foreign currencies or composite currencies) aggregate
initial public offering price of its Global Medium-Term Notes, Series C, due
more than 9 months from the date of issue (the "Notes") and its Global Units,
Series C (the "Units" and together with the Notes, the "Program Securities"), in
each case subject to reduction as a result of the sale of the Company's (i)
Global Medium-Term Notes, Series D and Series E, to be sold primarily outside of
the United States, (ii) Global Units, Series D and Series E, to be sold
primarily outside of the United States, and (iii) the sale of certain of the
Company's other debt securities, warrants, preferred stock, purchase contracts
and units.

               The Notes may be issued as senior indebtedness (the "Series C
Senior Notes") or as subordinated indebtedness (the "Series C Subordinated
Notes") of the Company. The Series C Senior Notes will be issued, either alone
or as part of a Unit, pursuant to the provisions of a senior indenture dated as
of April 15, 1989, as supplemented by a first supplemental senior indenture
dated as of May 15, 1991 and a second supplemental senior indenture dated as of
April 15, 1996 (as so supplemented and as may be further supplemented or amended
from time to time, the "Senior Debt Indenture"), between the Company and The
Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the "Senior
Debt Trustee"). The Series C Subordinated Notes will be issued pursuant to the
provisions of a subordinated indenture dated as of April 15, 1989, as
supplemented by a first supplemental subordinated indenture dated as of May 15,
1991 and a second supplemental subordinated indenture dated as of April 15, 1996
(as so supplemented and as may be further supplemented or amended from time to
time, the "Subordinated Debt Indenture"), between the Company and The First
National Bank of Chicago, as trustee (the "Subordinated Debt Trustee"). The
Senior Debt Indenture and the Subordinated Debt Indenture are sometimes
hereinafter referred to individually as an "Indenture" and collectively as the
"Indentures," and the Senior Debt Trustee and the Subordinated Debt Trustee are
sometimes hereinafter referred to individually as a "Trustee" and collectively
as the "Trustees."

               The Units will be issued pursuant to the Unit Agreement dated as
of January 24, 1997, among the Company, The Chase Manhattan Bank, as Unit Agent,
as Collateral Agent, as Trustee and Paying Agent under the Indenture referred to
therein, and as Warrant Agent under the Warrant Agreement referred to therein
and the holders from time to time of the Units described therein. Units may
include one or more (i) Series C Senior Notes, (ii) warrants ("Universal
Warrants") entitling the holders thereof to purchase or sell (a) securities of
an entity unaffiliated with the Company, a basket of such securities, an index
or indices of such securities or any combination of the above, (b) currencies or
composite currencies or (c) commodities, (iii) purchase contracts ("Purchase
Contracts") requiring the holders thereof to purchase or sell (a) securities of
an entity unaffiliated with the Company, a basket of such securities, an index
or indices of such securities or any combination of the above, (b) currencies or
composite currencies or (c) commodities or (iv) any combination thereof. The
applicable prospectus supplement will specify whether Notes, Universal Warrants
and Purchase Contracts comprised by a Unit may or may not be separated from any
series of Units. Universal Warrants issued as part of a Unit will be issued
pursuant to the Universal Warrant Agreement dated as of January 24, 1997 (the
"Universal Warrant Agreement") between the Company and The Chase Manhattan Bank,
as Warrant Agent. Purchase Contracts entered into by the Company and the holders
thereof will be governed by the Unit Agreement.

               The Notes whether issued alone, or as part of a Unit, will have
the maturities, interest rates, redemption provisions, if any, and other terms
as set forth in supplements to the Basic Prospectus referred to below. The
Universal Warrants issued as part of a Unit will have the exercise prices,
exercise dates, expiration dates and other terms as set forth in supplements to
the Basic Prospectus. The Purchase Contracts issued as part of a Unit will have
the closing dates, purchase or sale prices and other terms as set forth in
supplements to the Basic Prospectus.

               The Company hereby appoints you as its exclusive agent for the
purpose of soliciting and receiving offers to purchase Program Securities from
the Company by others and, on the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, you
agree to use reasonable efforts to solicit and receive offers to purchase
Program Securities upon terms acceptable to the Company at such times and in
such amounts as the Company shall from time to time specify. In addition, you
may also purchase Program Securities as principal pursuant to the terms of a
terms agreement relating to such sale (in the case of Notes, a "Notes Terms
Agreement" and, in the case of Units, a "Units Terms Agreement") in accordance
with the provisions of Section 2(b) hereof.

               The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating to
the Program Securities. Such registration statement, including the exhibits
thereto, as amended at the Commencement Date (as hereinafter defined), is
hereinafter referred to as the "Registration Statement." The Company proposes to
file with the Commission from time to time, pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), supplements to the
prospectus included in the Registration Statement that will describe certain
terms of the Program Securities. The prospectus in the form in which it appears
in the Registration Statement is hereinafter referred to as the "Basic
Prospectus." The term "Prospectus" means the Basic Prospectus together with the
prospectus supplement or supplements (each a "Prospectus Supplement")
specifically relating to Notes, as filed with, or transmitted for filing to, the
Commission pursuant to Rule 424. As used herein, the terms "Basic Prospectus"
and "Prospectus" shall include in each case the documents, if any, incorporated
by reference therein. The terms "supplement," "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Basic Prospectus by the
Company with the Commission pursuant4, as amended (the "Exchange Act").

               1. Representations and Warranties. The Company represents and
warrants to and agrees with you as of the Commencement Date, as of each date on
which you solicit offers to purchase Program Securities, as of each date on
which the Company accepts an offer to purchase Program Securities (including any
purchase by you as principal pursuant to a Notes Terms Agreement or a Units
Terms Agreement), as of each date the Company issues and delivers Program
Securities and as of each date the Registration Statement or the Basic
Prospectus is amended or supplemented, as follows (it being understood that such
representations, warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as amended
or supplemented to each such date):

               (a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.

               (b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(iii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that (1) the representations and warranties set forth in this Section
1(b) do not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to you furnished to the
Company in writing by you expressly for use therein or (B) to those parts of the
Registration Statement that constitute the Statements of Eligibility (Form T-1)
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
of the Trustees and (2) the representations and warranties set forth in clauses
(iii) and (iv) above, when made as of the Commencement Date or as of any date on
which you solicit offers to purchase Program Securities or on which the Company
accepts an offer to purchase Program Securities, shall be deemed not to cover
information concerning an offering of particular Program Securiton will be set
forth in a supplement to the Basic Prospectus.

               (c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.

               (d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.

               (e) Each of this Agreement and any applicable Written Notes Terms
Agreement or Written Units Terms Agreement (each as hereinafter defined) has
been duly authorized, executed and delivered by the Company.

               (f) Each Indenture has been duly qualified under the Trust
Indenture Act and each of the Indentures, the Unit Agreement and the Universal
Warrant Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (ii) is subject to
general principles of equity, regardless of whether such enforceability is
considered at a proceeding in equity or at law.

                (g) The forms of Notes, whether issued alone or as part of a
Unit, have been duly authorized and established in conformity with the
provisions of the relevant Indenture and, when the Notes have been executed and
authenticated in accordance with the provisions of the relevant Indenture and
delivered to and duly paid for by the purchasers thereof, the Notes will be
entitled to the benefits of such Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their respective
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered at a
proceeding in equity or at law.

               (h) The forms of Units, including the forms of Universal Warrants
and Purchase Contracts which, in addition to the Notes, may comprise such Units,
have been duly authorized and established in conformity with the provisions of
(i) in the case of the Unitsrrants, the Universal Warrant Agreement. When the
Units have been delivered to and duly paid for by the purchasers thereof and (a)
any Purchase Contracts included in such Units have been executed by the Company
and countersigned and executed by the Unit Agent and (b) any Universal Warrants
included in such Units have been executed by the Company and countersigned by
the Warrant Agent, the Units (including any such Purchase Contracts or Universal
Warrants contained therein) will be entitled to the benefits of the Unit
Agreement and, in the case of the Universal Warrants, the Universal Warrant
Agreement and will be valid and binding obligations of the Company, enforceable
in accordance with their respective terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights generally and (ii)
is subject to general principles of equity, regardless of whether such
enforceability is considered at a proceeding in equity or at law.

               (i) The execution and delivery by the Company of this Agreement,
the Notes (whether issued alone or as part of a Unit), the Units (including any
Purchase Contracts and Universal Warrants included therein) the Indentures, the
Unit Agreement, the Universal Warrant Agreement and any applicable Written Notes
Terms Agreement or Written Units Terms Agreement and the performance by the
Company of its obligations under this Agreement, the Notes, the Units, the
Indentures, the Unit Agreement, the Universal Warrant Agreement and any
applicable Notes Terms Agreement or Units Terms Agreement will not contravene
any provision of applicable law or the certificate of incorporation or by-laws
of the Company or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, the Notes, the Units, the Indentures, the
Unit Agreement, the Universal Warrant Agreement and any applicable Notes Terms
Agreement or Units Terms Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Program Securities; provided, however, that no representation is
made or warranty given as to whether the purchase of the Program Securities
constitutes a "prohibited transaction" under Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended.

               (j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or id its subsidiaries, taken as a whole, from that set
forth in the Prospectus.

               (k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.

               (l) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
except to the extent that the failure to obtain or file would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.

               (m)  Morgan Stanley & Co. Incorporated is registered as a
broker-dealer and investment adviser with the Commission, is registered with
the Commodity Futures Trading Commission as a futures commission merchant and
is a member of the New York Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.

               (n) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or affiliate located in
Cuba.


               Notwithstanding the foregoing, it is understood and agreed that
the representations and warranth) (except as to due authorization of the Units,
Universal Warrants and Purchase Contracts) and (i), when made as of the
Commencement Date, or as of any date on which you solicit offers to purchase
Program Securities, with respect to any Program Securities the payments of
principal or interest on which, or any other payments with respect to which,
will be determined by reference to one or more currency exchange rates,
commodity prices, securities of entities unaffiliated with the Company, baskets
of such securities, equity indices or other factors, shall be deemed not to
address the application of the Commodity Exchange Act, as amended, or the rules,
regulations or interpretations of the Commodity Futures Trading Commission.

               2.  Solicitations as Agent; Purchases as Principal.

               (a) Solicitations as Agent. In connection with your actions as
agent hereunder, you agree to use reasonable efforts to solicit offers to
purchase Program Securities upon the terms and conditions set forth in the
Prospectus as then amended or supplemented.

               The Company reserves the right, in its sole discretion, to
instruct you to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Program Securities. Upon receipt of at least
one business day's prior notice from the Company, you will forthwith suspend
solicitations of offers to purchase Program Securities from the Company until
such time as the Company has advised you that such solicitation may be resumed.
While such solicitation is suspended, the Company shall not be required to
deliver any certificates, opinions or letters in accordance with Sections 5(a),
5(b) and 5(c); provided, however, that if the Registration Statement or
Prospectus is amended or supplemented during the period of suspension (other
than by an amendment or supplement providing solely for (i) in the case of
Notes, issued alone or as part of a Unit, a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the
Notes, (ii) in the case of Units, a change in the exercise price, exercise date
or period or expiration of an underlying Universal Warrant or a change in the
settlement date or purchase or sale price of an underlying Purchase Contract or
(iii) for a change you deem to be immaterial), you shall not be required to
resume soliciting offers to purchase Program Securities until the Company has
delivered such certificates, opinions and letters as you may request.

               The Company agrees to pay to you, as consideration for the sale
of each Program Security resulting from a solicitation made or an offer to
purchase received by you, a commission in the form of a discount from the
purchase price of such Program Security equal to between .125% and .750%
(depending upon such Note's maturity or, in the case of Units, any underlying
Note's maturity or the terms of the Units and of the securities comprised by
such Units) of the principal amount of such Note or, in the case of Units, the
face amount of such Unit (provided that the commission for Notes having, or
Units including Notes or other securities having, a maturity of 30 years or
greater will be negotiated) or such other discount as may be specified in the
Prospectus Supplement relating to such Note or Unit.

               You shall communicate to the Company, orally or in writing, each
offer to purchase Program Securities received by you as agent that in your
judgment should be considered by the Company. The Company shall have the sole
right to accept offers to purchase Program Securities and may reject any offer
in whole or in part. You shall have the right to reject any offer to purchase
Program Securities that you consider to be unacceptable, and any such rejection
shall not be deemed a breach of your agreements contained herein. The procedural
details relating to the issue and delivery of Program Securities sold by you as
agent and the payment therefor shall be as set forth in the Administrative
Procedures (as hereinafter defined).

               (b) Purchases as Principal. Each sale of Program Securities to
you as principal shall be made in accordance with the terms of this Agreement.
In connection with each such sale, the Company will enter into a Notes Terms
Agreement or Units Terms Agreement that will provide for the sale of such
Program Securities to and the purchase thereof by you. Each Notes Terms
Agreement or Units Terms Agreement will take the form of either (i) a written
agreement between you and the Company, which may be substantially in the form of
Exhibit A or Exhibit A-1 (as applicable) hereto (in the case of Notes, a
"Written Notes Terms Agreement" and, in the case of Units, a "Written Units
Terms Agreement"), or (ii) an oral agreement between you and the Company
confirmed in writing by you to the Company.

               Your commitment to purchase Program Securities as principal
pursuant to a Notes Terms Agreement or Units Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each (i) Note Terms Agreement shall specify the principal amount of Notes
to be purchased by you pursuant thereto, the maturity date of such Notes, the
price to be paid to the Company for such Notes, the interest rate and interest
rate formula, if any, applicable to such Notes and any other terms of such Notes
and (ii) Unit Terms Agreement shall specify (a) the information set forth in (i)
above with respect to any Notes issued as part of a Unit, (b) with respect to
Universal Warrants issued as part of a Unit, the exercise price, the exercise
date or period, the expiration date and any other terms of such Universal
Warrants, and (c) with respect to Purchase Contracts issued as part of a Unit,
the settlement date, the purchase or sale price or any other terms of such
Purchase Contracts. Each such Notes Terms Agreement or Units Terms Agreement may
also specify any requirements for officers' certificates, opinions of counsel
and letters from the independent auditors of the Company pursuant to Section 4
hereof. A Notes Terms Agreement and a Unit Terms Agreement may also specify
certain provisions relating to the reoffering of such Notes or Units, as the
case may be, by you.

               Each Notes Terms Agreement and each Units Terms Agreement shall
specify the time and place of delivery of and payment for such Notes or Units,
as the case may be. Unless otherwise specified in a Notes Terms Agreement or a
Units Terms Agreement, the procedural details relating to the issue and delivery
of Notes or Units, as the case may be, purchased by you as principal and the
payment therefor shall be as set forth in the Administrative Procedures. Each
date of delivery of and payment for Program Securities to be purchased by you as
principal pursuant to a Notes Terms Agreement or a Units Terms Agreement, as the
case may be, is referred to herein as a "Settlement Date."

               Unless otherwise specified in a Notes Terms Agreement or a Units
Terms Agreement, if you are purchasing Notes or Units, as principal you may
resell such Notes or Units to other dealers. Any such sales may be at a
discount, which shall not exceed the amount set forth in the Prospectus
Supplement relating to such Notes or Units.

               (c) Administrative Procedures. You and the Company agree to
perform the respective duties and obligations specifically provided to be
performed in the Global Medium-Term Notes, Series C and the Global Units, Series
C, Administrative Procedures (attached hereto as Exhibit B) (the "Administrative
Procedures"), as amended from time to time. The Administrative Procedures may be
amended only by written agreement of the Company and you.

               (d) Delivery. The documents required to be delivered by Section 4
of this Agreement as a condition precedent to your obligation to begin
soliciting offers to purchase Program Securities as agent of the Company shall
be delivered at the office of Davis Polk & Wardwell, your counsel, not later
than 4:00 p.m., New Yoay agree upon in writing, but in no event later than the
day prior to the earlier of (i) the date on which you begin soliciting offers to
purchase Program Securities and (ii) the first date on which the Company accepts
any offer by you to purchase Program Securities as principal. The date of
delivery of such documents is referred to herein as the "Commencement Date."

               3.  Agreements.  The Company agrees with you that:

               (a) Prior to the termination of the offering of the Program
Securities pursuant to this Agreement or any Notes Terms Agreement or Units
Terms Agreement, the Company will not file any Prospectus Supplement relating to
the Program Securities or any amendment to the Registration Statement unless the
Company has previously furnished to you a copy thereof for your review and will
not file any such proposed supplement or amendment to which you reasonably
object; provided, however, that the foregoing requirement shall not apply to any
of the Company's periodic filings with the Commission required to be filed
pursuant to Section 13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies
of which filings the Company will cause to be delivered to you promptly after
being transmitted for filing with the Commission. Subject to the foregoing
sentence, the Company will promptly cause each Prospectus Supplement to be filed
with or transmitted for filing to the Commission in accordance with Rule 424(b)
under the Securities Act. The Company will promptly advise you (i) of the filing
of any amendment or supplement to the Basic Prospectus, (ii) of the filing and
effectiveness of any amendment to the Registration Statement, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Basic Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threateninby the Company of any notification with respect to the suspension of
the qualification of the Program Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company will
use its best efforts to prevent the issuance of any such stop order or notice of
suspension of qualification and, if issued, to obtain as soon as possible the
withdrawal thereof. If the Basic Prospectus is amended or supplemented as a
result of the filing under the Exchange Act of any document incorporated by
reference in the Prospectus, you shall not be obligated to solicit offers to
purchase Program Securities so long as you are not reasonably satisfied with
such document.

               (b) If, at any time when a prospectus relating to the Program
Securities is required to be delivered under the Securities Act, any event
occurs or condition exists as a result of which the Prospectus, as then amended
or supplemented, would include an untrue statement of a material fact, or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances when the Prospectus, as then amended or supplemented,
is delivered to a purchaser, not misleading, or if, in your opinion or in the
opinion of the Company, it is necessary at any time to amend or supplement the
Prospectus, as then amended or supplemented, to comply with applicable law, the
Company will immediately notify you by telephone (with confirmation in writing)
to suspend solicitation of offers to purchase Program Securities and, if so
notified by the Company, you shall forthwith suspend such solicitation and cease
using the Prospectus, as then amended or supplemented. If the Company shall
decide to amend or supplement the Registration Statement or Prospectus, as then
amended or supplemented, it shall so advise you promptly by telephone (with
confirmation in writing) and, at its expense, shall prepare and cause to be
filed promptly with the Commission an amendment or supplement to tspectus, as
then amended or supplemented, satisfactory in all respects to you, that will
correct such statement or omission or effect such compliance and will supply
such amended or supplemented Prospectus to you in such quantities as you may
reasonably request. If any documents, certificates, opinions and letters
furnished to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and
5(c) in connection with the preparation and filing of such amendment or
supplement are satisfactory in all respects to you, upon the filing with the
Commission of such amendment or supplement to the Prospectus or upon the
effectiveness of an amendment to the Registration Statement, you will resume the
solicitation of offers to purchase Program Securities hereunder. Notwithstanding
any other provision of this Section 3(b), until the distribution of any Program
Securities you may own as principal has been completed, if any event described
above in this paragraph (b) occurs, the Company will, at its own expense,
forthwith prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or Prospectus, as then
amended or supplemented, satisfactory in all respects to you, will supply such
amended or supplemented Prospectus to you in such quantities as you may
reasonably request and shall furnish to you pursuant to paragraph (f) below and
Sections 5(a), 5(b) and 5(c) such documents, certificates, opinions and letters
as you may request in connection with the preparation and filing of such
amendment or supplement.

               (c) The Company will make generally available to its security
holders and to you as soon as practicable earning statements that satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder covering twelve month periods beginning, in each
case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in Rule 158 under the Securittement
with respect to each sale of Program Securities. If such fiscal quarter is the
last fiscal quarter of the Company's fiscal year, such earning statement shall
be made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.

               (d) The Company will furnish to you, without charge, a signed
copy of the Registration Statement, including exhibits and all amendments
thereto, and as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto as you may
reasonably request.

               (e) The Company will endeavor to qualify the Notes for offer and
sale under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to maintain such qualifications for as long as you shall
reasonably request.

               (f) During the term of this Agreement, the Company shall furnish
to you such relevant documents and certificates of officers of the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Basic Prospectus, any amendments or supplements
thereto, the Indentures, the Unit Agreement, the Warrant Agreement, the Notes,
the Units, the Universal Warrants, the Purchase Contracts, this Agreement, the
Administrative Procedures, any Notes Terms Agreement or Units Terms Agreement
and the performance by the Company of its obligations hereunder or thereunder as
you may from time to time reasonably request.

               (g) The Company shall notify you promptly in writing of any
downgrading, or of its receipt of any notice of any intended or potential
downgrading or of any review for possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.

               (h) The Company will, whether or not any sale of Program
Securities is consummated, pay all expenses incident to the performance of its
obligations under this Agreement and any Notes Terms Agreement or Units Terms
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Program Securities, (iii) the fees
and disbursements of the Company's counsel and accountants, of the Trustees and
their counsel, the Unit Agent and its counsel, and the Warrant Agent and its
counsel (iv) y) under securities or Blue Sky laws in accordance with the
provisions of Section 3(e), including filing fees and the fees and disbursements
of your counsel in connection therewith and in connection with the preparation
of any Blue Sky or Legal Investment Memoranda, (v) the printing and delivery to
you in quantities as hereinabove stated of copies of the Registration Statement
and all amendments thereto and of the Prospectus and any amendments or
supplements thereto, (vi) the printing and delivery to you of copies of the
Indentures, the Unit Agreement, the Universal Warrant Agreement and any Blue Sky
or Legal Investment Memoranda, (vii) any fees charged by rating agencies for the
rating of the Program Securities, (viii) the fees and expenses, if any, incurred
with respect to any filing with the National Association of Securities Dealers,
Inc., (ix) the fees and disbursements of your counsel incurred in connection
with the offering and sale of the Program Securities, including any opinions to
be rendered by such counsel hereunder, and (x) any out-of-pocket expenses
incurred by you; provided that any advertising expenses incurred by you shall
have been approved by the Company.

               (i) During the period beginning on the date of any Notes Terms
Agreement or Units Terms Agreement relating to either Notes or Units, as the
case may be, and continuing to and including the Settlement Date with respect to
such Notes Terms Agreement or Units Terms Agreement, the Company will not,
without your prior consent, offer, sell, contract to sell or otherwise dispose
of (i) in the case of Notes, any debt securities of the Company substantially
similar to the Notes set forth in such Notes Terms Agreement (other than (A) the
Notes that are to be sold pursuant to such Notes Terms Agreement, (B) Notes
previously agreed to be sold by the Company and (C) commercial paper issued in
the ordinary course of business) or (ii) in the case of Units, any securities
substantially similar to such Units (other than (A) the Units that are sold
pursuant to such Units Terms Agreement or (B) Units previously agreed to be sold
by the Company), in each case, except as may otherwise be provided in the
applicable Notes Terms Agreement or Units Terms Agreement.

               4. Conditions of the Obligations of the Agent. Your obligation to
solicit offers to purchase Program Securities as agent of the Company, your
obligation to purchase Program Securities as principal pursuant to any Notes
Terms Agreement or Units Terms Agreement and the obligation of any other
purchaser to purchase Program Securities will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of the Company's officers made in each certificate
furnished pursuant to the provisions hereof and to the performance and
observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed (in the case of your obligation to solicit
offers to purchase Program Securities, at the time of such solicitation, and, in
the case of your or any other purchaser's obligation to purchase Program
Securities, at the time the Company accepts the offer to purchase such Program
Securities and at the time of issuance and delivery) and (in each case) to the
following additional conditions precedent when and as specified:

               (a)  Prior to such solicitation or purchase, as the case may
                    be:

               (i) there shall not have occurred any change, or any development
         involving a prospective change, in the condition, financial or
         otherwise, or in the earnings, business or operations of the Company
         and its subsidiaries, taken as a whole, from that set forth in the
         Prospectus, as amended or supplemented at the time of such solicitation
         or at the time such offer to purchase was made, that, in your judgment,
         is material and adverse and that makes it, in your judgment,
         impracticable to market the Program Securities on the terms and in the
         manner contemplated by the Prospectus, as so amended or supplemented;

             (ii) there shall not have occurred any (A) suspension or material
         limitation of trading generally on or by, as the case may be, any of
         the New York Stock Exchange, the American Stock Exchange, the National
         Association of Securities Dealers, Inc., the Chicago Board Options
         Exchange, the Chicago Mercantile Exchange or the Chicago Board of
         Trade, (B) suspension of trading of any securities of the Company on
         any exchange or in any over-the-counter market, (C) declaration of a
         general moratorium on commercial banking activities in New York by
         either Federal or New York State authorities or (D) any outbreak or
         escalation of hostilities or any change in financial markets or any
         calamity or crisis that, in your judgment, is material and adverse and,
         in the case of any of the events described in clauses (ii)(A) through
         (D), such event, singly or together with any other such event, makes
         it, in your judgment, impracticable to market the Program Securities on
         the terms and in the manner contemplated by the Prospectus, as amended
         or supplemented at the time of such solicitation or at the time such
         offer to purchase was made; and

            (iii) there shall not have occurred any downgrading, nor shall any
         notice have been given of any intended or potential downgrading or of
         any review for a possible change that does not indicate the direction
         of the possible change, in the rating accorded any of the Company's
         securities by any "nationally recognized statistical rating
         organization," as such term is defined for purposes of Rule 436(g)(2)
         under the Securities Act;

(A) except, in each case described in paragraph (i), (ii) or (iii) above, as
disclosed to you in writing by the Company prior to such solicitation or, in the
case of a purchase of Program Securities, before the offer to purchase such
Program Securities was made or (B) unless in each case described in (ii) above,
the relevant event shall have occurred and been known to you prior to such
solicitation or, in the case of a purchase of Program Securities, before the
offer to purchase such Program Securities was made.

               (b) On the Commencement Date and, if called for by any Notes
Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date,
you shall have received:

               (i) The opinion, dated as of such date, of Jonathan M. Clark,
         General Counsel and Secretary of the Company, or of other counsel
         satisfactory to the Agent and who is an officer of the Company, to the
         effect that:

                     (A) the Company has been duly incorporated, is validly
               existing as a corporation in good standing under the laws of the
               State of Delaware, has the corporate power and authority to own
               its property and to conduct its business as described in the
               Prospectus, as amended or supplemented, and is duly qualified to
               transact business and is in good standing in each jurisdiction in
               which the conduct of its business or its ownership or leasing of
               property requires such qualification, except to the extent that
               the failure to be so qualified or be in good standing would not
               have a material adverse effect on the Company and its
               consolidated subsidiaries, taken as a whole;

                     (B) each of Morgan Stanley & Co. Incorporated and Morgan
               Stanley International Incorporated (each a "Material Subsidiary")
               has been duly incorporated, is validly existing as a corporation
               in good standing under the laws of the jurisdiction of its
               incorporation, has the corporate power and authority to own its
               property and to conduct its business as described in the
               Prospectus, as amended or supplemented, and is duly qualified to
               transact business and is in good standing in each jurisdiction in
               which the conduct of its business or its ownership or leasing of
               property requires such qualification, except to the extent that
               the failure to be so qualified or be in good standing would not
               have a material adverse effect on the Company and its
               consolidated subsidiaries, taken as a whole;


                     (C) each of the Company and its Material Subsidiaries has
               all necessary consents, authorizations, approvals, orders,
               certificates and permits of and from, and has made all
               declarations and filings with, all federal, state, local and
               other governmental authorities, all self-regulatory organizations
               and all courts and other tribunals, to own, lease, license and
               use its properties and assets and to conduct its business in the
               manner described in the Prospectus, as amended or supplemented,
               except to the extent that the failure to obtain or file would not
               have a material adverse effect on the Company and its
               consolidated subsidiaries, taken as a whole;

                     (D) each of this Agreement and any applicable Written Notes
               Terms Agreement or Written Units Terms Agreement has been duly
               authorized, executed and delivered by the Company;

                     (E) each Indenture has been duly qualified under the Trust
               Indenture Act and each of the Indentures, the Unit Agreement and
               the Universal Warrant Agreement has been duly authorized,
               executed and delivered by the Company and is a valid and binding
               agreement of the Company, enforceable in accordance with its
               terms except as (i) the enforceability thereof may be limited by
               bankruptcy, insolvency, reorganization, liquidation, moratorium
               and other similar laws affecting creditors' rights generally and
               (ii) is subject to general principles of equity, regardless of
               whether such enforceability is considered at a proceeding in
               equity or at law;

                     (F) the forms of Notes, whether issued alone or as part of
               a Unit, have been duly authorized and established in conformity
               with the provisions of the relevant Indenture and, if the Notes
               had been executed by the Company and authenticated by the
               relevant Trustee or its duly appointed agent in accordance with
               the provisions of the relevant Indenture and delivered to and
               duly paid for by the purchasers thereof on the date of such
               opinion, the Notes would be entitled to the benefits of such
               Indenture and would be valid and binding obligations of the
               Company, enforceable in accordance with their respective terms
               except as (i) the enforceability thereof may be limited by
               bankruptcy, insolvency, reorganization, liquidation, moratorium
               and other similar laws affecting creditors' rights generally and
               (ii) is subject to general principles of equity, regardless of
               whether such enforceability is considered at a proceeding in
               equity or at law;

                     (G) the forms of Units, including the forms of Universal
               Warrants and Purchase Contracts which, in addition to the Notes,
               may comprise such Units, have been duly authorized and
               established in conformity with the provisions of (i) in the case
               of Units and Purchase Contracts, the Unit Agreement and (ii) in
               the case of the Universal Warrants, the Universal Warrant
               Agreement, and if the Units (including the Universal Warrants and
               the Purchase Contracts) had been delivered to and duly paid for
               by the purchasers thereof (and any Universal Warrant included
               therein had been executed by the Company and countersigned by the
               Warrant Agent and any Purchase Contracts included therein had
               been executed by the Company and executed and countersigned by
               the Unit Agent) on the date of such opinion, the Units (including
               the Universal Warrants and Purchase Contracts contained therein)
               would be entitled to the benefits of the Unit Agreement and in
               the case of the Warrants, the Universal Warrant Agreement, and
               would be valid and binding obligations of the Company,
               enforceable in accordance with their respective terms except as
               (i) the enforceability thereof may be limited by bankruptcy,
               insolvency, reorganization, liquidation, moratorium and other
               similar laws affecting creditors' rights generally and (ii) and
               is subject to general principles of equity, regardless of whether
               such enforceability is considered at proceedings in equity or at
               law;

                     (H) the execution and delivery by the Company of the Notes
               (whether issued alone or as part of a Unit), the Units (including
               any Purchase Contract or Universal Warrant included therein), the
               Indentures, the Unit Agreement, the Universal Warrant Agreement
               and any applicable Written Notes Terms Agreement or Written Units
               Terms Agreement and the performance by the Company of its
               obligations under this Agreement, the Notes, the Units, the
               Indentures, the Unit Agreement, the Universal Warrant Agreement
               and any applicable Notes Terms Agreement or Units Terms Agreement
               will not contravene any provision of applicable law or the
               certificate of incorporation or by-laws of the Company or, to the
               best of such counsel's knowledge, any agreement or other
               instrument binding upon the Company or any of its consolidated
               subsidiaries that is material to the Company and its consolidated
               subsidiaries, taken as a whole, or, to the best of such counsel's
               knowledge, any judgment, order or decree of any U.S. governmental
               body, agency or court having jurisdiction over the Company or any
               of its consolidated subsidiaries, and no consent, approval,
               authorization or order of or qualification with any U.S.
               governmental body or agency is required for the performance by
               the Company of its obligations under this Agreement, the Notes,
               the Units, the Indentures, the Unit Agreement, the Universal
               Warrant Agreement and any applicable Notes Terms Agreement or
               Units Terms Agreement, except such as may be required by the
               securities or Blue Sky laws of the various states in connection
               with the offer and sale of the Program Securities; provided,
               however, that no opinion is expressed on whether the purchase of
               the Program Securities constitutes a "prohibited transaction"
               under Section 406 of the Employee Retirement Income Security Act
               of 1974, as amended, or Section 4975 of the Internal Revenue Code
               of 1986, as amended;

                     (I) the statements (1) in the Prospectus, as then amended
               or supplemented, under the captions "Description of Notes" (in
               the Prospectus Supplement), "Description of Debt Securities" (in
               the Basic Prospectus), "Description of Units" (in the Prospectus
               Supplement and in the Basic Prospectus), "Plan of Distribution"
               (in the Prospectus Supplement and in the Basic Prospectus),
               "Description of Purchase Contracts" (in the Basic Prospectus) and
               "Description of Warrants" (in the Basic Prospectus), (2) in the
               Registration Statement, as then amended or supplemented, under
               Item 15, (3) in "Item 3 - Legal Proceedings" of the Company's
               most recent annual report on Form 10-K incorporated by reference
               in the Prospectus and (4) in "Item 1 - Legal Proceedings" of Part
               II of the Company's quarterly reports on Form 10-Q, if any, filed
               since such annual report, in each case insofar as such statements
               constitute summaries of the legal matters, documents or
               proceedings referred to therein, fairly present the information
               called for with respect to such legal matters, documents and
               proceedings and fairly summarize the matters referred to therein;

                     (J) after due inquiry, such counsel does not know of any
               legal or governmental proceedings pending or threatened to which
               the Company or any of its consolidated subsidiaries is a party or
               to which any of the properties of the Company or any of its
               consolidated subsidiaries is subject that are required to be
               described in the Registration Statement or the Prospectus, as
               then amended or supplemented, and are not so described or of any
               U.S. federal or state statutes, regulations, contracts or other
               documents governed by U.S. federal or state law that are required
               to be described in the Registration Statement or the Prospectus,
               as then amended or supplemented, or to be filed or incorporated
               by reference as exhibits to such Registration Statement that are
               not described, filed or incorporated by reference as required;
               and

                     (K) such counsel (1) is of the opinion that each document,
               if any, filed pursuant to the Exchange Act and incorporated by
               reference in the Prospectus as then amended or supplemented
               (except as to financial statements and schedules included therein
               as to which such counsel need not express any opinion), complied
               when so filed as to form in all material respects with the
               Exchange Act and the applicable rules and regulations of the
               Commission thereunder, (2) has no reason to believe that any part
               of the Registration Statement (except as to financial statements
               and schedules as to which such counsel need not express any
               belief and except for that part of the Registration Statement
               that constitutes the Forms T-1 heretofore referred to), as then
               amended, if applicable, when such part became effective
               contained, and the Registration Statement (except as to financial
               statements and schedules included therein, as to which such
               counsel need not express any belief and except for the part of
               the Registration Statement that constitutes the Form T-1) as of
               the date such opinion is delivered, contains any untrue statement
               of a material fact or omitted or omits to state a material fact
               required to be stated therein or necessary to make the statements
               therein not misleading, (3) is of the opinion that the
               Registration Statement and Prospectus, as then amended or
               supplemented, if applicable (except for financial statements and
               schedules included therein as to which such counsel need not
               express any opinion), comply as to form in all material respects
               with the Securities Act and the applicable rules and regulations
               of the Commission thereunder and (4) has no reason to believe
               that the Prospectus, as then amended or supplemented, if
               applicable (except for financial statements and schedules as to
               which such counsel need not express any belief), as of the date
               such opinion is delivered contains any untrue statement of a
               material fact or omits to state a material fact necessary in
               order to make the statements therein, in the light of the
               circumstances under which they were made, not misleading;
               provided that in the case of an opinion delivered on the
               Commencement Date or pursuant to Section 5(b), the opinion and
               belief set forth in clauses (3) and (4) above shall be deemed not
               to cover information concerning an offering of particular Notes
               or Units to the extent such information will be set forth in a
               supplement to the Basic Prospectus.

            (ii) The opinion, dated as of such date, of Davis Polk & Wardwell,
         your special counsel, covering the matters in subparagraphs (D), (E),
         (F), (G) and (I) (with respect to statements in the Prospectus, as then
         amended or supplemented, under the captions "Description of Notes" (in
         the Prospectus Supplement), "Description of Debt Securities" (in the
         Basic Prospectus), "Description of Units" (in the Prospectus Supplement
         and the Basic Prospectus), "Plan of Distribution" (in the Prospectus
         Supplement and in the Basic Prospectus), "Description of Purchase
         Contracts" (in the Basic Prospectus) and "Description of Warrants" (in
         the Basic Prospectus)) and clauses (2), (3) and (4) of subparagraph (K)
         in paragraph (b)(i) above.

               Notwithstanding the foregoing, the opinions described in
         subparagraphs (F) (except as to due authorization of the Notes), (G)
         (except as to due authorization of the Units, Universal Warrants and
         Purchase Contracts), (H), (I)(1) and (K)(3) and (4) of paragraph (b)(i)
         above, when contained in an opinion delivered on the Commencement Date
         or pursuant to Section 5(b), shall be deemed not to address the
         application of the Commodity Exchange Act, as amended, or the rules,
         regulations or interpretations of the Commodity Futures Trading
         Commission to Program Securities the payments of principal or interest
         on which, or any other payments with respect to which, will be
         determined by reference to one or more currency exchange rates,
         commodity prices, securities of entities unaffiliated with the Company,
         baskets of such securities, equity indices or other factors.

               With respect to subparagraph (K) of paragraph (b)(i) above,
         Jonathan M. Clark or such other counsel for the Company may state that
         his opinion and belief are based upon his participation, or the
         participation of someone under his supervision, in the preparation of
         the Registration Statement and Prospectus and any amendments or
         supplements thereto and documents incorporated therein by reference and
         review and discussion of the contents thereof, but are without
         independent check or verification, except as specified. With respect to
         clauses (2), (3) and (4) of subparagraph (K) of paragraph (b)(i) above,
         Davis Polk & Wardwell may state that their opinion and belief are based
         upon their participation in the preparation of the Registration
         Statement and Prospectus and any amendments or supplements thereto (but
         not including documents incorporated therein by reference) and review
         and discussion of the contents thereof (including documents
         incorporated therein by reference), but are without independent check
         or verification, except as specified.

            (iii) The opinion, dated as of such date, of Shearman & Sterling,
         special counsel to the Company, to the effect that the statements set
         forth under the caption "United States Federal Taxation" in the
         Prospectus Supplement and under the caption "Limitations on Issuance of
         Bearer Debt Securities and Bearer Warrants" in the Basic Prospectus,
         insofar as such statements relate to statements of law or legal
         conclusions under the laws of the United States or matters of United
         States law, fairly present the information called for and fairly
         summarize the matters referred to therein.

               The opinion of Shearman & Sterling, described in paragraph
         (b)(iii) above shall be rendered to you at the request of the Company
         and shall so state therein.

               (c) On the Commencement Date and, if called for by any Notes
Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date,
you shall have received a certificate, dated the Commencement Date or such
Settlement Date, as the case may be, and signed by an executive officer of the
Company to the effect set forth in subparagraph (a)(iii) above and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of such date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before such date.

               The officer signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.

               (d) On the Commencement Date and, if called for by any Notes
Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date,
the Company's independent auditors shall have furnished to you a letter or
letters, dated as of the Commencement Date or such Settlement Date, as the case
may be, in form and substance satisfactory to you containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus, as
then amended or supplemented.

               (e) On the Commencement Date and on each Settlement Date, the
Company shall have furnished to you such appropriate further information,
certificates and documents as you may reasonably request.

               5. Additional Agreements of the Company. (a) Each time the
Registration Statement or Prospectus is amended or supplemented (other than by
an amendment or supplement providing solely for (i) in the case of Notes, a
change in the interest rates, redemption provisions, amortization schedules or
maturities offered on the Notes issued alone or as part of a Unit, (ii) in the
case of Units, a change in the exercise price, exercise date or period or
expiration of an underlying Universal Warrant or a change in the settlement date
or purchase or sale price of an underlying Purchase Contract or (iii) for a
change you deem to be immaterial), the Company will deliver or cause to be
delivered forthwith to you a certificate signed by an executive officer of the
Company, dated the date of such amendment or supplement, as the case may be, in
form reasonably satisfactory to you, of the same tenor as the certificate
referred to in Section 4(c) relating to the Registration Statement or the
Prospectus as amended or supplemented to the time of delivery of such
certificate.

               (b) Each time the Company furnishes a certificate pursuant to
Section 5(a), the Company will furnish or cause to be furnished forthwith to you
a written opinion of couuch amendment or supplement, as the case may be, shall
be in a form satisfactory to you and shall be of the same tenor as the opinion
referred to in Section 4(b)(i), but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion. In lieu of such opinion, counsel last furnishing such an
opinion to you may furnish to you a letter to the effect that you may rely on
such last opinion to the same extent as though it were dated the date of such
letter (except that statements in such last opinion will be deemed to relate to
the Registration Statement and the Prospectus as amended or supplemented to the
time of delivery of such letter.)

               (c) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Prospectus, the Company shall cause its independent auditors
forthwith to furnish you with a letter, dated the date of such amendment or
supplement, as the case may be, in form satisfactory to you, of the same tenor
as the letter referred to in Section 4(d), with regard to the amended or
supplemental financial information included or incorporated by reference in the
Registration Statement or the Prospectus as amended or supplemented to the date
of such letter.

               6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless you and each person, if any, who controls you within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by you or any such controlling person in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained of or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to you furnished to the Company in writing by you expressly for use
therein.

               (b) You agree to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to you, but only with reference to
information relating to you furnished to the Company in writing by you expressly
for use in the Registration Statement or the Prospectus or any amendments or
supplements thereto.

               (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemni mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by you, in the case
of parties indemnified pursuant to paragraph (a) above, and by the Company, in
the case of parties indemnified pursuant to paragraph (b) above. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the in effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

               (d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein in connection with any offering of Program Securities then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and you on the other hand from
the offering of such Program Securities or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and you on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and you on the other hand in connection with the offering of such Program
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of such Program Securities (before deducting
expenses) received by the Company bear to the total discounts and commissions
received by you in respect thereof. The relative fault of the Company on the one
hand and of you on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by you and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

               The Company and you agree that it would not be just or equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, you shall not be required to contribute any amount in excess of the
amount by which the total price at which the Program Securities referred to in
paragraph (d) above that were offered and sold to the public through you exceeds
the amount of any damages that you have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 6 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.

               (f) The indemnity and contribution provisions contained in this
Section 6, representations, warranties and other statements of the Company, its
officers and you set forth in or made pursuant to this Agreement or any Notes
Terms Agreement or Units Terms Agreement will remain in full force and effect
regardless of (i) any termination of this Agreement or any such Notes Terms
Agreement or Units Terms Agreement, (ii) any investigation made by or on behalf
of you or any person controlling you or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Program Securities.

               7. Position of the Agent. In acting under this Agreement and in
connection with the sale of any Program Securities by the Company (other than
Program Securities sold to you pursuant to a Notes Terms Agreement or Units
Terms Agreement, as the case may be), you are acting solely as agent of the
Company and do not assume any obligation towards or relationship of agency or
trust with any purchaser of Program Securities. You shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Program Securities has been solicited by you and accepted by
the Company, but you shall not have any liability to the Company in the event
any such purchase is not consummated for any reason. If the Company shall
default in its obligations to deliver Program Securities to a purchaser whose
offer it has accepted, the Company shall hold you harmless against any loss,
claim, damage or liability arising from or as a result of such default and
shall, in particular, pay to you the commission you would have received had such
sale been consummated.

               8. Termination. This Agreement may be terminated at any time
either by the Company or by you upon the giving of written notice of such
termination to the other party hereto, but without prejudice to any rights,
obligations or liabilities of either party hereto accrued or incurred prior to
such termination. The termination of this Agreement shall not require
termination of any Notes Terms Agreement or Units Terms Agreement, and the
termination of any such Notes Terms Agreement or Units Terms Agreement shall not
require termination of this Agreement. If this Agreement is terminated, the
provisions of the third paragraph of Section 2(a), the last sentence of Section
3(b) and Sections 3(c), 3(h), 6, 7, 9, 11 and 13 shall survive; provided that if
at the time of termination an offer to purchase Program Securities has been
accepted by the Company but the time of delivery to the purchaser or its agent
of such Program Securities has not occurred, the provisions of Sections 2(b),
2(c), 3(a), 3(b), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall also survive until such
delivery has been made.

               9.  Notices.  All communications hereunder will be in
writing and effective only on receipt, and, if sent to you, will be mailed,
delivered or telefaxed and confirmed to you at 1585 Broadway, New York, New
York 10036, Attention:  Manager, Credit Department (telefax number: 212-
703-4575), with a copy to 1221 Avenue of the Americas, New York, New York
10020, Attention:  Managing Director, Debt Syndicate (telefax number: 212-
764-7490) or, if sent to the Company, will be mailed, delivered or
telefaxed and confirmed to the Company at 1585 Broadway, New York, New York
10036, Attention:  Secretary.

               10. Successors. This Agreement and any Notes Terms Agreement or
Units Terms Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors and
controlling persons referred to in Section 6 and the purchasers of Notes and
Units (to the extent expressly provided in Section 4), and no other person will
have any right or obligation hereunder.

               11.  Counterparts.  This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.

               12.  Applicable Law.  This Agreement will be governed by and
construed in accordance with the internal laws of the State of New York.

               13.  Headings.  The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.

               If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and you.

                                 Very truly yours,

                                 MORGAN STANLEY GROUP INC.


                                 By:
                                     -----------------------------------
                                     Name: Eileen K. Murray
                                     Title:   Treasurer

The foregoing Agreement 
is hereby confirmed 
and accepted as of the date 
first above written.

MORGAN STANLEY & CO. INCORPORATED



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




                                                                       EXHIBIT A



                           MORGAN STANLEY GROUP INC.

                      GLOBAL MEDIUM-TERM NOTES, SERIES C

                             NOTES TERMS AGREEMENT




                                                           _______________, 19__

Morgan Stanley Group Inc.
1585 Broadway
New York, New York  10036

Attention:

               Re:   U.S. Distribution Agreement
                     dated ______________
                     (the "U.S. Distribution Agreement")

               The undersigned agrees to purchase your Global Medium-Term Notes,
Series C, having the following terms:




                                                                                Floating
                                             Fixed Rate                         Rate
All Notes:                                   Notes:                             Notes:
- -----------------------------------------    -------------------------------    ---------------------------
                                                                          
Principal Amount:                            Interest Rate:                     Base Rate:
Purchase Price:                              Applicability of Modified          Index Maturity:
                                             Payment upon Acceleration:
                                                                                Index Currency:
Price to Public:                             If yes, state issue price:         Spread (Plus or Minus):
Settlement Date and Time:                    Amortization Schedule:             Spread Multiplier:
Place of Delivery:                           Applicability of Annual            Alternate Rate Event
                                             Interest Payments:                 Spread:
Specified Currency:                          Denominated Currency (if           Initial Interest Rate:
                                             any):
Original Issue Date:                         Indexed Currency or                Initial Interest Reset
                                             Currencies (if any):               Date:
Interest Accrual Date:                       Payment Currency (if any):         Interest Reset Dates:
Maturity Date:                               Exchange Rate Agent (if any):      Interest Reset Period:
Initial Accrual Period OID:                  Reference Dealers:                 Maximum Interest Rate:
Total Amount of OID:                         Face Amount (if any):              Minimum Interest Rate:
Original Yield to Maturity:                  Fixed Amount of each               Interest Payment Date(s):
                                             Indexed Currency (if any):
Optional Repayment Date(s):                  Aggregate Fixed Amount of          Interest Payment Period:
                                             each Indexed Currency (if
                                             any):
Optional Redemption                          Applicability of Issuer's          Calculation Agent:
Date(s):                                     Option to Extend Original
                                             Maturity Date:
Initial Redemption Date:                     If yes, state Final Maturity       Reporting Service:
                                             Date:
Initial Redemption                                                              Variable Rate Renewable
Percentage:                                                                     Notes:

Annual Redemption                                                               Redemption Dates:
Percentage Reduction:

Ranking:                                                                        Redemption Percentage:

Other Provisions:                                                               Initial Maturity Date:

                                                                                Final Maturity Date:

                                                                                Applicability of Issuer's
                                                                                Option to reset Spread or
                                                                                Spread Multiplier:




               The provisions of Sections 1, 2(b) and 2(c) and 3 through 6 and 9
through 13 of the U.S. Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.

               This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so terminated, the
provisions of Sections 3(h), 6, 9, 11, and 13 of the U.S. Distribution Agreement
shall survive for the purposes of this Agreement.

               The following information, opinions, certificates, letters and
documents referred to in Section 4 of the U.S. Distribution Agreement will be
required:  ________________




                                 MORGAN STANLEY & CO. INCORPORATED


                                 By ______________________________________
                                     Title:


Accepted:

MORGAN STANLEY GROUP INC.


By ___________________________
     Title:



EXHIBIT A-1


                           MORGAN STANLEY GROUP INC.

                            GLOBAL UNITS, SERIES C

                             UNITS TERMS AGREEMENT


                                                         ________________, 19 __

Morgan Stanley Group Inc.
1585 Broadway
New York, New York  10036

Attention:

               Re:   U.S. Distribution Agreement dated _____________
                     (the "U.S. Distribution Agreement")

               The undersigned agrees to purchase your Global Units, Series C,
[specified designation] having the following terms:

                                                                      
                                                                             Purchase Contracts
                                               Universal Warrants
               Units:                    Issued as Part of a Unit:           Issued as Part of a Unit:
- -------------------------------------    -------------------------------    -------------------------------
Settlement Date and Time                 Designation of the Series of       Designation of the Series
                                         Warrants [Call] [Put]              of Purchase Contracts:
                                         Warrants:                          [Purchase][Sale] Purchase
                                                                            Contracts
Number (Face Amount)                     Warrant Property:                  Aggregate Number of
                                                                            Purchase Contracts:

                                                                            Purchase Contract
                                                                            Property:

Severability:                            Aggregate Number of                Quantity per Purchase
                                         Warrants:                          Contract:

                                                                            Purchase Price
Other Terms:                                                                Settlement Date:

                                         Date(s) upon which                 Payment Location:
                                         Warrants may be exercised:
                                                                            Method of Settlement:

                                                                            Currency of Settlement
                                                                            Payment:

                                                                            Contract Fees, if any:

                                         Universal Warrants                 Purchase Contracts
All Units:                               Issued as Part of a Unit:          Issued as Part of a Unit:
- -------------------------------------    -------------------------------    -------------------------------

                                         Expiration Date:
                                         Currency in which exercise         Corporation Acceleration:
                                         payments shall be made:
                                                                            Holders' Acceleration:
                                         Exchange Rate (or method
                                         of calculation:                    Redemption Provisions:

                                         Form of Settlement:
                                         [Call Price:]*
                                                                            Other Terms:
                                         [Formula for determining
                                         Cash Settlement Value:]**

                                         [Amount of Warrant
                                         Property Salable per
                                         Warrant:]***

                                         [Put Price for such specified
                                         amount of Warrant Property
                                         per Warrant:]

                                         [Method of delivery of any
                                         Warrant Property to be
                                         delivered for sale upoon
                                         exercise of Warrants:]***



                                         Other Terms:

- ---------
*   Applicable to Call Warrants
**  Applicable to Put Warrants
*** Applicable to Put Warrants only if such Put Warrants contemplate that the
    holdel deliver Warrant Property to settle Put Warrants








All Notes Issued                             Fixed Rate Notes                   Floating Rate Notes
as Part of a Unit:                           Issued as Part of a Unit:          Issued as Part of a Unit:
- -----------------------------------------    -------------------------------    ---------------------------
                                                                          
Principal Amount:                            Interest Rate:                     Base Rate:
Purchase Price:                              Applicability of Modified          Index Maturity:
                                             Payment upon Acceleration:
                                                                                Index Currency:
Price to Public:                             If yes, state issue price:         Spread (Plus or Minus):

Settlement Date and Time:                    Amortization Schedule:             Spread Multiplier:

Place of Delivery:                           Applicability of Annual            Alternate Rate Event
                                             Interest Payments:                 Spread:

Specified Currency:                          Denominated Currency (if           Initial Interest Rate:
                                             any):

Original Issue Date:                         Indexed Currency or                Initial Interest Reset
                                             Currencies (if any):               Date:

Interest Accrual Date:                       Payment Currency (if any):         Interest Reset Dates:

Maturity Date:                               Exchange Rate Agent (if any):      Interest Reset Period:

Initial Accrual Period OID:                  Reference Dealers:                 Maximum Interest Rate:

Total Amount of OID:                         Face Amount (if any):              Minimum Interest Rate:

Original Yield to Maturity:                  Fixed Amount of each               Interest Payment Date(s):
                                             Indexed Currency (if any):

Optional Repayment Date(s):                  Aggregate Fixed Amount of          Interest Payment Period:
                                             each Indexed Currency (if
                                             any):

Optional Redemption                          Applicability of Issuer's          Calculation Agent:
Date(s):                                     Option to Extend Original
                                             Maturity Date:

Initial Redemption Date:                     If yes, state Final Maturity       Reporting Service:
                                             Date:

Initial Redemption                                                              Variable Rate Renewable
Percentage:                                                                     Notes:

Annual Redemption                                                               Redemption Dates:
Percentage Reduction:

Ranking:                                                                        Redemption Percentage:

Other Provisions:                                                               Initial Maturity Date:

                                                                                Final Maturity Date:

                                                                                Applicability of Issuer's
                                                                                Option to reset Spread or
                                                                                Spread Multiplier:



               The provisions of Sections 1, 2(b) and 2(c) and 3 through 6 and 9
through 13 of the U.S. Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.

               This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so terminated, the
provisions of Sections 3(h), 6, 9, 11, and 13 of the U.S. Distribution Agreement
shall survive for the purposes of this Agreement.

               The following information, opinions, certificates, letters and
documents referred to in Section 4 of the U.S. Distribution Agreement will be
required:  ________________




                                 MORGAN STANLEY & CO. INCORPORATED


                                 By ______________________________________
                                     Title:


Accepted:

MORGAN STANLEY GROUP INC.


By ___________________________
     Title:

EX-1.B

                           MORGAN STANLEY GROUP INC.

                                $_____________

                Global Medium-Term Notes, Series D and Series E

                      Global Units, Series D and Series E

                          EURO DISTRIBUTION AGREEMENT



                                                         February [__], 1997



Morgan Stanley & Co. International Limited
Morgan Stanley Bank AG
Morgan Stanley S.A.
Bank Morgan Stanley AG
  c/o Morgan Stanley & Co. International
        Limited
  25 Cabot Square
  Canary Wharf London E14 4QA
  England

Dear Sirs:

               Morgan Stanley Group Inc., a Delaware corporation (the
"Company"), confirms its agreement with you with respect to the issue and sale
from time to time by the Company primarily outside the United States of up to
$_____________ (or the equivalent thereof in one or more foreign currencies or
composite currencies) aggregate initial public offering price of its Global
Medium-Term Notes, Series D and Series E, each due more than 9 months from the
date of issue (the "Notes") and, its Global Units, Series D and Series E , (the
"Units" and together with the Notes, "Program Securities"), in each case subject
to reduction as a result of the sale of the Company's Global Medium-Term Notes,
Series C and Global Units, Series C, to be sold primarily inside the United
States, and the sale of certain of the Company's other debt securities,
warrants, preferred stock, purchase contracts and units. The Series D Notes and
the Series D Units are intended to be listed on the London Stock Exchange
Limited (the "London Stock Exchange") or on another stock exchange or exchanges,
if so required by Section 3(i) hereof. The Series E Notes and the Series E Units
will not be listed on any stock exchange.

               The Notes may be issued as senior indebtedness (the "Senior
Notes") or as subordinated indebtedness (the "Subordinated Notes") of the
Company. The Senior Notes will be issued, either alone or as part of a Unit,
pursuant to the provisions of a senior indenture dated as of April 15, 1989, as
supplemented by a first supplemental senior indenture dated as of May 15, 1991
and a second supplemental senior indenture dated as of April 15, 1996 (as so
supplemented and as may be further supplemented or amended from time to time,
the "Senior Debt Indenture"), between the Company and The Chase Manhattan Bank
(formerly known as Chemical Bank), as trustee (the "Senior Debt Trustee"). The
Subordinated Notes will be issued pursuant to the provisions of a subordinated
indenture dated as of April 15, 1989, as supplemented by a first supplemental
subordinated indenture dated as of May 15, 1991 and a second supplemental
subordinated indenture dated as of April 15, 1996 (as so supplemented and as may
be further supplemented or amended from time to time, the "Subordinated Debt
Indenture"), between the Company and The First National Bank of Chicago, as
trustee (the "Subordinated Debt Trustee"). The Senior Debt Indenture and the
Subordinated Debt Indenture are sometimes hereinafter referred to individually
as an "Indenture" and collectively as the "Indentures," and the Senior Debt
Trustee and the Subordinated Debt Trustee are sometimes hereinafter referred to
individually as a "Trustee" and collectively as the "Trustees."

               The Units will be issued pursuant to the Unit Agreement dated as
of January 24, 1997, among the Company, The Chase Manhattan Bank, as Unit Agent,
as Collateral Agent, as Trustee and Paying Agent under the Indenture referred to
therein, and as Warrant Agent under the Warrant Agreement referred to therein
and the holders from time to time of the Units described therein. Units may
include one or more (i) Senior Notes, (ii) warrants ("Universal Warrants")
entitling the holders thereof to purchase or sell (a) securities of an entity
unaffiliated with the Company, a basket of such securities, an index or indices
of such securities or any combination of the above, (b) currencies or composite
currencies or (c) commodities, (iii) purchase contracts ("Purchase Contracts")
requiring the holders thereof to purchase or sell (a) securities of an entity
unaffiliated with the Company, a basket of such securities, an index or indices
of such securities or any combination of the above, (b) currencies or composite
currencies or (c) commodities or (iv) any combination thereof. The applicable
prospectus supplement will specify whether Notes, Universal Warrants and
Purchase Contracts comprised by a Unit may or may not be separated from any
series of Units. Universal Warrants issued as part of a Unit will be issued
pursuant to the Universal Warrant Agreement dated as of January 24, 1997 (the
"Universal Warrant Agreement"), between the Company and The Chase Manhattan
Bank, as Warrant Agent. Purchase Contracts entered into by the Company and the
holders thereof will be governed by the Unit Agreement.

               The Notes, whether issued alone or as part of a Unit, will have
the maturities, interest rates, redemption provisions, if any, and other terms
as set forth in supplements to the Basic Prospectus referred to below. The
Universal Warrants issued as part of a Unit will have the exercise prices,
exercise dates, expiration dates and other terms as set forth in supplements to
the Basic Prospectus. The Purchase Contracts issued as part of a Unit will have
the closing dates, purchase or sale prices and other terms as set forth in
supplements to the Basic Prospectus. The Company has initially appointed The
Chase Manhattan Bank, London Branch, at its principal office in London, as
principal paying agent (the "Principal Paying Agent") for the Notes.

               The Notes will be issued in bearer form or in definitive
registered form without coupons (the "Registered Notes"), the Units will be
issued in bearer form or in definitive registered form (the "Registered Units")
and the securities included in a Unit will be in the form of such Unit. The
Notes and the Units, (the "Program Securities") issued in bearer form will be
represented initially by, in the case of the Notes, a temporary global Note and,
in the case of the Units, a temporary global Unit, each of which will be
delivered to a common depositary outside the United States for the operator of
the Euroclear System (the "Euroclear Operator") and Cedel Bank, societe anonyme
("Cedel"). Beneficial interests in a temporary global Note or a temporary global
Unit will be exchangeable for beneficial interests in, in the case of a
temporary global Note, a permanent global Note and, in the case of a temporary
global Unit, a permanent global Unit. Beneficial interests in a permanent global
Note will be exchangeable in whole, but not in part, for definitive Notes in
bearer form, with interest coupons attached upon receipt of the Principal Paying
Agent of an initial request to so exchange by any holder of a beneficial
interest in such permanent global Note (such temporary global Note, permanent
global Note and definitive Notes in bearer form are collectively referred to as
the "Bearer Notes"), or for Registered Notes. Beneficial interests in a
permanent global Unit (including an interest in the securities included in such
Unit) will be exchangeable in whole, but not in part, for definitive Units in
bearer form upon receipt of the Unit Agent of an initial request to so exchange
by any holder of a beneficial interest in such permanent global Unit (such
temporary global Unit, permanent global Unit and definitive Units in bearer form
are collectively referred to as the "Bearer Units"). As used in this Agreement,
the term "Note" includes any temporary global Note or permanent global Note
issued pursuant to the Indentures and the term "Unit" includes any temporary
global Unit or permanent global Unit issued pursuant to the Unit Agreement.

               The Company hereby appoints you as its exclusive agents for the
purpose of soliciting and receiving offers to purchase Program Securities from
the Company by others and, on the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, you
agree to use reasonable efforts to solicit and receive offers to purchase
Program Securities upon terms acceptable to the Company at such times and in
such amounts as the Company shall from time to time specify. In addition, you
may also purchase Program Securities as principal pursuant to the terms of a
terms agreement relating to such sale (in the case of Notes, a "Notes Terms
Agreement" and, in the case of Units, a "Units Terms Agreement") in accordance
with the provisions of Section 2(b) hereof. Program Securities denominated or
payable in Deutsche Marks may only be offered and sold by the Company through
Morgan Stanley Bank AG, the Deutsche Mark arranger, on an agency or principal
basis. Morgan Stanley Bank AG agrees to notify the German Central Bank at the
end of each month about the amounts, dates of issue and other terms of all
Program Securities denominated or payable in Deutsche Marks offered and sold by
Morgan Stanley Bank AG during the month in question. Program Securities
denominated or payable in French Francs may only be offered and sold by the
Company through Morgan Stanley S.A. on an agency or principal basis, and Morgan
Stanley S.A. agrees to notify the French Tresor prior to the issuance of any
such Program Securities. Program Securities denominated, payable in or indexed
to Swiss Francs may only be offered and sold by the Company through Bank Morgan
Stanley AG on an agency or principal basis, and Bank Morgan Stanley AG agrees to
notify the Swiss National Bank prior to the issuance of any such Program
Securities.

               The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating to
the Program Securities. Such registration statement, including the exhibits
thereto, as amended at the Commencement Date (as hereinafter defined), is
hereinafter referred to as the "Registration Statement." The Company proposes to
file with the Commission from time to time, pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), supplements to the
prospectus included in the Registration Statement that will describe certain
terms of the Program Securities. The prospectus in the form in which it appears
in the Registration Statement is hereinafter referred to as the "Basic
Prospectus." The term "Prospectus" means the Basic Prospectus together with the
prospectus supplement or supplements (each a "Prospectus Supplement")
specifically relating to Notes, as filed with, or transmitted for filing to, the
Commission pursuant to Rule 424. As used herein, the terms "Basic Prospectus"
and "Prospectus" shall include in each case the documents, if any, incorporated
by reference therein. The terms "supplement," "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Basic Prospectus by the
Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

               1. Representations and Warranties. The Company represents and
warrants to and agrees with you as of the Commencement Date, as of each date on
which you solicit offers to purchase Program Securities, as of each date on
which the Company accepts an offer to purchase Program Securities (including any
purchase by you as principal pursuant to a Notes Terms Agreement or a Units
Terms Agreement), as of each date the Company issues and delivers Program
Securities and as of each date the Registration Statement or the Basic
Prospectus is amended or supplemented, as follows (it being understood that such
representations, warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as amended
or supplemented to each such date):

               (a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.

               (b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(iii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that (1) the representations and warranties set forth in this Section
1(b) do not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to you furnished to the
Company in writing by you expressly for use therein or (B) to those parts of the
Registration Statement that constitute the Statements of Eligibility (Form T-1)
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
of the Trustees and (2) the representations and warranties set forth in clauses
(iii) and (iv) above, when made as of the Commencement Date or as of any date on
which you solicit offers to purchase Program Securities or on which the Company
accepts an offer to purchase Program Securities, shall be deemed not to cover
information concerning an offering of particular Program Securities to the
extent such information will be set forth in a supplement to the Basic
Prospectus.

               (c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.

               (d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.

               (e) Each of this Agreement and any applicable Written Notes Terms
Agreement or Written Units Terms Agreement (each as hereinafter defined) has
been duly authorized, executed and delivered by the Company.

               (f) Each Indenture has been duly qualified under the Trust
Indenture Act and each of the Indentures, the Unit Agreement and the Universal
Warrant Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (ii) is subject to
general principles of equity, regardless of whether such enforceability is
considered at proceedings in equity or at law.

                (g) The forms of Notes, whether issued alone or as part of a
Unit, have been duly authorized and established in conformity with the
provisions of the relevant Indenture and, when the Notes have been executed and
authenticated in accordance with the provisions of the relevant Indenture and
delivered to and duly paid for by the purchasers thereof, the Notes will be
entitled to the benefits of such Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their respective
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered at a
proceeding in equity or at law.

               (h) The forms of Units, including the forms of Universal Warrants
and Purchase Contracts which, in addition to the Notes, may comprise such Units,
have been duly authorized and established in conformity with the provisions of
(i) in the case of the Units and Purchase Contracts, the Unit Agreement and (ii)
in the case of Universal Warrants, the Universal Warrant Agreement. When the
Units have been delivered to and duly paid for by the purchasers thereof and (a)
any Purchase Contracts included in such Units have been executed by the Company
and countersigned and executed by the Unit Agent and (b) any Universal Warrants
included in such Units have been executed by the Company and countersigned by
the Warrant Agent, the Units (including any such Purchase Contracts or Universal
Warrants contained therein) will be entitled to the benefits of the Unit
Agreement and, in the case of the Universal Warrants, the Universal Warrant
Agreement and will be valid and binding obligations of the Company, enforceable
in accordance with their respective terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights generally and (ii)
is subject to general principles of equity, regardless of whether such
enforceability is considered at a proceeding in equity or at law.

               (i) The execution and delivery by the Company of this Agreement,
the Notes (whether issued alone or as part of a Unit), the Units (including any
Purchase Contracts and Universal Warrants included therein) the Indentures, the
Unit Agreement, the Universal Warrant Agreement and any applicable Written Notes
Terms Agreement or Written Units Terms Agreement and the performance by the
Company of its obligations under this Agreement, the Notes, the Units, the
Indentures, the Unit Agreement, the Universal Warrant Agreement and any
applicable Notes Terms Agreement or Units Terms Agreement will not contravene
any provision of applicable law or the certificate of incorporation or by-laws
of the Company or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, the Notes, the Units, the Indentures, the
Unit Agreement, the Universal Warrant Agreement and any applicable Notes Terms
Agreement or Units Terms Agreement; provided, however, that no representation is
made or warranty given as to whether the purchase of the Program Securities
constitutes a "prohibited transaction" under Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended.

               (j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.

               (k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.

               (l) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
except to the extent that the failure to obtain or file would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.

               (m)  Morgan Stanley & Co. Incorporated is registered as a
broker-dealer and investment adviser with the Commission, is registered with
the Commodity Futures Trading Commission as a futures commission merchant and
is a member of the New York Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.

               Notwithstanding the foregoing, it is understood and agreed that
the representations and warranties set forth in Section 1(b)(iii) and (iv), (g)
(except as to due authorization of the Notes) (h) (except as to due
authorization of the Units, Universal Warrants and Purchase Contracts) and (i),
when made as of the Commencement Date, or as of any date on which you solicit
offers to purchase Program Securities, with respect to any Program Securities
the payments of principal or interest on which, or any other payments with
respect to which, will be determined by reference to one or more currency
exchange rates, commodity prices, securities of entities unaffiliated with the
Company, baskets of such securities, equity indices or other factors, shall be
deemed not to address the application of the Commodity Exchange Act, as amended,
or the rules, regulations or interpretations of the Commodity Futures Trading
Commission.

               2.  Solicitations as Agents; Purchases as Principals.

               (a) Solicitations as Agents. In connection with your actions as
agents hereunder, you agree to use reasonable efforts to solicit offers to
purchase Program Securities upon the terms and conditions set forth in the
Prospectus as then amended or supplemented.

               The Company reserves the right, in its sole discretion, to
instruct you to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Program Securities. Upon receipt of at least
one business day's prior notice from the Company, you will forthwith suspend
solicitations of offers to purchase Program Securities from the Company until
such time as the Company has advised you that such solicitation may be resumed.
While such solicitation is suspended, the Company shall not be required to
deliver any certificates, opinions or letters in accordance with Sections 5(a),
5(b) and 5(c); provided, however, that if the Registration Statement or
Prospectus is amended or supplemented during the period of suspension (other
than by an amendment or supplement providing solely for (i) in the case of
Notes, issued alone or as part of a Unit, a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the
Notes, (ii) in the case of Units, a change in the exercise price, exercise date
or period or expiration of an underlying Universal Warrant or a change in the
settlement date or purchase or sale price of an underlying Purchase Contract or
(iii) for a change you deem to be immaterial), you shall not be required to
resume soliciting offers to purchase Program Securities until the Company has
delivered such certificates, opinions and letters as you may request.

               The Company agrees to pay to you, as consideration for the sale
of each Program Security resulting from a solicitation made or an offer to
purchase received by you, a commission in the form of a discount from the
purchase price of such Program Security equal to between .125% and .750%
(depending upon such Note's maturity or, in the case of Units, any underlying
Note's maturity or the terms of the Units and of the securities comprised by
such Units) of the principal amount of such Note or, in the case of Units, the
face amount of such Unit (provided that the commission for Notes having, or
Units including Notes or other securities having, a maturity of 30 years or
greater will be negotiated) or such other discount as may be specified in the
Prospectus Supplement relating to such Note or Unit.

               You shall communicate to the Company, orally or in writing, each
offer to purchase Program Securities received by you as agent that in your
judgment should be considered by the Company. The Company shall have the sole
right to accept offers to purchase Program Securities and may reject any offer
in whole or in part. You shall have the right to reject any offer to purchase
Program Securities that you consider to be unacceptable, and any such rejection
shall not be deemed a breach of your agreements contained herein. The procedural
details relating to the issue and delivery of Program Securities sold by you as
agent and the payment therefor shall be as set forth in the Administrative
Procedures (as hereinafter defined).

                (b) Purchases as Principals. Each sale of Program Securities to
you as principals shall be made in accordance with the terms of this Agreement.
In connection with each such sale, the Company will enter into a Notes Terms
Agreement or Units Terms Agreement that will provide for the sale of such
Program Securities to and the purchase thereof by you. Each Notes Terms
Agreement or Units Terms Agreement will take the form of either (i) a written
agreement between you and the Company, which may be substantially in the form of
Exhibit A or Exhibit A-1 (as applicable) hereto (in the case of Notes, a
"Written Notes Terms Agreement" and, in the case of Units, a "Written Units
Terms Agreement"), or (ii) an oral agreement between you and the Company
confirmed in writing by you to the Company.

               Your commitment to purchase Program Securities as principal
pursuant to a Notes Terms Agreement or Units Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each (i) Note Terms Agreement shall specify the principal amount of Notes
to be purchased by you pursuant thereto, the maturity date of such Notes, the
price to be paid to the Company for such Notes, the interest rate and interest
rate formula, if any, applicable to such Notes and any other terms of such Notes
and (ii) Unit Terms Agreement shall specify (a) the information set forth in (i)
above with respect to any Notes issued as part of a Unit, (b) with respect to
Universal Warrants issued as part of a Unit, the exercise price, the exercise
date or period, the expiration date and any other terms of such Universal
Warrants, and (c) with respect to Purchase Contracts issued as part of a Unit,
the settlement date, the purchase or sale price or any other terms of such
Purchase Contracts. Each such Notes Terms Agreement or Units Terms Agreement may
also specify any requirements for officers' certificates, opinions of counsel
and letters from the independent auditors of the Company pursuant to Section 4
hereof. A Notes Terms Agreement and a Unit Terms Agreement may also specify
certain provisions relating to the reoffering of such Notes or Units, as the
case may be, by you.

               Each Notes Terms Agreement and each Units Terms Agreement shall
specify the time and place of delivery of and payment for such Notes or Units,
as the case may be. Unless otherwise specified in a Notes Terms Agreement or a
Units Terms Agreement, the procedural details relating to the issue and delivery
of Notes or Units, as the case may be, purchased by you as principal and the
payment therefor shall be as set forth in the Administrative Procedures. Each
date of delivery of and payment for Program Securities to be purchased by you as
principal pursuant to a Notes Terms Agreement or a Units Terms Agreement, as the
case may be, is referred to herein as a "Settlement Date."

               Unless otherwise specified in a Notes Terms Agreement or a Units
Terms Agreement, if you are purchasing Notes or Units as principal you may
resell such Notes or Units to other dealers. Any such sales may be at a
discount, which shall not exceed the amount set forth in the Prospectus
Supplement relating to such Notes or Units.

               (c) Administrative Procedures. You and the Company agree to
perform the respective duties and obligations specifically provided to be
performed in the Global Medium-Term Notes, Series D and Series E and the Global
Units, Series D and Series E, Administrative Procedures (attached hereto as
Exhibit B) (the "Administrative Procedures"), as amended from time to time. The
Administrative Procedures may be amended only by written agreement of the
Company and you.

               (d) Delivery. The documents required to be delivered by Section 4
of this Agreement as a condition precedent to your obligation to begin
soliciting offers to purchase Program Securities as agent of the Company shall
be delivered at the office of Davis Polk & Wardwell, your counsel, not later
than 4:00 p.m., New York time, on the date hereof, or at such other time and/or
place as you and the Company may agree upon in writing, but in no event later
than the day prior to the earlier of (i) the date on which you begin soliciting
offers to purchase Program Securities and (ii) the first date on which the
Company accepts any offer by you to purchase Program Securities as principal.
The date of delivery of such documents is referred to herein as the
"Commencement Date."

               3.  Agreements.  The Company agrees with you that:

               (a) Prior to the termination of the offering of the Program
Securities pursuant to this Agreement or any Notes Terms Agreement or Units
Terms Agreement, the Company will not file any Prospectus Supplement relating to
the Program Securities or any amendment to the Registration Statement unless the
Company has previously furnished to you a copy thereof for your review and will
not file any such proposed supplement or amendment to which you reasonably
object; provided, however, that the foregoing requirement shall not apply to any
of the Company's periodic filings with the Commission required to be filed
pursuant to Section 13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies
of which filings the Company will cause to be delivered to you promptly after
being transmitted for filing with the Commission. Subject to the foregoing
sentence, the Company will promptly cause each Prospectus Supplement to be filed
with or transmitted for filing to the Commission in accordance with Rule 424(b)
under the Securities Act. The Company will promptly advise you (i) of the filing
of any amendment or supplement to the Basic Prospectus, (ii) of the filing and
effectiveness of any amendment to the Registration Statement, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Basic Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Program Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (vi) of the issuance by any
non-United States regulatory authority of any request for information relating
to the Program Securities or suspension of the listing of the Program Securities
on any stock exchange on which the Program Securities are then listed. The
Company will use its best efforts to prevent the issuance of any such stop order
or notice of suspension of qualification or listing and, if issued, to obtain as
soon as possible the withdrawal thereof. If the Basic Prospectus is amended or
supplemented as a result of the filing under the Exchange Act of any document
incorporated by reference in the Prospectus, you shall not be obligated to
solicit offers to purchase Program Securities so long as you are not reasonably
satisfied with such document.

               (b) If, at any time when a prospectus relating to the Program
Securities is required to be delivered under the Securities Act or made
available to purchasers of the Program Securities, any event occurs or condition
exists as a result of which the Prospectus, as then amended or supplemented,
would include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances when the Prospectus, as then amended or supplemented, is delivered
to a purchaser, not misleading, or if, in your opinion or in the opinion of the
Company, it is necessary at any time to amend or supplement the Prospectus, as
then amended or supplemented, to comply with applicable law, the Company will
immediately notify you by telephone (with confirmation in writing) to suspend
solicitation of offers to purchase Program Securities and, if so notified by the
Company, you shall forthwith suspend such solicitation and cease using the
Prospectus, as then amended or supplemented. If the Company shall decide to
amend or supplement the Registration Statement or Prospectus, as then amended or
supplemented, it shall so advise you promptly by telephone (with confirmation in
writing) and, at its expense, shall prepare and cause to be filed promptly with
the Commission an amendment or supplement to the Registration Statement or
Prospectus, as then amended or supplemented, satisfactory in all respects to
you, that will correct such statement or omission or effect such compliance and
will supply such amended or supplemented Prospectus to you in such quantities as
you may reasonably request. If any documents, certificates, opinions and letters
furnished to you pursuant to paragraph (e) below and Sections 5(a), 5(b) and
5(c) in connection with the preparation and filing of such amendment or
supplement are satisfactory in all respects to you, upon the filing with the
Commission of such amendment or supplement to the Prospectus or upon the
effectiveness of an amendment to the Registration Statement, you will resume the
solicitation of offers to purchase Program Securities hereunder. Notwithstanding
any other provision of this Section 3(b), until the distribution of any Program
Securities you may own as principal has been completed, if any event described
above in this paragraph (b) occurs, the Company will, at its own expense,
forthwith prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or Prospectus, as then
amended or supplemented, satisfactory in all respects to you, will supply such
amended or supplemented Prospectus to you in such quantities as you may
reasonably request and shall furnish to you pursuant to paragraph (e) below and
Sections 5(a), 5(b) and 5(c) such documents, certificates, opinions and letters
as you may request in connection with the preparation and filing of such
amendment or supplement.

               (c) The Company will make generally available to its security
holders and to you as soon as practicable earning statements that satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder covering twelve month periods beginning, in each
case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in Rule 158 under the Securities Act)
of the Registration Statement with respect to each sale of Program Securities.
If such fiscal quarter is the last fiscal quarter of the Company's fiscal year,
such earning statement shall be made available not later than 90 days after the
close of the period covered thereby and in all other cases shall be made
available not later than 45 days after the close of the period covered thereby.

               (d) The Company will furnish to you, without charge, a signed
copy of the Registration Statement, including exhibits and all amendments
thereto, and as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto as you may
reasonably request.

               (e) During the term of this Agreement, the Company shall furnish
to you such relevant documents and certificates of officers of the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Basic Prospectus, any amendments or supplements
thereto, the Indentures, the Unit Agreement, the Warrant Agreement, the Notes,
the Units, the Universal Warrants, the Purchase Contracts, this Agreement, the
Administrative Procedures, any Notes Terms Agreement or Units Terms Agreement
and the performance by the Company of its obligations hereunder or thereunder as
you may from time to time reasonably request.

               (f) The Company shall notify you promptly in writing of any
downgrading, or of its receipt of any notice of any intended or potential
downgrading or of any review for possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.

               (g) The Company will, whether or not any sale of Program
Securities is consummated, pay all expenses incident to the performance of its
obligations under this Agreement and any Notes Terms Agreement or Units Terms
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Program Securities, (iii) the fees
and disbursements of the Company's counsel and accountants, of the Trustees and
their counsel, of the Unit Agent and its counsel, of the Warrant Agent and its
counsel and of the Principal Paying Agent and its counsel and any paying agents
for the Notes appointed by the Company, (iv) the fees and expenses incurred with
respect to listing the Series D Notes and the Series D Units on the London Stock
Exchange or on another stock exchange or exchanges if so required by Section
3(i), (v) the printing and delivery to you in quantities as hereinabove stated
of copies of the Registration Statement and all amendments thereto and of the
Prospectus and any amendments or supplements thereto, (vi) the printing and
delivery to you of copies of the Indentures, the Unit Agreement or the Universal
Warrant Agreement (vii) any fees charged by rating agencies for the rating of
the Program Securities, (viii) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities Dealers, Inc.,
(ix) the fees and disbursements of your counsel incurred in connection with the
offering and sale of the Program Securities, including any opinions to be
rendered by such counsel hereunder, and (x) any out-of-pocket expenses incurred
by you; provided that any advertising expenses incurred by you shall have been
approved by the Company.

               (h) During the period beginning on the date of any Notes Terms
Agreement or Units Terms Agreement relating to either Notes or Units, as the
case may be, and continuing to and including the Settlement Date with respect to
such Notes Terms Agreement or Units Terms Agreement, the Company will not,
without your prior consent, offer, sell, contract to sell or otherwise dispose
of (i) in the case of Notes, any debt securities of the Company substantially
similar to the Notes set forth in such Notes Terms Agreement (other than (A) the
Notes that are to be sold pursuant to such Notes Terms Agreement, (B) Notes
previously agreed to be sold by the Company and (C) commercial paper issued in
the ordinary course of business) or (ii) in the case of Units, any securities
substantially similar to such Units (other than (A) the Units that are sold
pursuant to such Units Terms Agreement or (B) Units previously agreed to be sold
by the Company), in each case, except as may otherwise be provided in the
applicable Notes Terms Agreement or Units Terms Agreement.

               (i) The Company will indemnify and hold you harmless against any
documentary, stamp or similar transfer or issue tax, including any interest and
penalties, on the issue of the Program Securities in accordance with the terms
of this Agreement, on the execution and delivery of this Agreement and on the
exchange of any temporary global Notes for definitive Notes or permanent global
Notes, of any temporary global Units for definitive Units or permanent global
Units, of any permanent global bearer Notes for definitive bearer Notes or of
any permanent global bearer Units for definitive bearer Units, that are or may
be required to be paid under the laws of the United Kingdom, the United States
or any political subdivision or taxing authority thereof or therein.

               (j) In connection with the application to list the Series D Notes
and Series D Units on the London Stock Exchange, the Company will furnish from
time to time any and all documents, instruments, information and undertakings
and publish all advertisements or other material that may be necessary in order
to effect such listing and will maintain such listing until, (i) in the case of
the Notes, none of the Series D Notes is outstanding, either as part of a Unit
or otherwise, or until such time as payment of principal, premium, if any, and
interest in respect of all the Series D Notes, whether issued alone or as part
of a Unit, has been duly provided for, whichever is earlier and (ii) in the case
of the Units, none of the Series D Units is outstanding; provided, however, that
if the Company can no longer reasonably maintain such listing, it will use its
best efforts to obtain and maintain the quotation for, or listing of, the Series
D Notes and Series D Units on such other stock exchange or exchanges as you
shall reasonably request. In addition, for so long as the Series D Notes and
Series D Units are listed on a stock exchange and such exchange so requires, the
Company will maintain in London, or in such other place as the Series D Notes
and Series D Units are listed (if the Series D Notes and Series D Units are no
longer listed on the London Stock Exchange), a paying agent in respect of the
Series D Notes or Series D Units, as required.

               4. Conditions of the Obligations of the Agents. Your obligation
to solicit offers to purchase Program Securities as agents of the Company, your
obligation to purchase Program Securities as principals pursuant to any Notes
Terms Agreement or Units Terms Agreement and the obligation of any other
purchaser to purchase Program Securities will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of the Company's officers made in each certificate
furnished pursuant to the provisions hereof and to the performance and
observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed (in the case of your obligation to solicit
offers to purchase Program Securities, at the time of such solicitation, and, in
the case of your or any other purchaser's obligation to purchase Program
Securities, at the time the Company accepts the offer to purchase such Program
Securities and at the time of issuance and delivery) and (in each case) to the
following additional conditions precedent when and as specified:

               (a)  Prior to such solicitation or purchase, as the case may
                    be:


               (i) there shall not have occurred any change, or any development
         involving a prospective change, in the condition, financial or
         otherwise, or in the earnings, business or operations of the Company
         and its subsidiaries, taken as a whole, from that set forth in the
         Prospectus, as amended or supplemented at the time of such solicitation
         or at the time such offer to purchase was made, that, in your judgment,
         is material and adverse and that makes it, in your judgment,
         impracticable to market the Program Securities on the terms and in the
         manner contemplated by the Prospectus, as so amended or supplemented;


             (ii) there shall not have occurred such a change in national or
         international financial, political or economic conditions or currency
         exchange rates or exchange controls as would in your view be likely to
         prejudice materially the success of the offering and distribution of
         the Program Securities or dealings in the Program Securities in the
         secondary market; and


            (iii) there shall not have occurred any downgrading, nor shall any
         notice have been given of any intended or potential downgrading or of
         any review for a possible change that does not indicate the direction
         of the possible change, in the rating accorded any of the Company's
         securities by any "nationally recognized statistical rating
         organization," as such term is defined for purposes of Rule 436(g)(2)
         under the Securities Act;


(A) except, in each case described in paragraph (i), (ii) or (iii) above, as
disclosed to you in writing by the Company prior to such solicitation or, in the
case of a purchase of Program Securities, before the offer to purchase such
Program Securities was made or (B) unless in each case described in (ii) above,
the relevant event shall have occurred and been known to you prior to such
solicitation or, in the case of a purchase of Program Securities, before the
offer to purchase such Program Securities was made.

               (b) On the Commencement Date and, if called for by any Notes
Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date,
you shall have received:

               (i) The opinion, dated as of such date, of Jonathan M. Clark,
         General Counsel and Secretary of the Company, or of other counsel
         satisfactory to the Agent and who is an officer of the Company, to the
         effect that:

                     (A) the Company has been duly incorporated, is validly
               existing as a corporation in good standing under the laws of the
               State of Delaware, has the corporate power and authority to own
               its property and to conduct its business as described in the
               Prospectus, as amended or supplemented, and is duly qualified to
               transact business and is in good standing in each jurisdiction in
               which the conduct of its business or its ownership or leasing of
               property requires such qualification, except to the extent that
               the failure to be so qualified or be in good standing would not
               have a material adverse effect on the Company and its
               consolidated subsidiaries, taken as a whole;

                     (B) each of Morgan Stanley & Co. Incorporated and Morgan
               Stanley International Incorporated (each a "Material Subsidiary")
               has been duly incorporated, is validly existing as a corporation
               in good standing under the laws of the jurisdiction of its
               incorporation, has the corporate power and authority to own its
               property and to conduct its business as described in the
               Prospectus, as amended or supplemented, and is duly qualified to
               transact business and is in good standing in each jurisdiction in
               which the conduct of its business or its ownership or leasing of
               property requires such qualification, except to the extent that
               the failure to be so qualified or be in good standing would not
               have a material adverse effect on the Company and its
               consolidated subsidiaries, taken as a whole;

                     (C) each of the Company and its Material Subsidiaries has
               all necessary consents, authorizations, approvals, orders,
               certificates and permits of and from, and has made all
               declarations and filings with, all federal, state, local and
               other governmental authorities, all self-regulatory organizations
               and all courts and other tribunals, to own, lease, license and
               use its properties and assets and to conduct its business in the
               manner described in the Prospectus, as amended or supplemented,
               except to the extent that the failure to obtain or file would not
               have a material adverse effect on the Company and its
               consolidated subsidiaries, taken as a whole;

                     (D) each of this Agreement and any applicable Written Notes
               Terms Agreement or Written Units Terms Agreement has been duly
               authorized, executed and delivered by the Company;

                     (E) each Indenture has been duly qualified under the Trust
               Indenture Act and each of the Indentures, the Unit Agreement and
               the Universal Warrant Agreement has been duly authorized,
               executed and delivered by the Company and is a valid and binding
               agreement of the Company, enforceable in accordance with its
               terms except as (i) the enforceability thereof may be limited by
               bankruptcy, insolvency, reorganization, liquidation, moratorium
               and other similar laws affecting creditors' rights generally and
               (ii) is subject to general principles of equity, regardless of
               whether such enforceability is considered at a proceeding in
               equity or at law;

                     (F) the forms of Notes, whether issued alone or as part of
               a Unit, have been duly authorized and established in conformity
               with the provisions of the relevant Indenture and, if the Notes
               had been executed by the Company and authenticated by the
               relevant Trustee or its duly appointed agent in accordance with
               the provisions of the relevant Indenture and delivered to and
               duly paid for by the purchasers thereof on the date of such
               opinion, the Notes would be entitled to the benefits of such
               Indenture and would be valid and binding obligations of the
               Company, enforceable in accordance with their respective terms
               except as (i) the enforceability thereof may be limited by
               bankruptcy, insolvency, reorganization, liquidation, moratorium
               and other similar laws affecting creditors' rights generally and
               (ii) is subject to general principles of equity, regardless of
               whether such enforceability is considered at a proceeding in
               equity or at law;

                     (G) the forms of Units, including the forms of Universal
               Warrants and Purchase Contracts which, in addition to the Notes,
               may comprise such Units, have been duly authorized and
               established in conformity with the provisions of (i) in the case
               of Units and Purchase Contracts, the Unit Agreement and (ii) in
               the case of the Universal Warrants, the Universal Warrant
               Agreement, and if the Units (including the Universal Warrants and
               the Purchase Contracts) had been delivered to and duly paid for
               by the purchasers thereof (and any Universal Warrant included
               therein had been executed by the Company and countersigned by the
               Warrant Agent and any Purchase Contracts included therein had
               been executed by the Company and executed and countersigned by
               the Unit Agent) on the date of such opinion, the Units (including
               the Universal Warrants and Purchase Contracts contained therein)
               would be entitled to the benefits of the Unit Agreement and, in
               the case of the Universal Warrants, the Universal Warrant
               Agreement and would be valid and binding obligations of the
               Company, enforceable in accordance with their respective terms
               except as (i) the enforceability thereof may be limited by
               bankruptcy, insolvency, reorganization, liquidation, moratorium
               and other similar laws affecting creditors' rights generally and
               (ii) and is subject to general principles of equity, regardless
               of whether such enforceability is considered at a proceeding in
               equity or at law;

                     (H) the execution and delivery by the Company of the Notes
               (whether issued alone or as part of a Unit), the Units (including
               any Purchase Contract or Universal Warrant included therein), the
               Indentures, the Unit Agreement, the Universal Warrant Agreement
               and any applicable Written Notes Terms Agreement or Written Units
               Terms Agreement and the performance by the Company of its
               obligations under this Agreement, the Notes, the Units, the
               Indentures, the Unit Agreement, the Universal Warrant Agreement
               and any applicable Notes Terms Agreement or Units Terms Agreement
               will not contravene any provision of applicable law or the
               certificate of incorporation or by-laws of the Company or, to the
               best of such counsel's knowledge, any agreement or other
               instrument binding upon the Company or any of its consolidated
               subsidiaries that is material to the Company and its consolidated
               subsidiaries, taken as a whole, or, to the best of such counsel's
               knowledge, any judgment, order or decree of any U.S. governmental
               body, agency or court having jurisdiction over the Company or any
               of its consolidated subsidiaries, and no consent, approval,
               authorization or order of or qualification with any U.S.
               governmental body or agency is required for the performance by
               the Company of its obligations under this Agreement, the Notes,
               the Units, the Indentures, the Unit Agreement, the Universal
               Warrant Agreement and any applicable Notes Terms Agreement or
               Units Terms Agreement; provided, however, that no opinion is
               expressed on whether the purchase of the Program Securities
               constitutes a "prohibited transaction" under Section 406 of the
               Employee Retirement Income Security Act of 1974, as amended, or
               Section 4975 of the Internal Revenue Code of 1986, as amended;

                     (I) the statements (1) in the Prospectus, as then amended
               or supplemented, under the captions "Description of Notes" (in
               the Prospectus Supplement), "Description of Debt Securities" (in
               the Basic Prospectus), "Description of Units" (in the Prospectus
               Supplement and in the Basic Prospectus), "Plan of Distribution"
               (in the Prospectus Supplement and in the Basic Prospectus),
               "Description of Purchase Contracts" (in the Basic Prospectus) and
               "Description of Warrants" (in the Basic Prospectus), (2) in the
               Registration Statement, as then amended or supplemented, under
               Item 15, (3) in "Item 3 - Legal Proceedings" of the Company's
               most recent annual report on Form 10-K incorporated by reference
               in the Prospectus and (4) in "Item 1 - Legal Proceedings" of Part
               II of the Company's quarterly reports on Form 10-Q, if any, filed
               since such annual report, in each case insofar as such statements
               constitute summaries of the legal matters, documents or
               proceedings referred to therein, fairly present the information
               called for with respect to such legal matters, documents and
               proceedings and fairly summarize the matters referred to therein;

                     (J) after due inquiry, such counsel does not know of any
               legal or governmental proceedings pending or threatened to which
               the Company or any of its consolidated subsidiaries is a party or
               to which any of the properties of the Company or any of its
               consolidated subsidiaries is subject that are required to be
               described in the Registration Statement or the Prospectus, as
               then amended or supplemented, and are not so described or of any
               U.S. federal or state statutes, regulations, contracts or other
               documents governed by U.S. federal or state law that are required
               to be described in the Registration Statement or the Prospectus,
               as then amended or supplemented, or to be filed or incorporated
               by reference as exhibits to such Registration Statement that are
               not described, filed or incorporated by reference as required;
               and

                     (K) such counsel (1) is of the opinion that each document,
               if any, filed pursuant to the Exchange Act and incorporated by
               reference in the Prospectus, as then amended or supplemented
               (except as to financial statements and schedules included therein
               as to which such counsel need not express any opinion), complied
               when so filed as to form in all material respects with the
               Exchange Act and the applicable rules and regulations of the
               Commission thereunder, (2) has no reason to believe that any part
               of the Registration Statement (except as to financial statements
               and schedules as to which such counsel need not express any
               belief and except for that part of the Registration Statement
               that constitutes the Forms T-1 heretofore referred to), as then
               amended, if applicable, when such part became effective
               contained, and the Registration Statement (except as to financial
               statements and schedules included therein, as to which such
               counsel need not express any belief and except for the part of
               the Registration Statement that constitutes the Form T-1) as of
               the date such opinion is delivered, contains any untrue statement
               of a material fact or omitted or omits to state a material fact
               required to be stated therein or necessary to make the statements
               therein not misleading, (3) is of the opinion that the
               Registration Statement and Prospectus, as then amended or
               supplemented, if applicable (except for financial statements and
               schedules included therein as to which such counsel need not
               express any opinion), comply as to form in all material respects
               with the Securities Act and the applicable rules and regulations
               of the Commission thereunder and (4) has no reason to believe
               that the Prospectus, as then amended or supplemented, if
               applicable (except for financial statements and schedules as to
               which such counsel need not express any belief), as of the date
               such opinion is delivered contains any untrue statement of a
               material fact or omits to state a material fact necessary in
               order to make the statements therein, in the light of the
               circumstances under which they were made, not misleading;
               provided that in the case of an opinion delivered on the
               Commencement Date or pursuant to Section 5(b), the opinion and
               belief set forth in clauses (3) and (4) above shall be deemed not
               to cover information concerning an offering of particular Notes
               or Units to the extent such information will be set forth in a
               supplement to the Basic Prospectus.


            (ii) The opinion, dated as of such date, of Davis Polk & Wardwell,
         your special counsel, covering the matters in subparagraphs (D), (E),
         (F), (G) and (I) (with respect to statements in the Prospectus, as then
         amended or supplemented, under the captions "Description of Notes" (in
         the Prospectus Supplement), "Description of Debt Securities" (in the
         Basic Prospectus), "Description of Units" (in the Prospectus Supplement
         and the Basic Prospectus), "Plan of Distribution" (in the Prospectus
         Supplement and in the Basic Prospectus), "Description of Purchase
         Contracts" (in the Basic Prospectus) and "Description of Warrants" (in
         the Basic Prospectus)) and clauses (2), (3) and (4) of subparagraph (K)
         in paragraph (b)(i) above.


               Notwithstanding the foregoing, the opinions described in
         subparagraphs (F) (except as to due authorization of the Notes), (G)
         (except as to due authorization of the Units, Universal Warrants and
         Purchase Contracts), (H), (I)(1) and (K)(3) and (4) of paragraph (b)(i)
         above, when contained in an opinion delivered on the Commencement Date
         or pursuant to Section 5(b), shall be deemed not to address the
         application of the Commodity Exchange Act, as amended, or the rules,
         regulations or interpretations of the Commodity Futures Trading
         Commission to Program Securities the payments of principal or interest
         on which, or any other payments with respect to which, will be
         determined by reference to one or more currency exchange rates,
         commodity prices, securities of entities unaffiliated with the Company,
         baskets of such securities, equity indices or other factors.


               With respect to subparagraph (K) of paragraph (b)(i) above,
         Jonathan M. Clark or such other counsel for the Company may state that
         his opinion and belief are based upon his participation, or the
         participation of someone under his supervision, in the preparation of
         the Registration Statement and Prospectus and any amendments or
         supplements thereto and documents incorporated therein by reference and
         review and discussion of the contents thereof, but are without
         independent check or verification, except as specified. With respect to
         clauses (2), (3) and (4) of subparagraph (K) of paragraph (b)(i) above,
         Davis Polk & Wardwell may state that their opinion and belief are based
         upon their participation in the preparation of the Registration
         Statement and Prospectus and any amendments or supplements thereto (but
         not including documents incorporated therein by reference) and review
         and discussion of the contents thereof (including documents
         incorporated therein by reference), but are without independent check
         or verification, except as specified.


            (iii) The opinion, dated as of such date, of Shearman & Sterling,
         special counsel to the Company, to the effect that the statements set
         forth under the caption "United States Federal Taxation--Foreign
         Holders" in the Prospectus Supplement and under the caption
         "Limitations on Issuance of Bearer Debt Securities and Bearer Warrants"
         in the Basic Prospectus, insofar as such statements relate to
         statements of law or legal conclusions under the laws of the United
         States or matters of United States law, fairly present the information
         called for and fairly summarize the matters referred to therein.


               The opinion of Shearman & Sterling, described in paragraph
         (b)(iii) above shall be rendered to you at the request of the Company
         and shall so state therein.


               (c) On the Commencement Date and, if called for by any Notes
Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date,
you shall have received a certificate, dated the Commencement Date or such
Settlement Date, as the case may be, and signed by an executive officer of the
Company to the effect set forth in subparagraph (a)(iii) above and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of such date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before such date.

               The officer signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.

               (d) On the Commencement Date and, if called for by any Notes
Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date,
the Company's independent auditors shall have furnished to you a letter or
letters, dated as of the Commencement Date or such Settlement Date, as the case
may be, in form and substance satisfactory to you containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus, as
then amended or supplemented.

               (e) On the Commencement Date and on each Settlement Date, the
Company shall have furnished to you such appropriate further information,
certificates and documents as you may reasonably request.

               (f) On the Commencement Date, application to list the Series D
Notes and Series D Units on the London Stock Exchange shall have been made and,
prior to the issuance of the first Series D Note or Series D Unit, such listing
shall have been granted, subject to official notice of issuance.

               5. Additional Agreements of the Company. (a) Each time the
Registration Statement or Prospectus is amended or supplemented (other than by
an amendment or supplement providing solely for (i) in the case of Notes, a
change in the interest rates, redemption provisions, amortization schedules or
maturities offered on the Notes issued alone or as part of a Unit, (ii) in the
case of Units, a change in the exercise price, exercise date or period or
expiration of an underlying Universal Warrant or a change in the settlement date
or purchase or sale price of an underlying Purchase Contract or (iii) for a
change you deem to be immaterial), the Company will deliver or cause to be
delivered forthwith to you a certificate signed by an executive officer of the
Company, dated the date of such amendment or supplement, as the case may be, in
form reasonably satisfactory to you, of the same tenor as the certificate
referred to in Section 4(c) relating to the Registration Statement or the
Prospectus as amended or supplemented to the time of delivery of such
certificate.

               (b) Each time the Company furnishes a certificate pursuant to
Section 5(a), the Company will furnish or cause to be furnished forthwith to you
a written opinion of counsel for the Company. Any such opinion shall be dated
the date of such amendment or supplement, as the case may be, shall be in a form
satisfactory to you and shall be of the same tenor as the opinion referred to in
Section 4(b)(i), but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinion.
In lieu of such opinion, counsel last furnishing such an opinion to you may
furnish to you a letter to the effect that you may rely on such last opinion to
the same extent as though it were dated the date of such letter (except that
statements in such last opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to the time of delivery
of such letter.)

               (c) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Prospectus, the Company shall cause its independent auditors
forthwith to furnish you with a letter, dated the date of such amendment or
supplement, as the case may be, in form satisfactory to you, of the same tenor
as the letter referred to in Section 4(d), with regard to the amended or
supplemental financial information included or incorporated by reference in the
Registration Statement or the Prospectus as amended or supplemented to the date
of such letter.

               6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless you and each person, if any, who controls you within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by you or any such controlling person in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to you furnished to
the Company in writing by you expressly for use therein.

               (b) You agree to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to you, but only with reference to
information relating to you furnished to the Company in writing by you expressly
for use in the Registration Statement or the Prospectus or any amendments or
supplements thereto.

               (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by you, in the case of parties indemnified pursuant to
paragraph (a) above, and by the Company, in the case of parties indemnified
pursuant to paragraph (b) above. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

               (d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein in connection with any offering of Program Securities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and you on the other hand from
the offering of such Program Securities or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and you on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and you on the other hand in connection with the offering of such Program
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of such Program Securities (before deducting
expenses) received by the Company bear to the total discounts and commissions
received by you in respect thereof. The relative fault of the Company on the one
hand and of you on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by you and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

               (e) The Company and you agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, you shall not be required to contribute any amount in excess of the
amount by which the total price at which the Program Securities referred to in
paragraph (d) above that were offered and sold to the public through you exceeds
the amount of any damages that you have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 6 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.

               (f) The indemnity and contribution provisions contained in this
Section 6, representations, warranties and other statements of the Company, its
officers and you set forth in or made pursuant to this Agreement or any Notes
Terms Agreement or Units Terms Agreement will remain in full force and effect
regardless of (i) any termination of this Agreement or any such Notes Terms
Agreement or Units Terms Agreement, (ii) any investigation made by or on behalf
of you or any person controlling you or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Program Securities.

               7.  Offering Restrictions.  You hereby represent to the Company
and agree with respect to the Program Securities that:


             (a)(1) you have not (i) offered or sold and during the Restricted
         Period (as defined below) will not offer or sell Bearer Notes (whether
         offered alone or as part of a Unit) (including any Note that is
         exchangeable for Bearer Notes) directly or indirectly in the United
         States (as defined below) or to or for the account of any United States
         person (as defined below), other than to a Qualifying Foreign Branch
         (as defined below) or to certain other persons as provided under United
         States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(1)(iii)(B) and
         (C); and (ii) delivered and will not deliver within the United States
         definitive Bearer Notes that are sold during the Restricted Period;


               (2) you have, and throughout the Restricted Period will have, in
         effect procedures reasonably designed to ensure that your employees or
         agents who are directly engaged in selling Bearer Notes (whether
         offered alone or as part of a Unit) are aware that such Bearer Notes
         may not be offered or sold during the Restricted Period to a person who
         is within the United States or to a United States person, except as
         permitted by Section 7(a)(1)(i) above;


               (3) if you are a United States person, you are acquiring the
         Bearer Notes (whether offered alone or as part of a Unit) for purposes
         of resale in connection with their original issuance and if you retain
         Bearer Notes for your own account, you will only do so in accordance
         with the requirements of United States Treasury Regulations Section
         1.163-5(c)(2)(i)(D)(6);


               (4) if you transfer to any affiliate Bearer Notes (whether
         offered alone or as part of a Unit) for the purpose of offering or
         selling such Bearer Notes during the Restricted Period, you will either
         (i) obtain from such affiliate for the benefit of the Company the
         representations and agreements contained in clauses (1), (2) and (3) or
         (ii) repeat and confirm the representations and agreements contained in
         clauses (1), (2) and (3) on such affiliate's behalf and obtain from
         such affiliate the authority to so obligate it; and


               (5) you will obtain for the benefit of the Company the
         representations and agreements contained in clauses (1), (2), (3) and
         (4) from any person other than your affiliate with whom you enter into
         a written contract, within the meaning of United States Treasury
         Regulations Section 1.163-5(c)(2)(i)(D)(4), for the offer or sale
         during the Restricted Period of Bearer Notes (whether offered alone or
         as part of a Unit).

For purposes of this Section 7(a), an offer or sale will be considered to be
made in the United States if the offeror or seller of such Notes (whether
offered alone or as part of a Unit) has an address within the United States for
the offeree or purchaser of such Notes with respect to the offer or sale. As
used in this Section 7(a), "United States person" means a citizen or resident of
the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, or an estate or trust the income of which is subject to United States
federal income taxation regardless of its source, "United States" means the
United States (including the States and the District of Columbia), its
territories, its possessions and any other areas subject to its jurisdiction;
"Qualifying Foreign Branch" means a branch of a United States financial
institution, as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v), located outside the United States that is purchasing for its
own account or for resale and that has agreed, as a condition to purchase, to
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the United
States Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder; and "Restricted Period" with respect to each issuance
means the period which begins on the earlier of the date on which the Company
receives the proceeds of the sale of Notes with respect to such issuance or the
first date on which the Notes are offered to persons other than you, and which
ends 40 days after the date on which the Company receives the proceeds of the
sale of such Notes; provided that with respect to a Note held as part of an
unsold allotment or subscription, any offer or sale of such Note by the Company
or you shall be deemed to be during the Restricted Period.

         (b) (1) In relation to Program Securities which have a maturity of one
year or more and which are to be listed on the London Stock Exchange, you have
not offered or sold and will not offer or sell any Program Securities to persons
in the United Kingdom prior to admission of such Program Securities to listing
in accordance with Part IV of the Financial Services Act 1986 (the "Act"),
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Act; (2) in relation to Program Securities which have a maturity of one year
or more and which are not to be listed on the London Stock Exchange, you have
not offered or sold and, prior to the expiry of the period of six months from
the date of issue of such Program Securities, will not offer or sell any such
Program Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (3) you have complied with and will
comply with all applicable provisions of the Act with respect to anything done
by you in relation to the Program Securities in, from or otherwise involving the
United Kingdom; and (4) you have only issued or passed on and will only issue or
pass on in the United Kingdom any document received by you in connection with
the issue of the Program Securities, other than any document which consists of
or any part of listing particulars, supplementary listing particulars or any
other document required or permitted to be published by the listing rules under
Part IV of the Act, to a person who is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995 or is a person to whom such document may otherwise lawfully be issued or
passed on.

         (c) You will not offer or sell any Program Securities in any
jurisdiction if such offer or sale would not be in compliance with any
applicable law or regulation or if any consent, approval or permission is needed
for such offer or sale by you or for or on behalf of the Company unless such
consent, approval or permission has been previously obtained. Without prejudice
to the provisions of this Section 7 above and subject to the obligations of the
Company set forth in Section 3 of this Agreement, the Company shall have no
responsibility for, and you will obtain, any consent, approval or permission
required by you for the subscription, offer, sale or delivery by you of Program
Securities under the laws and regulations in force in any jurisdiction to which
you are subject or in or from which you make any subscription, offer, sale or
delivery.

         (d) You will not offer or sell any Program Securities, directly or
indirectly, in Japan or to, or for the benefit of, any resident of Japan (which
term as used herein means any person resident in Japan including any corporation
or other entity organized under the laws of Japan) or to others for the
re-offering or re-sale, directly or indirectly, in Japan or to a resident of
Japan except pursuant to an exemption from the registration requirements of, and
otherwise in compliance with, the Securities and Exchange Law of Japan and other
relevant laws and regulations of Japan.

         (e) You will not offer and sell any Program Securities in the Federal
Republic of Germany other than in compliance with the provisions of the German
Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz) of December 13, 1990,
as amended, and of any other laws applicable in the Federal Republic of Germany
governing the issue, offering and sale of securities.

         (f) You will not offer and sell any Program Securities denominated or
payable in or indexed to Swiss Francs other than in compliance with Swiss law
and the regulations of the Swiss National Bank in effect from time to time.

         (g) You will not offer and sell any Notes or Units denominated or
payable in or indexed to French Francs (in the case of Notes, "French Franc
Notes" and, in the case of Units, "French Franc Units") other than in compliance
with French law, including, without limitation, the marche de l'eurofranc from
time to time of the Comite des Emissions de Bourse ("French EuroFranc
Regulations"). Unless otherwise authorized pursuant to French law, including,
without limitation, the French EuroFranc Regulations, you agree that French
Franc Notes and French Franc Units will be issued outside the Republic of France
and that, in connection with their initial distribution, you will not offer or
sell, directly or indirectly, any French Franc Notes or French Franc Units to
the public in the Republic of France, and will not distribute or cause to be
distributed to the public in the Republic of France the Prospectus or any other
offering material relating to French Franc Notes or French Franc Units.

               8. Position of the Agent. In acting under this Agreement and in
connection with the sale of any Program Securities by the Company (other than
Program Securities sold to you pursuant to a Notes Terms Agreement or Units
Terms Agreement, as the case may be), you are acting solely as agent of the
Company and do not assume any obligation towards or relationship of agency or
trust with any purchaser of Program Securities. You shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Program Securities has been solicited by you and accepted by
the Company, but you shall not have any liability to the Company in the event
any such purchase is not consummated for any reason. If the Company shall
default in its obligations to deliver Program Securities to a purchaser whose
offer it has accepted, the Company shall hold you harmless against any loss,
claim, damage or liability arising from or as a result of such default and
shall, in particular, pay to you the commission you would have received had such
sale been consummated.

               9. Termination. This Agreement may be terminated at any time
either by the Company or by you upon the giving of written notice of such
termination to the other parties hereto, but without prejudice to any rights,
obligations or liabilities of the other parties hereto accrued or incurred prior
to such termination. The termination of this Agreement shall not require
termination of any Notes Terms Agreement or Units Terms Agreement, and the
termination of any such Notes Terms Agreement or Units Terms Agreement shall not
require termination of this Agreement. If this Agreement is terminated, the
provisions of the third paragraph of Section 2(a), the last sentence of Section
3(b) and Sections 3(c), 3(g), 6, 7, 8, 10, 12 and 14 shall survive; provided
that if at the time of termination an offer to purchase Program Securities has
been accepted by the Company but the time of delivery to the purchaser or its
agent of such Program Securities has not occurred, the provisions of Sections
2(b), 2(c), 3(a), 3(b), 3(e), 3(f), 3(h), 4 and 5 shall also survive until such
delivery has been made.

               10.  Notices.  All communications hereunder will be in writing
and effective only on receipt, and, if sent to Morgan Stanley & Co.
International Limited, will be mailed, delivered or telefaxed and confirmed to
(a) Morgan Stanley & Co. International Limited at 25 Cabot Square, Canary
Wharf, London E14 4QA, England, to the attention of Capital Markets - Debt
Syndicate (Telephone No.:  011-44-71-425-7750; Telecopy No.:
011-44-71-425-7999), (b) Morgan Stanley Bank AG, Rahmhofstrasse 2-4, 60313
Frankfurt am Main, Federal Republic of Germany to the attention of Ron Lenihan
(Telephone No.:  011-49-69-152-060; Telecopy No.: 011-49-69-597-6627), (c)
Morgan Stanley S.A., 25 rue Balzac, 75008 Paris, France to the attention of
Debt Capital Markets (Telephone No.:  011-33-1-5377-7879 or 7300; Telecopy
No.:  011-33-1-5377-7899) or (d) Bank Morgan Stanley AG, Bahnhofstrasse 92-3rd
Floor, Ch-8023, Zurich, Switzerland, to the attention of John Webley
(Telephone No. 011-41-1-220-9111; Telecopy No. 011-41-1-220-9800) or, if sent
to the Company, will be mailed, delivered or telefaxed and confirmed to the
Company at 1585 Broadway, New York, New York  10036, Attention:  Secretary.

               11. Successors. This Agreement and any Notes Terms Agreement or
Units Terms Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors and
controlling persons referred to in Section 6 and the purchasers of Notes and
Units (to the extent expressly provided in Section 4), and no other person will
have any right or obligation hereunder.

               12.  Counterparts.  This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.

               13.  Applicable Law.  This Agreement will be governed by and
construed in accordance with the internal laws of the State of New York.

               14.  Headings.  The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.


               If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and you.

                                 Very truly yours,

                                 MORGAN STANLEY GROUP INC.


                                 By:__________________________
                                     Name: Eileen K. Murray
                                     Title:   Treasurer

The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.

MORGAN STANLEY & CO. INTERNATIONAL
  LIMITED



By: _______________________________
      Title:


MORGAN STANLEY BANK AG


By: _______________________________
      Title:


By: _______________________________
      Title:


MORGAN STANLEY S.A.


By: _______________________________
     Title:


By: _______________________________
      Title:


BANK MORGAN STANLEY AG


By: _______________________________
      Title:


By: _______________________________
      Title:


                                                       EXHIBIT A



                           MORGAN STANLEY GROUP INC.

                GLOBAL MEDIUM-TERM NOTES, SERIES D AND SERIES E

                             NOTES TERMS AGREEMENT




                                               _______________, 19__

Morgan Stanley Group Inc.
1585 Broadway
New York, New York  10036

Attention:

               Re:   Euro Distribution Agreement dated ________ ___,
                     1997 (the "Euro Distribution Agreement")

               The undersigned agrees to purchase your Global Medium-Term Notes,
Series [D/E], having the following terms:





All Notes                        Fixed Rate Notes                Floating Rate Notes
- ---------------------------      ----------------------------    ------------------------------

                                                           
Principal Amount:                Interest Rate:                  Base Rate:

Purchase Price:                  Applicability of Modified       Index Maturity:
                                 Payment upon
                                 Acceleration:

Price to Public:                 If yes, state issue price:      Spread (Plus or Minus):

Settlement Date and Time:        Amortization Schedule:          Spread Multiplier:

Place of Delivery:               Applicability of Annual         Alternate Rate Event
                                 Interest Payments:              Spread:

Specified Currency:              Denominated Currency (if        Initial Interest Rate:
                                 any):

Original Issue Date:             Indexed Currency or             Initial Interest Reset Date:
                                 Currencies (if any):

Interest Accrual Date:           Payment Currency (if any):      Interest Reset Dates:

Interest Payment Date(s):        Exchange Rate Agent (if         Interest Reset Period:
                                 any):

Maturity Date:                   Reference Dealers:              Maximum Interest Rate:

Initial Accrual Period           Face Amount (if any):           Minimum Interest Rate:
OID:

Total Amount of OID:             Fixed Amount of each            Interest Payment Period:
                                 Indexed Currency (if any):

Original Yield to Maturity:      Aggregate Fixed Amount          Calculation Agent:
                                 of each Indexed Currency
                                 (if any):
Optional Repayment                                               Reporting Service:
Date(s):

Optional Redemption                                              Index Currency:
Date(s):

Initial Redemption Date:

Initial Redemption
Percentage:

Annual Redemption
Percentage Reduction:

Ranking:

Series:

Minimum Denominations:

Other Terms:




               The provisions of Sections 1, 2(b) and 2(c) and 3 through 6 and
10 through 14 of the Euro Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.

               This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so terminated, the
provisions of Sections 3(g), 6, 10, 12, and 14 of the Euro Distribution
Agreement shall survive for the purposes of this Agreement.

               The following information, opinions, certificates, letters and
documents referred to in Section 4 of the U.S. Distribution Agreement will be
required:  ________________





                         [MORGAN STANLEY & CO. INTERNATIONAL
                         LIMITED]


                         By _______________________________________
                             Title:


                         [MORGAN STANLEY BANK AG]


                         By _______________________________________
                             Title:


                         [MORGAN STANLEY S.A.]


                         By _______________________________________
                             Title:



                         [BANK MORGAN STANLEY AG]


                         By _______________________________________
                             Title:


Accepted:

MORGAN STANLEY GROUP INC.


By ___________________________
     Title:


                                                       EXHIBIT A-1


                           MORGAN STANLEY GROUP INC.

                      GLOBAL UNITS, SERIES D AND SERIES E

                             UNITS TERMS AGREEMENT


                                             ________________, 19 __

Morgan Stanley Group Inc.
1585 Broadway
New York, New York  10036

Attention:

               Re:   Euro Distribution Agreement dated ________ __,
                     1997 (the "Euro Distribution Agreement")

               The undersigned agrees to purchase your Global Units, Series
[D/E], [specified designation] having the following terms:



                                          Universal Warrants                 Purchase Contracts
All Units:                                Issued as Part of a Unit:          Issued as Part of a Unit:
- -------------------------------           ----------------------------       ------------------------------

                                                                       
Settlement Date and Time                  Designation of the Series of       Designation of the Series of
                                          Warrants [Call] [Put]              Purchase Contracts:
                                          Warrants:                          [Purchase][Sale] Purchase
                                                                             Contracts
Number (Face Amount)                      Warrant Property:                  Aggregate Number of
                                                                             Purchase Contracts:
Severability:                             Aggregate Number of                Purchase Contract
                                          Warrants:                          Property:
Other Terms:                              Date(s) upon which Warrants        Quantity per Purchase
                                          may be exercised:                  Contract:
                                          Currency in which exercise         Purchase Price
                                          payments shall be made:
                                          Exchange Rate (or method of        Settlement Date:
                                          calculation:
                                          Form of Settlement:                Payment Location:
                                          [Call Price:]
                                          [Formula for determining           Method of Settlement:
                                          Cash Settlement Value:]
                                          [Amount of Warrant Property        Currency of Settlement
                                          Salable per Warrant:]          Payment:
                                          [Put Price for such specified      Contract Fees, if any:
                                          amount of Warrant Property
                                          per Warrant:]
                                          [Method of delivery of any         Corporation Acceleration:
                                          Warrant Property to be
                                          delivered for sale upon
                                          exercise of Warrants:]
                                          Other Terms:                       Holders' Acceleration:
                                                                             Redemption Provisions:

                                                                             Other Terms:

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

*     Applicable to Call Warrants

**    Applicable to Put Warrants

***   Applicable to Put Warrants only if such Put Warrants contemplate that the
      holder deliver Warrant Property to settle Put Warrants







All Notes                                    Fixed Rate Notes                Floating Rate Notes
Issued as Part of a Unit:                    Issued as Part of a Unit:       Issued as Part of a Unit:
- -----------------------------------------    ----------------------------    ------------------------------
                                                                       
Principal Amount:                            Interest Rate:                  Base Rate:
Purchase Price:                              Applicability of Modified       Index Maturity:
                                             Payment upon
                                             Acceleration:
Price to Public:                             If yes, state issue price:      Spread (Plus or Minus):
Settlement Date and Time:                    Amortization Schedule:          Spread Multiplier:
Place of Delivery:                           Applicability of Annual         Alternate Rate Event
                                             Interest Payments:              Spread:
Specified Currency:                          Denominated Currency (if        Initial Interest Rate:
                                             any):
Original Issue Date:                         Indexed Currency or             Initial Interest Reset Date:
                                             Currencies (if any):
Interest Accrual Date:                       Payment Currency (if any):      Interest Reset Dates:
Interest Payment Date(s):                    Exchange Rate Agent (if         Interest Reset Period:
                                             any):
Maturity Date:                               Reference Dealers:              Maximum Interest Rate:
Initial Accrual Period                       Face Amount (if any):           Minimum Interest Rate:
OID:
Total Amount of OID:                         Fixed Amount of each            Interest Payment Period:
                                             Indexed Currency (if any):
Original Yield to Maturity:                  Aggregate Fixed Amount          Calculation Agent:
                                             of each Indexed Currency
                                             (if any):
Optional Repayment                                                           Reporting Service:
Date(s):
Optional Redemption                                                          Index Currency:
Date(s):
Initial Redemption Date:
Initial Redemption
Percentage:
Annual Redemption
Percentage Reduction:
Ranking:
Series:
Minimum Denominations:
Other Terms:



               The provisions of Sections 1, 2(b) and 2(c) and 3 through 6 and
10 through 14 of the Euro Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
               This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so terminated, the
provisions of Sections 3(g), 6, 10, 12, and 14 of the Euro Distribution
Agreement shall survive for the purposes of this Agreement.


               The following information, opinions, certificates, letters and
documents referred to in Section 4 of the Euro Distribution Agreement will be
required: ___________.

                           [MORGAN STANLEY & CO. INTERNATIONAL
                           LIMITED]


                           By _______________________________________
                              Title:


                           [MORGAN STANLEY BANK AG]


                           By _______________________________________
                              Title:


                           [MORGAN STANLEY S.A.]


                           By _______________________________________
                               Title:



                           [BANK MORGAN STANLEY AG]


                           By _______________________________________
                               Title:


Accepted:

MORGAN STANLEY GROUP INC.


By ___________________________
     Title:

EX-4.A

                         MORGAN STANLEY GROUP INC.


                                    and


                  THE CHASE MANHATTAN BANK, Warrant Agent



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



                        UNIVERSAL WARRANT AGREEMENT



                       dated as of January 24, 1997




                             TABLE OF CONTENTS


                                                                   Page
                                                                   ----
                                 ARTICLE 1
                            Universal Warrants

   Section 1.01.  Ranking..........................................  1
   Section 1.02.  Form, Execution and Delivery of Warrant
                  Certificates.....................................  1
   Section 1.03.  Number Unlimited; Issuable in Series.............  3
   Section 1.04.  Countersignature and Delivery of Warrant
                  Certificates.....................................  5
   Section 1.05.  Place of Exercise; Registration of Transfers and
                   Exchanges.......................................  8
   Section 1.06.  Mutilated or Missing Warrant Certificates........ 12
   Section 1.07.  Registered Holders............................... 13
   Section 1.08.  Cancellation..................................... 13
   Section 1.09.  Additional Warrant Agents........................ 14
   Section 1.10.  Appointment of Calculation Agents................ 14


                                 ARTICLE 2
                Duration and Exercise of Universal Warrants

   Section 2.01.  Duration and Exercise of Universal Warrants...... 15
   Section 2.02.  Return of Money Held Unclaimed for Two Years..... 15


                                 ARTICLE 3
           Other Provisions Relating to Rights of Warrantholders

   Section 3.01.  Warrantholder May Enforce Rights................. 15
   Section 3.02.  No Rights as Holder of Warrant Property
                   Conferred by Universal Warrants or
                   Warrant Certificates............................ 15

   Section 3.03.  Merger, Consolidation, Conveyance or Transfer.... 16


                                 ARTICLE 4
       Universal Warrants Acquired by the Company; Payment of Taxes

    Section 4.01.  Universal Warrants Acquired by the Company...... 16
    Section 4.02.  Payment of Taxes................................ 17


                                 ARTICLE 5
                       Concerning the Warrant Agent

    Section 5.01.  Warrant Agent................................... 17
    Section 5.02.  Condition of Warrant Agent's Obligations........ 17
    Section 5.03.  Resignation and Appointment of Successor........ 19


                                 ARTICLE 6
                               Miscellaneous

    Section 6.01.  Amendment....................................... 21
    Section 6.02.  Notices and Demands to the Company and the
                    Warrant Agent.................................. 22
    Section 6.03.  Addresses for Notices........................... 23
    Section 6.04.  Notices to Warrantholders....................... 23
    Section 6.05.  Obtaining of Approvals.......................... 23
    Section 6.06.  Persons Having Rights under this Agreement...... 23
    Section 6.07.  Inspection of Agreement......................... 24
    Section 6.08.  Officer's Certificates and Opinions of Counsel;
                    Statements to be Contained Therein............. 24
    Section 6.09.  Payments Due on Saturdays, Sundays and
                    Holidays....................................... 25
    Section 6.10.  Judgment Currency............................... 25
    Section 6.11.  Headings........................................ 25
    Section 6.12.  Counterparts.................................... 26
    Section 6.13.  Applicable Law.................................. 26

TESTIMONIUM........................................................ 26

SIGNATURES......................................................... 26

Exhibit I            Form of Registered Call Warrant Certificate

Exhibit II           Form of Registered Put Warrant Certificate

                               WARRANT AGREEMENT

                     THIS AGREEMENT, dated as of January 24, 1997, between
MORGAN STANLEY GROUP INC., a corporation organized and existing under the laws
of the State of Delaware (the "Company"), and THE CHASE MANHATTAN BANK, a New
York banking corporation (the "Warrant Agent").

               WHEREAS, the Company has duly authorized the issue from time to
time of warrants (the "Universal Warrants") to purchase or sell (i) securities
of an entity unaffiliated with the Company, a basket of such securities, an
index or indices of such securities or any combination of the above, (ii)
currencies or composite securities or (iii) commodities (the property described
in clauses (i), (ii) and (iii), in relation to a Universal Warrant, being
hereinafter referred to as the "Warrant Property" applicable to such Universal
Warrant) to be issued in one or more series and in such number and with such
terms as may from time to time be authorized in accordance with the terms of
this Agreement;

               WHEREAS, the Company has duly authorized the execution and
delivery of this Agreement to provide, among other things, for the delivery and
administration of the Universal Warrants; and

               WHEREAS, all things necessary to make this Agreement a valid
agreement according to its terms have been done;

               NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE 1


                              Universal Warrants

               Section 1.01. Ranking. The Universal Warrants are unsecured
contractual obligations of the Company and will rank pari passu with the
Company's other unsecured contractual obligations and with the Company's
unsecured and unsubordinated debt.

               Section 1.02. Form, Execution and Delivery of Warrant
Certificates. (a) Certificates ("Warrant Certificates") evidencing the Universal
Warranties of each series shall be substantially in the form of Exhibits I and
II hereto or in such form (not inconsistent with this Agreement) as shall be
established by or pursuant to one or more Board Resolutions (as defined below)
(as set forth in a Board Resolution or, to the extent established pursuant to,
rather than set forth in, a Board Resolution, in an Officer's Certificate (as
defined below) detailing such establishment) or in one or more agreements
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Agreement. The Warrant Certificates may have imprinted or otherwise reproduced
thereon such letters, numbers or other marks of identification or designation
and such legends or endorsements as the officers of the Company executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and that are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto, or with any rule or regulation of any self-regulatory organization (an
"SRO") on which the Universal Warrants of such series may be listed, or of any
securities depository, or to conform to usage. Warrant Certificates shall be
signed on behalf of the Company by the chairman or vice chairman of the Board of
Directors, the president, the chief financial officer, the treasurer or any
managing director of the Company or such other person specifically designated by
the Board of Directors or the Executive Committee thereof to execute Warrant
Certificates, which signature may or may not be attested by the secretary or an
assistant secretary of the Company. The signature of any of such officers may be
either manual or facsimile. Typographical and other minor errors or defects in
any such signature shall not affect the validity or enforceability of any
Warrant Certificate that has been duly countersigned and delivered by the
Warrant Agent.

               "Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Company to have been
duly adopted or consented to by the Board of Directors and to be in full force
and effect, and delivered to the Warrant Agent.

               "Board of Directors" means either the Board of Directors of the
Company or any committee of such Board duly authorized to act on its behalf for
the purposes of this Agreement.

               "Officer's Certificate" means a certificate signed by the chief
financial officer, the treasurer or any managing director of the Company or such
other person specifically designated by the Board of Directors to execute any
such certificate and delivered to the Warrant Agent. Without limiting the
generality of the foregoing, if the Universal Warrants of any series are to be
issued as components of a unit ("Unit") with one or more other securities of the
Company, an officer's certificate or similar certificate relating to the
Universal Warrants delivered pursuant to an indenture or unit agreement or
similar agreement governing such Units or one or more other components thereof
may also constitute an Officer's Certificate under this Agreement.

               (b) In case any officer of the Company who shall have signed a
Warrant Certificate, either manually or by facsimile signature, shall cease to
be such officer before such Warrant Certificate shall have been countersigned
and delivered by the Warrant Agent to the Company or delivered by the Company,
such Warrant Certificate nevertheless may be countersigned and delivered as
though the person who signed such Warrant Certificate had not ceased to be such
officer of the Company; and a Warrant Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Warrant
Certificate, shall be a proper officer of the Company to sign such Warrant
Certificate, although at the date of the execution of this Warrant Agreement any
such person was not such officer.

               (c) Pending the preparation of final Warrant Certificates
evidencing Universal Warrants of any series, the Company may execute and the
Warrant Agent shall countersign and deliver temporary Warrant Certificates
evidencing such Universal Warrants (printed, lithographed, typewritten or
otherwise produced, in each case in form satisfactory to the Warrant Agent).
Such temporary Warrant Certificates shall be issuable substantially in the form
of the final Warrant Certificates but with such omissions, insertions and
variations as may be appropriate for temporary Warrant Certificates, all as may
be determined by the Company with the concurrence of the Warrant Agent. Such
temporary Warrant Certificates may contain such reference to any provisions of
this Warrant Agreement as may be appropriate. Every such temporary Warrant
Certificate shall be executed by the Company and shall be countersigned by the
Warrant Agent upon the same conditions and in substantially the same manner, and
with like effect, as the final Warrant Certificates. Without unreasonable delay,
the Company shall execute and shall furnish final Warrant Certificates and
thereupon such temporary Warrant Certificates may be surrendered in exchange
therefor without charge, and the Warrant Agent shall countersign and deliver in
exchange for such temporary Warrant Certificates final Warrant Certificates
evidencing a like aggregate number of Universal Warrants of the same series and
of like tenor as those evidenced by such temporary Warrant Certificates. Until
so exchanged, such temporary Warrant Certificates and the Universal Warrants
evidenced thereby shall be entitled to the same benefits under this Warrant
Agreement as final Warrant Certificates and the Universal Warrants evidenced
thereby.

               Section 1.03.  Number Unlimited; Issuable in Series. (a) The
aggregate number of Universal Warrants that may be delivered under this
Agreement is unlimited.

               (b) The Universal Warrants may be issued in one or more series.
There shall be established in or pursuant to one or more Board Resolutions (and
to the extent established pursuant to, rather than set forth in, a Board
Resolution, in an Officer's Certificate detailing such establishment) or
established in one or more agreements supplemental hereto, prior to the initial
issuance of Universal Warrants of any series;

              (1) the designation of the Universal Warrants of the series, which
shall distinguish the Universal Warrants of the series from the Universal
Warrants of all other series;

              (2) any limit upon the aggregate number of the Universal Warrants
of the series that may be countersigned and delivered under this Agreement
(except for Universal Warrants countersigned and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Universal Warrants of the
series);

              (3) the specific Warrant Property purchasable or salable upon
exercise of the Universal Warrants of the series, and the amount thereof (or the
method for determining the same);

              (4)  the price at which the Universal Warrants of the series
will be issued and, if other than U.S. dollars, the coin or currency or
composite currency in which such issue price will be payable;

              (5) whether the Universal Warrants of the series are warrants to
purchase ("call warrants") or warrants to sell ("put warrants") the Warrant
Property;

              (6) the price at which and, if other than U.S. Dollars, the coin
or currency or composite currency with which the Warrant Property may be
purchased or sold upon exercise of the Universal Warrants of the series (or the
method for determining the same);

              (7) whether the exercise price for the Universal Warrants of the
series may be paid in cash or by the exchange of any other security of the
Company, or both, or otherwise, and the method of exercise of the Universal
Warrants of the series;

              (8)  whether the exercise of the Universal Warrants of the
series is to be settled in cash or by delivery of the Warrant Property or
both, or otherwise;

              (9) the date on which the right to exercise the Universal Warrants
of the series shall commence and the date (the "Expiration Date") on which such
right shall expire or, if the Universal Warrants of the series are not
continuously exercisable throughout such period, the specific date or dates on
which they will be exercisable;

             (10) whether the Warrant Certificates representing the Universal
Warrants of the series will be in registered form ("Registered Warrants") or
bearer form ("Bearer Warrants") or both;

             (11) whether the Warrant Certificates evidencing any Registered
Warrants or Bearer Warrants of the series will be issued in global form ("Global
Warrant Certificates") or definitive form ("Definitive Warrant Certificates") or
both, and whether and on what terms (if different from those set forth herein)
Warrant Certificates in one form may be converted into or exchanged for Warrant
Certificates in the other form;

             (12) any warrant agents, depositaries, authenticating or paying
agents, transfer agents or registrars or any determination or calculation agents
or other agents with respect to Universal Warrants of the series;

             (13) whether the Universal Warrants of the series will be issued
separately or together as a unit (a "Unit") with one or more other securities of
the Company or any other person and, if the Universal Warrants of the series are
to be issued as components of Units, whether and on what terms the Universal
Warrants of the series may be separated from the other components of such Units
prior to the Expiration Date of such Universal Warrants; and

             (14) any other terms of the Universal Warrants of the series (which
terms shall not be inconsistent with the provisions of this Agreement).

               (c) All Universal Warrants of any one series shall be
substantially identical, except as may otherwise be provided by or pursuant to
the Board Resolution or Officer's Certificate referred to above or as set forth
in any such agreement supplemental hereto. All Universal Warrants of any one
series need not be issued at the same time and may be issued from time to time,
consistent with the terms of this Agreement, if so provided by or pursuant to
such Board Resolution, such Officer's Certificate or in any such agreement
supplemental hereto.

               Section 1.04. Countersignature and Delivery of Warrant
Certificates. (a) The Company may deliver Warrant Certificates evidencing
Universal Warrants of any series executed by the Company to the Warrant Agent
for countersignature together with the applicable documents referred to below in
this Section, and the Warrant Agent shall thereupon countersign and deliver such
Warrant Certificates to or upon the order of the Company (contained in the
Issuer Order (as defined below) referred to below in this Section) or pursuant
to such procedures acceptable to the Warrant Agent as may be specified from time
to time by an Issuer Order. Any terms of the Universal Warrants evidenced by
such Warrant Certificates may be determined by or pursuant to such Issuer Order
or such other procedures. If provided for in such procedures, such Issuer Order
may authorize countersignature and delivery pursuant to oral instructions from
the Company or its duly authorized agent, which instructions shall be promptly
confirmed in writing. In countersigning such Warrant Certificates and accepting
the responsibilities under this Agreement in relation to the Universal Warrants
evidenced by such Warrant Certificates, the Warrant Agent shall be entitled to
receive (in the case of subparagraphs 2, 3 and 4 below only at or before the
time of the first request of the Company to the Warrant Agent to countersign
Warrant Certificates in a particular form evidencing Universal Warrants) and
shall be fully protected in relying upon, unless and until such documents have
been superseded or revoked:

              (1) an Issuer Order requesting such countersignature and setting
forth delivery instructions if the Warrant Certificates are not to be delivered
to the Company;

              (2) any Board Resolution, Officer's Certificate and/or executed
supplemental agreement pursuant to which the forms and terms of the Universal
Warrants evidenced by such Warrant Certificates were established;

              (3) an Officer's Certificate setting forth the forms and terms of
the Universal Warrants evidenced by such Warrant Certificates stating that the
form or forms and terms of the Universal Warrants evidenced by such Warrant
Certificates have been established pursuant to Sections 1.02 and 1.03 and comply
with this Agreement, and covering such other matters as the Warrant Agent may
reasonably request; and

              (4) At the option of the Company, either an Opinion of Counsel (as
defined below) or a letter addressed to the Warrant Agent permitting it to rely
on an Opinion of Counsel, substantially to the effect that:

                   (i)   the forms of the Warrant Certificates have been duly
authorized and established in conformity with the provisions of this
Agreement;

                  (ii) in the case of an underwritten offering, the terms of the
Universal Warrants have been duly authorized and established in conformity with
the provisions of this Agreement and, in the case of an offering that is not
underwritten, certain terms of the Universal Warrants have been established
pursuant to a Board Resolution, an Officer's Certificate or a supplemental
agreement in accordance with this Agreement, and when such other terms as are to
be established pursuant to procedures set forth in an Issuer Order shall have
been established, all terms will have been duly authorized by the Company and
will have been established in conformity with the provisions of this Agreement;
and

                 (iii) when the Warrant Certificates have been executed by the
Company and countersigned by the Warrant Agent in accordance with the provisions
of this Agreement and delivered to and duly paid for by the purchasers thereof,
subject to such other conditions as may be set forth in such opinion of counsel,
they will have been duly issued under this Agreement and the Universal Warrants
evidenced thereby will be valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, and will be entitled to
the benefits of this Agreement.

         In rendering such opinions, such counsel may qualify any opinions as to
         enforceability by stating that such enforceability may be limited by
         bankruptcy, insolvency, reorganization, liquidation, moratorium and
         other similar laws affecting the rights and remedies of creditors and
         is subject to general principles of equity (regardless of whether such
         enforceability is considered in a proceeding in equity or at law). Such
         counsel may rely, as to all matters governed by the laws of
         jurisdictions other than the State of New York and the federal law of
         the United States, upon opinions of other counsel (copies of which
         shall be delivered to the Warrant Agent), who shall be counsel
         reasonably satisfactory to the Warrant Agent, in which case the opinion
         shall state that such counsel believes he and the Warrant Agent are
         entitled so to rely. Such counsel may also state that, insofar as such
         opinion involves factual matters, such counsel has relied, to the
         extent such counsel deems proper, upon certificates of officers of the
         Company and its subsidiaries and certificates of public officials.

               "Issuer Order" means a written statement, request or order of the
         Company signed in its name by the chief financial officer, the
         treasurer or any managing director of the Company or such other person
         specifically designated by the Board of Directors to execute any such
         written instrument, request or order. Without limiting the generality
         of the foregoing, if the Universal Warrants of a series are issued as
         components of Units, an issuer order or similar order relating to the
         Universal Warrants delivered pursuant to an indenture or unit or
         similar agreement governing such Units or one or more other components
         thereof may also constitute an Issuer Order under this Agreement if
         addressed to the Warrant Agent.

               "Opinion of Counsel" means an opinion in writing signed by the
General Counsel of the Company or by such other legal counsel, who may be an
employee of or counsel to the Company, and who shall be satisfactory to the
Warrant Agent.

               (b) The Warrant Agent shall have the right to decline to
countersign and deliver any Warrant Certificates under this Section if the
Warrant Agent, being advised by counsel, determines that such action may not
lawfully be taken by the Company or if the Warrant Agent in good faith
determines that (i) such action would expose the Warrant Agent to personal
liability to existing registered or beneficial holders of Universal Warrants
(each, a "Warrantholder") or would affect the Warrant Agent's own rights, duties
or immunities under the Warrant Certificates, the Universal Warrants, this
Agreement or otherwise or (ii) the terms of such Universal Warrants are
administratively unacceptable to it.

               (c) If the Company shall establish pursuant to Section 1.03 that
the Universal Warrants of a series are to be evidenced in whole or in part by
one or more Global Warrant Certificates, then the Company shall execute and the
Warrant Agent shall, in accordance with this Section and the Issuer Order with
respect to such series, countersign and deliver one or more Global Warrant
Certificates that (i) shall evidence all or part of the Universal Warrants of
such series issued in such form and not yet canceled, (ii) shall be registered
in the name of the Depositary (as defined below) for such Universal Warrants or
the nominee of such Depositary, (iii) shall be delivered by the Warrant Agent to
such Depositary or pursuant to such Depositary's instructions and (iv) shall
bear a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Universal Warrants in definitive registered
form, this Warrant Certificate and the Universal Warrants evidenced hereby may
not be transferred except as a whole by the Depositary to the nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."

               "Depositary" means, with respect to the Universal Warrants of any
series that are or may be evidenced by one or more Global Warrant Certificates,
the person or persons designated as Depositary by the Company pursuant to
Section 1.03 hereof until a successor Depositary shall have become such pursuant
to the applicable provisions of this Agreement, and thereafter "Depositary"
shall mean or include each person who is then a Depositary hereunder, and if at
any time there is more than one such person, "Depositary" as used with respect
to the Universal Warrants of any such series shall mean the Depositary with
respect to that series.

               (d) If so required by applicable law, each Depositary for a
series of Universal Warrants must, at the time of its designation and at all
times while it serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute or regulation.

               (e) Each Warrant Certificate shall be dated the date of its
countersignature. A Warrant Certificate shall not be valid for any purpose, and
no Universal Warrant evidenced thereby shall be exercisable, unless and until
such Warrant Certificate has been countersigned by the manual signature of an
authorized officer of the Warrant Agent. Such countersignature by an authorized
officer of the Warrant Agent upon any Warrant Certificate executed by the
Company in accordance with this Agreement shall be conclusive evidence that the
Warrant Certificate so countersigned and the Universal Warrants evidenced
thereby have been duly issued hereunder.

               Section 1.05.  Place of Exercise; Registration of Transfers and
Exchanges.

               (a) Except as otherwise established pursuant to Section 1.03 with
respect to Universal Warrants of a series, Universal Warrants may be presented
for exercise at the Warrant Agent's Window (as defined below) in accordance with
procedures to be established pursuant to Section 1.03.

               (b) Except as otherwise provided herein or as established
pursuant to Section 1.03 with respect to the Universal Warrants of a series, the
Warrant Agent shall from time to time register the transfer of any outstanding
Registered Definitive Warrant Certificates upon the records to be maintained by
it for that purpose (the "Warrant Register") at the Warrant Agent's Office (as
defined below), subject to such reasonable regulations as the Company or the
Warrant Agent may prescribe with respect to the Universal Warrants of such
series, upon surrender thereof at the Warrant Agent's Window (as defined below),
Attention: Transfer Department, duly endorsed by, or accompanied by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent
and the Company duly executed by, the Registered Holder(s) (as defined below)
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney, such signature to be guaranteed by a bank or trust company
with a correspondent office in The City of New York or by a broker or dealer
that is a member of the National Association of Securities Dealers, Inc. (the
"NASD") or by a member of a national securities exchange or in such other manner
acceptable to the Warrant Agent and the Company. Upon any such registration of
transfer, one or more new Warrant Certificates of the same series and like terms
evidencing a like number of unexercised Universal Warrants shall be issued to
the transferee(s) and the surrendered Warrant Certificate shall be cancelled by
the Warrant Agent.

               (c) Except as otherwise established for a series of Universal
Warrants pursuant to Section 1.03, at the option of a Registered Holder,
Definitive Warrant Certificates may be exchanged for other Definitive Warrant
Certificates evidencing the same aggregate number of unexercised Universal
Warrants of the same series and of like tenor upon surrender to the Warrant
Agent of the Definitive Warrant Certificates to be exchanged at the Warrant
Agent's Window, Attention: Transfer Department. The "Warrant Agent's Window"
shall be the window of the Warrant Agent maintained for purposes of transfer and
tender in the Borough of Manhattan, The City of New York (or at the address of
any additional agency established by the Company pursuant to Section 1.08
hereof, or at the address of any successor Warrant Agent (as provided in Section
5.03)), which is, on the date of this Agreement, The Chase Manhattan Bank,
Corporate Trust Securities Window, 55 Water Street, Room 234, North Building,
New York, New York 10041. If the Universal Warrants of any series are issued in
both registered and unregistered form, except as otherwise established for such
series pursuant to Section 1.03, at the option of the holder thereof, Warrant
Certificates evidencing Bearer Warrants of any series may be exchanged for
Definitive Warrant Certificates evidencing an equal number of unexercised
Registered Warrants of the same series and of like tenor upon surrender of such
Warrant Certificates evidencing Bearer Warrants to be exchanged at the Warrant
Agent's Window, Attention: Transfer Department. Unless otherwise established for
such series pursuant to Section 1.03, Registered Warrants of any series may not
be exchanged for Bearer Warrants of such series. Upon surrender of any
unexercised Warrant Certificate for exchange, the Warrant Agent shall cancel
such Warrant Certificate, and the Company shall execute, and the Warrant Agent
shall countersign and deliver, one or more new Warrant Certificates evidencing a
like number of unexercised Universal Warrants of the same series and of like
tenor.

               (d) Universal Warrants evidenced by the Warrant Certificates
issued upon transfer or exchange pursuant to paragraph (b) or (c) of this
Section shall be valid obligations of the Company, constituting the same
obligations of the Company as the Universal Warrants evidenced by the Warrant
Certificates surrendered for transfer or exchange, and entitled to the same
benefits under this Agreement as were such Universal Warrants evidenced by the
Warrant Certificates prior to such surrender.

               (e) Except as provided in Section 1.06, no service charge shall
be made for any registration of transfer or exchange of Warrant Certificates,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Warrant Certificates, other than
exchanges pursuant to this Section not involving any transfer.

               (f) In the event that upon any exercise of Universal Warrants
evidenced by a Warrant Certificate the number of Universal Warrants exercised
shall be less than the total number of Universal Warrants evidenced by such
Warrant Certificate, there shall be issued to the Registered Holder thereof (or,
in the case of Bearer Warrants, the holder thereof) or his assignee a new
Warrant Certificate evidencing the number of Universal Warrants of the same
series and of like tenor not exercised.

               (g) Warrant Certificates evidencing Bearer Warrants shall be
transferable by delivery.

               (h) Notwithstanding any other provision of this Agreement, unless
and until it is exchanged in whole or in part for Definitive Warrant
Certificates, a Global Warrant Certificate evidencing all or a portion of the
Universal Warrants of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.

               (i) If at any time the Depositary for any series of Universal
Warrants notifies the Company that it is unwilling or unable to continue as
Depositary for such series or if at any time the Depositary for such series
shall no longer be eligible under this Agreement, the Company shall appoint a
successor Depositary with respect to such series. If a successor Depositary for
such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election pursuant to Section 1.03 that such series be evidenced by one or more
Global Warrant Certificates shall no longer be effective and the Company will
execute, and the Warrant Agent, upon receipt of an Officer's Certificate for the
countersignature and delivery of Definitive Warrant Certificates evidencing
Universal Warrants of such series, will countersign and deliver Definitive
Warrant Certificates evidencing Universal Warrants of such series and of like
tenor in an aggregate number equal to the number of the unexercised Universal
Warrants represented by such Global Warrant Certificate or Certificates in
exchange for such Global Warrant Certificate or Certificates.

               (j) If established pursuant to Section 1.03 with respect to a
series of Universal Warrants evidenced in whole or in part by one or more Global
Warrant Certificates, the Depositary for such series may surrender such Global
Warrant Certificate or Certificates in exchange in whole or in part for
Definitive Warrant Certificates evidencing Universal Warrants of the same series
and of like tenor on such terms as are acceptable to the Company and such
Depositary. Thereupon, the Company shall execute, and the Warrant Agent shall
countersign and deliver, without service charge,

             (1) to the person specified by such Depositary a new Definitive
Warrant Certificate of the same series and of like tenor in an aggregate number
equal to and in exchange for such person's beneficial interest in the Universal
Warrants evidenced by such Global Warrant Certificate or Certificates; and

             (2) to such Depositary a new Global Warrant Certificate or
Certificates evidencing Universal Warrants of the same series and of like tenor
in number equal to the difference, if any, between the number of unexercised
Universal Warrants evidenced by the surrendered Global Warrant Certificates and
the number of unexercised Universal Warrants evidenced by such Definitive
Warrant Certificate countersigned and delivered pursuant to clause (i) above.

Upon the exchange of a Global Warrant Certificate for Definitive Warrant
Certificates, such Global Warrant Certificate shall be canceled by the Warrant
Agent or an agent of the Company or the Warrant Agent. Registered Definitive
Warrant Certificates issued in exchange for a Registered Global Warrant
Certificate pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depositary for such series, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Warrant Agent or an agent of the Company or the Warrant Agent. The
Warrant Agent or such agent shall deliver such Warrant Certificates to or as
directed by the persons in whose names such Warrant Certificates are so
registered. Definitive Bearer Warrant Certificates issued in exchange for a
Global Bearer Warrant Certificate pursuant to this Section shall be issued in
such authorized denominations as the Depositary for such series, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Warrant Agent or an agent of the Company or the Warrant Agent. The
Warrant Agent or such agent shall deliver such Warrant Certificates to or as
directed by the Depositary for such series.

               (k) Notwithstanding anything herein or in the terms of any series
of Universal Warrants to the contrary, none of the Company, the Warrant Agent or
any agent of the Company or the Warrant Agent (any of which, other than the
Company, shall rely on an Officer's Certificate and an Opinion of Counsel) shall
be required to exchange any Bearer Warrant for a Registered Warrant if such
exchange would result in adverse Federal income tax consequences to the Company
under then applicable United States Federal income tax laws

               (l) The Company will maintain one or more offices or agencies in
a city or cities located outside the United States (including any city in which
such an agency is required to be maintained under the rules of any stock
exchange on which the Universal Warrants of such series are listed) where the
Bearer Warrants, if any, of each series may be presented for exercise and
payment. No payment on any Bearer Warrants will be made upon presentation of
such Bearer Warrant at an agency of the Company within the United States nor
will any payment be made by transfer to an account in, or by mail to an address
in, the United States unless pursuant to applicable United States laws and
regulations then in effect such payment can be made without adverse tax
consequences to the Company. Notwithstanding the foregoing, payments in United
States dollars with respect to Bearer Warrants of any series which are payable
in United States dollars may be made at an agency of the Company maintained in
the Borough of Manhattan, The City of New York if such payment in United States
dollars at each agency maintained by the Company outside the United States for
payment on such Bearer Warrants is illegal or effectively precluded by exchange
controls or other similar restrictions

               (m) The Company may from time to time designate one or more
additional offices or agencies where the Universal Warrants of a series may be
presented for exercise and payment, where the Universal Warrants of that series
may be presented for exchange as provided in this Agreement and where the
Registered Universal Warrants of that series may be presented for registration
of transfer as in this Agreement provided, and the Company may from time to time
rescind any such designation, as the Company may deem desirable or expedient;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain the agencies provided for in
this Section. The Company will give to the Warrant Agent prompt written notice
of any such designation or rescission thereof.

               Section 1.06. Mutilated or Missing Warrant Certificates. (a) If
any Warrant Certificate evidencing Universal Warrants of any series is
mutilated, lost, stolen or destroyed, the Company may in its discretion execute,
and the Warrant Agent may countersign and deliver, in exchange and substitution
for the mutilated Warrant Certificate, or in replacement for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate representing an
equivalent number of unexercised Universal Warrants of the same series and of
like tenor, bearing an identification number, if applicable, not
contemporaneously outstanding, but only (in case of loss, theft or destruction)
upon receipt of evidence satisfactory to the Company and the Warrant Agent of
such loss, theft or destruction of such Warrant Certificate and security or
indemnity, if requested, also satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company or the Warrant
Agent may prescribe.

               (b) In case the Universal Warrants evidenced by any such
mutilated, lost, stolen or destroyed Warrant Certificate have been or are about
to be exercised, or deemed to be exercised, the Company in its absolute
discretion may, instead of issuing a new Warrant Certificate, and subject to the
conditions set forth in clause (a) above, direct the Warrant Agent to treat the
same as if it had received the Warrant Certificate together with an irrevocable
exercise notice in proper form in respect thereof, as established with respect
to the Universal Warrants of such series.

               (c) The Universal Warrants evidenced by each new Warrant
Certificate issued pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall be original, additional contractual
obligations of the Company, and shall be entitled to the same benefits under
this Agreement as the Universal Warrants evidenced by the Warrant Certificate
that was lost, stolen or destroyed.

               (d) Upon the issuance of any new Warrant Certificate in
accordance with this Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Warrant Agent) connected therewith.

               (e) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) any other rights and remedies with respect to
the replacement or payment of mutilated, lost, stolen or destroyed Warrant
Certificates.

               Section 1.07. Registered Holders. (a) Prior to due presentment
for registration of transfer, the Company, the Warrant Agent, and any agent of
the Company or the Warrant Agent may deem and treat the person in whose name a
Warrant Certificate shall be registered in the Warrant Register (a "Registered
Holder") as the absolute owner of the Registered Warrants evidenced thereby
(notwithstanding any notation of ownership or other writing on the Warrant
Certificate) for any purpose whatsoever, and as the person entitled to exercise
the rights represented by the Registered Warrants evidenced thereby, and neither
the Company nor the Warrant Agent, nor any agent of the Company or the Warrant
Agent, shall be affected by any notice to the contrary. All payments on account
of any Registered Warrant to the Registered Holder, or upon his order, shall be
valid, and to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability of the Company for moneys paid upon such Registered
Warrant. This Section shall be without prejudice to the rights of Warrantholders
as described elsewhere herein.

               (b) The Company, the Warrant Agent and any agent of the Company
or the Warrant Agent may treat the holder of any Bearer Warrant as the absolute
owner of such Bearer Warrant for the purpose of exercising the rights
represented thereby and for all other purposes and neither the Company, the
Warrant Agent, nor any agent of the Company or the Warrant Agent shall be
affected by any notice to the contrary. All payments on account of such Bearer
Warrant made to any such person, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon such Bearer Warrant. This Section shall be
without prejudice to the rights of Warrantholders as described elsewhere herein.

               Section 1.08. Cancellation. All Universal Warrant Certificates
surrendered to the Warrant Agent for redemption or registration of transfer or
exchange shall be promptly cancelled by the Warrant Agent. The Company may at
any time deliver to the Warrant Agent for cancellation any Universal Warrant
Certificates previously countersigned and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Universal Warrant
Certificates so delivered shall, upon receipt by the Warrant Agent of an Issuer
Order, be promptly cancelled by the Warrant Agent. No Universal Warrant
Certificates shall be countersigned in lieu of or in exchange for any Universal
Warrant Certificates cancelled as provided in this Section, except as permitted
by this Agreement. All cancelled Universal Warrant Certificates held by the
Warrant Agent shall be disposed of in accordance with its customary procedures
and a certificate of their disposition shall be delivered by the Warrant Agent
to the Company, unless by Issuer Order the Company shall direct that cancelled
Universal Warrant Certificates be returned to it.

               If the Company or any affiliate of the Company shall acquire any
Universal Warrant Certificate, such acquisition shall not operate as a
cancellation of such Universal Warrant Certificate unless and until such
Universal Warrant Certificate is delivered to the Warrant Agent for the purpose
of cancellation.

               Section 1.09. Additional Warrant Agents. Whenever the Company
shall appoint a warrant agent other than the Warrant Agent with respect to the
Universal Warrants of any series, it will cause such warrant agent to execute
and deliver to the Warrant Agent an instrument in which such agent shall agree
with the Warrant Agent, subject to the provisions of this Section,

               (a) that it will hold all Warrant Property received by it as such
agent for any payment with respect to the Universal Warrants of such series in
trust for the benefit of the Warrantholders of such series if any, or of the
Warrant Agent, and

               (b) that it will give the Warrant Agent notice of any failure by
the Company to make any payment with respect to the Universal Warrants of such
series when the same shall be due and payable.

               The Company will, on or prior to each date of any payment of
Universal Warrants of any such series, deposit with the Warrant Agent or any
such additional warrant agent a sum sufficient to make such payment, and the
Company will promptly notify the Warrant Agent of any failure to take such
action with respect to any such additional warrant agent.

               Section 1.10. Appointment of Calculation Agents. Pursuant to
Section 1.03 hereof, the Company may, in connection with any series of Universal
Warrants appoint Morgan Stanley & Co. Incorporated, Morgan Stanley & Co.
International Limited or any other person or entity as Calculation Agent to make
any calculations as may be required pursuant to the terms of any such series of
Universal Warrants. Any such Calculation Agent shall act as an independent
expert and, unless otherwise provided by this Agreement, its calculations and
determinations under this Agreement shall, absent manifest error, be final and
binding on the Company, the Warrant Agent and the Warrantholders. Any such
calculations will be made available to a Warrantholder for inspection at the
Warrant Agent's Office.

                                   ARTICLE 2


                  Duration and Exercise of Universal Warrants

               Section 2.01. Duration and Exercise of Universal Warrants. All
terms with respect to duration and exercise of Universal Warrants will be
established pursuant to Section 1.03 for each series of Universal Warrants.

               Section 2.02. Return of Money Held Unclaimed for Two Years.
Except as otherwise provided herein, any money or other assets deposited with or
paid to the Warrant Agent for the payment of any Universal Warrants and not paid
but remaining unclaimed for two years after the date upon which such money or
other assets shall have become due and payable shall be repaid by the Warrant
Agent to the Company, at the Company's request pursuant to an Officer's
Certificate, and the holders of such Universal Warrants shall thereafter look
only to the Company for any payment which such holders may be entitled to
collect and all liability of the Warrant Agent with respect to such money shall
thereupon cease; provided that the Warrant Agent, before making any such
repayment, may (but shall not be obligated to) at the expense of the Company
notify (i) in the case of Registered Warrants evidenced by Definitive Warrant
Certificates, the Registered Holders, (ii) in the case of Warrants evidenced by
one or more Global Warrant Certificates, the participants of the Depositary, and
(iii) in the case of Bearer Warrants evidenced by Definitive Warrant
Certificates, the holders thereof, in each case as provided in Section 6.04,
that said money has not been so applied and remains unclaimed and that after a
date named in the notification any unclaimed balance of said money then
remaining will be returned to the Company.

                                   ARTICLE 3


             Other Provisions Relating to Rights of Warrantholders

               Section 3.01. Warrantholder May Enforce Rights. Notwithstanding
any of the provisions of this Agreement, any Warrantholder may, without the
consent of the Warrant Agent, the Depositary, any participant of the Depositary,
any other Warrantholder, the holder of any Warrant Property or, if applicable,
the common depositary for Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor, as operator of the Euroclear System and Cedel Bank,
societe anonyme, or its successor, in and for its own behalf, enforce, and may
institute and maintain, any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, its right to exercise its
Universal Warrants as provided in this Agreement and established with respect to
such Universal Warrants pursuant to Section 1.03.

               Section 3.02. No Rights as Holder of Warrant Property Conferred
by Universal Warrants or Warrant Certificates. No Warrant Certificate or
Universal Warrant evidenced thereby shall entitle the holder or any beneficial
owner thereof to any of the rights of a holder or beneficial owner of Warrant
Property, including, without limitation, the right to receive the payment of
principal of (premium, if any) or interest, if any, on Warrant Property or to
vote or to enforce any rights under any documents governing Warrant Property.

               Section 3.03. Merger, Consolidation, Conveyance or Transfer. (a)
If at any time there shall be a merger or consolidation of the Company or a
conveyance or transfer of its property and assets substantially as an entirety,
then in any such event the successor, if other than the Company, shall by an
instrument of assumption delivered to the Warrant Agent succeed to and be
substituted for the Company, with the same effect as if it had been named herein
and in the Warrant Certificates as the Company. The Company shall thereupon,
except in the case of a transfer by way of lease, be relieved of any further
obligation hereunder and under the Universal Warrants and the Warrant
Certificates, and the Company, as the predecessor corporation, except in the
case of a transfer by way of lease, may thereupon or at any time thereafter be
dissolved, wound up or liquidated. Such successor and assuming corporation may
thereupon cause to be signed, and may issue either in its own name or in the
name of the Company, Warrant Certificates evidencing any or all of the Universal
Warrants issuable hereunder that theretofore shall not have been signed by the
Company. All the Universal Warrants so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Universal Warrants
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Universal Warrants had been issued at the date of the
execution hereof. In any case of any such merger, consolidation, conveyance or
transfer, such changes in phraseology and form (but not in substance) may be
made in the Warrant Certificates representing the Universal Warrants thereafter
to be issued as may be appropriate.

               (b) The Warrant Agent may receive an Opinion of Counsel as
conclusive evidence that any such merger, consolidation, conveyance, transfer or
assumption complies with the provisions of this Section.

                                   ARTICLE 4


         Universal Warrants Acquired by the Company; Payment of Taxes

               Section 4.01. Universal Warrants Acquired by the Company. (a) In
the event the Company shall purchase or otherwise acquire Universal Warrants,
such Universal Warrants may, at the option of the Company, be (i) in the case of
Bearer Warrants or Registered Warrants evidenced by Definitive Warrant
Certificates, delivered to the Warrant Agent, and if so delivered, the Warrant
Agent shall promptly cancel such Universal Warrants on the records of the
Warrant Agent or (ii) in the case of Warrants evidenced by one or more Global
Warrant Certificates, surrendered free through a participant of the Depositary
to the Depositary for credit to the account of the Warrant Agent maintained at
the Depositary, and if so credited, the Warrant Agent shall promptly note the
cancellation of such Universal Warrants by notation on the records of the
Warrant Agent and the Warrant Agent shall cause its records to be marked to
reflect the reduction in the number of Universal Warrants evidenced by the
Global Warrant Certificate or Certificates by the number of Universal Warrants
so canceled promptly after such account is credited. Universal Warrants acquired
by the Company may also, at the option of the Company, be resold by the Company
directly or to or through any of its affiliates in lieu of being surrendered to
the Warrant Agent or credited to its account. No Warrant Certificate shall be
countersigned in lieu of or in exchange for any Universal Warrant that is
canceled as provided herein, except as otherwise expressly permitted by this
Agreement.

               (b) Any canceled Warrant Certificate held by the Warrant Agent
under this Agreement shall be disposed of by the Warrant Agent in accordance
with its customary procedures unless otherwise directed by the Company, and the
Warrant Agent shall deliver a certificate of disposition to the Company
evidencing the same.

               Section 4.02. Payment of Taxes. The Company will pay all stamp,
withholding and other duties, if any, attributable to the initial issuance of
each series or tranche of Universal Warrants; provided, however, that, anything
in this Agreement to the contrary notwithstanding, the Company shall not be
required to pay any tax or other governmental charge that may be payable in
respect of any transfer involving any beneficial or record interest in, or
ownership interest of, any Universal Warrants or Warrant Certificates.


                                   ARTICLE 5

                         Concerning the Warrant Agent

               Section 5.01. Warrant Agent. The Company hereby appoints The
Chase Manhattan Bank as Warrant Agent of the Company in respect of the Universal
Warrants upon the terms and subject to the conditions set forth herein; and The
Chase Manhattan Bank hereby accepts such appointment. The Warrant Agent shall
have the powers and authority granted to and conferred upon it in this Agreement
and such further powers and authority to act on behalf of the Company as the
Company may hereafter grant to or confer upon it with its consent. All of the
terms and provisions with respect to such powers and authority contained in any
Warrant Certificate are subject to and governed by the terms and provisions
hereof.

               Section 5.02. Condition of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of the
Universal Warrants shall be subject:

               (1) The Company agrees promptly to pay the Warrant Agent the
         compensation to be agreed upon with the Company for all services
         rendered by the Warrant Agent and to reimburse the Warrant Agent for
         its reasonable out-of-pocket expenses (including attorneys' fees and
         expenses) incurred by the Warrant Agent without negligence or bad faith
         on its part in connection with the services rendered by it hereunder.
         The Company also agrees to indemnify the Warrant Agent for, and to hold
         it harmless against, any loss, liability or expense (including
         reasonable attorneys' fees and expenses) incurred without negligence or
         bad faith on the part of the Warrant Agent, arising out of or in
         connection with its acting as such Warrant Agent hereunder, as well as
         the reasonable costs and expenses of defending against any claim of
         liability in the premises. The obligations of the Company under this
         Section shall survive the expiration of all Universal Warrants issued
         under this Agreement.

               (2) In acting under this Agreement, the Warrant Agent is acting
         solely as agent of the Company and does not assume any obligation or
         relationship of agency or trust for or with any Warrantholders.

               (3) The Warrant Agent may consult with counsel satisfactory to it
         (including counsel to the Company), and the opinion of such counsel
         shall be full and complete authorization and protection in respect of
         any action taken, suffered or omitted by it hereunder in good faith and
         in accordance with the opinion of such counsel.

               (4) The Warrant Agent shall be protected and shall incur no
         liability for or in respect of any action taken or thing suffered by it
         in reliance upon any notice, direction, consent, certificate,
         affidavit, opinion, statement or other paper or document reasonably
         believed by it to be genuine and to have been presented or signed by
         the proper parties.

               (5) The Warrant Agent and its officers, directors and employees
         may become the owner of, or acquire any interest in, any Universal
         Warrants or other obligations of the Company, with the same rights that
         it or they would have if it were not the Warrant Agent hereunder and,
         to the extent permitted by applicable law, it or they may engage or be
         interested in any financial or other transaction with the Company and
         may act on behalf of, or as depositary, trustee or agent for, any
         committee or body of owners or holders of Universal Warrants or other
         obligations of the Company as freely as if it were not the Warrant
         Agent hereunder.

               (6) The Warrant Agent shall not be under any liability for
         interest on any monies at any time received by it pursuant to any of
         the provisions of this Agreement nor shall it be obligated to segregate
         such monies from other monies held by it, except as required by law.
         The Warrant Agent shall not be responsible for advancing funds on
         behalf of the Company.

               (7) The Warrant Agent shall not be under any responsibility with
         respect to the validity or sufficiency of this Agreement or the
         execution and delivery hereof (except the due authorization, execution
         and delivery hereof by the Warrant Agent) or with respect to the
         validity or execution of the Warrant Certificates (except its
         countersignature thereof).

               (8) The recitals contained herein and in the Warrant Certificates
         (except as to the Warrant Agent's countersignature thereon) shall be
         taken as the statements of the Company, and the Warrant Agent assumes
         no responsibility for the correctness of the same.

               (9) The Warrant Agent shall be obligated to perform such duties
         as are specifically set forth in this Agreement and no implied duties
         or obligations shall be read into this Agreement against the Warrant
         Agent. The Warrant Agent shall not be under any obligation to take any
         action hereunder likely to involve it in any expense or liability, the
         payment of which is not, in its reasonable opinion, assured to it. The
         Warrant Agent shall not be accountable or under any duty or
         responsibility for the application by the Company of any proceeds of
         the issuance of any Warrants. The Warrant Agent shall have no duty or
         responsibility in case of any default by the Company in the performance
         of its covenants or agreements contained in this Agreement or in any
         Warrant Certificate or in the case of the receipt of any written demand
         from a holder of a Universal Warrant with respect to such default,
         including, without limiting the generality of the foregoing, any duty
         or responsibility to initiate or attempt to initiate any proceedings at
         law or otherwise or, except as provided in Section 6.02, to make any
         demand upon the Company.

               Section 5.03. Resignation and Appointment of Successor. (a) The
Company agrees, for the benefit of the holders from time to time of the
Universal Warrants, that there shall at all times be a Warrant Agent hereunder
with respect to each series of Universal Warrants until all the Universal
Warrants of such series are no longer outstanding or until monies for the
payment of all outstanding Universal Warrants of such series, if any, shall have
been paid to the Warrant Agent and shall have been returned to the Company as
provided in Section 2.02, whichever occurs earlier.

               (b) The Warrant Agent may at any time resign as such agent with
respect to any series of Universal Warrants by giving written notice to the
Company of such intention on its part, specifying the date on which its desired
resignation shall become effective, subject to the appointment of a successor
Warrant Agent with respect to such series and acceptance of such appointment by
such successor Warrant Agent as hereinafter provided. The Warrant Agent
hereunder may be removed with respect to any series of Universal Warrants at any
time by the filing with it of an instrument in writing signed by or on behalf of
the Company and specifying such removal and the date when it shall become
effective. Such resignation or removal shall take effect upon the appointment by
the Company, as hereinafter provided, of a successor Warrant Agent with respect
to such series (which shall be a banking institution organized under the laws of
the United States of America or one of the states thereof, have a combined
capital and surplus of at least $50,000,000 (as set forth in its most recent
reports of condition published pursuant to law or to the requirements of any
United States federal or state regulatory or supervisory authority) and having
an office in the Borough of Manhattan, The City of New York) and the acceptance
of such appointment by such successor Warrant Agent. In the event a successor
Warrant Agent has not been appointed and accepted its duties within 90 days of
the Warrant Agent's notice of resignation, the Warrant Agent may apply to any
court of competent jurisdiction for the designation of a successor Warrant Agent
with respect to such series. The obligation of the Company under Section 5.02(1)
shall continue to the extent set forth therein notwithstanding the resignation
or removal of the Warrant Agent with respect to any series of Universal
Warrants.

               (c) In case at any time the Warrant Agent with respect to any
series of Universal Warrants shall give notice of its intent to resign, or shall
be removed, or shall become incapable of acting, or shall be adjudged a bankrupt
or insolvent, or make an assignment for the benefit of its creditors, or consent
to the appointment of a receiver or custodian of all or any substantial part of
its property, or shall admit in writing its inability to pay or meet its debts
as they mature, or if a receiver or custodian of it or of all or any substantial
part of its property shall be appointed, or if any public officer shall have
taken charge or control of the Warrant Agent or of its property or affairs, for
the purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be promptly appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
latter of such appointment, the Warrant Agent so superseded shall cease to be
Warrant Agent hereunder with respect to such series.

               (d) Any successor Warrant Agent appointed hereunder with respect
to any series of Universal Warrants shall execute, acknowledge and deliver to
its predecessor and to the Company an instrument accepting such appointment
hereunder, and thereupon such successor Warrant Agent, without any further act,
deed or conveyance, shall become vested with all the authority, rights, powers,
trusts, immunities, duties and obligations of such predecessor with like effect
as if originally named as Warrant Agent with respect to such series hereunder,
and such predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and such
successor Warrant Agent shall be entitled to receive, all monies, securities and
other property on deposit with or held by such predecessor (including, without
limitation, the Warrant Register), as Warrant Agent with respect to such series
hereunder.

               (e) If a successor Warrant Agent is appointed with respect to the
Universal Warrants of one or more (but not all) series, the Company, the
predecessor Warrant Agent and each successor Warrant Agent with respect to the
Universal Warrants of any applicable series shall execute and deliver an
agreement supplemental hereto that shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers and duties
of the predecessor Warrant Agent with respect to the Universal Warrants of any
series as to which the predecessor Warrant Agent is not retiring shall continue
to be vested in the predecessor Warrant Agent, and shall add to or change any of
the provisions of this Agreement as shall be necessary to provide for or
facilitate the administration of the Universal Warrants hereunder by more than
one Warrant Agent, it being understood that nothing herein or in such
supplemental agreement shall constitute such Warrant Agents Co-Warrant Agents of
the same Universal Warrants and that each such Warrant Agent shall be a Warrant
Agent with respect to separate series of Universal Warrants.

               (f) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the corporate agency assets and business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.


                                   ARTICLE 6


                                 Miscellaneous

               Section 6.01. Amendment. (a) This Agreement and the terms of the
Universal Warrants of any series may be amended (by means of an agreement
supplemental hereto or otherwise) by the Company and the Warrant Agent, without
the consent of the Warrantholders of any series of Universal Warrants, (i) for
the purpose of curing any ambiguity, or of curing, correcting or supplementing
any defective or inconsistent provision contained herein or therein, (ii) to
establish the form or terms of Warrant Certificates or Universal Warrants of any
series as permitted by Sections 1.02 and 1.03, (iii) to evidence and provide for
the acceptance of appointment hereunder by a successor Warrant Agent with
respect to the Universal Warrants of any series and to add to or change any of
the provisions of this Agreement as shall be necessary to provide for or
facilitate the administration of the Universal Warrants hereunder by more than
one Warrant Agent pursuant to Section 5.03, or (iv) in any other manner which
the Company may deem necessary or desirable and which will not materially and
adversely affect the interests of the Warrantholders of such series.

               (b) The Company and the Warrant Agent may modify or amend this
Agreement (by means of an agreement supplemental hereto or otherwise) with the
consent of Warrantholders holding not less than a majority in number of the then
outstanding Universal Warrants of all series affected by such modification or
amendment, for any purpose; provided, however, that no such modification or
amendment that changes the exercise price of the Universal Warrants of any
series, shortens the period of time during which the Universal Warrants of such
series may be exercised, or otherwise materially and adversely affects the
exercise rights of the affected Warrantholders or reduces the percentage of the
number of outstanding Universal Warrants of such series, the consent of whose
holders is required for modification or amendment of this Agreement, may be made
without the consent of each Warrantholder affected thereby. In the case of
Universal Warrants evidenced by one or more Global Warrant Certificates, the
Company and the Warrant Agent shall be entitled to rely upon certification in
form satisfactory to each of them that any requisite consent has been obtained
from holders of beneficial ownership interests in the relevant Global Warrant
Certificate. Such certification may be provided by participants of the
Depositary acting on behalf of such beneficial owners of Universal Warrants,
provided that any such certification is accompanied by a certification from the
Depositary as to the Universal Warrant holdings of such participants.

               (c) An amendment that changes or eliminates any provision of this
Agreement that has expressly been included solely for the benefit of one or more
particular series of Universal Warrants, or that modifies the rights of
Warrantholders of such series with respect to such provision, shall be deemed
not to affect the rights under this Agreement of the Warrantholders of any other
series.

               (d) Upon the request of the Company, accompanied by a copy of a
Board Resolution (which Board Resolution may provide general terms or parameters
for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order) authorizing the
execution of any such amendment, and upon the filing with the Warrant Agent of
evidence of the consent of Warrantholders as aforesaid, the Warrant Agent shall
join with the Company in the execution of such amendment unless such amendment
affects the Warrant Agent's own rights, duties or immunities under this
Agreement or otherwise, in which case the Warrant Agent may in its discretion,
but shall not be obligated to, enter into such amendment. In executing, or
accepting the additional duties created by, any amendment permitted by this
Article, the Warrant Agent shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement. The fact and date
of the execution of any consent of Warrantholders, or the authority of the
Person executing the same, may be proved in any manner which the Warrant Agent
(with the approval of the Company) deems sufficient.

               (e) It shall not be necessary for the consent of the
Warrantholders under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof.

               Section 6.02. Notices and Demands to the Company and the Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to the
Company by any Warrantholder pursuant to the provisions of this Agreement or the
terms of the Universal Warrants of any series, the Warrant Agent shall promptly
forward such notice or demand to the Company.

               Section 6.03. Addresses for Notices. Any communications to the
Warrant Agent with respect to this Agreement shall be in writing addressed to
450 West 33rd Street, New York, New York 10001, Attention: Corporate and
Municipal Agency Department (the "Warrant Agent's Office") and any
communications to the Company with respect to this Agreement shall be addressed
to Morgan Stanley Group Inc., 1221 Avenue of the Americas, New York, New York
10020, Attention: Corporate Treasurer (or in each case to such other address as
shall be given in writing to the other party hereto).

               Section 6.04. Notices to Warrantholders. The Company may cause to
have notice given to the Warrantholders of any series by providing the Warrant
Agent with a form of notice to be distributed by (i) in the case of Registered
Warrants evidenced by Definitive Warrant Certificates, the Warrant Agent to
Registered Holders by first class mail, (ii) in the case of Warrants evidenced
by one or more Global Warrant Certificates, the Depositary to be distributed by
the Depositary to its participants in accordance with the custom and practices
of the Depositary or (iii) in the case of Bearer Warrants evidenced by
Definitive Warrant Certificates, publication at least once in an Authorized
Newspaper (as defined below) in The City of New York, and Western Europe.

               "Authorized Newspaper" means a newspaper (which, in the case of
The City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition) and, in the case of Western Europe, will, if practicable, be the
Financial Times (London Edition)) published in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in The City of New
York, and Western Europe, as applicable. If it shall be impractical in the
opinion of the Warrant Agent to make any publication of any notice required
hereby in an Authorized Newspaper, any publication or other notice in lieu
thereof that is made or given with the approval of the Warrant Agent shall
constitute a sufficient publication of such notice.

               Section 6.05. Obtaining of Approvals. The Company will from time
to time take all action that may be necessary to obtain and keep effective any
and all filings or notices under applicable law, which may be or become required
in connection with the issuance, sale, trading, transfer or delivery of the
Warrant Certificates or the exercise of the Universal Warrants.

               Section 6.06. Persons Having Rights under this Agreement. Nothing
in this Agreement expressed or implied and nothing that may be inferred from any
of the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Warrant Agent and
the Warrantholders any right, remedy or claim under or by reason of this
Agreement or of any covenant, condition, stipulation, promise or agreement
hereof, and all covenants, conditions, stipulations, promises and agreements
contained in this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent, their respective successors and the Warrantholders.

               Section 6.07. Inspection of Agreement. A copy of this Agreement
shall be available at all reasonable times at the Warrant Agent's Office for
inspection by the Warrantholders, participants of the Depositary certified as
such by the Depositary or any person certified by any such participant to be an
indirect participant of the Depositary or any person certified by any such
participant to be a beneficial owner of a Universal Warrant, in each case, on
behalf of whom such participant holds Universal Warrants.

               Section 6.08. Officer's Certificates and Opinions of Counsel;
Statements to be Contained Therein. (a) Each certificate or opinion provided for
in this Agreement and delivered to the Warrant Agent with respect to compliance
with a condition or covenant provided for in this Agreement shall include (i) a
statement that the person making such certificate or opinion has read such
covenant or condition, (ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based, (iii) a statement that, in the opinion of
such person, such person has made such examination or investigation as is
necessary to enable such person to express an informed opinion as to whether or
not such covenant or condition has been complied with and (iv) a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with.

               (b) Any certificate, statement or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon a certificate
or opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
such officer's certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters, information with respect to which is
in the possession of the Company, upon the certificate, statement or opinion of
or representations by an officer or officers of the Company, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which such officer's certificate, statement or opinion may
be based as aforesaid are erroneous, or in the exercise of reasonable care
should know that the same are erroneous.

               (c) Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which such officer's or counsel's, as the
case may be, certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Warrant Agent shall contain a
statement that such firm is independent.

               Section 6.09.  Payments Due on Saturdays, Sundays and Holidays.
  If the date fixed for any payment with respect to the Universal Warrants of
any series appertaining thereto shall not be a Business Day (as defined below),
then such payment need not be made on such date, but may be made on the next
succeeding Business Day with same force and effect as if made on the date fixed,
and no interest shall accrue for the period after such date.

               "Business Day" means, with respect to any Universal Warrant, a
Business Day as defined in any debt security included in any unit comprising
such Universal Warrant or as otherwise established pursuant to Section 1.03
hereof or if the term Business Day is not so specified, Business Day means any
day that is not a Saturday or Sunday or a legal holiday in The City of New York
or a day on which banking institutions in The City of New York are authorized or
required by law, regulation or executive order to be closed.

               Section 6.10. Judgment Currency. The Company agrees, to the
fullest extent that it may effectively do so under applicable law, that (a) if
for the purpose of obtaining judgment in any court it is necessary to convert
the sum due in respect of the Universal Warrants of any series (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Warrant Agent could purchase in The City of
New York the Required Currency with the Judgment Currency on the day on which
final unappealable judgment is entered, unless such day is not a New York
Banking Day (as defined below), in which event, to the extent permitted by
applicable law, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Warrant Agent could purchase in
The City of New York the Required Currency with the Judgment Currency on the
last New York Banking Day preceding the day on which final unappealable judgment
is entered and (b) its obligations under this Agreement and the terms of the
Universal Warrants of such series to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency so expressed to be payable
and (iii) shall not be affected by judgment being obtained for any other sum due
under this Agreement. For purposes of the foregoing, "New York Banking Day"
means any day except a Saturday, Sunday or a legal holiday in The City of New
York or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to close.

               Section 6.11.  Headings.   The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.

               Section 6.12.  Counterparts.   This Agreement may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original; but such counterparts shall together constitute but one and the
same instrument.

               Section 6.13. Applicable Law. This Agreement and each Universal
Warrant shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
said State, excluding choice of law provisions.



               IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.

                                 MORGAN STANLEY GROUP INC.



                                 By ______________________________
                                    Name: Eileen K. Murray
                                    Title: Treasurer


                                 THE CHASE MANHATTAN BANK



                                 By ______________________________
                                    Name:
                                    Title:





                                                                     Exhibit I


             [FORM OF FACE OF REGISTERED CALL WARRANT CERTIFICATE]



No. _____                              CUSIP No. __________

[Unless and until it is exchanged in whole or in part for Universal Warrants in
definitive registered form, this Warrant Certificate and the Universal Warrants
evidenced hereby may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.]


                           MORGAN STANLEY GROUP INC.

                      [Designation of Universal Warrants]

NUMBER OF WARRANTS EVIDENCED BY THIS CERTIFICATE: [UP TO _____](*)


WARRANT PROPERTY:

AMOUNT OF WARRANT PROPERTY
   PURCHASABLE PER WARRANT:

CALL PRICE PER WARRANT:

FORM OF PAYMENT OF
   CALL PRICE:

FORM OF SETTLEMENT:

DATES OF EXERCISE:

OTHER TERMS:


         This Warrant Certificate certifies that __________, or registered
assigns, is the Registered Holder of the number of [Designation of Universal
Warrants] (the "Warrants") [specified above](**)[specified on Schedule A
hereto](***). Upon receipt by the Warrant Agent of this Warrant Certificate, the
exercise notice on the reverse hereof (or an exercise notice in substantially
identical form delivered herewith)(the "Exercise Notice"), duly completed and
executed, and the Call Price per Warrant set forth above, in the form set forth
above, for each Warrant to be exercised (the "Exercise Property") at the Warrant
Agent's Window, Attention: Tender Department, in the Borough of Manhattan, The
City of New York, each Warrant evidenced hereby entitles the Registered Holder
hereof to receive, subject to the terms and conditions set forth herein and in
the Warrant Agreement (as defined below), from Morgan Stanley Group Inc. (the
"Company") the amount and form of property (the "Warrant Property") specified
above. Warrants will not entitle the Warrantholder to any of the rights of the
holders of any of the Warrant Property.

         Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth in this place.

         This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.

- --------------
(*)   Applies to global warrant certificates.
(**)  Applies to definitive warrant certificates
(***) Applies to global warrant certificates





         IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
instrument to be duly executed.


Dated: ___________               MORGAN STANLEY GROUP INC.



                                 By: __________________________
                                       Name:
                                       Title:

Attest:


By: _____________________
      Secretary


Countersigned as of the date above written:



THE CHASE MANHATTAN BANK,
   as Warrant Agent


By: _____________________
      Authorized Officer





           [FORM OF REVERSE OF REGISTERED CALL WARRANT CERTIFICATE]


                           MORGAN STANLEY GROUP INC.

         The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Universal Warrants issued by the Company pursuant to a
Universal Warrant Agreement, dated as of January 24, 1997 (the "Warrant
Agreement"), between the Company and The Chase Manhattan Bank (the "Warrant
Agent") and are subject to the terms and provisions contained in the Warrant
Agreement, to all of which terms and provisions each Warrantholder consents by
acceptance of this Warrant Certificate or a beneficial interest therein and
which Warrant Agreement is hereby incorporated by reference in and made a part
of this Warrant Certificate. Without limiting the foregoing, all capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Warrant Agreement. A copy of the Warrant Agreement is on file at the Warrant
Agent's Office. The Warrants constitute a separate series of Universal Warrants
under the Warrant Agreement.

         The Warrants are unsecured contractual obligations of the Company and
rank pari passu with the Company's other unsecured contractual obligations and
with the Company's unsecured and unsubordinated debt.

         Subject to the provisions hereof and the Warrant Agreement, each
Warrant may be exercised during the dates of exercise set forth on the face
hereof by delivering or causing to be delivered this Warrant Certificate, the
Exercise Notice, duly completed and executed, and the Exercise Property for each
such Warrant to the Warrant Agent's Window, in the Borough of Manhattan, The
City of New York, which is, on the date hereof (unless otherwise specified
herein), The Chase Manhattan Bank Corporate Trust Securities Window, 55 Water
Street, Room 234, North Building, New York, New York 10041, Attention: Tender
Department, or at such other address as the Warrant Agent may specify from time
to time.

         Each Warrant entitles the Warrantholder to receive, upon exercise, the
Warrant Property set forth on the face hereof.

         The Warrant Agreement and the terms of the Warrants are subject to
amendment as provided in the Warrant Agreement.

         This Warrant Certificate shall be governed by, and interpreted in
accordance with, the laws of the State of New York.




                      [Designation of Universal Warrants]

                                Exercise Notice


The Chase Manhattan Bank
Corporate Trust Securities Window
55 Water Street, Room 234
North Building
New York, New York 10041

Attention:  Tender Department

         The undersigned (the "Registered Holder") hereby irrevocably exercises
__________ Warrants (the "Exercised Warrants") and delivers to you herewith a
Warrant Certificate or Certificates, registered in the Registered Holder's name,
representing a number of Warrants at least equal to the number of Exercised
Warrants, and the Exercise Property with respect thereto.

         The Registered Holder hereby directs the Warrant Agent (a) to deliver
the Warrant Property as follows:



and (b) if the number of Exercised Warrants is less than the number of Warrants
represented by the enclosed Warrant Certificate, to deliver a Warrant
Certificate representing the unexercised Warrants to:




Dated: ____________
                                    ---------------------------
                                         (Registered Holder)

                                    By: ________________________
                                          Authorized Signature
                                          Address:
                                          Telephone:






           [If Warrant is a Global Warrant, insert this Schedule A.]


                      [Designation of Universal Warrants]

                                                                      SCHEDULE A

                                    GLOBAL
                               UNIVERSAL WARRANT
                             SCHEDULE OF EXCHANGES


   The initial number of Universal Warrants represented by this Global Universal
Warrant is __________. In accordance with the Universal Warrant Agreement and
the Unit Agreement dated as of January 24, 1997 among the Issuer, The Chase
Manhattan Bank, as Unit Agent, as Warrant Agent, as Collateral Agent, and as
Trustee under the Indenture referred to therein and the Holders from time to
time of the Units described therein, the following (A) exchanges of [the number
of Universal Warrants indicated below for a like number of Universal Warrants to
be represented by a Global Universal Warrant that has been separated from a Unit
(a "Separated Universal Warrant")](*) [the number of Universal Warrants that had
been represented by a Global Universal Warrant that is part of a Unit (an
"Attached Unit Universal Warrant") for a like number of Universal Warrants
represented by this Global Universal Warrant](**) or (B) reductions as a result
of the exercise of the number of Universal Warrants indicated below have been
made:





                                               [Number of
                                               Attached Unit
                                               Universal Warrants
                                               Exchanged  for        [Increased                      Reduced        Notation
            [Number          [Reduced          Universal Warrants    Number           Number         Number         Made by
Date of     Exchanged for    Number            represented by        Outstanding      of             Outstanding    or on
Exchange    Separated        Outstanding       this Separated        Following        Universal      Following      Behalf
or          Universal        Following Such    Universal             Such             Warrants       Such           of Warrant
Exercise    Warrants](*)     Exchange](*)      Warrant](**)          Exchange](**)    Exercised      Exercise       Agent

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

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

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

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

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

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

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

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

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

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

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


(*)Applies only if this Global Universal Warrant is part of a Unit.
(**)Applies only if this Global Universal Warrant has been separated from a
Unit.





                                                                    EXHIBIT II


             [FORM OF FACE OF REGISTERED PUT WARRANT CERTIFICATE]


No. _____                              CUSIP No. __________

[Unless and until it is exchanged in whole or in part for Universal Warrants in
definitive registered form, this Warrant Certificate and the Universal Warrants
evidenced hereby may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.]


                           MORGAN STANLEY GROUP INC.

                      [Designation of Universal Warrants]

NUMBER OF WARRANTS EVIDENCED BY THIS CERTIFICATE: [UP TO ____](*)

CASH SETTLEMENT VALUE PER WARRANT (OR METHOD OF DETERMINING SAME):

[WARRANT PROPERTY:](**)

[AMOUNT OF WARRANT PROPERTY
   SALABLE PER WARRANT:](**)

[PUT PRICE FOR SUCH SPECIFIED AMOUNT OF WARRANT PROPERTY PER WARRANT:](**)

[METHOD OF DELIVERY OF ANY WARRANT PROPERTY TO BE DELIVERED FOR SALE UPON
EXERCISE OF WARRANTS:](**)

DATES OF EXERCISE:

OTHER TERMS:

         This Warrant Certificate certifies that __________, or registered
         assigns, is the Registered Holder of the number of [Designation of
         Universal Warrants] (the "Warrants") [specified above](*) [specified on
         Schedule A hereto](**). Upon receipt by the Warrant Agent of this
         Warrant Certificate, the exercise notice on the reverse hereof (or an
         exercise notice in substantially identical form delivered herewith)(the
         "Exercise Notice"), duly completed and executed, and the Amount of
         Warrant Property saleable per Warrant set forth above, adjusted, if
         applicable, as set forth above, for each Warrant to be exercised,
         delivered as set forth above at the Warrant Agent's Window, Attention:
         Tender Department, in the Borough of Manhattan, The City of New York
         (which is, on the date hereof, Corporate Trust Securities Window, 55
         Water Street, Room 234, North Building, New York, New York 10041,
         Attention: Tender Department), each Warrant evidenced hereby entitles
         the Registered Holder hereof to receive, subject to the terms and
         conditions set forth herein and in the Warrant Agreement (as defined
         below), from Morgan Stanley Group Inc. (the "Company") the [Cash
         Settlement Value][Put Price](***) per Warrant specified above.

- -------------
(*)   Applies to global warrant certificates.
(**)  Only if the terms of the Warrants contemplate that the holder may deliver
      Warrant Property to exercise the Warrants.
(**)  Applies to global warrant certificates.
(***) Only if the terms of the Warrants contemplate that the holder may deliver
      Warrant Property to exercise the Warrants.

         Unless otherwise indicated above, a Warrant will not require or entitle
a Warrantholder to sell or deliver to the Company, nor will the Company be under
any obligation to, nor will it, purchase or take delivery from any Warrantholder
of, any Warrant Property, and upon exercise of a Warrant, the Company will make
only a cash payment in the amount of the Cash Settlement Value or Put Price per
Warrant. Warrantholders will not receive any interest on any Cash Settlement
Value.

         Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth in this place.

         This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.



         IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
instrument to be duly executed.


Dated: ___________               MORGAN STANLEY GROUP INC.


                                    By: __________________________
                                       Name:
                                       Title:

Attest:

By: _____________________
      Secretary

Countersigned as of the date above written:

THE CHASE MANHATTAN BANK,
   as Warrant Agent


By: _____________________
      Authorized Officer






            [FORM OF REVERSE OF REGISTERED PUT WARRANT CERTIFICATE]


                           MORGAN STANLEY GROUP INC.

         The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Universal Warrants issued by the Company pursuant to a
Universal Warrant Agreement, dated as of January 24, 1997 (the "Universal
Warrant Agreement"), between the Company and The Chase Manhattan Bank (the
"Warrant Agent") and are subject to the terms and provisions contained in the
Universal Warrant Agreement, to all of which terms and provisions each
Warrantholder consents by acceptance of this Warrant Certificate or a beneficial
interest therein and which Universal Warrant Agreement is hereby incorporated by
reference in and made a part of this Warrant Certificate. Without limiting the
foregoing, all capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Universal Warrant Agreement. A copy of the
Universal Warrant Agreement is on file at the Warrant Agent's Office. The
Warrants constitute a separate series of Universal Warrants under the Universal
Warrant Agreement.

         The Warrants are unsecured contractual obligations of the Company and
rank pari passu with the Company's other unsecured contractual obligations and
with the Company's unsecured and unsubordinated debt.

         The Warrant Agreement and the terms of the Warrants are subject to
amendment as provided in the Universal Warrant Agreement.

         This Warrant Certificate shall be governed by, and interpreted in
accordance with, the laws of the State of New York.





                      [Designation of Universal Warrants]

                                Exercise Notice


The Chase Manhattan Bank
Corporate Trust Securities Window
55 Water Street, Room 234
North Building
New York, New York 10041

Attention:  Tender Department

         The undersigned (the "Registered Holder") hereby irrevocably exercises
__________ Warrants (the "Exercised Warrants") and delivers to you herewith a
Warrant Certificate or Certificates, registered in the Registered Holder's name,
representing a number of Warrants at least equal to the number of Exercised
Warrants[, and the Warrant Property with respect thereto].(*)

         The Registered Holder hereby directs the Warrant Agent (a) to deliver
the [Cash Settlement Value][Put Price](*) per Warrant as follows:



and (b) if the number of Exercised Warrants is less than the number of Warrants
represented by the enclosed Warrant Certificate, to deliver a Warrant
Certificate representing the unexercised Warrants to:


Dated: ____________

                                    ---------------------------
                                        (Registered Holder)


                                    By: ________________________
                                          Authorized Signature
                                          Address:
                                          Telephone:

- -------------
(*) Only if terms of the Warrants contemplate that the holder may deliver
    Warrant Property to exercise the Warrants.





           [If Warrant is a Global Warrant, insert this Schedule A.]

                      [Designation of Universal Warrants]

                                                                      SCHEDULE A

                                    GLOBAL
                               UNIVERSAL WARRANT
                             SCHEDULE OF EXCHANGES


   The initial number of Universal Warrants represented by this Global Universal
Warrant is __________. In accordance with the Universal Warrant Agreement and
the Unit Agreement dated as of January 24, 1997 among the Issuer, The Chase
Manhattan Bank, as Unit Agent, as Warrant Agent, as Collateral Agent, and as
Trustee under the Indenture referred to therein and the Holders from time to
time of the Units described therein, the following (A) exchanges of [the number
of Universal Warrants indicated below for a like number of Universal Warrants to
be represented by a Global Universal Warrant that has been separated from a Unit
(a "Separated Universal Warrant")](*) [the number of Universal Warrants that had
been represented by a Global Universal Warrant that is part of a Unit (an
"Attached Unit Universal Warrant") for a like number of Universal Warrants
represented by this Global Universal Warrant](**) or (B) reductions as a result
of the exercise of the number of Universal Warrants indicated below have been
made:





                                               [Number of
                                               Attached Unit
                                               Universal Warrants                                                    Notation
                                               Exchanged for                                                         Made by
            [Number          [Reduced          Universal Warrants    [Increased                      Reduced         or on
Date of     Exchanged for    Number            represented by        Number          Number  of      Number          Behalf
Exchange    Separated        Outstanding       this Separated        Outstanding     Universal       Outstanding     of
or          Universal        Following Such    Universal             Following Such  Warrants        Following Such  Warrant
Exercise    Warrants](*)     Exchange](*)      Warrant](**)          Exchange](**)   Exercised       Exercise        Agent
                                                                                                
- ---------   ------------     ------------      ------------          ------------     ------------   ------------    ------------

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

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

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

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

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

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

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

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

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

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












(*)Applies only if this Global Universal Warrant is part of a Unit.
(**)Applies only if this Global Universal Warrant has been separated from a
Unit.

EX-4.B

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

                          MORGAN STANLEY GROUP INC.,

                          THE CHASE MANHATTAN BANK, 
                          as Unit Agent, as Collateral
                      Agent, as Trustee and Paying Agent under
                    the Indenture referred to herein, and
                      as Warrant Agent under the Warrant
                         Agreement referred to herein

                                      AND

                       THE HOLDERS FROM TIME TO TIME OF
                          THE UNITS DESCRIBED HEREIN


                               -----------------
                                UNIT AGREEMENT
                               -----------------



                         Dated as of January 24, 1997

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




                               TABLE OF CONTENTS


                                  ARTICLE ONE
         Section 101.  Definitions......................................  2


                                  ARTICLE TWO
         Section 201.  Forms Generally.................................. 12
         Section 202.  Form of Certificate of Authentication and
                       Countersignature................................. 12
         Section 203.  Amount Unlimited; Issuable in Series............. 13
         Section 204.  Denominations.................................... 14
         Section 205.  Rights and Obligations Evidenced by the Units.... 14
         Section 206.  Execution, Authentication, Delivery and Dating... 15
         Section 207.  Temporary Unit Certificates...................... 15
         Section 208.  Registration of Transfer and Exchange; Global
                       Units............................................ 16
         Section 209.  Mutilated, Destroyed, Lost and Stolen Unit
                       Certificates..................................... 19
         Section 210.  Persons Deemed Owners............................ 21
         Section 211.  Cancellation..................................... 22
         Section 212.  Exchange of Global Units and Definitive Units.... 22

                                 ARTICLE THREE
         Section 301.  Form and Execution of Purchase Contracts;
                       Temporary Purchase Contracts..................... 23
         Section 302.  Number Unlimited; Issuable in Series............. 25
         Section 303.  Countersignature, Execution on Behalf of Holder
                       and Delivery of Purchase Contracts............... 27
         Section 304.  Further Provisions Relating to Issuance of
                       Purchase Contracts............................... 30
         Section 305.  Purchase of Purchase Contract Property; Optional
                       Acceleration of Purchase Obligations;
                       Authorization of Agent by Holder; Transferees
                       Bound............................................ 30
         Section 306.  Payment of Purchase Price........................ 32
         Section 307.  Delivery of Purchase Contract Property, Warrant
                       Property or Other Amounts........................ 35
         Section 308.  Charges and Taxes................................ 36

                                 ARTICLE FOUR
         Section 401.  Acceleration of Obligations...................... 36
         Section 402.  Unconditional Rights Under Purchase Contracts;
                       Limitation on Proceedings by Holders............. 37
         Section 403.  Restoration of Rights and Remedies............... 38
         Section 404.  Rights and Remedies Cumulative................... 38
         Section 405.  Delay or Omission Not Waiver..................... 38
         Section 406.  Waiver of Past Defaults.......................... 38
         Section 407.  Undertaking for Costs............................ 39
         Section 408.  Waiver of Stay or Extension Laws................. 39
         Section 409.  Agent May File Proofs of Claim................... 40
         Section 410.  Suits for Enforcement............................ 40
         Section 411.  Control by Holders............................... 41

                                 ARTICLE FIVE
         Section 501.  Granting of Security Interests; Rights and
                       Remedies of Collateral Agent; Perfection......... 42
         Section 502.  Distribution of Principal and Interest; Release
                       of Collateral.................................... 43
         Section 503.  Certain Duties and Responsibilities of the
                       Collateral Agent................................. 44
         Section 504.  Knowledge of the Collateral Agent................ 45
         Section 505.  Certain Rights of Collateral Agent............... 45
         Section 506.  Compensation and Reimbursement................... 46
         Section 507.  Corporate Collateral Agent Required:
                       Eligibility...................................... 47
         Section 508.  Resignation and Removal; Appointment of Successor 47
         Section 509.  Acceptance of Appointment by Successor........... 49
         Section 510.  Merger, Conversion, Consolidation or Succession
                       to Business...................................... 50
         Section 511.  Money Held in Trust.............................. 50

                                  ARTICLE SIX
         Section 601.  Certain Duties and Responsibilities.............. 50
         Section 602.  Notice of Default................................ 51
         Section 603.  Certain Rights of Agent.......................... 52
         Section 604.  Not Responsible for Recitals or Issuance of Units 53
         Section 605.  May Hold Units................................... 53
         Section 606.  Money Held in Trust.............................. 54
         Section 607.  Compensation and Reimbursement................... 54
         Section 608.  Corporate Agent Required:  Eligibility........... 55
         Section 609.  Resignation and Removal; Appointment of Successor 55
         Section 610.  Acceptance of Appointment by Successor........... 57
         Section 611.  Merger, Conversion, Consolidation or Succession
                       to Business...................................... 58
         Section 612.  Appointment of Authenticating Agent.............. 58
         Section 613.  Corporation to Furnish Agent Names and Addresses
                       of Holders....................................... 61
         Section 614.  Preservation of Information; Communications to
                       Holders.......................................... 61
         Section 615.  No Obligation of Holder.......................... 62
         Section 616.  Tax Compliance................................... 62

                                 ARTICLE SEVEN
         Section 701.  Supplemental Agreements Without Consent of
                       Holders.......................................... 64
         Section 702.  Supplemental Agreements with Consent of Holders.. 65
         Section 703.  Execution of Supplemental Agreements............. 66
         Section 704.  Effect of Supplemental Agreements................ 66
         Section 705.  Reference to Supplemental Agreements............. 66

                                 ARTICLE EIGHT
         Section 801.  Covenant Not to Merge, Consolidate, Sell or
                       Convey Property Except Under Certain Conditions.. 67
         Section 802.  Rights and Duties of Successor Corporation....... 67
         Section 803.  Opinion of Counsel to Agent...................... 68

                                 ARTICLE NINE
         Section 901.  Performance Under Purchase Contracts............. 68
         Section 902.  Maintenance of Office or Agency.................. 68
         Section 903.  Money for Payments to Be Held in Trust........... 69
         Section 904.  Statements of Officers of the Corporation as to
                       Default.......................................... 70
         Section 905.  Negative Pledge.................................. 71
         Section 906.  Luxembourg Publications.......................... 71

                                  ARTICLE TEN
         Section 1001. Optional Redemption of Purchase Contracts;
                       Redemption Upon Redemption of Debt Securities.... 72
         Section 1002. Notice of Redemption; Partial Redemptions........ 72
         Section 1003. Payment of Purchase Contracts Called for
                       Redemption....................................... 73
         Section 1004. Exclusion of Certain Purchase Contracts from
                       Eligibility for Selection for Redemption......... 74

                                ARTICLE ELEVEN
         Section 1101. Incorporators, Stockholders, Officers and
                       Directors of the Corporation Immune from
                       Liability........................................ 75
         Section 1102. Compliance Certificates and Opinions............. 75
         Section 1103. Form of Documents Delivered to Agent or
                       Collateral Agent................................. 76
         Section 1104. Acts of Holders.................................. 77
         Section 1105. Notices. Etc..................................... 78
         Section 1106. Notice to Holders; Waiver........................ 78
         Section 1107. Effect of Headings and Table of Contents......... 79
         Section 1108. Successors and Assigns........................... 79
         Section 1109. Separability Clause.............................. 79
         Section 1110. Benefits of Agreement............................ 79
         Section 1111. Governing Law.................................... 80
         Section 1112. Legal Holidays................................... 80
         Section 1113. Counterparts..................................... 80
         Section 1114. Appointment of Certain Agents.................... 80
         Section 1115. Inspection of Agreement.......................... 80


               UNIT AGREEMENT, dated as of January 24, 1997, by and among MORGAN
STANLEY GROUP INC., a Delaware corporation (the "Corporation"), THE CHASE
MANHATTAN BANK, a New York banking corporation ("Chase"), acting solely as unit
agent and collateral agent under this Agreement (in its capacity as unit agent,
the "Agent," and, in its capacity as collateral agent, the "Collateral Agent"),
except to the extent that this Agreement specifically states that the Agent is
acting in another capacity, Chase, as trustee and paying agent under the
Indenture described below (in its capacity as trustee under the Indenture, the
"Trustee" and, in its capacity as paying agent under the Indenture, the "Paying
Agent"), and Chase, as Warrant Agent under the Warrant Agreement described below
(in its capacity as Warrant Agent under the Warrant Agreement, the "Warrant
Agent"), and the holders from time to time of the Units described herein.

               WHEREAS, the Corporation has entered into a Senior Indenture
dated as of April 15, 1989, as supplemented by a First Supplemental Senior
Indenture dated as of May 15, 1991 and a Second Supplemental Senior Indenture
dated as of April 15, 1996 (as so supplemented, the "Indenture"), between the
Corporation and The Chase Manhattan Bank (formerly known as Chemical Bank), as
Trustee;

               WHEREAS, the Corporation has duly authorized the issuance, from
time to time, pursuant to the Indenture of senior debt securities ("Debt
Securities");

               WHEREAS, the Corporation has entered into a Universal Warrant
Agreement (the "Warrant Agreement") dated as of January 24, 1997 between the
Corporation and Chase, as Warrant Agent;

               WHEREAS, the Corporation has duly authorized the issuance, from
time to time, pursuant to the Warrant Agreement of Universal Warrants
("Warrants") to purchase or sell (i) securities of an entity unaffiliated with
the Corporation, a basket of such securities, an index or indices of such
securities or any combination of the above, (ii) currencies or composite
currencies or (iii) commodities, in each case on terms to be determined at the
time of sale;

               WHEREAS, the Corporation has duly authorized the issuance, from
time to time, of Purchase Contracts ("Purchase Contracts") to purchase or sell
(i) securities of an entity unaffiliated with the Corporation, a basket of such
securities, an index or indices of such securities or any combination of the
above, (ii) currencies or composite currencies or (iii) commodities, in each
case on terms to be determined at the time of sale;

               WHEREAS, the Corporation has duly authorized the issuance, from
time to time, pursuant to the Indenture, of Purchase Contracts that require
holders to satisfy their obligations thereunder upon issuance of such Purchase
Contracts ("Prepaid Purchase Contracts");

               WHEREAS, the Corporation desires to provide for the issuance of
units ("Units") consisting of one or more Purchase Contracts, Prepaid Purchase
Contracts, Warrants or Debt Securities, or any combination thereof;

               WHEREAS, the parties hereto wish to secure the performance by the
holders of Units consisting of Debt Securities and Purchase Contracts of their
obligations under such Purchase Contracts and the observance and performance of
the covenants and agreements contained herein and in such Purchase Contracts;

               NOW, THEREFORE, in consideration of the premises and the
purchases of the Units by the holders thereof, the Corporation, the Agent, the
Warrant Agent, the Collateral Agent and the Trustee and Paying Agent mutually
covenant and agree as follows:


                                  ARTICLE ONE

                       Definitions and Other Provisions
                            of General Application

               Section 101.  Definitions.  For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:

               (1) the terms defined in this Article have the meanings assigned
         to them in this Article and include the plural as well as the singular;

               (2) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles in the United States in effect at the time of any
         computation; and

               (3) the words "herein," "hereof" and "hereunder" and other words
         of similar import refer to this Agreement as a whole and not to any
         particular Article, Section or other subdivision.

               "Accelerated Settlement Date," with respect to a Purchase
Contract of any series, means any date to which the Corporation accelerates the
obligations of the Holder of the Units of which such Purchase Contract
constitutes a part, subject to any limitations as may be specified pursuant to
Section 302.

               "Acceleration Notice," has the meaning specified in Section
305(b).

               "Act," with respect to any Holder, has the meaning specified in
Section 1104.

               "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

               "Agent" means the Person named as the "Agent" in the first
paragraph of this Agreement until a successor Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter "Agent"
shall mean such successor Person.

               "Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.

               "Authenticating Agent" means any Person authorized by the Agent
to act on behalf of the Agent to countersign and execute Purchase Contracts.

               "Bankruptcy Event" means any of the following events: (i) a court
having jurisdiction in the premises shall enter a decree or order for relief
with respect to the Corporation in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Corporation or for any substantial part of its
property or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (ii) the Corporation shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Corporation or for any substantial part of its property, or
make any general assignment for the benefit of creditors.

               "Board of Directors," means the board of directors of the
Corporation or any other committee duly authorized to act on its behalf with
respect to this Agreement.

               "Board Resolution," means one or more resolutions, certified by
the Secretary or an Assistant Secretary of the Corporation to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect on the date of such certification and delivered to the Agent or the
Collateral Agent, as the case may be.

               "Business Day" means any day that is not a Saturday or Sunday or
a legal holiday in The City of New York or a day on which banking institutions
in The City of New York are authorized or required by law, regulation or
executive order to be closed.

               "Cash Settlement" has the meaning set forth in Section
306(a)(1).

               "Closed Purchase Contract" means any Purchase Contract or Prepaid
Purchase Contract with respect to which a purchase or sale of, or other
settlement with respect to, the Purchase Contract Property has occurred pursuant
to Article Four or that has been redeemed or is otherwise not Outstanding.

               "Collateral" has the meaning specified in Section 501(a).

               "Collateral Agent" means the Person named as the "Collateral
Agent" in the first paragraph of this Agreement until a successor Collateral
Agent shall have become such pursuant to the applicable provisions of this
Agreement, and thereafter "Collateral Agent" shall mean such successor Person.

               "Corporate Trust Office" means the office of the Agent or the
Collateral Agent, as appropriate, at which at any particular time its corporate
trust business shall be principally administered, which office at the date
hereof is located at 450 West 33rd Street, 15th Floor, New York, New York 10001.

               "Corporation" means the Person named as the "Corporation" in the
first paragraph of this Agreement until a successor Person shall have become
such pursuant to the applicable provisions of this Agreement, and thereafter the
"Corporation" shall mean such successor Person.

               "Debt Securities" has the meaning stated in the second recital in
this Agreement and more particularly means any Debt Securities originally issued
as part of a Unit of any series.

               "Debt Security Register" with respect to any Debt Securities
constituting a part of the Units of any series means the security register of
the Corporation maintained by the Trustee pursuant to the Indenture.

               "Debt Security Settlement" has the meaning set forth in Section
306(a)(2).

               "Default" means an Event of Default under the Indenture or a
Purchase Contract Default.

               "Definitive Securities" means any Security in definitive form.

               "Definitive Unit" means any Unit comprised of Definitive
Securities.

               "Depositary" means, with respect to Registered Units, DTC, or any
successor, or, with respect to any Unregistered Units, a common depositary for
Morgan Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System, or Cedel Bank, societe anonyme, or any other relevant
depositary named in an Issuer Order, in each case, as the Holder of any Global
Units.

               "DTC" means The Depository Trust Company or its nominee.

               "Event of Default," with respect to the Debt Securities, has the
meaning set forth in the Indenture.

               "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

               "Global Debt Security" means a global Debt Security in bearer or
registered form originally issued as part of a Global Unit of any series.

               "Global Prepaid Purchase Contract" means a global Prepaid
Purchase Contract in bearer or registered form originally issued as part of a
Global Unit of any series.

               "Global Purchase Contract" means a global Purchase Contract in
bearer or registered form originally issued as part of a Global Unit of any
series.

               "Global Security" means any of a Global Debt Security, Global
Warrant, Global Purchase Contract or Global Prepaid Purchase Contract.

               "Global Unit" means any Unit that comprises one or more Global
Securities and is represented by a global Unit Certificate in bearer or
registered form.

               "Global Warrant" means a global Warrant in bearer or registered
form originally issued as part of a Global Unit of any series.

               "Holder" means (i) in the case of any Registered Security or
Registered Unit, the Person in whose name such Registered Security or the
Registered Securities constituting a part of such Registered Unit are registered
on the relevant Security Register and (ii) in the case of any Unregistered
Security or Unregistered Unit, the bearer of such Security or Unit, provided
that, in the case of (i) above, so long as the Registered Securities
constituting part of such Units are not separable, "Holder" shall mean the
Person in whose name a Registered Security constituting a part of such Unit is
registered on the Security Register specified pursuant to Section 203.

               "Indenture" has the meaning specified in the first recital in
this Agreement.

               "Initial Acceleration Date" means, with respect to Purchase
Contracts or Prepaid Purchase Contracts of any series, the initial date, if any,
specified pursuant to Section 302 on which such Purchase Contracts or Prepaid
Purchase Contracts may be accelerated pursuant to Section 305 hereof.

               "Interest Payment Date," with respect to any Debt Security, has
the meaning set forth in the Indenture or in any document executed pursuant to
the terms of the Indenture relating to such Debt Security.

               "Issuer Order" or "Issuer Request," means a written order or
request signed in the name of the Corporation by the Chief Financial Officer,
Treasurer, or any Managing Director of the Corporation or any other person
authorized by the Board of Directors and delivered to the Agent or the
Collateral Agent, as the case may be.

               "Letter of Representations" means, as of any date, the Letter of
Representations or Letters of Representations to DTC in effect as of such date
from the Agent relating to the Units covered by this Agreement.

               "Minimum Acceleration Amount" means the minimum number of
Purchase Contracts of any series as specified pursuant to Section 302 that may
be subject to acceleration pursuant to Section 305.

               "Minimum Remaining Amount" means the minimum number of Purchase
Contracts of any series as specified pursuant to Section 302 that must remain
Outstanding immediately following any acceleration pursuant to Section 305.

               "Officer's Certificate" means a certificate signed by the Chief
Financial Officer, Treasurer or any Managing Director of the Corporation or any
other person authorized by the Board of Directors and delivered to the Agent or
the Collateral Agent, as the case may be.

               "Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Corporation and who shall
otherwise be satisfactory to the Agent or the Collateral Agent, as the case may
be.

               "Optional Definitive Unit Request" has the meaning set forth in
Section 212.

               "Outstanding," with respect to any Unit, Debt Security, Warrant,
Purchase Contract or Prepaid Purchase Contract means, as of the date of
determination, all Units, Debt Securities, Warrants, Purchase Contracts or
Prepaid Purchase Contracts, as the case may be, evidenced by Units theretofore
authenticated, countersigned, executed and delivered under this Agreement,
except:

               (i) Units, Debt Securities, Warrants, Purchase Contracts or
         Prepaid Purchase Contracts theretofore deemed cancelled, cancelled by
         the Agent, Warrant Agent or Trustee, as the case may be, or delivered
         to the Agent, Warrant Agent or Trustee, as the case may be, for
         cancellation, in each case pursuant to the provisions of this
         Agreement, the Warrant Agreement or the Indenture;

              (ii) Closed Purchase Contracts; and

             (iii) Units, Debt Securities, Warrants, Purchase Contracts or
         Prepaid Purchase Contracts evidenced by Unit Certificates in exchange
         for or in lieu of which other Unit Certificates have been
         authenticated, countersigned, executed and delivered pursuant to this
         Agreement, other than any such Units, Debt Securities, Warrants,
         Purchase Contracts or Prepaid Purchase Contracts, as the case may be,
         evidenced by a Unit Certificate in respect of which there shall have
         been presented to the Agent proof satisfactory to it that such Unit
         Certificate is held by a bona fide purchaser in whose hands the Units,
         Debt Securities, Warrants, Purchase Contracts or Prepaid Purchase
         Contracts, as the case may be, evidenced by such Unit Certificate are
         valid obligations of the Corporation;

provided, however, that in determining whether the Holders of the requisite
number of Outstanding Units, Debt Securities, Warrants, Purchase Contracts and
Prepaid Purchase Contracts, as the case may be, have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Units, Debt
Securities, Warrants, Purchase Contracts and Prepaid Purchase Contracts owned by
the Corporation or any Affiliate of the Corporation shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Agent
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Units, Debt Securities, Warrants,
Purchase Contracts and Prepaid Purchase Contracts which the Agent knows to be so
owned shall be so disregarded. Units, Debt Securities, Warrants, Purchase
Contracts and Prepaid Purchase Contracts that are so owned but that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Agent the pledgee's right so to act with respect to
such Units, Debt Securities, Warrants, Purchase Contracts and Prepaid Purchase
Contracts and that the pledgee is not the Corporation or any Affiliate of the
Corporation.

               "Paying Agent" means any Person authorized by the Corporation to
pay the Settlement Amount, redemption price or any other sums payable by the
Corporation with respect to any Purchase Contracts; provided that such Person
shall be a bank or trust company organized and in good standing under the laws
of the United States or any state in the United States, having (together with
its parent) capital, surplus and undivided profits aggregating at least
$50,000,000 or any foreign branch or office of such a bank or trust company,
and, subject to the foregoing, may be an Affiliate of the Corporation.

               "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

               "Pledged Items" means, as of any date, any Debt Securities
constituting a part of the Units of any series or any and all other securities,
instruments or other property as may be specified pursuant to Section 302.

               "Prepaid Purchase Contracts" has the meaning stated in the sixth
recital in this Agreement and more particularly means any Prepaid Purchase
Contracts originally issued as part of a Unit of any series.

               "Purchase Contract Default" with respect to Purchase Contracts of
any series means the occurrence of any of the following events: (i) failure of
the Corporation to deliver the Purchase Contract Property or the cash value
thereof for such Purchase Contracts against tender of payment therefor on any
Settlement Date, in the case of Purchase Contracts that obligate the Corporation
to sell the Purchase Contract Property, (ii) failure of the Corporation to pay
the Settlement Amount for such Purchase Contracts when the same becomes due and
payable, in the case of Purchase Contracts that obligate the Corporation to
purchase the Purchase Contract Property, (iii) failure on the part of the
Corporation duly to observe or perform any other of the covenants or agreements
on its part in such Purchase Contracts or in this Agreement with respect to such
Purchase Contracts and continuance of such failure for a period of 60 days after
the date on which written notice of such failure, requiring the Corporation to
remedy the same, shall have been given to the Corporation and the Agent by
Holders of at least 25% of the affected Purchase Contracts at the time
Outstanding, (iv) a Bankruptcy Event or (v) any other Purchase Contract Default
provided in any supplemental agreement under which such series of Purchase
Contracts is issued or in the form of such Purchase Contracts.

               "Purchase Contract Property" with respect to a Purchase Contract
of any series has the meaning specified pursuant to Section 302.

               "Purchase Contract Register" and "Purchase Contract Registrar"
have the respective meanings specified in Section 208.

               "Purchase Contracts" has the meaning stated in the fifth recital
in this Agreement and more particularly means any Purchase Contracts
constituting a part of the Units of any series countersigned, executed and
delivered in accordance with this Agreement.

               "Purchase Price" of any Purchase Contract that obligates the
Corporation to sell, and the Holder to purchase, the Purchase Contract Property
has the meaning specified pursuant to Section 302.

               "Registered Debt Security" means any Debt Security or Prepaid
Purchase Contract registered on the Debt Security Register.

               "Registered Purchase Contract" means any Purchase Contract
registered on the Purchase Contract Register.

               "Registered Security" means any of a Registered Debt Security,
Registered Warrant or Registered Purchase Contract.

               "Registered Unit" means any Unit consisting of Registered
Securities.

               "Registered Warrant" means any Warrant registered on the Warrant
Register.

               "Regular Record Date" has the meaning specified pursuant to
Section 203.

               "Responsible Officer," with respect to the Agent or Collateral
Agent, means the chairman or vice-chairman of the board of directors, the
chairman or vice-chairman of the executive committee of the board of directors,
the president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer, any trust officer or assistant trust officer, the
controller and any assistant controller or any other officer of the Agent or
Collateral Agent customarily performing functions similar to those performed by
any of the above-designated officers and also means, with respect to a
particular corporate trust or agency matter, any other officer to whom such
matter is referred because of his knowledge and familiarity with the particular
subject.

               "Security" means any of a Debt Security, Warrant, Purchase
Contract or Prepaid Purchase Contract.

               "Security Register" means any of the Debt Security Register,
Purchase Contract Register or Warrant Register.

               "Settlement Amount" of any Purchase Contract that obligates the
Corporation to purchase, and the Holder to sell, the Purchase Contract Property
has the meaning specified pursuant to Section 302.

               "Settlement Date" means the Stated Settlement Date and any
Accelerated Settlement Date.

               "SRO" has the meaning specified in Section 201.

               "Stated Settlement Date" of any Purchase Contract of any series
has the meaning specified pursuant to Section 302.

               "Trustee," with respect to any Debt Securities or Prepaid
Purchase Contracts, means the Person acting as Trustee under the Indenture until
a successor Trustee shall have become such pursuant to the applicable provisions
of such Indenture, and thereafter "Trustee" shall mean such successor Trustee.

               "Unit" has the meaning stated in the seventh recital to this
Agreement and more particularly the collective rights and obligations of the
Corporation and a Holder with respect to the Securities comprising such Unit, as
specified pursuant to Section 203.

               "Unit Certificate" means a certificate evidencing the rights and
obligations of the Corporation and a Holder with respect to the number of Units
specified on such certificate.

               "Unregistered Security" means any Security other than a
Registered Security.

               "Unregistered Unit" means any Unit other than a Registered Unit.

               "Unsettled Purchase Contract" means any Purchase Contract that
has not been redeemed or with respect to which settlement has not occurred
pursuant to Article Four.

               "Warrant Agreement" has the meaning stated in the third recital
of this Agreement.

               "Warrant Property" has the meaning specified in the Warrant
Agreement.

               "Warrant Register" with respect to any Warrants constituting a
part of the Units of any series means the security register of the Corporation
maintained by the Warrant Agent pursuant to the Warrant Agreement.

               "Warrants" has the meaning stated in the fourth recital of this
Agreement and more particularly means any Warrants originally issued as part of
a Unit of any series.


                                  ARTICLE TWO

                                     Units

               Section 201. Forms Generally. The Units of each series shall be
substantially in the form of Exhibit A or in such form (not inconsistent with
this Agreement) as shall be established by or pursuant to one or more Board
Resolutions (as set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an Officer's
Certificate detailing such establishment). The Unit Certificates may have
imprinted or otherwise reproduced thereon such letters, numbers or other marks
of identification or designation and such legends or endorsements as the
officers of the Corporation executing the Securities constituting a part thereof
may approve (execution thereof to be conclusive evidence of such approval) and
that are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto, or with any rule or regulation of any self-regulatory organization (an
"SRO") on which the Units of such series may be listed or quoted or of any
securities depository or to conform to general usage.

               The Unit Certificates shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Unit Certificates, as evidenced by
their execution of the Securities constituting a part of the Units evidenced by
such Unit Certificates.

               Section 202. Form of Certificate of Authentication and
Countersignature. The form of the Trustee's certificate of authentication of any
Debt Securities or Prepaid Purchase Contracts, the form of any Warrant Agent's
countersignature of any Warrants and the form of the Agent's execution on behalf
of the Holder and countersignature of any Purchase Contracts, each constituting
a part of the Units of any series, shall be substantially in such form as set
forth in the Indenture, the Warrant Agreement or this Agreement, as applicable.

               Section 203.  Amount Unlimited;  Issuable in Series.  The
aggregate number of Units that may be authenticated, countersigned and
delivered under this Agreement is unlimited.

               The Units may be issued in one or more series. There shall be
established, upon the order of the Corporation (contained in an Issuer Order) or
pursuant to such procedures acceptable to the Agent as may be specified from
time to time by an Issuer Order, prior to the initial issuance of Units of any
series:

               (1)  the designation of the Units of the series, which shall
         distinguish the Units of the series from the Units of all other
         series;

               (2) any limit upon the aggregate number of Units of the series
         that may be authenticated and delivered under this Agreement (except
         for Units authenticated and delivered upon registration of transfer of,
         or in exchange for, or in lieu of, other Units of the series pursuant
         to Section 207, 208, 209 or 212);

               (3)  the designation of the Securities constituting a part of
         the Units of the series;

               (4) whether and on what terms any Securities constituting a part
         of the Units of the series may be separated from the Units of the
         series and the other Securities constituting a part of such Units;

               (5)  in the case of Units of a series consisting in any part of
         Purchase Contracts, the information specified pursuant to Section
         302;

               (6) whether the Units of the series will be issuable as
         Registered Units (and if so, whether such Units will be issuable in
         global form) or Unregistered Units (and if so, whether such Units will
         be issuable in global form), or any combination of the foregoing, any
         restrictions applicable to the offer, sale or delivery of Unregistered
         Securities and, if other than as provided in Section 208, the terms
         upon which Unregistered Units of any series may be exchanged for
         Registered Units of such series and vice versa;

               (7) in the case of Units issued as Registered Units consisting of
         Registered Securities that may not be separated from the other
         Registered Securities constituting a part of such Units, the
         designation of the Security Register to be used to determine the Holder
         of such Units;

               (8) if the Units of such series are to be issuable in definitive
         form (whether upon original issue or upon exchange of a temporary Unit
         of such series) only upon receipt of certain certificates or other
         documents or satisfaction of other conditions, the form and terms of
         such certificates, documents or conditions;

               (9) any trustees, depositaries, authenticating or paying agents,
         transfer agents or registrars or any other agents with respect to the
         Units of such series;

               (10)  any other events of default or covenants with respect to
         the Units of such series; and

               (11) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Agreement).

               All Units of any one series shall be substantially identical,
except as may otherwise be provided by or pursuant to the Issuer Order or
procedures referred to above. All Units of any one series need not be issued at
the same time and may be issued from time to time, consistent with the terms of
this Agreement, if so provided by or pursuant to such Board Resolution or such
Issuer Order.

               Section 204.  Denominations.  Units of any series shall be
issuable only in denominations of a single Unit and any integral multiple
thereof.

               Section 205. Rights and Obligations Evidenced by the Units. Units
of any series shall evidence (i) the ownership by the Holder thereof of (A) the
principal amount of Debt Securities, if any, specified on the face of a Unit
Certificate representing Definitive Units or in Schedule A attached to any Unit
Certificate representing Global Units, (B) the number of Warrants, if any,
specified on the face of a Unit Certificate representing Definitive Units or in
Schedule A attached to any Unit Certificate representing Global Units and (C)
the number of Prepaid Purchase Contracts, if any, specified on the face of a
Unit Certificate representing Definitive Units or in Schedule A attached to any
Unit Certificate representing Global Units and (ii) the rights and obligations
of the Corporation and the Holder under the number of Purchase Contracts, if
any, specified on the face of a Unit Certificate representing Definitive Units
or in Schedule A attached to any Unit Certificate representing Global Units.

               Section 206. Execution, Authentication, Delivery and Dating. Upon
the execution and delivery of this Agreement, and at any time and from time to
time thereafter, the Corporation may deliver, subject to any limitation on the
aggregate principal amount of Debt Securities, if any, or the number of
Warrants, Purchase Contracts or Prepaid Purchase Contracts, if any, represented
thereby, an unlimited number of Unit Certificates (including the Securities
executed by the Corporation constituting the Units evidenced by such Unit
Certificates) to the Trustee, Warrant Agent and/or the Agent for authentication,
countersignature or execution, as the case may be, of the Securities comprised
by such Units, together with its Issuer Orders for authentication,
countersignature or execution of such Securities, and the Trustee in accordance
with the Indenture and the Issuer Order of the Corporation shall authenticate
the Debt Securities and Prepaid Purchase Contracts, if any, constituting a part
of the Units evidenced by such Unit Certificates, the Warrant Agent in
accordance with the Warrant Agreement and the Issuer Order of the Corporation
shall countersign the Warrants, if any, constituting a part of the Units
evidenced by such Unit Certificates and the Agent in accordance with this
Agreement and the Issuer Order of the Corporation shall countersign and execute
on behalf of the Holders thereof the Purchase Contracts, if any, constituting a
part of the Units evidenced by such Unit Certificates, and each shall deliver
such Unit Certificates upon the order of the Corporation.

               Any Debt Securities or Prepaid Purchase Contracts constituting a
part of the Units of any series shall be executed on behalf of the Corporation
in accordance with the terms of the Indenture. Any Warrants constituting a part
of the Units of any series shall be executed on behalf of the Corporation in
accordance with the terms of the Warrant Agreement. Any Purchase Contracts
constituting a part of the Units shall be executed on behalf of the Corporation
in accordance with Section 301.

               Section 207. Temporary Unit Certificates. Pending the preparation
of Unit Certificates for any series, the Corporation may execute and deliver to
the Trustee, the Warrant Agent and/or the Agent, as appropriate, and the
Trustee, the Warrant Agent and/or the Agent, as appropriate, shall authenticate,
countersign, execute on behalf of the Holder and deliver, as appropriate, in
lieu of such Unit Certificates, temporary Unit Certificates for such series.
Temporary Unit Certificates shall be in substantially the form of the Unit
Certificates of such series, but with such omissions, insertions and variations
as may be appropriate for temporary Unit Certificates, all as may be determined
by the Corporation with the concurrence of the Trustee, Warrant Agent and/or
Agent, as appropriate, as evidenced by the execution and authentication and/or
countersignature of the Securities constituting a part of the Units evidenced
thereby, as applicable.

               If temporary Unit Certificates for any series are issued, the
Corporation will cause definitive Unit Certificates for such series to be
prepared without unreasonable delay. After the preparation of such definitive
Unit Certificates, the temporary Unit Certificates shall be exchangeable
therefor upon surrender of temporary Registered Units of such series at the
Corporate Trust Office, at the expense of the Corporation and without charge to
any Holder and, in the case of Unregistered Units, at any agency maintained for
such purpose as specified pursuant to Section 203. Upon surrender for
cancellation of any one or more temporary Unit Certificates, the Corporation
shall execute and deliver to the Trustee, the Warrant Agent and/or the Agent,
and the Trustee, the Warrant Agent and/or the Agent shall authenticate,
countersign, execute on behalf of the Holder and deliver, as appropriate, in
exchange therefor definitive Unit Certificates of the same series of like tenor,
of authorized denominations and evidencing a like number of Units as the
temporary Unit Certificate or Certificates so surrendered. Until so exchanged,
the temporary Unit Certificates of any series shall in all respects evidence the
same benefits and the same obligations under any Debt Securities, Prepaid
Purchase Contracts, Warrants and Purchase Contracts constituting parts of such
Units, the Indenture, the Warrant Agreement and this Agreement as definitive
Unit Certificates of such series, unless otherwise specified pursuant to Section
203.

               Section 208. Registration of Transfer and Exchange; Global Units.
The Agent shall keep at its Corporate Trust Office for each series of Registered
Units a register (the register maintained in such office being herein referred
to as the "Purchase Contract Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the registration of
Registered Purchase Contracts, if any, constituting a part of such series and of
transfers of such Purchase Contracts (the Agent, in such capacity, the "Purchase
Contract Registrar").

               At the option of the Holder thereof, Registered Units of any
series (other than a global Registered Unit, except as set forth below) may be
transferred or exchanged for a Registered Unit or Registered Units of such
series having authorized denominations evidencing the number of Units
transferred or exchanged, upon surrender of such Registered Units to be so
transferred or exchanged at the Corporate Trust Office of the Agent upon
payment, if the Corporation shall so require, of the charges hereinafter
provided. If the Units of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 203, at the
option of the Holder thereof, Unregistered Units of such series may be exchanged
for Registered Units of such series having authorized denominations and
evidencing the number of Units transferred or exchanged, upon surrender of such
Unregistered Units to be so transferred or exchanged at the Corporate Trust
Office of the Agent and upon payment, if the Corporation shall so require, of
the charges hereinafter provided. At the option of the Holder thereof, if
Unregistered Units of any series are issued in more than one authorized
denomination, except as otherwise specified pursuant to Section 203, such
Unregistered Units may be exchanged for Unregistered Units of such series having
authorized denominations evidencing the number of Units exchanged, upon
surrender of such Unregistered Units to be so exchanged at the Corporate Trust
Office of the Agent or as specified pursuant to Section 203, and upon payment,
if the Corporation shall so require, of the charges hereinafter provided. Unless
otherwise specified pursuant to Section 203, Registered Units of any series may
not be exchanged for Unregistered Units of such series. Whenever any Units are
so surrendered for transfer or exchange, the Corporation shall execute, and the
Trustee, Warrant Agent and/or the Agent, as appropriate, shall authenticate,
countersign or execute, as the case may be, and deliver the Units which the
Holder making the transfer or exchange is entitled to receive. All Units
(including the Securities constituting part of such Units) surrendered upon any
exchange or transfer provided for in this Agreement shall be promptly cancelled
and disposed of by the Agent and the Agent will deliver a certificate of
disposition thereof to the Corporation and to the Trustee and the Warrant Agent,
as applicable.

               Unregistered Units shall be transferable by delivery.

               Subject to Section 212, if the Corporation shall establish
pursuant to Section 203 that the Units of a series are to be evidenced by one or
more Global Units, then the Corporation shall execute and the Agent, Warrant
Agent and Trustee shall, in accordance with this Section and Section 206,
countersign, authenticate and execute, as appropriate, and deliver one or more
global Unit Certificates that (i) shall evidence all or a portion of the Units
of such series issued in such form and not yet cancelled, (ii) in the case of
Registered Units, shall be registered in the name of the Depositary for such
Units or the nominee of such Depositary, (iii) shall be delivered by the Agent
to the Depositary for such Units or pursuant to such Depositary's instructions
and (iv) in the case of Registered Units, shall bear a legend substantially to
the following effect: "Unless and until it is exchanged in whole or in part for
Units in definitive registered form, this Unit Certificate may not be
transferred except as a whole by the Depositary to the nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary." Whenever Global Units of any series are
exchanged for Definitive Units of such series or whenever Definitive Units of
any series are exchanged for Global Units of such series, the Agent shall cause,
as applicable: (i) Schedule A of the Global Debt Security, if any, to be
endorsed to reflect any increase or decrease, as the case may be, in the
principal amount of Debt Securities, if any, that are comprised by Global Units
as a result of such exchange, (ii) Schedule A of the Global Warrant, if any, to
be endorsed to reflect any increase or decrease, as the case may be, in the
number of Warrants, if any, that are comprised by the Global Units as a result
of such exchange, (iii) Schedule A of the Global Purchase Contract, if any, to
be endorsed to reflect any increase or decrease, as the case may be, in the
number of Purchase Contracts, if any, that are comprised by Global Units as a
result of such exchange and (iv) Schedule A of the Global Prepaid Purchase
Contract, if any, to be endorsed to reflect any increase or decrease, as the
case may be, in the number of Prepaid Purchase Contracts, if any, that are
comprised by Global Units as a result of such exchange, whereupon such number of
Global Units shall be decreased or increased for all purposes by the number so
exchanged, as noted.

               All Unit Certificates authenticated, countersigned and executed
upon any registration of transfer or exchange of a Unit Certificate shall
evidence the ownership of the principal amount of Debt Securities, if any,
specified on the face thereof, the number of Warrants, if any, specified on the
face thereof and the number of Prepaid Purchase Contracts, if any, specified on
the face thereof and the rights and obligations of the Holder and the
Corporation under the number of Purchase Contracts, if any, specified on the
face thereof and shall be entitled to the same benefits, and be subject to the
same obligations, under the Indenture, the Warrant Agreement and this Agreement
as the Units evidenced by the Unit Certificate surrendered upon such
registration of transfer or exchange.

               Every Unit Certificate presented or surrendered for registration
of transfer or for exchange shall (if so required by the Corporation or the
Agent) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Corporation and the Agent, duly executed by the
Holder thereof or his attorney duly authorized in writing.

               No service charge shall be made for any transfer or exchange of a
Unit, but the Corporation and the Agent may require payment from the Holder of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Units, other than
any exchanges pursuant to Section 209 not involving any transfer.

               Notwithstanding the foregoing, and subject to Section 2.8 of the
Indenture, the Corporation shall not be obligated to execute and deliver to the
Trustee, the Warrant Agent or the Agent, and none of the Trustee, under the
terms of the Indenture, the Warrant Agent, under the terms of the Warrant
Agreement, or the Agent hereunder shall be obligated to authenticate,
countersign or execute on behalf of the Holder any Unit Certificate presented or
surrendered for registration of transfer or for exchange of any Debt Securities,
Prepaid Purchase Contracts, Warrants or Purchase Contracts evidenced thereby or
any Unit Certificate evidencing a Definitive Unit to be issued in exchange for
interests in Global Units or to reflect any increase or decrease in a Global
Unit, Global Debt Security, Global Warrant, Global Purchase Contract or Global
Prepaid Purchase Contract (i) during the period beginning any time on or after
the opening of business 15 days before the day of mailing of a notice of
redemption or of any other exercise of any right held by the Corporation with
respect to the Unit (or any Security constituting a part of the Units of such
series) and ending at the close of business on the day of the giving of such
notice, (ii) that evidences or would evidence any such Unit or Security selected
or called for redemption or with respect to which such right has been exercised
or (iii) at any given date, if such date is on or after any date that is after
the Settlement Date or the date of redemption, as applicable, with respect to
the Purchase Contracts, if any, evidenced or to be evidenced by such Unit
Certificate (or at any time on or after the last exercise date with respect to
any Warrant constituting a part of such Unit), except with respect to any
Registered Debt Securities or portions thereof that remain or will remain
Outstanding following such Settlement Date or date of redemption (or such last
exercise date) or (iv) at any other date specified pursuant to Section 203.

               Section 209. Mutilated, Destroyed, Lost and Stolen Unit
Certificates. If any mutilated Unit Certificate is surrendered to the Agent, the
Corporation shall execute and deliver to the Trustee, the Warrant Agent and/or
the Agent, as appropriate, and the Trustee, the Warrant Agent and/or the Agent
shall authenticate, countersign, execute on behalf of the Holder and deliver, as
appropriate, in exchange therefor new Securities comprised by Units of the same
series, of like tenor, and evidenced by a new Unit Certificate evidencing the
same number of Units and bearing a number not contemporaneously outstanding.

               If there shall be delivered to the Corporation and the Trustee,
the Warrant Agent and/or the Agent, as appropriate, (i) evidence to their
satisfaction of the destruction, loss or theft of any Unit Certificate and (ii)
such security or indemnity as may be required by them to hold each of them and
any agent of any of them harmless, then, in the absence of notice to the
Corporation and the Trustee, the Warrant Agent and/or the Agent, as appropriate,
that such Unit Certificate has been acquired by a bona fide purchaser, the
Corporation shall execute and deliver to the Trustee, the Warrant Agent and/or
the Agent, as appropriate, and the Trustee (in accordance with the provisions of
the Indenture), the Warrant Agent (in accordance with the provisions of the
Warrant Agreement) and/or the Agent (in accordance with the provisions hereof)
shall authenticate, countersign, execute on behalf of the Holder and deliver to
the Holder, as appropriate, in lieu of any such destroyed, lost or stolen Unit
Certificate, new Securities comprised by Units of the same series, of like
tenor, and evidenced by a new Unit Certificate evidencing the same number of
Units and bearing a number not contemporaneously outstanding.

               Unless otherwise specified pursuant to Section 203,
notwithstanding the foregoing, the Corporation shall not be obligated to execute
and deliver to the Trustee, the Warrant Agent or the Agent, and none of the
Trustee (under the Indenture), the Warrant Agent (under the Warrant Agreement),
or the Agent shall be obligated to authenticate, countersign or execute on
behalf of the Holder, or deliver to the Holder, a new Unit Certificate (or any
Security constituting a part of such Unit) (i) during the period beginning any
time on or after the opening of business 15 days before the day of mailing of a
notice of redemption or of any other exercise of any right held by the
Corporation with respect to the Unit (or any Security constituting a part of
such Unit) and ending at the close of business on the day of the giving of such
notice, (ii) that evidences any Unit or Purchase Contracts selected or called
for redemption or with respect to which such right has been exercised, (iii) at
any given date, if such date is on or after the Settlement Date or date of
redemption, as applicable, with respect to any Purchase Contracts evidenced by
such Unit Certificate (or at any time on or after the last exercise date with
respect to any Warrant constituting a part of such Unit), except with respect to
any Registered Debt Security or portion thereof evidenced by such Unit
Certificate that remains or will remain Outstanding following such Settlement
Date or date of redemption (or such last exercise date) or (iv) at any other
date specified pursuant to Section 203. In lieu of delivery of a new Unit
Certificate, upon satisfaction of the applicable conditions specified in clauses
(i) and (ii) of the preceding paragraph, the Agent shall deliver or cause to be
delivered on the applicable Settlement Date, redemption date or exercise date
(i) in respect of Purchase Contracts, Warrants or Debt Securities constituting a
part of the Units evidenced by such Unit Certificate that are selected or called
for redemption, the redemption price of such Purchase Contracts, Warrants or
Debt Securities or (ii) in respect of Purchase Contracts or Warrants
constituting a part of the Units evidenced by such Unit Certificate with respect
to which a Cash Settlement or Debt Security Settlement (or any equivalent manner
of settlement) has taken place, (x) the Purchase Contract Property or Warrant
Property (or cash value thereof), purchase price, cash settlement value,
Settlement Amount or other amount, as the case may be, deliverable with respect
to such Purchase Contracts or Warrants (and, in the case of an effective Cash
Settlement (or any equivalent manner of settlement), the related Debt
Securities) or (y) if a Purchase Contract Default or any default under the
Warrant Agreement or Warrant has occurred by virtue of the Corporation's having
failed to deliver the Purchase Contract Property or Warrant Property (or cash
value thereof), purchase price, cash settlement value, Settlement Amount or
other amount, as the case may be, deliverable against tender by the Agent of the
purchase price, Purchase Contract Property (or the cash value thereof) or other
Settlement Amount, exercise price or other amount, as the case may be, such
purchase price, Purchase Contract Property (or cash value thereof) or Settlement
Amount or other amount, if any, received by the Agent from the Holder in respect
of the Settlement of such Purchase Contracts or exercise of such Warrants or in
respect of principal with respect to the related Debt Securities received by the
Agent.

               Upon the issuance of any new Unit Certificate under this Section,
the Corporation and the Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.

               Every new Unit Certificate executed pursuant to this Section in
lieu of any destroyed, lost or stolen Unit Certificate shall constitute an
original additional contractual obligation of the Corporation and of the Holder
(with respect to any Purchase Contracts constituting a part of the Units
evidenced thereby), whether or not the destroyed, lost or stolen Unit
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Unit Certificates
delivered hereunder.

               The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Unit
Certificates.

               Section 210. Persons Deemed Owners. Prior to due presentment of a
Unit Certificate of any series for registration of transfer, the Corporation,
the Trustee, the Warrant Agent, the Collateral Agent and the Agent, as
appropriate, and any agent of the Corporation, the Trustee, the Warrant Agent,
the Collateral Agent or the Agent, as appropriate, may treat the Person in whose
name any Registered Security evidenced by such Unit Certificate is registered
and, with respect to any Unregistered Security constituting a part of the Units
evidenced by such Unit Certificate, the bearer thereof, as the owner of the
Units evidenced thereby for all purposes whatsoever, whether or not payment with
respect to any Security constituting a part of the Units evidenced thereby shall
be overdue and notwithstanding any notice to the contrary. None of the
Corporation, the Trustee, the Warrant Agent, the Agent, the Collateral Agent or
any agent of the Corporation, the Trustee, the Warrant Agent, the Collateral
Agent or the Agent shall be affected by notice to the contrary.

               Section 211. Cancellation. Subject to Section 307, all Unit
Certificates surrendered for payment, and all Unit Certificates surrendered for
redemption of any Debt Securities, Prepaid Purchase Contracts or Purchase
Contracts evidenced thereby, exercise of any Warrants evidenced thereby,
termination or settlement of any Purchase Contracts evidenced thereby, delivery
of Purchase Contract Property or registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, the Warrant Agent or the
Agent, as appropriate, be delivered to the Trustee, the Warrant Agent and/or the
Agent, as appropriate, and, if not already cancelled, any Debt Securities,
Prepaid Purchase Contracts, Warrants or Purchase Contracts evidenced by such
Units shall be promptly cancelled by the Trustee, the Warrant Agent and/or the
Agent, as appropriate. The Corporation may at any time deliver to the Trustee,
the Warrant Agent and/or the Agent, as appropriate, for cancellation any Unit
Certificates previously authenticated, countersigned, executed and delivered
hereunder, under the Warrant Agreement and under the Indenture, which the
Corporation may have acquired in any manner whatsoever, and all Unit
Certificates so delivered shall, upon Issuer Order of the Corporation, be
promptly cancelled by the Trustee, Warrant Agent and/or the Agent, as
appropriate. No Unit Certificates shall be authenticated, countersigned and
executed in lieu of or in exchange for any Unit Certificates cancelled as
provided in this Section, except as permitted by this Agreement. All cancelled
Unit Certificates held by the Agent shall be disposed of in accordance with its
customary procedures and a certificate of their disposition shall be delivered
by the Agent to the Corporation, unless by Issuer Order the Corporation shall
direct that cancelled Unit Certificates be returned to it.

               If the Corporation or any Affiliate of the Corporation shall
acquire any Unit Certificate, such acquisition shall not operate as a
cancellation of such Unit Certificate unless and until such Unit Certificate is
delivered to the Trustee, the Warrant Agent and/or the Agent, as appropriate,
for the purpose of cancellation.

               Section 212. Exchange of Global Units and Definitive Units. In
the case of Registered Units, Holders of Global Units of any series shall
receive Definitive Units of such series in exchange for interests in such Global
Units if DTC notifies the Corporation that it is unwilling or unable to continue
as Depositary with respect to the Global Units of such series or if at any time
it ceases to be a clearing agency under the Exchange Act, and a successor
Depositary registered as a clearing agency under the Exchange Act is not
appointed by the Corporation within 90 days after receipt of such notice or
after it becomes aware that DTC has ceased to be such a clearing agency.

               If so provided pursuant to Section 203, interests in such Global
Units may also be transferred or exchanged for Definitive Units upon the request
of the Depositary to the Trustee, the Warrant Agent and/or the Agent, as
appropriate, to authenticate, countersign and execute, as the case may be, Unit
Certificates representing Definitive Units (such request being referred to
herein as an "Optional Definitive Unit Request").

               Definitive Units exchanged for interests in Global Units pursuant
to this Section 212 shall be denominated in the amounts and registered in the
name of such Person or Persons as the Depositary shall instruct the Agent, the
Warrant Agent and the Trustee, as appropriate.

               If so specified pursuant to Section 203, Holders of Definitive
Units may transfer or exchange such Definitive Units for interests in Global
Units by depositing the Unit Certificates evidencing such Definitive Units with
the Agent and requesting the Agent, the Warrant Agent and the Trustee, as
appropriate, to effect such exchange. The Agent shall notify the Depositary of
any such exchange and, upon delivery to the Agent, the Warrant Agent and the
Trustee, as appropriate, of the Unit Certificates evidencing the Definitive
Units to be so transferred or exchanged, the Agent shall take all actions
required with respect to any Global Securities evidenced by such Global Units
and Unit Certificates evidencing the remaining Definitive Units, if any, will be
issued in accordance with Section 208.



                                 ARTICLE THREE

                The Purchase Contracts; Settlement of Warrants

               Section 301. Form and Execution of Purchase Contracts; Temporary
Purchase Contracts. (a) Purchase Contracts of each series shall be substantially
in the forms attached as Exhibit A, as appropriate, or in such form (not
inconsistent with this Agreement) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to rather than set forth in a Board Resolution, an
Officer's Certificate detailing such establishment, in each case, which may be
included in any Board Resolution or Officer's Certificate made pursuant to this
Agreement) or in one or more agreements supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Agreement. The Purchase Contracts may have
imprinted or otherwise reproduced thereon such letters, numbers or other marks
of identification or designation and such legends or endorsements as the
officers of the Corporation executing the same may approve (execution thereof to
be conclusive evidence of such approval) and that are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto, or with any rule or
regulation of any SRO on which the Purchase Contracts of such series may be
listed or quoted, or of any securities depository, or to conform to general
usage. Purchase Contracts shall be signed on behalf of the Corporation by the
chairman or vice chairman of the Board of Directors, the president, the chief
financial officer, the treasurer or any managing director of the Corporation or
such other person specifically designated by the Board of Directors or the
Executive Committee thereof to execute Purchase Contracts, which signature may
or may not be attested by the secretary or an assistant secretary of the
Corporation. The signature of any of such officers may be either manual or
facsimile. Typographical and other minor errors or defects in any such signature
shall not affect the validity or enforceability of any Purchase Contract that
has been duly countersigned and delivered by the Agent.

               (b) In case any officer of the Corporation who shall have signed
a Purchase Contract, either manually or by facsimile signature, shall cease to
be such officer before such Purchase Contract shall have been countersigned and
delivered by the Agent to the Corporation or delivered by the Corporation, such
Purchase Contract nevertheless may be countersigned and delivered as though the
person who signed such Purchase Contract had not ceased to be such officer of
the Corporation; and a Purchase Contract may be signed on behalf of the
Corporation by any person who, at the actual date of the execution of such
Purchase Contract, shall be a proper officer of the Corporation to sign such
Purchase Contract, although at the date of the execution of this Agreement any
such person was not such officer.

               (c) Pending the preparation of final Purchase Contracts of any
series, the Corporation may execute and the Agent shall countersign and deliver
temporary Purchase Contracts (printed, lithographed, typewritten or otherwise
produced, in each case in form satisfactory to the Agent). Such temporary
Purchase Contracts shall be issuable substantially in the form of the final
Purchase Contracts but with such omissions, insertions and variations as may be
appropriate for temporary Purchase Contracts, all as may be determined by the
Corporation with the concurrence of the Agent. Such temporary Purchase Contracts
may contain such reference to any provisions of this Agreement as may be
appropriate. Every such temporary Purchase Contract shall be executed by the
Corporation and shall be countersigned by the Agent upon the same conditions and
in substantially the same manner, and with like effect, as the final Purchase
Contracts. Without unreasonable delay, the Corporation shall execute and shall
furnish final Purchase Contracts and thereupon such temporary Purchase Contracts
may be surrendered in exchange therefor without charge, and the Agent shall
countersign and deliver in exchange for such temporary Purchase Contracts final
Purchase Contracts evidencing a like aggregate number of Purchase Contracts of
the same series and of like tenor as those evidenced by such temporary Purchase
Contracts. Until so exchanged, such temporary Purchase Contracts shall be
entitled to the same benefits under this Agreement as final Purchase Contracts.

               Section 302.  Number Unlimited; Issuable in Series.  (a)  The
aggregate number of Purchase Contracts that may be delivered under this
Agreement is unlimited.

               (b) The Purchase Contracts may be issued in one or more series.
There shall be established in or pursuant to one or more Board Resolutions (and
to the extent established pursuant to rather than set forth in a Board
Resolution, in an Officer's Certificate detailing such establishment) or
established in one or more agreements supplemental hereto, prior to the initial
issuance of Purchase Contracts of any series:

               (1) the designation of the Purchase Contracts of the series,
         which shall distinguish the Purchase Contracts of the series from the
         Purchase Contracts of all other series;

               (2) any limit upon the aggregate number of the Purchase Contracts
         of the series that may be countersigned and delivered under this
         Agreement (except for Purchase Contracts countersigned and delivered
         upon registration of transfer of, or in exchange for, or in lieu of,
         other Purchase Contracts of the series);

               (3) the specific property (the "Purchase Contract Property") used
         to determine the amount payable upon settlement of the Purchase
         Contracts of the series, and the amount of such property (or the method
         for determining the same);

               (4) whether the Purchase Contracts of the series provide for the
         purchase by the Corporation and the sale by the Holder or the sale by
         the Corporation and the purchase by the Holder of the Purchase Contract
         Property;

               (5) in the case of Purchase Contracts that obligate the
         Corporation to sell, and the Holder to purchase, Purchase Contract
         Property, the Purchase Price at which and, if other than U.S. Dollars,
         the coin or currency or composite currency with which the Purchase
         Contract Property is to be purchased by the Holder upon settlement of
         the Purchase Contracts of the series (or the method for determining the
         same) and whether the Purchase Price for such Purchase Contracts may be
         paid in cash or by the exchange of any other security of the
         Corporation, or both, or otherwise;

               (6) in the case of Purchase Contracts that obligate the
         Corporation to purchase, and the Holders to sell, Purchase Contract
         Property, the Settlement Amount for the Purchase Contracts of the
         series (or the method for determining the same) and, if other than U.S.
         Dollars, the coin or currency or composite currency in which such
         Settlement Amount is to be paid;

               (7) whether the settlement of the Purchase Contracts of the
         series is to be in cash or by delivery of the Purchase Contract
         Property, or otherwise, and the method of settlement of the Purchase
         Contracts of the series;

               (8) the specific date or dates on which the Purchase Contracts
         will be settled, whether the settlement may be accelerated by the
         Corporation or the Holders thereof and, if so, the initial accelerated
         settlement date, the minimum number of Purchase Contracts that may be
         accelerated and the minimum number of Purchase Contracts greater than
         zero that must remain Outstanding immediately following such
         acceleration;

               (9) whether the Purchase Contracts of the series will be in
         registered form ("Registered Purchase Contracts") or bearer form
         ("Bearer Purchase Contracts") or both;

               (10) whether any Purchase Contracts of the series will be issued
         in global form or definitive form or both, and whether and on what
         terms (if different from those set forth herein) Purchase Contracts in
         one form may be converted into or exchanged for Purchase Contracts in
         the other form;

               (11) any agents, depositaries, authenticating or paying agents,
         transfer agents or registrars or any determination or calculation
         agents or other agents with respect to Purchase Contracts of the
         series;

               (12) whether and on what terms the Purchase Contracts of the
         series may be separated from the other components of the Units of which
         the Purchase Contracts are a component;

               (13) whether the Purchase Contracts of such series will be
         subject to redemption by the Corporation and, if so, the initial
         redemption date, the minimum number of Purchase Contracts that may be
         redeemed and the minimum number of Purchase Contracts greater than zero
         that must remain Outstanding immediately following such redemption; and

               (14) any other terms of the Purchase Contracts of the series
         (which terms shall not be inconsistent with the provisions of this
         Agreement).

               (c) All Purchase Contracts of any one series shall be
substantially identical, except as may otherwise be provided by or pursuant to
the Board Resolution or Officer's Certificate referred to above or as set forth
in any such agreement supplemental hereto. All Purchase Contracts of any one
series need not be issued at the same time and may be issued from time to time,
consistent with the terms of this Agreement, if so provided by or pursuant to
such Board Resolution, such Officer's Certificate or in any such agreement
supplemental hereto.

         Section 303. Countersignature, Execution on Behalf of Holder and
Delivery of Purchase Contracts. (a) The Corporation may deliver Purchase
Contracts of any series executed by the Corporation to the Agent for
countersignature and execution on behalf of the Holders, together with the
applicable documents referred to below in this Section, and the Agent shall
thereupon countersign, execute on behalf of the Holders and deliver such
Purchase Contracts to or upon the order of the Corporation (contained in the
Issuer Order referred to below in this Section) or pursuant to such procedures
acceptable to the Agent as may be specified from time to time by an Issuer
Order. If provided for in such procedures, such Issuer Order may authorize
countersignature, execution on behalf of the Holders and delivery pursuant to
oral instructions from the Corporation or its duly authorized agent, which
instructions shall be promptly confirmed in writing. In countersigning such
Purchase Contracts, executing such Purchase Contracts on behalf of the Holders
and accepting the responsibilities under this Agreement in relation to the
Purchase Contracts, the Agent shall be entitled to receive (in the case of
subparagraphs 2, 3 and 4 below only at or before the time of the first request
of the Corporation to the Agent to countersign and execute on behalf of the
Holders Purchase Contracts in a particular form) and shall be fully protected in
relying upon, unless and until such documents have been superseded or revoked:

               (1) an Issuer Order requesting such countersignature and
         execution and setting forth delivery instructions if the Purchase
         Contracts are not to be delivered to the Corporation;

               (2) any Board Resolution, Officer's Certificate and/or executed
         supplemental agreement pursuant to which the forms and terms of the
         Purchase Contracts were established;

               (3) an Officer's Certificate setting forth the forms and terms of
         the Purchase Contracts, stating that the form or forms and terms of
         such Purchase Contracts have been established pursuant to Sections 301
         and 302 and comply with this Agreement, and covering such other matters
         as the Agent may reasonably request; and

               (4) At the option of the Corporation, either an Opinion of
         Counsel or a letter addressed to the Agent permitting it to rely on an
         Opinion of Counsel, substantially to the effect that:

                     (i)   the forms of the Purchase Contracts have been duly
                  authorized and established in conformity with the provisions
                  of this Agreement;

                     (ii) the terms of the Purchase Contracts have been duly
                  authorized and established in conformity with the provisions
                  of this Agreement and certain terms of the Purchase Contracts
                  have been established pursuant to a Board Resolution, an
                  Officer's Certificate or a supplemental agreement in
                  accordance with this Agreement, and when such other terms as
                  are to be established pursuant to procedures set forth in an
                  Issuer Order shall have been established, all terms will have
                  been duly authorized by the Corporation and will have been
                  established in conformity with the provisions of this
                  Agreement; and

                     (iii) when the Purchase Contracts have been executed by the
                  Corporation and by the Agent on behalf of the Holders and
                  countersigned by the Agent in accordance with the provisions
                  of this Agreement and delivered to and duly paid for by the
                  purchasers thereof, subject to such other conditions as may be
                  set forth in such opinion of counsel, they will have been duly
                  issued under this Agreement and will be valid and legally
                  binding obligations of the Corporation, enforceable in
                  accordance with their respective terms, and will be entitled
                  to the benefits of this Agreement.


               In rendering such opinions, such counsel may qualify any opinions
as to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the State of New
York and the federal law of the United States, upon opinions of other counsel
(copies of which shall be delivered to the Agent), who shall be counsel
reasonably satisfactory to the Agent, in which case the opinion shall state that
such counsel believes he and the Agent are entitled so to rely. Such counsel may
also state that, insofar as such opinion involves factual matters, he has
relied, to the extent he deems proper, upon certificates of officers of the
Corporation and its subsidiaries and certificates of public officials.

               (b) The Agent shall have the right to decline to countersign,
execute on behalf of the Holders and deliver any Purchase Contract under this
Section if the Agent, being advised by counsel, determines that such action may
not lawfully be taken by the Corporation or if the Agent in good faith by its
board of directors or board of trustees determines that such action would expose
the Agent to personal liability to existing registered or beneficial holders of
Purchase Contracts or would affect the Agent's own rights, duties or immunities
under the Purchase Contracts, this Agreement or otherwise.

               (c) If the Corporation shall establish pursuant to Section 302
that the Purchase Contracts of a series are to be evidenced by one or more
Global Purchase Contracts, then unless otherwise agreed between the Corporation
and the Agent the Corporation shall execute and the Agent shall, in accordance
with this Section and the Issuer Order with respect to such series, countersign,
execute on behalf of the Holders and deliver one or more Global Purchase
Contracts that (i) shall evidence all or a portion of the Purchase Contracts of
such series issued in such form and not yet cancelled, (ii) in the case of
Registered Purchase Contracts, shall be registered in the name of the Depositary
for such Purchase Contracts or the nominee of such Depositary, (iii) shall be
delivered by the Agent to such Depositary or pursuant to such Depositary's
instructions and (iv) in the case of Registered Purchase Contracts, shall bear a
legend substantially to the following effect: "Unless and until it is exchanged
in whole or in part for Purchase Contracts in definitive registered form, this
Purchase Contract may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary."

               (d) If so required by applicable law, each Depositary for a
series of Registered Purchase Contracts must, at the time of its designation and
at all times while it serves as Depositary, be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and any other applicable
statute or regulation.

               (e) Each Purchase Contract shall be dated the date of its
countersignature. A Purchase Contract shall not be valid for any purpose, unless
and until such Purchase Contract has been executed by the Agent on behalf of the
Holder and countersigned by the manual signature of an authorized officer of the
Agent. Such countersignature by an authorized officer of the Agent upon any
Purchase Contract executed by the Corporation in accordance with this Agreement
shall be conclusive evidence that the Purchase Contract so countersigned has
been duly delivered and issued hereunder.

               Section 304. Further Provisions Relating to Issuance of Purchase
Contracts. Purchase Contracts may be executed by the Corporation and delivered
to the Agent upon the execution of this Agreement or from time to time
thereafter and in connection with exchanges, substitutions and transfers of
Units of any series. Subsequent to the original issuance of the Purchase
Contracts, the Agent shall, subject to the conditions set forth in this Article
and Article Two, countersign and execute on behalf of the Holder Purchase
Contracts issued in exchange or substitution for or upon transfer of Unit
Certificates evidencing one or more previously countersigned and executed
Unsettled Purchase Contracts evidenced by the Unit Certificates to be exchanged,
substituted for or transferred.

               Section 305. Purchase of Purchase Contract Property; Optional
Acceleration of Purchase Obligations; Authorization of Agent by Holder;
Transferees Bound. (a) Unless otherwise specified pursuant to Section 302, the
Unsettled Purchase Contracts of any series will either (i) obligate the Holders
thereof to purchase, and the Corporation to sell or deliver the cash value of,
Purchase Contract Property or (ii) obligate the Corporation to purchase, and the
Holders thereof to sell or deliver the cash value of, Purchase Contract
Property, in each case specified pursuant to Section 302 (or a quantity
calculated by a method specified pursuant to Section 302) on the Stated
Settlement Date at the Purchase Price specified pursuant to Section 302.

               (b) If this Section is specified as applicable pursuant to
Section 302, the Corporation may, subject to paragraph (c) of this Section, at
its sole option and in its sole discretion at any time or from time to time
(unless otherwise specified pursuant to Section 302) on not less than 30 nor
more than 60 days' written notice (an "Acceleration Notice") to the Agent and
the Holders, in the manner provided in Section 1105 and Section 1106,
respectively, accelerate the obligations of the Holders of at least the Minimum
Acceleration Amount of Unsettled Purchase Contracts to purchase or sell, as the
case may be, and of the Corporation to sell or purchase, as the case may be, on
any Accelerated Settlement Date (provided that such Accelerated Settlement Date
may not be prior to the Initial Acceleration Date), the quantity of Purchase
Contract Property specified pursuant to Section 302 for each Unsettled Purchase
Contract subject to such acceleration; provided that no such acceleration with
respect to fewer than all Unsettled Purchase Contracts shall (unless otherwise
specified pursuant to Section 302) result in fewer than the Minimum Remaining
Amount of Unsettled Purchase Contracts remaining Outstanding after such
Accelerated Settlement Date; and provided further that the Corporation shall
have the right, in its sole discretion, on or before the 10th day prior to such
Accelerated Settlement Date, to rescind any Acceleration Notice by written
notice to the Agent and written notice to the Holders pursuant to Sections 1105
and 1106 (whereupon all rights and obligations of the Corporation and the
Holders that would have arisen as a result of such Acceleration Notice shall be
of no force and effect), without prejudice to the rights of the Corporation,
including without limitation its rights to deliver an Acceleration Notice in the
future. If fewer than all Unsettled Purchase Contracts of such series are to be
accelerated to a particular Accelerated Settlement Date, the Agent shall select
from among the Unsettled Purchase Contracts such number thereof as are being
accelerated on a pro rata basis, by lot or by such other means reasonably
acceptable to the Agent, with appropriate adjustment being made to prevent the
fractional acceleration of the settlement of Purchase Contracts, such that the
settlement of Purchase Contracts are accelerated only in whole and not in part.

               (c) Each Holder of a Unit, by his acceptance thereof, authorizes
and directs the Agent to enter into, deliver and perform any Purchase Contracts
that are part of such Unit on his behalf, agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under the
Purchase Contracts evidenced by such Unit, and consents and agrees to the
provisions hereof. If the provisions of Section 306 are applicable to the Units
of any series, each Holder of a Unit of such series, by his acceptance thereof,
further covenants and agrees that, to the extent such Holder is deemed to have
elected to satisfy its obligations under any Purchase Contracts that are part of
such Unit or to pay the exercise price of any Warrants that are part of such
Unit, in either case by effecting a Debt Security Settlement as provided in
Section 306, and subject to the terms thereof, redemption payments with respect
to principal of any Debt Securities that are part of such Unit shall be applied
by the Agent in satisfaction of such Holder's obligations under such Purchase
Contract on the applicable Settlement Date or in payment of such exercise price
on the applicable exercise date.

               (d) Upon registration of transfer of a Purchase Contract of any
series, the transferee shall be bound (without the necessity of any other action
on the part of such transferee, except as may be required by the Agent pursuant
to this Article Three) under the terms of this Agreement and such Purchase
Contract, and the transferor shall be released from the obligations under the
Purchase Contract so transferred.

               (e) Each Holder of a Unit of any series, by his acceptance
thereof, authorizes the Agent to execute on his behalf any Purchase Contracts
that are part of such Unit, authorizes and directs the Agent on his behalf to
take such other action (including without limitation any actions required under
Article Five), and covenants and agrees to take such other action as may be
necessary or appropriate, or as may be required by the Agent, to effect the
provisions of this Agreement, the Units and the Purchase Contracts and appoints
the Agent as his attorney-in-fact for any and all such purposes.

               Section 306. Payment of Purchase Price. (a) Unless otherwise
specified pursuant to Section 302 (in the case of a Unit of any series
consisting of a Debt Security and a Purchase Contract that obligates the
Corporation to sell, and the Holder to purchase, Purchase Contract Property) or
Section 1.03 of the Warrant Agreement (in the case of a Unit of any series
consisting of a Debt Security and a Warrant that is a "call warrant" (as defined
in the Warrant Agreement)), the Purchase Price for any Purchase Contract
Property purchased by a Holder pursuant to such Purchase Contract shall be
payable at the Corporate Trust Office of the Agent and the exercise price for
any Warrant Property purchased by a Holder pursuant to such Warrant shall be
payable at the place or places specified in or pursuant to the Warrant
Agreement:

               (1) at the option of the Holder of the Unit of which such
         Purchase Contract or Warrant is part, after receipt by the Agent, in
         the case of the Purchase Contract, of written notice from the Holder
         not less than 10 days nor more than 20 days prior to the applicable
         Settlement Date or, in the case of the Warrant, after receipt by the
         Warrant Agent of the written exercise notice on the exercise date
         indicating the Holder's choice of cash settlement, by delivery by such
         Holder not later than 11:00 a.m., New York City time, on the Business
         Day immediately preceding the Settlement Date, in the case of the
         Purchase Contract, or on the exercise date, in the case of the Warrant,
         of the Purchase Price or exercise price, as the case may be (a "Cash
         Settlement"), to the Agent, in the case of the Purchase Contract, or
         the Warrant Agent, in the case of Warrant, in immediately available
         funds payable to or upon the order of the Corporation; or

               (2) by application of any payment received by the Agent (whether
         in its capacity as Agent, Collateral Agent, Trustee or Paying Agent)
         with respect to the principal of any Debt Security included in the Unit
         of which such Purchase Contract or Warrant constitutes a part, as
         provided in paragraph (f) of this Section (a "Debt Security
         Settlement").

A Holder of such Units who fails to provide notice to the Agent or the Warrant
Agent, as the case may be, as provided above that it will make a Cash Settlement
with respect to the settlement of a Purchase Contract or Warrants, or a Holder
of such Units who provides such notice but does not effect a Cash Settlement in
accordance with the terms of this Section 306, will be deemed to have elected to
have the Purchase Price for the Purchase Contract Property, or the exercise
price for the Warrant, paid pursuant to a Debt Security Settlement.

               (b) Notwithstanding paragraph (a) of this Section, in the case of
Purchase Contracts of any series that obligate the Corporation to sell, and the
Holders to purchase, Purchase Contract Property or in the case of Warrants that
are "call warrants," the Corporation shall not be entitled to sell any Purchase
Contract Property or Warrant Property, or receive any payment of the Purchase
Price or exercise price therefor, if the Corporation fails to deliver such
Purchase Contract Property or Warrant Property or the cash value thereof (if
specified pursuant to Section 302 or the Warrant Agreement or the applicable
Warrants) against tender by the Agent of payment therefor.

               (c) Unless otherwise specified pursuant to Section 302, to be
effective, payment with respect to a Purchase Contract or Warrant pursuant to a
Cash Settlement must be deposited with the Agent or the Warrant Agent by 11:00
a.m., New York City time, in the case of the Purchase Contract, on the Business
Day immediately preceding the Settlement Date or, in the case of a Warrant, on
the exercise date and must be made with respect to all (and not fewer than all)
of the Purchase Contracts or Warrants to be settled on such Settlement Date or
exercise date (i) included in the Definitive Units that are registered in the
name of the Person effecting Cash Settlement in the Purchase Contract Register
or Warrant Register, as the case may be, (ii) included in the Global Units that
are beneficially owned by the Person effecting Cash Settlement as specified in
the records of the direct and indirect participants of the Depositary or (iii)
in the case of Purchase Contracts or Warrants included in Unregistered
Definitive Units, owned by the Person effecting Cash Settlement, and, in the
case of (ii) and (iii) above, as certified in writing by such Person, which
certification shall be collected, in the case of (ii) above, on behalf of such
Person by the direct and indirect participants in the Depositary through which
such Person holds interests in the Global Units, and which will be provided to
the Agent or the Warrant Agent, in the case of (iii) above, by such Person or,
in the case of (ii) above, by the Depositary or any direct participant of such
Depositary, at the time payment pursuant to a Cash Settlement is deposited with
the Agent or the Warrant Agent. Any attempted Cash Settlement other than in
accordance with this Section 306 shall be deemed to have not been made and any
payments made to the Agent or the Warrant Agent by a Holder not complying with
this Section 306 shall be returned by the Agent or the Warrant Agent to such
Holder.

               (d) The Corporation shall not be obligated to deliver any
Purchase Contract Property (or the cash value thereof) with respect to a
Purchase Contract of any series that obligates the Corporation to sell, and the
Holder to purchase, Purchase Contract Property unless it shall have received
payment in full of the applicable Purchase Price for any Purchase Contract
Property to be purchased thereunder in the manner set forth herein or in any
Issuer Order relating to the issuance of the Purchase Contracts of such series.
The Corporation shall not be obligated to pay the Purchase Price or any other
Settlement Amount for any Purchase Contract Property to be purchased by the
Corporation pursuant to any Purchase Contract that obligates the Corporation to
purchase, and the Holder to sell, Purchase Contract Property unless it shall
have received such Purchase Contract Property (or the cash value thereof) or any
other Settlement Amount in the manner set forth herein or as specified pursuant
to Section 302.

               (e) In the case of Purchase Contracts that obligate the
Corporation to sell, and the Holders to purchase, Purchase Contract Property or
Warrants that are call warrants evidencing the Holder's right to purchase
Warrant Property, in each case consisting of securities in registered form, the
Agent shall cause such securities deliverable in respect of such Purchase
Contracts or Warrants, as the case may be, to be registered, in the case of
Registered Units, in the name of the Holder of such Units as set forth in the
appropriate Securities Register.

               (f) Unless a Holder of a Unit of any series has effected a Cash
Settlement in satisfaction of his obligations under any Purchase Contracts or
Warrants constituting a part of such Unit that obligate the Holder, or represent
the Holder's right, to purchase Purchase Contract Property or Warrant Property,
respectively, any payment with respect to principal of any Debt Security
evidenced by such Unit that is received by the Agent (whether in its capacity as
Agent, Collateral Agent, Trustee or Paying Agent) in connection with any Debt
Security Settlement shall be paid by the Agent to the Collateral Agent for
delivery to the Corporation in satisfaction of the Holder's obligations under
the Global Purchase Contract or Purchase Contracts or Global Warrant or Warrants
constituting a part of such Units. Any payment that is received by the Agent
(whether in its capacity as Agent, Collateral Agent, Trustee or Paying Agent)
with respect to interest on a Debt Security related to a Purchase Contract or
Warrant that has been settled in accordance with Section 306(a)(2) shall be
distributed to the Holders of Units upon surrender of the appropriate Unit
Certificate.

               (g) Except as otherwise specified pursuant to Section 302, all
payments to be made by the Holders or by the Agent (whether in its capacity as
Agent, Collateral Agent, Trustee or Paying Agent) shall be made in lawful money
of the United States of America, by certified check or wire transfer in
immediately available funds in accordance with such regulations as the Agent may
reasonably establish consistent with the provisions of this Agreement.

               (h) Any payment of the applicable Purchase Price or exercise
price deposited by a Holder hereunder with respect to a Purchase Contract or
Warrant shall be held by the Agent or Warrant Agent, as the case may be, in
custody for the benefit of the Holder and applied in satisfaction of such
Holder's obligations under such Purchase Contract or Warrant, or released and
delivered to the Holder upon the failure of the Corporation to satisfy its
settlement obligations against tender by the Agent or Warrant Agent, as the case
may be, of such payment of the applicable Purchase Price or the exercise price.

               Section 307. Delivery of Purchase Contract Property, Warrant
Property or Other Amounts. Unless otherwise specified pursuant to Section 302,
(i) in the case of Purchase Contracts obligating the Corporation to sell, and
the Holders to purchase, Purchase Contract Property or Warrants that are call
warrants, upon its receipt of payment in full of the Purchase Price or exercise
price for the Purchase Contract Property or Warrant Property purchased by any
Holder pursuant to the foregoing provisions of this Article or the Warrant
Agreement, the Corporation shall cause such Purchase Contract Property or
Warrant Property to be delivered to the Holders; and (ii) in the case of
Purchase Contracts obligating the Corporation to purchase, and the Holders to
sell, Purchase Contract Property or Warrants that are "put warrants" (as defined
in the Warrant Agreement), upon its receipt of the Purchase Contract Property,
Warrant Property, Settlement Amount or other amount, the Corporation shall cause
the Purchase Price, exercise price, Settlement Amount or other amount, as
applicable, to be delivered to the Holders, provided that in each case such
delivery shall be made only upon delivery to the Agent of the related Unit
Certificate.

               Upon receipt of any Unit Certificate, the Agent shall cancel such
Unit Certificate in accordance with Section 211 as a result of the delivery
referred to in the preceding paragraph. If any Debt Securities relating to
Closed Purchase Contracts or exercised Warrants constituting a part of Units
evidenced by such Unit Certificate remain Outstanding as a result of Cash
Settlement, the Corporation shall execute and the Trustee shall authenticate and
deliver (i) in the case of Definitive Units, to the Holder thereof, in
accordance with the terms of the Indenture, a new certificate or certificates
representing solely the principal amount of Debt Securities still Outstanding
(ii) in the case of Global Units, if a Global Debt Security not constituting
part of a Global Unit has not previously been issued by the Corporation, a
second Global Debt Security representing Debt Securities still Outstanding that
are not part of Units. If a second Global Debt Security referred to in clause
(ii) of the immediately preceding sentence has already been issued, the Agent
shall note thereon an appropriate increase in the number of Debt Securities
represented by such Global Debt Security.

               Section 308. Charges and Taxes. The Corporation shall not be
required to pay any tax or taxes that may be payable with respect to any
exchange of or substitution for a Unit Certificate or Security and the
Corporation shall not be required to issue or deliver such Unit Certificate or
such Security unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Corporation the amount of such tax or
shall have established to the satisfaction of the Corporation that such tax has
been paid. The Agent shall be under no obligation to pay any such tax.


                                 ARTICLE FOUR

                                   Remedies

               Section 401. Acceleration of Obligations. If at any time there
shall have occurred an Event of Default with respect to the Debt Securities
constituting a part of any Units that has resulted in the principal of any Debt
Securities being declared due and payable immediately pursuant to Section 5.1 of
the Indenture, then the Holders of not less than 25% of all Unsettled Purchase
Contracts constituting a part of any Units comprising Debt Securities subject to
such declaration may on behalf of all Holders of such Unsettled Purchase
Contracts by notice in writing to the Corporation and Agent declare the
obligations of such Holders to purchase or sell, as the case may be, and of the
Corporation to sell or purchase, as the case may be, the quantity of Purchase
Contract Property specified pursuant to Section 302 under each such Unsettled
Purchase Contract to be accelerated to the date of such declaration and, upon
any such declaration, such obligations shall be so accelerated. The foregoing
provision is subject to the condition that if, at any time prior to settlement
of such Purchase Contracts, the declaration with respect to Debt Securities
referred to in the immediately preceding sentence and its consequences are
rescinded and annulled in accordance with Section 5.1 of the Indenture, the
acceleration of the obligations with respect to Unsettled Purchase Contracts
referred to in the immediately preceding sentence and its consequences may be
annulled and rescinded by vote of the Holders of not less than 25% of all
affected Unsettled Purchase Contracts Outstanding.

               Section 402. Unconditional Rights Under Purchase Contracts;
Limitation on Proceedings by Holders. (a) The Holder of any Unit shall have the
right, which is absolute and unconditional, to purchase or sell, as the case may
be, Purchase Contract Property pursuant to such Purchase Contract and to
institute suit for the enforcement of such right, and such right shall not be
impaired without the consent of such Holder.

               (b) No Holder of any Unit shall have any right by virtue of or by
availing itself of any provision of this Agreement to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to this Agreement, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
hereunder, unless such Holder previously shall have given written notice to the
Agent and the Corporation of a Default and of the continuance thereof and, (i)
in the case of an Event of Default under Debt Securities or the Indenture, the
procedures (including notice to the Trustee and the Corporation) described in
Article Five of the Indenture have been complied with and (ii) in the case of a
Purchase Contract Default specified in clause (ii) of the definition thereof,
unless the Holders of not less than 25% of all affected Purchase Contracts
comprised by all Units then Outstanding shall have made written request upon the
Agent to institute such action or proceedings in its own name as Agent hereunder
and shall have offered to the Agent such reasonable indemnity as it may require
pursuant to Article Six, and the Agent for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute such
action or proceedings and no direction inconsistent with such request shall have
been given to the Agent in writing by holders of a majority of all affected
Purchase Contracts constituting parts of Units then Outstanding. Any Holder of a
Unit may then (but only then) seek to enforce the performance of the covenant or
agreement with respect to which such Purchase Contract Default exists; it being
intended and expressly covenanted by the Holder of each Unit with every other
Holder and the Agent that no Holder shall have any right by virtue of or by
availing itself of any provision of this Agreement to affect, disturb or
prejudice the rights of any other Holder, or to obtain or seek to obtain
priority over or preference to any other Holder, or to enforce any right under
this Agreement, except in accordance with this Section or the Indenture and for
the equal, ratable and common benefit of all Holders. For the protection and
enforcement of the provisions of this Section, each and every Holder of a Unit
and the Agent shall be entitled to such relief as can be given either at law or
in equity.

               Section 403. Restoration of Rights and Remedies. If any Holder of
Units has instituted any proceeding to enforce any right or remedy under this
Agreement and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to such Holder, then and in every such case,
subject to any determination in such proceeding the Corporation, the Agent, the
Trustee and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies the
Corporation, the Agent, the Trustee and such Holder shall continue as though no
such proceeding had been instituted.

               Section 404. Rights and Remedies Cumulative. Subject to Section
402, and except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Unit Certificates, no right or remedy
herein conferred upon or reserved to the Holders of Units is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

               Section 405. Delay or Omission Not Waiver. No delay or omission
of any Holder to exercise any right or remedy accruing upon any Default shall
impair any such right or remedy or constitute a waiver of any such Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.

               Section 406. Waiver of Past Defaults. The Holders of not less
than a majority of all affected Purchase Contracts evidenced by Units of all
series at the time Outstanding may on behalf of the Holders of all affected
Units waive any past Purchase Contract Default hereunder and its consequences,
except, unless theretofore cured (i) a Purchase Contract Default resulting from
the failure of the Corporation to deliver (A) in the case of Purchase Contracts
obligating the Corporation to sell, and the Holders to purchase, Purchase
Contract Property (or the cash value thereof) Purchase Contract Property (or the
cash value thereof) against tender of payment therefor or (B) in the case of
Purchase Contracts obligating the Corporation to purchase, and the Holders to
sell, Purchase Contract Property (or the cash value thereof) the applicable
Purchase Price or other Settlement Amount specified pursuant to Section 302
against tender of Purchase Contract Property or other amount specified pursuant
to Section 302 therefor or (ii) a Purchase Contract Default with respect to a
covenant or provision hereof which under Article Seven cannot be modified or
amended without approval of the Holder of each affected Purchase Contract that
is a part of an Outstanding Unit of any series. In the case of any such waiver,
the Holders, the Agent and the Corporation shall be restored to their former
positions and rights hereunder, respectively.

               Upon any such waiver, such Purchase Contract Default shall cease
to exist, for every purpose of this Agreement, but no such waiver shall extend
to any subsequent or other Purchase Contract Default or impair any right
consequent thereon unless so expressly therein provided.

               Section 407. Undertaking for Costs. All parties to this Agreement
agree, and each Holder of any Unit by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in any suit against
the Agent for any action taken, suffered or omitted by it as Agent, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Agent, to any suit instituted by any Holder
of Units, or group of Holders, holding in the aggregate more than 10% of the
Outstanding Units, or to any suit instituted by any Holder for enforcement of
the right to purchase or sell Purchase Contract Property under the Purchase
Contracts constituting a part of the Units held by such Holder or to receive
payment of the applicable Purchase Price (or other Settlement Amount that may be
specified pursuant to Section 302) with respect thereto.

               Section 408. Waiver of Stay or Extension Laws. The Corporation
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Agreement; and the Corporation (to the extent that it may lawfully do so)
each hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Agent, or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.

               Section 409. Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy or other
judicial proceeding relating to the Corporation or the property of the
Corporation or its creditors, the Agent shall be entitled and empowered, by
intervention in such proceeding or otherwise,

               (1) to file and prove a claim and to file such other papers or
               documents as may be necessary or advisable in order to have the
               claims of the Agent (including any claim for the reasonable
               compensation, expenses, disbursements and advances of the Agent,
               its agents and counsel) and of the Holders allowed in such
               judicial proceeding; and

               (2) to collect and receive any moneys or other property payable
               or deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator or other similar official in any
such proceeding is hereby authorized by each Holder to make such payments to the
Agent, and in the event that the Agent shall consent to the making of such
payments directly to the Holders, to pay to the Agent any amount due to it
hereunder; provided, however, that nothing herein shall be deemed to authorize
the Agent to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Units or the rights of any Holder thereof, or to authorize the
Agent to vote in respect of the claim of any Holder of Units in any such
proceeding.

               Section 410. Suits for Enforcement. In case a Purchase Contract
Default has occurred, has not been waived and is continuing, and subject to
receipt by the Agent of the request referred to in Section 402 or the direction
referred to in Section 411 and the security or indemnity referred to in Section
603(f), the Agent shall have the right to enforce, on behalf of the Holders, the
Purchase Contracts and the covenants and agreements of the Corporation contained
in the Purchase Contracts and in this Agreement with respect to the Purchase
Contracts and to proceed to protect and enforce such rights by appropriate
judicial proceedings to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of
any such covenant or agreement contained in this Agreement or in the Purchase
Contracts or in aid of the exercise of any power granted in this Agreement or to
enforce any other legal or equitable right vested in the Agent by this Agreement
or by law.


               All rights of action and of asserting claims under this
Agreement, or under the Units or any Securities comprised by the Units, may be
enforced by the Agent without the possession of the Units or any of the
Securities comprised by the Units or the production thereof on any trial or
other proceedings relative thereto, and any such actions or proceedings
instituted by the Agent shall be brought in its own name as agent and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Agent, each predecessor Agent and their respective agents
and attorneys, shall be for the ratable benefit of the Holders of the Units or
Securities in respect of which such action was taken.

               Section 411. Control by Holders. The Holders of a majority of
affected Outstanding Purchase Contracts constituting a part of any Outstanding
Units shall have the right to direct the time, method, and place of conducting
any proceeding for any remedy available to the Agent, or exercising any power
conferred on the Agent with respect to such Purchase Contracts by this
Agreement; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Agreement and provided further
that (subject to the provisions of Section 601) the Agent shall have the right
to decline to follow any such direction if the Agent, being advised by counsel,
shall determine that the action or proceeding so directed may not lawfully be
taken or if the Agent in good faith by its board of directors or board of
trustees or a committee of its Responsible Officers, shall determine that the
action or proceedings so directed could involve the Agent in personal liability
or if the Agent in good faith shall so determine that the actions or
forebearances specified in or pursuant to such direction would be unduly
prejudicial to the interests of Holders of Units not joining in the giving of
said direction, it being understood that (subject to Section 601) the Agent
shall have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.

               Nothing in this Agreement shall impair the right of the Agent in
its discretion (but subject to Section 410) to take any action deemed proper by
the Agent and which is not inconsistent with such direction or directions by
Holders.


                                 ARTICLE FIVE

                    Security Interests and Collateral Agent

               Section 501. Granting of Security Interests; Rights and Remedies
of Collateral Agent; Perfection. In order to secure the observance and
performance of the covenants and agreements of the Holders of Purchase Contracts
contained herein and in such Purchase Contracts, unless otherwise specified
pursuant to Section 203:

               (a) Effective upon issuance of Units of any series consisting of
Debt Securities and Purchase Contracts, the Holders thereof acting through the
Agent, as their attorney-in-fact, shall be deemed to grant, sell, convey,
assign, transfer and pledge unto the Collateral Agent, as agent of and for the
benefit of the Corporation, as collateral security for the performance when due
by such Holders of their respective obligations hereunder and under the Purchase
Contracts constituting a part of such Units, a security interest in and to, and
a lien upon and right of set-off (the "Pledge") against, all of their right,
title and interest in and to (i) the Pledged Items; (ii) all additions to and
substitutions for such Pledged Items as may be permissible, if so specified
pursuant to Section 302; (iii) all income, proceeds and collections received or
to be received, or derived or to be derived, now or any time hereafter from or
in connection with (i) and (ii) above, and (iv) all powers and rights now owned
or hereafter acquired under or with respect to the Pledged Items (such Pledged
Items, additions, substitutions, proceeds, collections, powers and rights being
herein collectively called the "Collateral").

               (b) Prior to or concurrently with the issuance of Global Units of
any series of which Debt Securities and Purchase Contracts constitute a part,
the initial Holders and the Agent shall cause the Debt Securities constituting a
part of such Global Units to be delivered to the Collateral Agent, and, if
specified pursuant to Section 302, accompanied by an instrument of transfer
executed in blank, and the Corporation shall notify the Collateral Agent of the
Pledge and receipt of such notification shall constitute acknowledgement by the
Collateral Agent (as third party in possession or otherwise) of the Pledge and
its holding of the Collateral subject to the Pledge, in each case for purposes
of perfecting the Pledge under applicable law. Subject to the Pledge, the
Holders from time to time of the Units of which the Debt Securities constitute a
part shall have full beneficial ownership of such Debt Securities.

               (c) The Collateral Agent shall have all of the rights, remedies
and recourse with respect to the Collateral afforded a secured party by the
Uniform Commercial Code as in effect in the State of New York (whether or not
said Code is in effect in the jurisdiction where the rights and remedies are
asserted), in addition to, and not in limitation of, the other rights, remedies
and recourse afforded to the Collateral Agent by this Agreement.

               (d) Each Holder, to the extent permitted by applicable law, by
accepting Units of any series issued hereunder authorizes the Collateral Agent
to execute and file, in the name of such Holder, Uniform Commercial Code
financing or continuation statements (which may be carbon, photographic,
photostatic or other reproductions of this Agreement or of a financing statement
relating to this Agreement) which the Collateral Agent in its sole discretion
(but subject to Section 503(f)) may deem necessary or appropriate to further
perfect, or maintain the perfection of the security interests granted hereby.

               Section 502.  Distribution of Principal and Interest;
Release of Collateral.  Unless otherwise specified pursuant to Section 203:

               (a) All payments of principal of, or interest on, any Pledged
Items received by the Collateral Agent pursuant to Section 306(f) shall be paid
by the Collateral Agent in same day funds no later than 2:00 p.m., New York City
time, on the Business Day such payments are received by the Collateral Agent or,
if received on a day that is not a Business Day or after 12:00 noon, New York
City time, on a Business Day, then such payment shall be made no later than 9:00
am., New York City time, on the next succeeding Business Day to the Corporation,
in full satisfaction of the respective obligations of the Holders of the Units
of which such Pledged Items are a part under the Purchase Contracts forming a
part of such Units. Any such payments in excess of such obligations of the
Holders shall be promptly paid to the Agent to the account designated by it for
such purpose. All such payments received by the Agent as provided herein shall
be applied by the Agent pursuant to the provisions hereof.

               (b) Upon notice to the Collateral Agent by the Agent that one or
more Holders of Units have elected to effect Cash Settlement of their respective
obligations under the Purchase Contracts forming a part of such Units in
accordance with the terms hereof, and that either the Agent has received from
such Holders, and paid to the Corporation, the related amounts pursuant to the
terms of the Purchase Contracts and this Agreement or no such payment is
required, and that all other conditions to such Cash Settlement have been
satisfied, then the Collateral Agent shall release from the Pledge the Pledged
Items relating to such Purchase Contracts.

               Section 503. Certain Duties and Responsibilities of the
Collateral Agent. The Collateral Agent accepts its duties and responsibilities
hereunder as agent for the Corporation, on and subject to the following terms
and conditions:

               (a) The Collateral Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. No provision
of this Agreement shall be construed to relieve the Collateral Agent from
liability for its own negligent action, its own negligent failure to act, or its
own wilful misconduct, except that

               (1) the duties and obligations of the Collateral Agent with
         respect to the Units shall be determined solely by the express
         provisions of this Agreement and the Collateral Agent shall not be
         liable except for the performance of such duties and obligations as are
         specifically set forth in this Agreement, and no implied covenants or
         obligations shall be read into this Agreement against the Collateral
         Agent; and

               (2) in the absence of bad faith on its part, the Collateral Agent
         may conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon any statements,
         certificates or opinions furnished to the Collateral Agent and
         conforming to the requirements of this Agreement, but in the case of
         any such statements, certificates or opinions that by any provision
         hereof are specifically required to be furnished to the Collateral
         Agent, the Collateral Agent shall be under a duty to examine the same
         to determine whether or not they conform to the requirements of this
         Agreement.

               (b) The Collateral Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Collateral Agent,
unless it shall be proved that the Collateral Agent was negligent in
ascertaining the pertinent facts.

               (c) No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

               (d) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Collateral Agent shall be subject to the provisions
of this Section.

               (e) The Collateral Agent is acting solely as agent for the
Corporation hereunder and owes no fiduciary duties to any Person by virtue of
this Agreement.

               (f) Except as specifically provided herein, the Collateral Agent
shall not be responsible for the validity, sufficiency, collectibility or
marketability of any Collateral given to or held by it hereunder or for the
validity or sufficiency of the lien on the Collateral purported to be created
hereby and shall have no obligation to file any financing or continuation
statement with respect to the Collateral in any public office at any time or
time.

               Section 504.  Knowledge of the Collateral Agent.

               The Collateral Agent shall not be deemed to have knowledge of any
default by any person under any Purchase Contract, unless and until a
Responsible Officer of the Collateral Agent assigned to its Corporate Trustee
Administration Department shall have actual knowledge thereof or shall have
received written notice thereof from the Corporation or any Holder.

               Section 505.  Certain Rights of Collateral Agent.  Subject
to the provisions of Section 503:

               (a) the Collateral Agent may rely and shall be protected in
         acting or refraining from acting upon any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, coupon, security or other paper
         or document believed by it to be genuine and to have been signed or
         presented by the proper party or parties;

               (b) any request, direction, order or demand of the Corporation
         mentioned herein shall be sufficiently evidenced by an Officer's
         Certificate, Issuer Order or Issuer Request, and any resolution of the
         Board of Directors of the Corporation, as the case may be, may be
         sufficiently evidenced by a Board Resolution;

               (c) the Collateral Agent may consult with counsel and the written
         advice of such counsel or any Opinion of Counsel shall be full and
         complete authorization and protection with respect to any action taken,
         suffered or omitted by it hereunder in good faith and in reliance
         thereon in accordance with such advice or Opinion of Counsel;

               (d) the Collateral Agent shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, appraisal, bond, debenture, note, coupon,
         security or other paper or document;

               (e) the Collateral Agent may execute any of the powers hereunder
         or perform any duties hereunder either directly or by or through agents
         or attorneys and the Collateral Agent shall not be responsible for any
         misconduct or negligence on the part of any such agent or attorney
         appointed with due care by it hereunder; and

               (f) the Collateral Agent shall not be liable for any action taken
         or omitted by it in good faith and believed by it to be authorized or
         within the discretion, rights or powers conferred upon it by this
         Agreement.

               Section 506.  Compensation and Reimbursement.  The Corporation
agrees:

               (a) to pay to the Collateral Agent from time to time reasonable
         compensation for all services rendered by it hereunder (which
         compensation shall not be limited by any provision of law with regard
         to the compensation of a trustee of an express trust),

               (b) except as otherwise expressly provided herein, to reimburse
         the Collateral Agent and any predecessor Collateral Agent upon its
         request for all reasonable expenses, disbursements and advances
         incurred or made by the Collateral Agent in accordance with any
         provision of this Agreement (including the reasonable compensation and
         the expenses and disbursements of its agents and counsel), except any
         such expense, disbursement or advance as may be attributable to its
         negligence or bad faith; and

               (c) to indemnify the Collateral Agent and any predecessor
         Collateral Agent for, and to hold it harmless against, any loss,
         liability or expense incurred without negligence or bad faith on its
         part, arising out of or in connection with the acceptance or
         administration of this Agreement and its duties hereunder, including
         the costs and expenses of defending itself against or investigating any
         claim of liability in connection with the exercise or performance of
         any of its powers or duties hereunder.

               The obligations of the Corporation under this Section to
compensate and indemnify the Collateral Agent and any predecessor Collateral
Agent and to pay or reimburse the Collateral Agent and any predecessor
Collateral Agent for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the resignation or removal
of such Collateral Agent or predecessor Collateral Agent or the termination
hereof or of any Purchase Contract. Such additional indebtedness shall be a
senior claim to that of the Units upon all property and funds held or collected
by the Collateral Agent as such, except funds held in trust for the benefit of
the Holders of Units, and the Units are hereby subordinated to such senior
claim.

               Section 507. Corporate Collateral Agent Required: Eligibility.
There shall at all times be a Collateral Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, having, together with
its parent, a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by Federal, State or District of Columbia authority
and willing to act on reasonable terms. If such corporation, or its parent,
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Collateral Agent hereunder shall at
all times be the Agent hereunder, the Trustee and a Paying Agent under the
Indenture and the Warrant Agent under the Warrant Agreement, subject to receipt
of an Opinion of Counsel that the same Person is not precluded by law from
acting in such capacities. If at any time the Collateral Agent shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The Collateral Agent may appoint one or more sub-collateral agents with
offices or agencies in a city or cities outside the United States.

               Section 508. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Collateral Agent and no appointment of a
successor Collateral Agent pursuant to this Article shall become effective until
the acceptance of appointment by the successor Collateral Agent in accordance
with the applicable requirements of Section 509.

               (b) The Collateral Agent may resign by giving written notice
thereof to the Corporation and the Holders, in accordance with Section 1105 and
Section 1106, 60 days prior to the effective date of such resignation. The
Collateral Agent may be removed at any time upon 60 days' notice by the filing
with it of an instrument in writing signed on behalf of the Corporation and
specifying such removal and the date when it is intended to become effective. If
the instrument of acceptance by a successor Collateral Agent required by Section
509 shall not have been delivered to the Collateral Agent within 30 days after
the giving of such notice of resignation, the resigning Collateral Agent may
petition any court of competent jurisdiction for the appointment of a successor
Collateral Agent.

               (c)  If at any time

               (1) the Collateral Agent shall cease to be eligible under Section
         507, or shall cease to be eligible as Agent hereunder, as Trustee under
         the Indenture or as Warrant Agent under the Warrant Agreement, and
         shall fail to resign after written request therefor by the Corporation,
         or

               (2) the Collateral Agent shall become incapable of acting with
         respect to the Collateral or shall be adjudged a bankrupt or insolvent,
         or a receiver or liquidator of the Collateral Agent or of its property
         shall be appointed or any public officer shall take charge or control
         of the Collateral Agent or of its property or affairs for the purpose
         of rehabilitation, conservation or liquidation,

then, in any such case, the Corporation, by Board Resolution, may remove the
Collateral Agent and appoint a successor Collateral Agent.

               (d) If the Collateral Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Collateral
Agent for any cause, the Corporation, by Board Resolution, shall promptly
appoint a successor Collateral Agent or Collateral Agents (other than the
Corporation) and shall comply with the applicable requirements of Section 509.

               (e) The Corporation shall give, or shall cause such successor
Collateral Agent to give, notice of each resignation and each removal of the
Collateral Agent and each appointment of a successor Collateral Agent to all
Holders of Units in accordance with Section 1106. Each notice shall include the
name of the successor Collateral Agent and the address of its Corporate Trust
Office.

               Section 509. Acceptance of Appointment by Successor. (a) In case
of the appointment hereunder of a successor Collateral Agent, every such
successor Collateral Agent so appointed shall execute, acknowledge and deliver
to the Corporation and to the retiring Collateral Agent an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Collateral Agent shall become effective and such successor Collateral Agent,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, agencies and duties of the retiring Collateral Agent, with like
effect as if originally named as Collateral Agent hereunder; but, on the request
of the Corporation or the successor Collateral Agent, such retiring Collateral
Agent shall, upon payment of all amounts due and payable to it pursuant to
Section 506, execute and deliver an instrument transferring to such successor
Collateral Agent all the rights and powers of the retiring Collateral Agent and
shall duly assign, transfer and deliver to such successor Collateral Agent all
property and money held by such retiring Collateral Agent hereunder. Any
retiring Collateral Agent shall, nonetheless, retain a prior claim upon all
property or funds held or collected by such Collateral Agent to secure any
amounts then due it pursuant to Section 506.

               (b) Upon request of any such successor Collateral Agent, the
Corporation shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Collateral Agent all such rights,
powers and agencies referred to in paragraph (a) of this Section.

               (c) No successor Collateral Agent shall accept its appointment
unless at the time of such acceptance such successor Collateral Agent shall be
eligible under this Article.

               (d) Upon acceptance of appointment by any successor Collateral
Agent as provided in this Section, the Corporation shall give notice thereof to
the Holders of Units in accordance with Section 1106. If the acceptance of
appointment is substantially contemporaneous with the resignation of the
Collateral Agent, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 508. If the Corporation fails to
give such notice within ten days after acceptance of appointment by the
successor Collateral Agent, the successor Collateral Agent shall cause such
notice to be given at the expense of the Corporation.

               Section 510. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Collateral Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation succeeding to all or substantially all the agency
business of the Collateral Agent, shall be the successor of the Collateral Agent
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that such corporation shall be
otherwise eligible under this Article.

               Section 511. Money Held in Trust. Money held by the Collateral
Agent in trust hereunder need not be segregated from other funds held by the
Collateral Agent, except to the extent required by law. The Collateral Agent
shall be under no obligation to invest or pay interest on any money received by
it hereunder, except as otherwise agreed with the Corporation. Any interest
accrued on funds deposited with the Collateral Agent or any Paying Agent under
this Agreement shall be paid to the Corporation from time to time and the
Holders of Units (whether or not any Purchase Contracts are to be redeemed with
such funds) shall have no claim to any such interest.

                                  ARTICLE SIX

                                   The Agent

               Section 601.  Certain Duties and Responsibilities.  (a)  The
Agent undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement.

               (b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that

               (1) the duties and obligations of the Agent with respect to the
         Units shall be determined solely by the express provisions of this
         Agreement and the Agent shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, and no implied covenants or obligations shall be read into
         this Agreement against the Agent; and

               (2) in the absence of bad faith on its part, the Agent may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon any statements,
         certificates or opinions furnished to the Agent and conforming to the
         requirements of this Agreement, but in the case of any such statements,
         certificates or opinions that by any provision hereof are specifically
         required to be furnished to the Agent, the Agent shall be under a duty
         to examine the same to determine whether or not they conform to the
         requirements of this Agreement.

               (c) The Agent shall not be liable for any error of judgment made
in good faith by a Responsible Officer of the Agent, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts.

               (d) The Agent shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in number of affected Outstanding
Purchase Contracts relating to the time, method and place of conducting any
proceeding for any remedy available to the Agent, or exercising any power
conferred upon the Agent, under this Agreement.

               (e) No provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

               (f) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.

               (g) The Agent is acting solely as agent for the Corporation
hereunder and owes no fiduciary duties to any person by virtue of this
Agreement.

               Section 602. Notice of Default. Within 90 days after the
occurrence of any Purchase Contract Default of which a Responsible Officer of
the Agent assigned to its Corporate Trustee Administration Department has actual
knowledge (and except with respect to a Purchase Contract Default under the
Purchase Contracts existing on the Settlement Date, in which event, as promptly
as practicable thereafter) the Agent shall provide to all Holders of Units, in
the manner provided in Section 1106, notice of such Purchase Contract Default
hereunder, unless such Purchase Contract Default shall have been cured or
waived.

               Section 603.  Certain Rights of Agent.  Subject to the
provisions of Section 601:

               (a) the Agent may rely and shall be protected in acting or
         refraining from acting upon any resolution, certificate, statement,
         instrument, opinion, report, notice, request, direction, consent,
         order, bond, debenture, note, coupon, security or other paper or
         document believed by it to be genuine and to have been signed or
         presented by the proper party or parties;

               (b) any request, direction, order or demand of the Corporation
         mentioned herein shall be sufficiently evidenced by an Officer's
         Certificate or Issuer Order or Issuer Request and any resolution of the
         Board of Directors of the Corporation, as the case may be, may be
         sufficiently evidenced by a Board Resolution;

               (c) the Agent may consult with counsel and the written advice of
         such counsel or any Opinion of Counsel shall be full and complete
         authorization and protection with respect to any action taken, suffered
         or omitted by it hereunder in good faith and in reliance thereon in
         accordance with such advice or Opinion of Counsel;

               (d) the Agent shall not be bound to make any investigation into
         the facts or matters stated in any resolution, certificate, statement,
         instrument, opinion, report, notice, request, consent, order, approval,
         appraisal, bond, debenture, note, coupon, security or other paper or
         document, but the Agent, in its discretion, may make reasonable further
         inquiry or investigation into such facts or matters related to the
         issuance of the Debt Securities, Prepaid Purchase Contracts or
         Warrants, as the case may be, and the execution, delivery and
         performance of the Purchase Contracts as it may see fit, and, if the
         Agent shall determine to make such further inquiry or investigation, it
         shall be entitled to examine the books, records and premises of the
         Corporation, at reasonable times during normal business hours,
         personally or by agent or attorney;

               (e) the Agent may execute any of the powers hereunder or perform
         any duties hereunder either directly or by or through agents or
         attorneys and the Agent shall not be responsible for any misconduct or
         negligence on the part of any such agent or attorney appointed with due
         care by it hereunder;

               (f) the Agent shall be under no obligation to exercise any of the
         rights or powers vested in it by this Agreement at the request, order
         or direction of any of the Holders pursuant to this Agreement, unless
         such Holders shall have offered to the Agent reasonable security or
         indemnity against the costs, expenses and liabilities that might be
         incurred by it in compliance with such request or direction;

               (g) the Agent shall not be liable for any action taken or omitted
         by it in good faith and believed by it to be authorized or within the
         discretion, rights or powers conferred upon it by this Agreement; and

               (h) the Agent shall not be charged with notice or knowledge of a
         Purchase Contract Default unless a Responsible Officer of the Agent
         assigned to its Corporate Trustee Administration Department shall have
         actual knowledge thereof.

               Section 604. Not Responsible for Recitals or Issuance of Units.
The recitals contained herein, in the Indenture, in the Warrant Agreement and in
the Units, except the Trustee's, Warrant Agent's and Agent's certificates of
authentication or countersignature, shall be taken as the statements of the
Corporation, and none of the Trustee, Agent, the Warrant Agent or any
Authenticating Agent assumes any responsibility for their correctness. The Agent
makes no representations as to the validity or sufficiency of this Agreement or
of the Units. None of the Trustee, Agent, the Warrant Agent or any
Authenticating Agent shall be accountable for the use or application by the
Corporation of the proceeds with respect to Units or be responsible for
exercising any remedy hereunder on behalf of the Holders, except as expressly
provided in this Agreement.

               Section 605. May Hold Units. The Agent, the Collateral Agent, the
Trustee, the Warrant Agent, any Authenticating Agent, any Purchase Contract
Registrar or any other agent of the Corporation, the Trustee, the Warrant Agent,
or the Agent, in its individual or any other capacity, may become the owner or
pledgee of Units and may otherwise deal with the Corporation and receive,
collect, hold and retain collections from the Corporation with the same rights
it would have if it were not Authenticating Agent, Purchase Contract Registrar
or such other agent, the Trustee, the Warrant Agent, the Collateral Agent or the
Agent.

               Section 606. Money Held in Trust. Money held by the Agent in
trust hereunder need not be segregated from other funds held by the Agent,
except to the extent required by law. The Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder, except as
otherwise agreed with the Corporation. Any interest accrued on funds deposited
with the Agent or any Paying Agent under this Agreement shall be paid to the
Corporation from time to time and the Holders of Units (whether or not any
Purchase Contracts are to be redeemed with such funds) shall have no claim to
any such interest.

               Section 607.  Compensation and Reimbursement.  The Corporation
agrees:

               (a) to pay to the Agent from time to time reasonable compensation
         for all services rendered by it hereunder (which compensation shall not
         be limited by any provision of law with regard to the compensation of a
         trustee of an express trust),

               (b) except as otherwise expressly provided herein, to reimburse
         the Agent and any predecessor Agent upon its request for all reasonable
         expenses, disbursements and advances incurred or made by the Agent in
         accordance with any provision of this Agreement (including the
         reasonable compensation and the expenses and disbursements of its
         agents and counsel), except any such expense, disbursement or advance
         as may be attributable to its negligence or bad faith; and

               (c) to indemnify the Agent and any predecessor Agent for, and to
         hold it harmless against, any loss, liability or expense incurred
         without negligence or bad faith on its part, arising out of or in
         connection with the acceptance or administration of this Agreement and
         its duties hereunder, including the costs and expenses of defending
         itself against or investigating any claim of liability in connection
         with the exercise or performance of any of its powers or duties
         hereunder.

               The obligations of the Corporation under this Section to
compensate and indemnify the Agent and any predecessor Agent and to pay or
reimburse the Agent and any predecessor Agent for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the resignation or removal of such Agent or predecessor Agent or the termination
hereof or any Purchase Contract. Such additional indebtedness shall be a senior
claim to that of the Units upon all property and funds held or collected by the
Agent as such, except funds held in trust for the benefit of the Holders of
particular Units, and the Units are hereby subordinated to such senior claim.

               Section 608. Corporate Agent Required: Eligibility. There shall
at all times be an Agent hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, having, together with its parent, a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by Federal, State or District of Columbia authority and willing to
act on reasonable terms. If such corporation, or its parent, publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The Agent hereunder shall at all times be the Collateral
Agent hereunder, the Trustee under the Indenture and the Warrant Agent under the
Warrant Agreement, subject to receipt of an Opinion of Counsel that the same
Person is precluded by law from acting in such capacities. If at any time the
Agent shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article. The Agent may appoint one or more
sub-agents with offices or agencies in a city or cities outside the United
States.

               Section 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a successor
Agent pursuant to this Article shall become effective until the acceptance of
appointment by the successor Agent in accordance with the applicable
requirements of Section 610.

               (b) The Agent may resign by giving written notice thereof to the
Corporation and the Holders, in accordance with Section 1105 and Section 1106,
60 days prior to the effective date of such resignation. The Agent may be
removed at any time upon 60 days' notice by the filing with it of an instrument
in writing signed on behalf of the Corporation and specifying such removal and
the date when it is intended to become effective. If the instrument of
acceptance by a successor Agent required by Section 610 shall not have been
delivered to the Agent within 30 days after the giving of such notice of
resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.

               (c)  If at any time

               (1) the Agent shall cease to be eligible under Section 608, or
         shall cease to be eligible as Collateral Agent hereunder, Trustee under
         the Indenture or as Warrant Agent under the Warrant Agreement, and
         shall fail to resign after written request therefor by the Corporation
         or by any Holder, or

               (2) the Agent shall become incapable of acting with respect to
         the Units or shall be adjudged a bankrupt or insolvent, or a receiver
         or liquidator of the Agent or of its property shall be appointed or any
         public officer shall take charge or control of the Agent or of its
         property or affairs for the purpose of rehabilitation, conservation or
         liquidation,

then, in any such case, (i) the Corporation, by Board Resolution, may remove the
Agent and appoint a successor Agent, or (ii) any Holder who has been a bona fide
Holder of a Unit for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Agent and the appointment of a successor Agent or Agents. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Agent and appoint a successor Agent.

               (d) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Corporation, by Board Resolution, shall promptly appoint a successor Agent or
Agents (other than the Corporation) and shall comply with the applicable
requirements of Section 610. If no successor Agent shall have been so appointed
by the Corporation and accepted appointment in the manner required by Section
610, any Holder who has been a bona fide Holder of a Unit for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Agent.

               (e) The Corporation shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent to all Holders of Units in accordance with
Section 1106. Each notice shall include the name of the successor Agent and the
address of its Corporate Trust Office.

               Section 610. Acceptance of Appointment by Successor. (a) In case
of the appointment hereunder of a successor Agent, every such successor Agent so
appointed shall execute, acknowledge and deliver to the Corporation and to the
retiring Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Agent shall become effective and such
successor Agent, without any further act, deed or conveyance, shall become
vested with all the rights, powers, agencies and duties of the retiring Agent,
with like effect as if originally named as Agent hereunder; but, on the request
of the Corporation or the successor Agent, such retiring Agent shall, upon
payment of all amounts due and payable to it pursuant to Section 607, execute
and deliver an instrument transferring to such successor Agent all the rights
and powers of the retiring Agent and shall duly assign, transfer and deliver to
such successor Agent all property and money held by such retiring Agent
hereunder. Any retiring Agent shall, nonetheless, retain a prior claim upon all
property or funds held or collected by such Agent to secure any amounts then due
it pursuant to Section 607.

               (b) Upon request of any such successor Agent, the Corporation
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.

               (c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be eligible under this
Article.

               (d) Upon acceptance of appointment by any successor Agent as
provided in this Section, the Corporation shall give notice thereof to the
Holders of Units in accordance with Section 1106. If the acceptance of
appointment is substantially contemporaneous with the resignation of the Agent,
then the notice called for by the preceding sentence may be combined with the
notice called for by Section 609. If the Corporation fails to give such notice
within ten days after acceptance of appointment by the successor Agent, the
successor Agent shall cause such notice to be given at the expense of the
Corporation.

               Section 611. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the agency business of the
Agent, shall be the successor of the Agent hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation shall be otherwise eligible under this Article.
In case any Purchase Contracts shall have been countersigned and executed, but
not delivered, by the Agent then in office, any successor by merger, conversion
or consolidation to such Agent may adopt such countersignature and execution and
deliver the Purchase Contracts so countersigned and executed with the same
effect as if such successor Agent had itself countersigned and executed such
Purchase Contracts.

               Section 612. Appointment of Authenticating Agent. At any time
when any of the Units remain Outstanding the Agent may, by an instrument in
writing, appoint an Authenticating Agent or Agents with respect to the Purchase
Contracts to be authorized to act on behalf of the Agent to countersign, execute
and deliver the Purchase Contracts issued upon exchange, registration of
transfer or pursuant to Section 209 and Purchase Contracts so countersigned,
executed and delivered shall be entitled to the benefits of this Agreement and
shall be valid and obligatory for all purposes as if countersigned by the Agent
hereunder. Wherever reference is made in this Agreement to the countersignature,
execution and delivery of Purchase Contracts by the Agent or the Agent's
countersignature or execution, such references shall be deemed to include
countersignature, execution and delivery on behalf of the Agent by an
Authenticating Agent and a countersignature and execution executed on behalf of
the Agent by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Corporation and shall at all times be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, subject to supervision or examination by Federal or State
or District of Columbia authority and having, together with its parent, a
combined capital and surplus of not less than $50,000,000. If such
Authenticating Agent, or its parent, publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
The Agent may also appoint one or more Authenticating Agents with offices or
agencies in a city or cities outside the United States.

               Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all the
agency business of an Authenticating Agent, shall continue to be an
Authenticating Agent, without the execution or filing of any paper or any
further act on the part of the Agent or the Authenticating Agent, provided that
such corporation shall be otherwise eligible under this Section.

               An Authenticating Agent may resign at any time by giving written
notice thereof to the Agent and to the Corporation. The Agent may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Corporation. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Agent may appoint a successor Authenticating
Agent which shall be acceptable to the Corporation and shall provide written
notice of such appointment to all Holders of Units in the manner and to the
extent provided in Section 1106. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section. No
Authenticating Agent shall have any responsibility or liability for any action
taken by it as such at the direction of the Agent.

               The provisions of Sections 210, 604 and 605 shall be applicable
to each Authenticating Agent.

               Pursuant to each appointment made under this Section, the
Purchase Contracts covered by such appointment may have endorsed thereon, in
addition to the form of Agent's countersignature and execution of the Purchase
Contracts evidenced thereby, an alternative countersignature and execution of
the Purchase Contracts contained therein in the following forms:

                                 THE CHASE MANHATTAN BANK, as Agent,
                                   as attorney-in-fact of the
                                   Holder hereof


                                 By [NAME OF AUTHENTICATING AGENT],
                                   as Authenticating Agent


                                 By_________________________________________
                                   [Authorized Officer]


                                 Countersigned:

                                 THE CHASE MANHATTAN BANK,
                                   as Agent

                                 By [NAME OF AUTHENTICATING AGENT],
                                 as Authenticating Agent


                                 By_________________________________________
                                   [Authorized Officer]


               Section 613.  Corporation to Furnish Agent Names and
Addresses of Holders.  The Corporation will furnish or cause to be
furnished to the Agent

               (a) not later than 15 days after each Regular Record Date in each
         year, a list, in such form as the Agent may reasonably require, of the
         names and addresses of the Holders of Registered Units as of such
         Regular Record Date, and

               (b) at such other times as the Agent may request in writing,
         within 30 days after the receipt by the Corporation of any such
         request, a list of similar form and content as of a date not more than
         15 days prior to the time such list is furnished;

provided that no such list need be furnished if the Agent shall be the Purchase
Contract Registrar, the registrar under the Warrant Agreement and the registrar
under the Indenture.

               Section 614. Preservation of Information; Communications to
Holders. (a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Registered Units contained in
the most recent list furnished to the Agent as provided in Section 613 and the
names and addresses of Holders of Registered Units received by the Agent in its
capacity as Purchase Contract Registrar, the registrar under the Warrant
Agreement and the registrar under the Indenture. The Agent may destroy any list
furnished to it as provided in Section 613 upon receipt of a new list so
furnished.

               (b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Unit for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Units and is accompanied by a copy of the form
of proxy or other communication that such applicants propose to transmit, then
the Agent shall, within five Business Days after the receipt of such
application, at its election either (i) afford such applicants access to the
information preserved at the time by the Agent in accordance with Section 614(a)
or (ii) inform such applicants as to the approximate number of Holders whose
names and addresses appear in the information preserved at the time by the
Agent, and as to the approximate cost of mailing to such Holders the form of
proxy or other communication, if any, specified in such application.

               If the Agent shall elect not to afford such applicants access to
such information, the Agent shall, upon the written request of such applicants,
mail to each Holder whose name and address appears in the information preserved
at the time by the Agent, a copy of the form of proxy or other communication
that is specified in such application, with reasonable promptness after a tender
to the Agent of the material to be mailed and of payment, or provision for
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Agent shall mail to such applicants a written statement to the
effect that in the opinion of the Agent, such mailing would be contrary to the
best interests of the Holders or would be in violation of applicable law.
Thereafter, the Agent shall be relieved of any obligation or duty to such
applicants with respect to their application.

               (c) Every Holder of Units, by his acceptance thereof, agrees with
the Corporation and the Agent that neither the Corporation nor the Agent nor any
agent of any of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with Section 614(b), regardless of the source from which such information was
derived, and that the Agent shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 614(b).

               Section 615. No Obligation of Holder. Except to the extent
otherwise provided in this Agreement, the Agent assumes no obligations and shall
not be subject to any liability under this Agreement or any Purchase Contract
with respect to the obligations of the Holder of a Unit thereunder. The
Corporation agrees, and each Holder of a Unit Certificate, by his acceptance
thereof, shall be deemed to have agreed, that the Agent's execution of the
Purchase Contracts evidenced by the Unit Certificates shall be solely as agent
and attorney-in-fact for the Holders, and that the Agent shall have no
obligation to perform such Purchase Contracts on behalf of the Holders, except
to the extent provided in this Article.

               Section 616. Tax Compliance. (a) The Agent, on its own behalf and
on behalf of the Corporation, will comply with all applicable certification,
information reporting and withholding (including "backup" withholding)
requirements imposed by applicable United States, federal and New York State tax
laws, regulations or administrative practice (i) with respect to payments on, or
transfer or redemption of the Debt Securities, the Prepaid Purchase Contracts,
the Warrants or the Purchase Contracts or (ii) if specifically instructed by the
Company, with respect to the issuance, delivery, holding, or exercise of rights
(other than by payment, transfer or redemption) under the Debt Securities, the
Prepaid Purchase Contracts, the Warrants or the Purchase Contracts. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns with respect to, and the timely payment of, all amounts
required to be withheld to the appropriate taxing authority or its designated
agent. The Corporation will provide to the Agent such information as it may
reasonably request in order to comply with this Section.

               (b) The Agent shall comply with any direction received from the
Corporation with respect to the application of such requirements to particular
payments or holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 601(b)(2) hereof.

               (c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available on
request at reasonable times during normal business hours to the Corporation or
to their authorized representatives duly authorized in writing.

               (d) Unless otherwise specified pursuant to Section 203, the
portion of the issue price of any Units of any series consisting of Debt
Securities and Purchase Contracts allocable to such Debt Securities shall equal
the principal amount payable at maturity of such Debt Securities. Unless
otherwise specified pursuant to Section 203, the portion of the issue price of
any Units of any series consisting of Debt Securities and Warrants allocable to
such Debt Securities shall equal the portion of the issue price that is in the
same proportion to such issue price as the fair market value of such Debt
Securities bears to the aggregate fair market value of such Debt Securities and
Warrants, taken as a whole. The Corporation and the Holders agree not to file
any tax returns, or take a position with any tax authority, that is inconsistent
with the characterization of the Debt Securities as debt.

               (e) Unless otherwise specified pursuant to Section 203, the
Corporation by the issuance and sale of any Unit and any Holder of a Unit by his
acceptance thereof agree to (in the absence of any applicable administrative
ruling or judicial determination to the contrary) treat the Securities that
constitute any Unit as separate securities and to file all United States
federal, state and local tax returns consistent with the treatment of such Unit
as constituted by separate securities.


                                 ARTICLE SEVEN

                            Supplemental Agreements

               Section 701. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Corporation, when authorized by a Board
Resolution or Officer's Certificate, the Agent and the Collateral Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Agent, for any of the following purposes:

               (1) to evidence the succession of another Person to the
         Corporation and the assumption by any such successor of the covenants
         of the Corporation herein and in the Purchase Contracts; or

               (2)  to evidence and provide for the acceptance of appointment
         hereunder by a successor Agent or Collateral Agent with respect to
         the Units; or

               (3) to add to the covenants of the Corporation, Collateral Agent
         or Agent such further covenants, restrictions, conditions or provisions
         as the Corporation, Collateral Agent and Agent shall consider to be for
         the protection of the Holders, and to make the occurrence, or the
         occurrence and continuance, of a default in any such additional
         covenants, restrictions, conditions or provisions of the Corporation a
         Purchase Contract Default permitting the enforcement of all or any of
         the several remedies provided in this Agreement as herein set forth;
         provided that in respect of any such additional covenant, restriction,
         condition or provision such supplemental agreement may provide for a
         particular period of grace after default (which period may be shorter
         or longer than that allowed in the case of other defaults) or may
         provide for an immediate enforcement upon such a Purchase Contract
         Default or may limit the remedies available to the Holders upon such a
         Purchase Contract Default or may limit the right of the Holders to
         waive such Purchase Default; or

               (4) to comply with the Securities Act of 1933, as amended, the
         Exchange Act or the Investment Company Act of 1940, as amended; or

               (5) to cure any ambiguity, to correct or supplement any provision
         herein or in the Purchase Contracts of any series that may be
         inconsistent with any other provision herein or therein, or to modify,
         alter, amend or supplement any other provisions with respect to matters
         or questions arising under this Agreement or under such Purchase
         Contracts; provided that such action shall not adversely affect the
         interests of the Holders in any material respect.

               Section 702. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of all Unsettled
Purchase Contracts constituting a part of any series of Units Outstanding, in
the case of clause (A) below, and with the consent of the Holders of not less
than a majority of all Units Outstanding, in the case of clause (B) below, by
Act of said Holders delivered to the Corporation and the Agent, the Corporation,
when authorized by a Board Resolution or Officer's Certificate, the Agent and
the Collateral Agent may enter into an agreement or agreements supplemental
hereto for the purpose of (A) modifying in any manner the terms of the Purchase
Contracts or this Agreement with respect to the Purchase Contracts or the rights
of the Holders of Units with respect to the Purchase Contracts or (B) modifying
in any manner the other terms of this Agreement or the other rights of Holders
of Units; provided, however, that no such supplemental agreement shall (i)
without the consent of the Holder of each Outstanding Purchase Contract affected
thereby in the case of clauses (1), (2) and (3) below and (ii) without the
consent of the Holder of each Unit affected thereby, in the case of clauses (4)
and (5) below:

               (1)  impair the right to institute suit for the enforcement of
         any Purchase Contract, or

               (2) reduce the percentage of the Purchase Contracts constituting
         a part of any series of Units Outstanding, the consent of whose Holders
         is required for any modification or amendment of the provisions of this
         Agreement relating to the Purchase Contracts or for any waiver of any
         Purchase Contract Defaults hereunder and their consequences provided
         for in this Agreement relating to the Purchase Contracts, or

               (3)  modify or affect (in any manner materially adverse to the
         Holders) the Holders' rights and obligations under the Purchase
         Contracts; or

               (4) modify or affect (in any manner materially adverse to the
         Holders) the terms of this Agreement or such Holder's Units (other than
         the terms referred to in clause (1), (2) or (3) above); or

               (5) reduce the percentage of Holders of Units whose consent is
         required for any modification or amendment of the provisions of this
         Agreement (other than the terms referred to in clause (1), (2) or (3)
         above).

               It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.

               Section 703. Execution of Supplemental Agreements. In exchange
for accepting the additional agencies or duties created by, any supplemental
agreement permitted by this Article or the modifications thereby of the agencies
or duties created by this Agreement, each of the Agent and the Collateral Agent
shall be entitled to receive and (subject to Sections 601 and 503, respectively)
shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement. Each of the Agent and the Collateral Agent may, but shall not be
obligated to, enter into any such supplemental agreement that affects the
Agent's or the Collateral Agent's rights, duties or immunities under this
Agreement or otherwise.

               Section 704. Effect of Supplemental Agreements. Upon the
execution of any supplemental agreement under this Article, this Agreement shall
be modified in accordance therewith, and such supplemental agreement shall form
a part of this Agreement for all purposes; and every Holder of Units,
theretofore or thereafter authenticated, countersigned, executed and delivered
hereunder, under the Warrant Agreement and/or under the Indenture shall be bound
thereby.

               Section 705. Reference to Supplemental Agreements. Unit
Certificates, Debt Securities, Warrants, Purchase Contracts and Prepaid Purchase
Contracts authenticated, countersigned, executed and delivered after the
execution of any supplemental agreement pursuant to this Article may, and shall
if required by the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the Corporation shall
so determine, new Unit Certificates, Debt Securities, Warrants, Purchase
Contracts and Prepaid Purchase Contracts so modified as to conform, in the
opinion of the Agent, and the Corporation, to any such supplemental agreement
may be prepared and executed by the Corporation and authenticated, executed,
countersigned and delivered by the Trustee, the Warrant Agent and the Agent, as
applicable, in exchange for Outstanding Unit Certificates, Debt Securities,
Warrants, Purchase Contracts and Prepaid Purchase Contracts.


                                 ARTICLE EIGHT

                   Consolidation, Merger, Sale or Conveyance

               Section 801. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions. The Corporation covenants that it will
not merge or consolidate with any other corporation or sell, convey or lease all
or substantially all of its assets to any Person, firm or corporation, except
that the Corporation may merge or consolidate with, or sell, convey or lease all
or substantially all of its assets to, any other corporation, provided that (i)
the Corporation shall be the continuing corporation, or the successor
corporation (if other than the Corporation) shall be a corporation organized and
existing under the laws of the United States of America or a state thereof or
the District of Columbia and such corporation shall assume the due and punctual
performance and observance of all of the covenants and conditions of this
Agreement to be performed by the Corporation by supplemental agreement in form
satisfactory to the Agent and the Collateral Agent, executed and delivered to
the Agent and the Collateral Agent by such corporation, and (ii) neither the
Corporation nor such successor corporation immediately after such merger or
consolidation, or such sale, conveyance or lease shall be in default in the
performance of any such covenant or condition.

               Section 802. Rights and Duties of Successor Corporation. In case
of any such consolidation, merger, sale or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Corporation with the same effect as if it
had been named herein as the Corporation. Such successor corporation thereupon
may cause to be signed, and may issue (subject to the provisions of the
Indenture and the Warrant Agreement) either in its own name or in the name of
Morgan Stanley Group Inc. any or all of the Unit Certificates, Debt Securities,
Warrants, Prepaid Purchase Contracts and Purchase Contracts issuable hereunder
which theretofore shall not have been signed by the Corporation and delivered to
the Agent; and, upon the order of such successor corporation, instead of the
Corporation, and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Trustee, the Warrant Agent and the Agent shall
authenticate, countersign, execute and deliver, as applicable, any Unit
Certificates, Debt Securities, Warrants, Prepaid Purchase Contracts and Purchase
Contracts that previously shall have been signed and delivered by the officers
of the Corporation to the Trustee, the Warrant Agent and the Agent for
authentication, execution and countersignature, and any Unit Certificate, Debt
Securities, Warrants, Prepaid Purchase Contracts and Purchase Contracts
evidencing Units which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee, the Warrant Agent and the Agent for such
purpose. All the Purchase Contracts so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Purchase Contracts
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Purchase Contracts had been issued at the date of the
execution hereof.

               In case of any such consolidation, merger, sale, conveyance or
lease such change in phraseology and form (but not in substance) may be made in
the Unit Certificates and Purchase Contracts thereafter to be issued as may be
appropriate.

               Section 803. Opinion of Counsel to Agent. The Agent and the
Collateral Agent, subject to Sections 601 and 603 and Sections 503 and 505,
respectively, may receive an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance or lease, and any such assumption,
complies with the provisions of this Article.


                                 ARTICLE NINE

                                   Covenants

               Section 901. Performance Under Purchase Contracts. The
Corporation covenants and agrees for the benefit of the Holders of the Units
that it will duly and punctually perform its obligations under the Purchase
Contracts in accordance with the terms of the Purchase Contracts and this
Agreement.

               Section 902. Maintenance of Office or Agency. So long as Units or
Purchase Contracts are authorized for issuance pursuant to this Agreement or are
Outstanding hereunder, the Corporation will maintain in the Borough of
Manhattan, The City of New York, an office or agency where Registered Units may
be presented or surrendered for payment or acquisition of Purchase Contract
Property or where Purchase Contract Property or other property may be tendered
for delivery, where Registered Units may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Corporation in
respect of Units and this Agreement may be served. The Corporation hereby
initially designates the Agent as its office or agency in the Borough of
Manhattan, The City of New York, for each of said purposes. The Corporation will
give prompt written notice to the Agent of the location, and any change in the
location, of such office or agency. The Corporation will maintain one or more
offices or agencies in a city or cities located outside the United States
(including any city in which such an agency is required to be maintained under
the rules of any stock exchange on which the Units of such series, or the
Securities constituting such Units, are listed) where the Unregistered Units, if
any, of each series may be presented or surrendered for payment or acquisition
of Purchase Contract Property or where Purchase Contract Property or other
property may be tendered for delivery. No payment or delivery of Purchase
Contract Property on any Unregistered Unit will be made upon presentation of
such Unregistered Unit at an agency of the Corporation within the United States
nor will any payment or delivery of Purchase Contract Property be made by
transfer to an account in, or by mail to an address in, the United States unless
pursuant to applicable United States laws and regulations then in effect such
payment can be made without adverse tax consequences to the Corporation.
Notwithstanding the foregoing, payments in U.S. dollars of Unregistered Units of
any series appertaining thereto which are payable in Dollars may be made at an
agency of the Corporation maintained in the Borough of Manhattan, The City of
New York if such payment in Dollars at each agency maintained by the Corporation
outside the United States for payment on such Unregistered Units is illegal or
effectively precluded by exchange controls or other similar restrictions. If at
any time the Corporation shall fail to maintain any such required office or
agency or shall fail to furnish the Agent with the name and address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Agent, and the Corporation hereby appoints the
Agent as its agent to receive all such presentations, surrenders, notices and
demands.

               The Corporation may also from time to time designate one or more
other offices or agencies where Debt Securities, Warrants, Prepaid Purchase
Contracts, Purchase Contracts and Unit Certificates may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Corporation of its obligations to maintain offices or
agencies provided for in this Section. The Corporation will give prompt written
notice to the Agent of any such designation or rescission and of any change in
the location of any such other office or agency.

               Section 903. Money for Payments to Be Held in Trust. Any money or
other property deposited with the Agent, in trust for payment with respect to
any Unit, remaining unclaimed for two years after such payment has become due
and payable shall be paid to the Corporation on request of the Corporation
pursuant to an Officer's Certificate; and the Holder of such Unit shall
thereafter, as an unsecured general creditor, look only to the Corporation for
payment thereof, and all liability of the Agent with respect to such trust money
or other property shall thereupon cease.

               In the event that (i) the Corporation has delivered Purchase
Contract Property (or the cash value thereof) to the Agent against tender of
payment for such Purchase Contract Property or Warrant Property (or the cash
value thereof) to the Warrant Agent against tender of payment for such Warrant
Property (or, in the case of Purchase Contracts or Warrants calling for the
purchase of Purchase Contract Property or Warrant Property, as the case may be,
by the Corporation, the Corporation has tendered payment) and (ii) a Holder of a
Unit Certificate fails to present and surrender the appropriate Unit Certificate
to the Agent or Warrant Agent, as appropriate, the Purchase Contract Property,
the Warrant Property or the cash value thereof or the Corporation's payment for
Purchase Contract Property or Warrant Property, as the case may be, deliverable
upon settlement of the Purchase Contracts or Warrants, as the case may be,
evidenced by such Unit Certificate, together with any distributions thereon
(and, if an effective Cash Settlement with respect to the obligations under such
Purchase Contracts or Warrants has been made, payments in respect of principal
of the Debt Securities that are part of such Units), shall be held by the Agent,
in trust, for the benefit of such Holder, until such Unit Certificate is
presented and surrendered or such Holder delivers to the Agent, the Warrant
Agent, the Trustee, and the Corporation (i) evidence to their satisfaction that
such certificate has been destroyed, lost or stolen and (ii) such security or
indemnity as may be required by them to hold each of them and any agent of any
of them harmless. In the event such Unit Certificate is not presented and
surrendered or such Holder does not satisfy the applicable conditions specified
in the preceding sentence on or prior to the date two years after the date of
settlement of the related Purchase Contract or Warrant, as the case may be, any
distributions received by the Agent with respect to the Purchase Contract
Property delivered in respect of the Unit Certificates shall be paid to the
Corporation, on the request of the Corporation pursuant to an Officer's
Certificate, and the Holders of such Unit shall thereafter, as unsecured general
creditors, look only to the Corporation for payment thereof and all liability of
the Agent with respect to such trust assets shall thereafter cease.

               Section 904. Statements of Officers of the Corporation as to
Default. The Corporation will deliver to the Agent, on or before March 31 in
each year, an Officer's Certificate stating whether or not to the best knowledge
of the signers thereof the Corporation is in default in the performance and
observance of any of the terms, provisions and conditions hereof or of any
Purchase Contracts, and, if the Corporation shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge.

               Section 905. Negative Pledge. Neither the Corporation nor any
successor corporation will, or will permit any Subsidiary (as hereinafter
defined) to, create, assume, incur or guarantee any indebtedness for borrowed
money secured by a pledge, lien or other encumbrance (except for Permitted
Liens, as hereinafter defined) on the Voting Securities (as hereinafter defined)
of Morgan Stanley & Co. Incorporated, a Delaware corporation and a wholly owned
subsidiary of the Corporation, or Morgan Stanley & Co. Incorporated Limited, an
English company and an indirect wholly owned subsidiary of the Corporation,
unless the Corporation shall cause the Units and the Securities constituting the
Units to be secured equally and ratably with (or, at the Corporation's option,
prior to) any indebtedness secured thereby. "Subsidiary" means any corporation,
partnership or other entity of which at the time of determination the
Corporation owns or controls directly or indirectly more than 50% of the shares
of voting stock or equivalent interest. "Permitted Liens" means liens for taxes
or assessments or governmental charges or levies not then due and delinquent or
the validity of which is being contested in good faith or which are less than
$1,000,000 in amount, liens created by or resulting from any litigation or legal
proceeding which is currently being contested in good faith by appropriate
proceedings or which involves claims of less than $1,000,000, deposits to secure
(or in lieu of) surety, stay, appeal or customs bonds and such other liens as
the Board of Directors of the Corporation determines do not materially detract
from or interfere with the present value or control of the Voting Securities
subject thereto or affected thereby. "Voting Securities" means stock of any
class or classes having general voting power under ordinary circumstances to
elect a majority of the board of directors, managers or trustees of the
corporation in question, provided that, for the purposes hereof, stock which
carries only the right to vote conditionally on the happening of an event shall
not be considered voting stock whether or not such event shall have happened.

               Section 906. Luxembourg Publications. In the event of the
publication of any notice pursuant to this Agreement, the party making such
publication in the Borough of Manhattan, The City of New York, and London shall
also, to the extent that notice is required to be given to Holders of Units of
any series or Securities constituting such Units by applicable Luxembourg law or
stock exchange regulation, as evidenced by an Officer's Certificate delivered to
such party, make a similar publication in Luxembourg.

                                  ARTICLE TEN

                                  Redemptions

               Section 1001. Optional Redemption of Purchase Contracts;
Redemption Upon Redemption of Debt Securities. If this Article is specified as
applicable pursuant to Section 302 in connection with the issuance of the
Purchase Contracts of a series, any or all of such Purchase Contracts may be
redeemed at the option of the Corporation, or from time to time in part, on such
date or dates and at a redemption price per Purchase Contract as shall be
specified pursuant to Section 302; provided that no redemption shall result in
there being more than zero but fewer than the minimum amount of Unsettled
Purchase Contracts that may remain Outstanding after such redemption, as
specified pursuant to Section 302.

               Unless otherwise specified pursuant to Section 203, in the event
that the Corporation shall redeem any Debt Security constituting part of a Unit
of any series pursuant to the provisions of the Indenture or such Debt Security,
the Corporation shall redeem any Purchase Contract or, to the extent permitted
under or pursuant to the Warrant Agreement, Warrant constituting part of the
same Unit on the redemption date of such related Debt Security.

               Section 1002. Notice of Redemption; Partial Redemptions. Unless
otherwise specified pursuant to Section 302, the Corporation or, upon Issuer
Order of the Corporation, the Agent in the name and at the expense of the
Corporation, shall give notice of redemption to the Holders of Purchase
Contracts in the manner and to the extent provided in Section 1106, at least 30
days and not more than 60 days prior to the date fixed for redemption. Any
notice which is given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the notice.
Failure to give notice by mail, or any defect in the notice to the Holder of any
Purchase Contract, shall not affect the validity of the proceedings for the
redemption of any other Purchase Contract.

               The notice of redemption to each Holder of Registered Purchase
Contracts shall specify the number of Registered Purchase Contracts held by such
Holder to be redeemed, the date fixed for redemption, the redemption price, the
place or places of payment and that payment will be made upon presentation and
surrender of Unit Certificates with respect to such Registered Purchase
Contracts evidenced by Unit Certificates.

               The Corporation's obligation to provide funds for redemption
shall be deemed fulfilled if, on or before 12:00 noon, local time in the place
of payment, on the redemption date specified in the notice of redemption given
as provided in this Section, the Corporation shall deposit with the Agent or
with one or more paying agents an amount of money sufficient to redeem on the
redemption date all the Purchase Contracts called for redemption at the
appropriate redemption price, together with irrevocable instructions and
authorization that such funds be applied to the redemption of the Purchase
Contracts called for redemption upon surrender of Unit Certificates representing
such Purchase Contracts, properly endorsed and assigned for transfer, in
accordance with this Article.

               The Corporation will deliver to the Agent at least 15 days prior
to the mailing of the notice of redemption an Officer's Certificate stating the
aggregate number of Purchase Contracts to be redeemed on such date and that the
Corporation has complied with the provisions of Section 1001 and of said
Purchase Contracts subject to said redemption.

               If fewer than all the Purchase Contracts are to be redeemed, the
Agent, prior to the mailing of the redemption notice, shall select the Purchase
Contracts to be redeemed on a pro rata basis, by lot or by such other means as
shall be acceptable to the Agent. Appropriate adjustment shall be made to
prevent the fractional redemption of Purchase Contracts, such that Purchase
Contracts are redeemed only in whole and not in part.

               The Agent shall promptly notify the Corporation in writing of the
Purchase Contracts so selected for redemption.

               Section 1003. Payment of Purchase Contracts Called for
Redemption. If notice of redemption has been given as above provided, (i) the
Purchase Contracts specified in such notice shall become due and payable on the
date and at the place stated in such notice at the applicable redemption price,
and (ii) on and after the date fixed for redemption (unless the Corporation
shall default in the payment of such Purchase Contracts at the redemption price)
such Purchase Contracts shall cease from and after the date fixed for redemption
to be entitled to any benefit under this Agreement, the Holders thereof shall
have no right or obligation in respect of such Purchase Contracts except the
right to receive the redemption price thereof and the Purchase Contracts shall
terminate and shall no longer be deemed to be Outstanding.

               If so specified pursuant to Section 302, on presentation and
surrender of Unit Certificates representing such Purchase Contracts, properly
endorsed and assigned for transfer, at a place of payment specified in said
notice, said Purchase Contracts shall be paid and redeemed by the Corporation at
the applicable redemption price. Following such redemption, the Unit
Certificates evidencing such Closed Purchase Contracts shall be cancelled in
accordance with Section 211. In the case of (i) Definitive Units, certificates
evidencing any Outstanding Debt Securities relating to such redeemed Purchase
Contracts shall be executed, authenticated and delivered in accordance with the
terms of the Indenture and (ii) Global Units, if a Global Debt Security not
constituting part of a Global Unit has not previously been issued by the
Corporation, a second Global Debenture evidencing any Outstanding Debt Security
relating to such redeemed Purchase Contracts shall be executed, authenticated
and delivered in accordance with the Indenture. If a second Global Debt Security
referred to in clause (ii) of the immediately preceding sentence has already
been issued, the Agent shall note thereon an appropriate increase in the number
of Debt Securities represented by such Global Debt Security.

               Any interest accrued on funds deposited with the Agent or any
Paying Agent in connection with this Article Ten shall be paid to the
Corporation from time to time and the Holders of Purchase Contracts (whether or
not such Purchase Contracts are to be redeemed with such funds) shall have no
claim to any such interest. Any funds deposited and unclaimed at the end of two
years from any redemption date shall be repaid or released to the Corporation,
on the request of the Corporation pursuant to an Officer's Certificate, after
which the Holder(s) of Purchase Contracts so called for redemption shall look
only to the Corporation for payment of the redemption price, without any
interest thereon and all liability of the Agent with respect to the redemption
price shall cease.

               Section 1004. Exclusion of Certain Purchase Contracts from
Eligibility for Selection for Redemption. Purchase Contracts shall be excluded
from eligibility for selection for a partial redemption if they are identified
by registration and certificate number in an Officer's Certificate delivered by
the Corporation to the Agent at least 10 days prior to the date of the mailing
of a notice of redemption as being owned of record and beneficially by, and not
pledged or hypothecated by (a) the Corporation or (b) an Affiliate of the
Corporation. Purchase Contracts shall also be excluded from eligibility for
selection for a partial redemption if they are the subject of an Acceleration
Notice.


                                ARTICLE ELEVEN

                           Miscellaneous Provisions

               Section 1101. Incorporators, Stockholders, Officers and Directors
of the Corporation Immune from Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Agreement, or in any Debt
Security, Prepaid Purchase Contract, Warrant Agreement or any Purchase Contract,
or because of any indebtedness evidenced thereby, shall be had against any
incorporator, or against any past, present or future stockholder, officer,
attorney-in-fact or director, as such, of the Corporation or of any successor
corporation, either directly or through the Corporation or any successor
corporation, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or penalty or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of the Units by the Holders thereof and as part of the
consideration for the issue thereof, provided that nothing in this Article shall
impair the obligations, covenants and agreements of the Corporation contained in
this Agreement and in any Debt Securities, Prepaid Purchase Contracts, Warrants
or Purchase Contracts constituting a part of the Units of any series.

               Section 1102. Compliance Certificates and Opinions. Except as
otherwise expressly provided by this Agreement, upon any application or request
by the Corporation to the Agent or Collateral Agent to take any action under any
provision of this Agreement, the Corporation, as applicable, shall furnish to
the Agent or Collateral Agent an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.

               Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:

               (1) a statement that each individual signing such certificate or
         opinion has reached such covenant or condition and the definitions
         herein relating thereto;

               (2) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

               (3) a statement that, in the opinion of each such individual, he
         has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether or not such covenant
         or condition has been complied with; and

               (4) a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

               Section 1103. Form of Documents Delivered to Agent or Collateral
Agent. In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

               Any certificate, statement or opinion of an officer or counsel of
or for the Corporation may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion is based are erroneous. Any such
certificate, statement or opinion may be based, insofar as it relates to factual
matters, upon a certificate, statement or opinion of, or representations by, an
officer or officers of the Corporation, as applicable, stating that the
information with respect to such factual matters is in the possession of the
Corporation, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

               Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.

               Section 1104. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Agent and, where it is hereby
expressly required, to the Corporation. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and (subject to Section 601)
conclusive in favor of the Agent and the Corporation, if made in the manner
provided in this Section.

               (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Agent deems
sufficient.

               (c) Subject to Section 203(7), the ownership (i) of Registered
Units of any series shall be proved by the Purchase Contract Register for such
series, with respect to any Purchase Contracts constituting a part of such
Units, the Warrant Register for such series with respect to any Warrants
constituting a part of such Units and the Debt Security Register for such
series, with respect to any Debt Securities or Prepaid Purchase Contracts
constituting a part of such Units, and (ii) of Unregistered Units shall be
proved by possession of the Unit Certificates evidencing such Units or by the
appropriate records of the depositary for such Units.

               (d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Unit Certificate shall bind
every future Holder of the same Unit Certificate and the Holder of every Unit
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof with respect to anything done, omitted or suffered
to be done by the Agent or the Corporation in reliance thereon, whether or not
notation of such action is made upon such Unit Certificate.

               (e) The Corporation may set a record date for purposes of
determining the identity of Holders of Units entitled to consent to any action
by consent authorized or permitted hereby. Unless otherwise specified pursuant
to Section 203, such record date shall be the later of 30 days prior to the
first solicitation of such consent or the date of the most recent list of
Holders of Units furnished to the Agent, pursuant hereto.

               Section 1105. Notices. Etc.  Any request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or other document
provided or permitted by this Agreement to be made upon, given or furnished
to, or filed with,

               (a) the Agent or the Collateral Agent, as the case may be, by any
         Holder or by the Corporation shall be sufficient for every purpose
         hereunder (unless otherwise herein expressly provided) if made, given,
         furnished or filed in writing and personally delivered or mailed,
         first-class postage prepaid, to the Agent at its Corporate Trust
         Office, Attention: Corporate Trustee Administration Department, or at
         any other address previously furnished in writing by the Agent or the
         Collateral Agent, as the case may be, to the Holders and the
         Corporation, or

               (b) the Corporation by the Agent, the Collateral Agent or by any
         Holder shall be sufficient for every purpose hereunder (unless
         otherwise herein expressly provided) if made, given, furnished or filed
         in writing and personally delivered or mailed, first-class postage
         prepaid, addressed to the Corporation at 1585 Broadway, New York, New
         York 10036, Attention: Patricia A. Kurtz, or at any other address
         previously furnished in writing to the Agent and the Collateral Agent
         by the Corporation.

               Section 1106. Notice to Holders; Waiver. Where this Agreement
provides for notice to Holders of Registered Securities or Registered Units of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided or as provided in the Letter of Representations) if in
writing and mailed, first-class postage prepaid, to each such Holder affected by
such event, at such Holder's address as it appears in the relevant Security
Registers, with respect to the Securities constituting such Unit, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.

               In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.

               Where this Agreement provides for notice to Holders of
Unregistered Securities or Unregistered Units of any event, such notice shall be
sufficiently given (unless otherwise specified herein or pursuant to Section 203
or 302) by publication in a newspaper in the English language of general
circulation in the Borough of Manhattan, The City of New York, and in The City
of London or, if publication in London is not practical, in an English language
newspaper with general circulation in Western Europe. Such notices will be
deemed to have been given on the date of such publication, or if published in
such newspapers on different dates, on the date of the first such publication.

               Section 1107. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

               Section 1108. Successors and Assigns. All covenants and
agreements in this Agreement, the Units, the Purchase Contracts and the Unit
Certificates by the Corporation shall bind its successors and assigns, whether
so expressed or not.

               Section 1109. Separability Clause. In case any provision in this
Agreement or in the Units, Unit Certificates or the Purchase Contracts shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.

               Section 1110. Benefits of Agreement. Nothing in this Agreement or
in the Units, Unit Certificates, the Indenture, the Debt Securities, the Prepaid
Purchase Contracts, the Warrants or the Purchase Contracts, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any benefits or any legal or equitable right, remedy or claim under
this Agreement. The Holders from time to time shall be parties to this Agreement
and shall be bound by all of the terms and conditions hereof and of the
Indenture, the Units, the Debt Securities, the Prepaid Purchase Contracts, the
Warrants and the Purchase Contracts evidenced by the Units, by their acceptance
of delivery of such Units.

               Section 1111. Governing Law.  This Agreement, the Units and the
Purchase Contracts shall be governed and construed in accordance with the laws
of the State of New York.

               Section 1112. Legal Holidays. Unless otherwise specified pursuant
to Section 302, in any case where any Settlement Date shall not be a Business
Day, then (notwithstanding any other provisions of this Agreement or the
Purchase Contracts) the Purchase Contracts shall not be performed on such date,
but shall be performed on the next succeeding Business Day with the same force
and effect as if performed on such Settlement Date; provided that no interest or
other amounts shall accrue or be payable by the Corporation or any Holder for
the period from and after any such Settlement Date.

               Section 1113. Counterparts. This Agreement may be executed in any
number of counterparts by the parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.

               Section 1114. Appointment of Certain Agents. (a) Pursuant to
Section 203 hereof, the Corporation may, in connection with any series of
Purchase Contracts appoint Morgan Stanley & Co. Incorporated, Morgan Stanley &
Co. International Limited or any other Person as Calculation Agent to make any
calculations as may be required pursuant to the terms of any such series of
Purchase Contracts. Any such Calculation Agent shall act as an independent
expert and, unless otherwise provided by this Agreement, its calculations and
determinations under this Agreement shall, absent manifest error, be final and
binding on the Corporation, the Agent and the Holders. Any such calculations
will be made available to the Holders for inspection at the Agent's Office.

               (b) Unless otherwise specified pursuant to Section 203, the
Corporation hereby appoints Chase as the Paying Agent under the Indenture with
respect to each Debt Security comprised by any Unit issued hereunder.

               Section 1115. Inspection of Agreement. A copy of this Agreement
shall be available at all reasonable times during normal business hours at the
Corporate Trust Office of the Agent for inspection by any Holder.

               IN WITNESS WHEREOF, the Corporation, the Agent, the Collateral
Agent, the Trustee and the Warrant Agent have duly executed this Agreement as of
the day and year first above set forth, and all Holders of Units shall become
parties hereto by and upon acceptance by them of delivery of Units issued in
accordance with the terms hereof.



                                 MORGAN STANLEY GROUP INC.


                                 By____________________________
                                   Name:   Eileen K. Murray
                                   Title:  Treasurer


                                 THE CHASE MANHATTAN BANK, as Agent



                                 By____________________________
                                   Name:
                                   Title:


                                 THE CHASE MANHATTAN BANK, as
                                   Collateral Agent



                                 By____________________________
                                   Name:
                                   Title:


                                 THE CHASE MANHATTAN BANK, as
                                   Trustee and Paying Agent
                                   under the Indenture



                                 By____________________________
                                   Name:
                                   Title:


                                 THE CHASE MANHATTAN BANK, as
                                   Warrant Agent under the
                                   Warrant Agreement



                                 By____________________________
                                   Name:
                                   Title:




                                                                     EXHIBIT A


                          [[FORM OF UNIT CERTIFICATE]

                                    [FACE]


         [IF THE UNIT CERTIFICATE IS TO BE A GLOBAL REGISTERED UNIT CERTIFICATE,
INSERT--This Unit Certificate is a global Unit Certificate within the meaning of
the Unit Agreement hereinafter referred to and is registered in the name of the
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
Unless and until it is exchanged in whole or in part for Units in definitive
registered form, this Unit Certificate may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary).

         Unless this Unit Certificate is presented by an authorized
representative of The Depositary (55 Water Street, New York) to Morgan Stanley
Group, Inc. or its agent for registration of transfer, exchange or payment, and
any Unit issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of the Depositary and any payment
hereon is made to Cede & Co. or such other entity as is requested by an
authorized representative of the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]


                               UNIT CERTIFICATE


                (issuable in integral multiples of whole Units)

            Evidencing the Ownership of, or Rights and Obligations
                      of the Holder Under, the Securities
                                Specified Below


             [Specify Securities Constituting Part of these Units]


Certificate No. _____                                          Number of Units
                                                                   [Up To]*


         This Unit Certificate certifies that ______________________ (the
"Holder"), or [registered assigns]**, is the [registered]** owner of [ ( )
Units]*** [the number of Units specified in Schedule A hereto.]*

         Each Unit represents ownership by the Holder of [specify Securities
constituting parts of the Unit] [, subject to the pledge of such Debt Securities
by such Holder pursuant to the Unit Agreement (the "Unit Agreement") dated as of
January __, 1997 among the Corporation, The Chase Manhattan Bank, as Agent, as
Collateral Agent, as Trustee and Paying Agent under the Indenture referred to
therein, and as Warrant Agent under the Warrant Agreement referred to therein
and the Holders from time to time of the Units described therein. Pursuant to
the Unit Agreement, the Debt Securities constituting part of the Units evidenced
hereby have been pledged to the Collateral Agent to secure the obligations of
the Holder under the Purchase Contract constituting part of such Units.]****

         [For so long as the [Warrant] [Purchase Contract] underlying each Unit
represented hereby remains in effect such Unit shall not be separable into its
constituent parts and the rights and obligations of the Holder of such Unit in
respect of such constituent parts may be transferred and exchanged only as a
Unit.]*****

                    [Designated Security Register:]******

                            [Other Terms of Units:]

- ------------
     *      Insert in Global Unit Certificates
     **     Insert in Registered Units
     ***    Insert in Definitive Unit Certificates
     ****   Insert in Registered Units consisting of Non-Separable Debt 
Securities and Purchase Contracts
     *****  Insert in non-separable Units.
     ****** Insert in non-separable Registered Units.


           [INSERT APPROPRIATE DEBT SECURITY CERTIFICATE OR WARRANT
                          CERTIFICATE, AS APPLICABLE]

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


                          [FORM OF PURCHASE CONTRACT

               CONTEMPLATING SALE BY MORGAN STANLEY GROUP INC.]





                           MORGAN STANLEY GROUP INC.



                  [Insert Designation of Purchase Contracts]



                             PURCHASE CONTRACT(S)



                          Purchase Contracts between

                           Morgan Stanley Group Inc.

                                      and

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

                            or registered assigns,

                      as holder hereunder (the "Holder")







         All capitalized terms used but not defined herein that are defined in
the Unit Agreement (described below) have the meanings set forth therein, and if
not defined therein, have the meaning set forth below.


- ------------------------------------------------------------------------------
               Purchase Contract Property:
- ------------------------------------------------------------------------------
                                 Quantity:
- ------------------------------------------------------------------------------
                           Purchase Price:
- ------------------------------------------------------------------------------
                          Settlement Date:
- ------------------------------------------------------------------------------
                         Payment Location:
- ------------------------------------------------------------------------------
                     Method of Settlement:
- ------------------------------------------------------------------------------
           Currency of Settlement Payment:
- ------------------------------------------------------------------------------
  Authorized Number of Purchase Contracts:
- ------------------------------------------------------------------------------
                            Contract Fees:
- ------------------------------------------------------------------------------
                 Corporation Acceleration:
- ------------------------------------------------------------------------------
                    Holders' Acceleration:
- ------------------------------------------------------------------------------
                    Redemption Provisions:
- ------------------------------------------------------------------------------
                              Other Terms:
- ------------------------------------------------------------------------------


         Subject to the conditions hereinafter set forth, the Holder agrees to
purchase and Morgan Stanley Group Inc., a corporation duly incorporated and
existing under the laws of the State of Delaware (the "Corporation"), agrees to
sell, subject to the terms of the Unit Agreement referred to below and as set
forth herein, on the Settlement Date, the Quantity of Purchase Contract
Property, for the Purchase Price. The Purchase Contract(s) evidenced hereby
shall not entitle the Holder to purchase the Purchase Contract Property prior to
the Settlement Date.



         The Purchase Price for the Purchase Contract Property purchased
pursuant to the Purchase Contracts evidenced hereby shall be payable at the
Payment Location on the Settlement Date pursuant to the Method of Settlement in
the Currency of Settlement Payment.



         Each Purchase Contract evidenced hereby is one of a duly authorized
issue of not more than the Authorized Number of Purchase Contracts of the
Corporation relating to the purchase by Holders of not more than the Aggregate
Quantity of Purchase Contract Property issued under the Unit Agreement, dated as
of January __, 1997 (the "Unit Agreement"), among the Corporation, The Chase
Manhattan Bank, as Agent (the "Agent") and as Collateral Agent thereunder, as
Warrant Agent (the "Warrant Agent") under the Warrant Agreement referred to
therein, as Trustee (the "Trustee") and Paying Agent under the Indenture
referred to therein, and the holders from time to time of Units, to which Unit
Agreement and supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Agent, the Collateral Agent, the Corporation
and the Holders and of the terms upon which the Purchase Contracts are, and are
to be, executed, countersigned, executed on behalf of the Holder and delivered.



         The Agent may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents in connection with any transfer
or exchange of each Purchase Contract evidenced hereby. No service charge shall
be required for any such registration of transfer or exchange, but the
Corporation and the Agent may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection with any registration of
transfer or exchange of Units.



         Upon registration of transfer of this Purchase Contract, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee, except as may be required by the Agent pursuant to the Unit
Agreement), under the terms of the Unit Agreement and the Purchase Contracts
evidenced hereby and the transferor shall be released from the obligations under
the Purchase Contracts hereby. The Corporation covenants and agrees, and the
Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by
the provisions of this paragraph.



         The extent to which, and the terms upon which, any cash or other
property (other than the Purchase Contract Property) is payable or deliverable
with respect to the Purchase Contracts evidenced hereby is described above under
"Contract Fees." The extent to which, and the terms upon which, the Corporation
may accelerate the obligations of the Corporation and the Holders of the
Purchase Contracts evidenced hereby is described above under "Corporation
Acceleration." The extent to which, and the terms upon which, the Holders of
such Purchase Contracts may accelerate the obligations of the Corporation and
the Holders of the Purchase Contracts is described above under "Holders'
Acceleration." The extent to which, and the terms upon which, the Corporation
may redeem the Purchase Contracts evidenced hereby is described above under
"Redemption Provisions."



         Subject to certain exceptions, the terms of the Purchase Contracts and
the provisions of the Unit Agreement may be amended with the consent of the
affected Holders of not less than a majority of the Purchase Contracts evidenced
by all Outstanding Units and certain Purchase Contract Defaults may be waived
with the consent of the Holders of a majority of the Purchase Contracts
evidenced by all Outstanding Units. Without the consent of any Holder of Units,
the terms of the Unit Agreement the Purchase Contracts may be amended to, among
other things, cure any ambiguity, to correct or supplement any provision in the
Unit Agreement or Purchase Contract to add to covenants of the Corporation,
Collateral Agent or Agent or to make any other provisions with respect to
matters or questions arising under the Unit Agreement or the Purchase Contracts
that do not adversely affect the interests of the Holders in any material
respect.



         Holders of the Purchase Contracts may not enforce the Unit Agreement or
such Purchase Contracts except as provided in the Unit Agreement.



         Any incorporator, or past, present or future stockholder, officer,
attorney-in-fact or director, as such, of the Corporation shall not have any
liability for any obligations of the Corporation under the Purchase Contracts or
the Unit Agreement or for any claim based on, with respect to or by reason of
such obligations or their creation. The Holder by his acceptance hereof waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Purchase Contracts.



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



         Prior to due presentment of a Unit Certificate or Purchase Contract for
registration of transfer, the Corporation, the Trustee, the Agent, the Warrant
Agent and the Collateral Agent, and any agent of the Corporation, the Trustee,
the Agent, the Warrant Agent and the Collateral Agent may treat the Person in
whose name this Purchase Contract is registered as a party to the Purchase
Contracts evidenced hereby for the purpose of performance of such Purchase
Contracts and for all other purposes whatsoever, and neither the Corporation,
the Trustee, the Agent, the Warrant Agent and the Collateral Agent nor any such
agent shall be affected by notice to the contrary.



         The Holder, by his acceptance hereof, authorizes the Agent to execute
the Purchase Contracts evidenced hereby on his behalf, authorizes and directs
the Agent on his behalf to take such other action, and covenants and agrees to
take such other action, as may be necessary or appropriate, or as may be
required by the Agent, to effectuate the provisions of the Unit Agreement
relating to the purchase of the Purchase Contract Property [and the pledge of
the Debt Securities constituting part of the Unit of which this Purchase
Contract forms a part to the Collateral Agent on the Holder's behalf,]*******
appoints the agent as his attorney-in-fact for any and all such purposes, and
agrees to be bound by the terms thereof.

- ------------
     ******* Insert in Registered Units consisting of Non-Separable Debt
Securities and Purchase Contracts.


         The Purchase Contracts shall not, prior to the performance thereof,
entitle the Holder to any of the rights of a holder of the Purchase Contract
Property.



         No Purchase Contract evidenced hereby shall be valid or obligatory for
any purpose until countersigned and executed on behalf of the Holder by the
Agent, pursuant to the Unit Agreement.



         IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
instrument to be duly executed.



Dated:



                                 MORGAN STANLEY GROUP INC.



                                 By: ___________________________
                                       Name:
                                       Title:





THE CHASE MANHATTAN BANK, as Agent,
and as attorney-in-fact of
the Holder hereof



By: ______________________
      Authorized Officer





Countersigned:



THE CHASE MANHATTAN BANK,
as Agent



By: ______________________

      Authorized Officer





                          [FORM OF PURCHASE CONTRACT

             CONTEMPLATING PURCHASE BY MORGAN STANLEY GROUP INC.]





                           MORGAN STANLEY GROUP INC.



                             PURCHASE CONTRACT(S)



                          Purchase Contracts between

                           Morgan Stanley Group Inc.

                                      and

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

                            or registered assigns,

                      as holder hereunder (the "Holder")







         All capitalized terms used but not defined herein that are defined in
the Unit Agreement (described below) have the meanings set forth therein, and if
not defined therein, have the meaning set forth below.


- ------------------------------------------------------------------------------
              Purchase Contract Property:
- ------------------------------------------------------------------------------
                                Quantity:
- ------------------------------------------------------------------------------
                          Purchase Price:
- ------------------------------------------------------------------------------
                         Settlement Date:
- ------------------------------------------------------------------------------
                        Payment Location:
- ------------------------------------------------------------------------------
                    Method of Settlement:
- ------------------------------------------------------------------------------
   Method of Computing Settlement Amount:
- ------------------------------------------------------------------------------
          Currency of Settlement Payment:
- ------------------------------------------------------------------------------
 Authorized Number of Purchase Contracts:
- ------------------------------------------------------------------------------
                Aggregate Purchase Price:
- ------------------------------------------------------------------------------
                           Contract Fees:
- ------------------------------------------------------------------------------
                Corporation Acceleration:
- ------------------------------------------------------------------------------
                   Holders' Acceleration:
- ------------------------------------------------------------------------------
                   Redemption Provisions:
- ------------------------------------------------------------------------------
                             Other Terms:
- ------------------------------------------------------------------------------


         Subject to the conditions hereinafter set forth, the Holder agrees to
sell and Morgan Stanley Group Inc., a corporation duly incorporated and existing
under the laws of the State of Delaware (the "Corporation"), agrees to purchase,
subject to the terms of the Unit Agreement referred to below and as set forth
herein, on the Settlement Date, the Quantity of Purchase Contract Property, for
the Purchase Price. The Purchase Contract(s) evidenced hereby shall not entitle
the Corporation to purchase the Purchase Contract Property, or the Holder to
receive the Purchase Price, prior to the Settlement Date.



         If so indicated under Method of Settlement above, the parties'
obligations under the Purchase Contracts evidenced hereby may be settled by
payment of the Settlement Amount by the Corporation or the Holder, as the case
may be. The Settlement Amount payable pursuant to the Purchase Contracts
evidenced hereby, as determined in accordance with the Method of Computing
Settlement Amount, shall be payable on the Settlement Date in the Currency of
Settlement Payment pursuant to the Method of Settlement at the Payment Location;
provided that any Settlement Amount payable by Holders pursuant to the Purchase
Contracts evidenced hereby may be deducted from the principal payment that may
be payable by the Corporation with respect to any Debt Securities comprised by
the Units of which such Purchase Contacts are a part.



         Each Purchase Contract evidenced hereby is one of a duly authorized
issue of not more than the Authorized Number of Purchase Contracts of the
Corporation issued under the Unit Agreement, dated as of January __, 1997 (the
"Unit Agreement"), among the Corporation, The Chase Manhattan Bank, as Agent
(the "Agent") and as Collateral Agent thereunder, as Warrant Agent (the "Warrant
Agent") under the Warrant Agreement referred to therein, as Trustee (the
"Trustee") and Paying Agent under the Indenture referred to therein, and the
holders from time to time of Units, to which Unit Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Corporation and the Holders and of the terms upon which the
Purchase Contracts are, and are to be, executed, countersigned, executed on
behalf of the Holder and delivered.



         The Agent may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents in connection with any transfer
or exchange of each Purchase Contract evidenced hereby. No service charge shall
be required for any such registration of transfer or exchange, but the
Corporation and the Agent may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection with any registration of
transfer or exchange of Units.



         Upon registration of transfer of this Purchase Contract, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee, except as may be required by the Agent pursuant to the Unit
Agreement), under the terms of the Unit Agreement and the Purchase Contracts
evidenced hereby and the transferor shall be released from the obligations under
the Purchase Contracts hereby. The Corporation covenants and agrees, and the
Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by
the provisions of this paragraph.



         The extent to which, and the terms upon which, any cash or other
property (other than the Purchase Contract Property) is payable or deliverable
with respect to the Purchase Contracts evidenced hereby is described above under
"Contract Fees." The extent to which, and the terms upon which, the Corporation
may accelerate the obligations of the Corporation and the Holders of the
Purchase Contracts evidenced hereby is described above under "Corporation
Acceleration." The extent to which, and the terms upon which, the Holders of
such Purchase Contracts may accelerate the obligations of the Corporation and
the Holders of the Purchase Contracts is described above under "Holders'
Acceleration." The extent to which, and the terms upon which, the Corporation
may redeem the Purchase Contracts evidenced hereby is described above under
"Redemption Provisions."



         Subject to certain exceptions, the terms of the Purchase Contracts and
the provisions of the Unit Agreement may be amended with the consent of the
affected Holders of not less than a majority of the Purchase Contracts evidenced
by all Outstanding Units and certain Purchase Contract Defaults may be waived
with the consent of the Holders of a majority of the Purchase Contracts
evidenced by all Outstanding Units. Without the consent of any Holder of Units,
the terms of the Unit Agreement or the Purchase Contracts may be amended to,
among other things, cure any ambiguity, to correct or supplement any provision
in the Unit Agreement or Purchase Contract, to add to the covenants of the
Corporation, Collateral Agent or Agent for the protection of the Holders, or to
make any other provisions with respect to matters or questions arising under the
Unit Agreement or the Purchase Contracts that do not adversely affect the
interests of the Holders in any material respect.



         Holders of the Purchase Contracts may not enforce the Unit Agreement or
such Purchase Contracts except as provided in the Unit Agreement.



         Any incorporator, or past, present or future stockholder, officer,
attorney-in-fact or director, as such, of the Corporation shall not have any
liability for any obligations of the Corporation under the Purchase Contracts or
the Unit Agreement or for any claim based on, with respect to or by reason of
such obligations or their creation. The Holder by his acceptance hereof waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Purchase Contracts.



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



         Prior to due presentment of a Unit Certificate or Purchase Contract for
registration of transfer, the Corporation, the Agent, the Trustee, the Warrant
Agent and the Collateral Agent, and any agent of the Corporation, the Agent, the
Trustee, the Warrant Agent and the Collateral Agent may treat the Person in
whose name this Purchase Contract is registered as a party to the Purchase
Contracts evidenced hereby for the purpose of performance of such Purchase
Contracts and for all other purposes whatsoever, and neither the Corporation,
the Agent, the Trustee, the Warrant Agent and the Collateral Agent nor any such
agent shall be affected by notice to the contrary.



         The Holder, by his acceptance hereof, authorizes the Agent to execute
the Purchase Contracts evidenced hereby on his behalf, authorizes and directs
the Agent on his behalf to take such other action, and covenants and agrees to
take such other action, as may be necessary or appropriate, or as may be
required by the Agent, to effectuate the provisions of the Unit Agreement
relating to the purchase of the Purchase Contract Property [and the pledge of
the Debt Securities constituting part of the Unit of which this Purchase
Contract forms a part to the Collateral Agent on the Holder's behalf,]********
appoints the agent as his attorney-in-fact for any and all such purposes, and
agrees to be bound by the terms thereof.

- ------------
********  Insert in Registered Units consisting of Debt Securities and Purchase
          Contracts.


         No Purchase Contract evidenced hereby shall be valid or obligatory for
any purpose until countersigned and executed on behalf of the Holder by the
Agent, pursuant to the Unit Agreement.



         IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
instrument to be duly executed.





Dated:



                                 MORGAN STANLEY GROUP INC.





                                 By: ___________________________
                                       Name:
                                       Title:





THE CHASE MANHATTAN BANK, as Agent,
and as attorney-in-fact of
the Holder hereof




By: ______________________
      Authorized Officer





Countersigned:



THE CHASE MANHATTAN BANK,
as Agent





By: ______________________

      Authorized Officer



         [IF PURCHASE CONTRACT IS A GLOBAL PURCHASE CONTRACT, INSERT -



                                                                      SCHEDULE I



                                    GLOBAL

                               PURCHASE CONTRACT

                             SCHEDULE OF EXCHANGES



   The initial number of Purchase Contracts represented by this Global Purchase
Contract is __________. In accordance with the Unit Agreement pursuant to which
this Global Purchase Contract has been issued, the following (A) exchanges of
[the number of Purchase Contracts indicated below for a like number of Purchase
Contracts represented by a Global Purchase Contract that has been separated from
a Unit (a "Separated Purchase Contract")](1) [the number of Purchase Contracts
that had been represented by a Global Purchase Contract that is part of a Unit
(an "Attached Unit Purchase Contract") for a like number of Purchase Contracts
represented by this Purchase Contract](2) and (B) settlements of the number of
Purchase Contracts indicated below have been made:




===================================================================================================================================
                                               Number of
                                               Attached Unit
                                               Purchase
                                               Contracts
                                               Exchanged for
                                               Purchase
              Number          Reduced          Contracts        Increased                            Reduced
              Exchanged for   Number           represented by   Number                               Number
Date of       Separated       Outstanding      this Separated   Outstanding      Number of           Outstanding     Notation Made
Exchange or   Purchase        Following Such   Purchase         Following Such   Purchase            Following Such  by or on Behalf
Settlement    Contract(1)     Exchange(1)      Contract(2)      Exchange(2)      Contracts Settled   Settlement      of Agent
                                                                                                

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

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

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

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

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

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

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

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

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


- ---------------
     (1) Applies only if this Purchase Contract is part of a Unit.

     (2) Applies only if this Purchase Contract has been separated from a Unit.



[IF PURCHASE CONTRACT IS SEPARATED FROM UNIT, INSERT -



                             [FORM OF ASSIGNMENT]



FOR VALUE RECEIVED, the undersigned assigns and transfers the Purchase
Contract(s) represented by this Certificate to:



_________________ (Insert assignee's social security or tax identification
number)



                   (Insert address and zip code of assignee)



and irrevocably appoints





agent to transfer this Certificate on the books of the Corporation.  The agent
may substitute another to act for him or her.



Date:



Signature(s):

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

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






   (Sign exactly as your name appears on the other side of this Certificate)



NOTICE:  The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.]



[IF UNIT CERTIFICATE IS A GLOBAL UNIT CERTIFICATE, INSERT -



                                                                  SCHEDULE A





                                    GLOBAL

                               UNIT CERTIFICATE

                             SCHEDULE OF EXCHANGES





The initial number of Units represented by this Global Unit Certificate is
_________. In accordance with the Unit Agreement pursuant to which this Global
Unit Certificate has been issued, the following reductions of the number of
Units represented by this Global Unit Certificate have occurred:


BIK


==================================================================================================================================
            Number Reduced by
            Separation of the    Number Reduced by       Number Reduced by        Number of Units         Notation Made by or
Date of     Component Parts of   Exercise of Universal   Settlement of Purchase   Outstanding Following   on Behalf of Paying
Reduction   this Unit            Warrants                Contracts                any such Reduction      Agent
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                           

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

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

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

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

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

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

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

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

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

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




[IF UNIT IS A DEFINITIVE UNIT, INSERT -



                             [FORM OF ASSIGNMENT]



FOR VALUE RECEIVED, the undersigned assigns and transfers the Unit(s)
represented by this Certificate to:



_________________ (Insert assignee's social security or tax identification
number)



                   (Insert address and zip code of assignee)



and irrevocably appoints





agent to transfer this Unit Certificate on the books of the Corporation.  The
agent may substitute another to act for him or her.



Date:



Signature(s):

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

- -----------------------------------------------------------------------------
   (Sign exactly as your name appears on the other side of this Certificate)



NOTICE:  The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.]

EX-8.A

                        [Shearman & Sterling Letterhead]

                
                                January 24, 1997
Morgan Stanley Group Inc.
1585 Broadway
New York, NY 10036

                           Morgan Stanley Group Inc.
                       Global Medium-Term Notes, Series C
                             Global Units, Series C
                       ----------------------------------

Ladies and Gentlemen:

          We have acted as special tax counsel to Morgan Stanley Group Inc.
(the "Company") in connection with the preparation and filing with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
of a Prospectus Supplement dated January 24, 1997 relating to a Prospectus dated
January 24, 1997 contained in the Company's Registration Statement on Form S-3
(Registration Statement No. 333-18005) (the "Registration Statement").

          We are of the opinion that the statements set forth under the caption
"United States Federal Taxation" in the Prospectus Supplement dated January 24,
1997 relating to the Prospectus dated January 24, 1997 and under the caption
"Limitations on Issuance of Bearer Debt Securities and Bearer Debt Warrants" in
the Prospectus dated January 24, 1997, contained in the Registration Statement,
insofar as such statements relate to statements of law or legal conclusions
under the laws of the United States or matters of United States law, fairly
present the information called for and fairly summarize the matters referred to
therein.

          We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.

                                            Very truly yours,

                                            /s/ Shearman & Sterling


PHB/DRM