Rule 424(b)(2)
                                                          Registration Statement
                                                          No. 333-18005

PROSPECTUS SUPPLEMENT
(To Prospectus dated January 24, 1997)

                               U.S.$5,860,000,000
                            Morgan Stanley Group Inc.
                 GLOBAL MEDIUM-TERM NOTES, SERIES D AND SERIES E
                       GLOBAL UNITS, SERIES D AND SERIES E

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


                  Due More Than Nine Months from Date of Issue

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


         Morgan Stanley Group Inc. (the  "Company") may offer from time to time,
either  alone or as part of a Unit,  its  Global  Medium-Term  Notes,  which are
issuable in one or more series and may be offered and sold in the United States,
outside  the  United   States  or  both  in  and   outside  the  United   States
simultaneously. Global Medium-Term Notes issued as part of a Unit will be issued
in conjunction with one or more Universal  Warrants,  Purchase  Contracts or any
combination  thereof.  See "Description of Units." The Global Medium-Term Notes,
Series D (the "Series D Notes"),  the Global  Medium-Term  Notes,  Series E (the
"Series E Notes" and, together with the Series D Notes, the "Notes"), the Global
Units,  Series D, each  consisting of one or more Series D Notes and one or more
Universal  Warrants,  Purchase  Contracts or any combination  thereof ("Series D
Units"), and the Global Units, Series E, each consisting of one or more Series E
Notes and one or more Universal Warrants,  Purchase Contracts or any combination
thereof  ("Series E Units" and,  together with the Series D Units,  the "Units,"
and the Units together with the Notes, the "Program Securities"), offered hereby
are offered outside the United States at an aggregate  initial offering price of
up to  U.S.$5,860,000,000,  or  the  equivalent  thereof  in  other  currencies,
including composite currencies such as the ECU (the "Specified  Currency").  See
"Description  of Notes -- Payment  Currency."  Such aggregate  offering price is
subject to  reduction  as a result of the sale by the  Company of certain  other
Debt Securities,  including the sale of the Company's Global  Medium-Term Notes,
Series C, and  Global  Units,  Series C,  primarily  in the United  States,  and
certain Warrants,  Preferred Stock,  Purchase  Contracts and Units. See "Plan of
Distribution."

         The  Notes  may  be  issued  as  Senior  Indebtedness  or  Subordinated
Indebtedness.  Subordinated  Indebtedness  will  be  subordinate  to all  Senior
Indebtedness.  See "Description of Debt Securities -- Subordinated  Debt" in the
accompanying  Prospectus.  The interest rate on each Note will be either a fixed
rate  established by the Company at the date of issue of such Note, which may be
zero in the case of certain Original Issue Discount Notes, or a floating rate as
set forth  therein and  specified in the  applicable  Pricing  Supplement.  Such
interest  rates  may be  determined  by  reference  to  the  prices  of  certain
securities or  commodities.  A Fixed Rate Note may pay a level amount in respect
of  both  interest  and  principal  amortized  over  the  life of the  Note  (an
"Amortizing Note"). The terms and conditions set forth in "Description of Notes"
in this Prospectus Supplement will apply to each Note unless otherwise specified
in the applicable  Pricing  Supplement  and in such Note.  Interest on each Note
(and principal on each Amortizing Note) is payable on the dates set forth herein
and/or in the applicable Pricing Supplement. Each Fixed Rate Note will mature on
any day more  than  nine  months  from the date of  issue,  as set  forth in the
applicable  Pricing  Supplement.  Each  Floating  Rate  Note  will  mature on an
Interest Payment Date more than nine months from the date of issue, as set forth
in the applicable Pricing  Supplement.  The Notes may be redeemed by the Company
prior to the maturity (including upon the occurrence of certain events involving
United States taxation or information reporting requirements) and will be issued
in  fully  registered  form,  in  bearer  form,  or in any  combination  of such
registered  and bearer  forms.  See  "Description  of Notes."  The Notes will be
issued in  denominations of U.S.$1,000 (or, in the case of Notes not denominated
in U.S. dollars,  the equivalent thereof in the Specified  Currency,  rounded to
the  nearest  1,000  units of the  Specified  Currency)  or any amount in excess
thereof which is an integral  multiple of  U.S.$1,000  (or, in the case of Notes
not denominated in U.S.  dollars,  1,000 units of the Specified  Currency).  Any
terms  relating to Notes being  denominated  in a Specified  Currency other than
U.S. dollars will be as set forth in the applicable Pricing  Supplement.  Unless
otherwise specified in the applicable Pricing Supplement,  payments on the Notes
will be increased by the amount of any deduction  for United States  withholding
taxes  to the  extent  described  under  "Description  of Notes  --  Payment  of
Additional Amounts."

         Universal  Warrants  included in Units will entitle 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.  The Company may satisfy its  obligations,  if any, with respect to
any Universal  Warrants by delivering the underlying  securities,  currencies or
commodities or, in the case of underlying  securities or  commodities,  the cash
value thereof,  as set forth in the applicable Pricing  Supplement.  A Universal
Warrant issued as part of a Unit may not be separated from the other  securities
comprising such Unit prior to such Warrant's  expiration  date unless  otherwise
specified in the applicable Pricing Supplement.

         Purchase  Contracts  included in Units will require 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.  A Purchase  Contract issued as part of a Unit may not be separated
from the other securities comprising such Unit prior to such Purchase Contract's
settlement  date,   unless  otherwise   specified  in  the  applicable   Pricing
Supplement.  The applicable  Pricing Supplement will also specify the methods by
which  the  holders  may  purchase  or  sell  such  securities,   currencies  or
commodities  and any  acceleration,  cancellation  or termination  provisions or
other provisions relating to the settlement of a Purchase Contract.

         Application  has been made to the London  Stock  Exchange  Limited (the
"London Stock  Exchange") for Series D Notes only, up to an aggregate  principal
amount outstanding at any time of up to U.S.$5,860,000,000 offered hereby during
the twelve months after the date of this Prospectus Supplement to be admitted to
the Official List of the London Stock Exchange. The Company may make application
from time to time for issues of Series D Units to be  admitted  to the  Official
List of the London Stock  Exchange,  in connection  with which  further  listing
particulars  will be produced.  Application  will, in certain  circumstances  as
described  herein,  be made to list  Series  D Notes  and  Series D Units on the
Bourse de Paris (the "Paris  Bourse").  For the sole purpose of listing Series D
Notes and Series D Units on the Paris Bourse, this Prospectus Supplement and the
accompanying  Prospectus have been submitted to the clearance  procedures of the
Commission des Operations de Bourse (the "COB") and have been  registered by the
COB under no.  ________ on February ____,  1997. The Series E Notes and Series E
Units will not be listed on any stock exchange.

                           ---------------------------
THESE SECURITIES HAVE  NOT BEEN  APPROVED  OR  DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
    AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON 
        THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE 
           PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A 
                               CRIMINAL OFFENSE.

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




                                      Price to                      Agent's                             Proceeds to
                                     Public (1)                 Commission (2)                       Company (2)(3)
                                     ----------                 --------------                       --------------
                                                                                                           

Per Note or Unit..............        100.000%                  .125% - .750%                       99.875% - 99.250%
Total(4)......................   U.S.$5,860,000,000    U.S.$7,325,000 - U.S.$43,950,000  U.S.$5,852,675,000 - U.S.$5,816,050,000



(1)      Unless otherwise specified in the applicable Pricing Supplement,  Notes
         will be sold at 100% of their principal amount,  and Units will be sold
         at 100% of the principal amount of the Notes included therein.
(2)      Unless otherwise  specified in the applicable Pricing  Supplement,  the
         commission  payable to an Agent for each Program  Security sold through
         such  Agent  will  range  from .125% to .750% of the Price to Public of
         such Program Security; provided, however, that commissions with respect
         to Program  Securities having a maturity of 30 years or greater will be
         negotiated.  The Company may also sell Program  Securities to an Agent,
         as  principal,  at  negotiated  discounts,  for resale to investors and
         other purchasers.
(3)      Before  deducting   expenses  payable  by  the  Company   estimated  at
         U.S.$3,174,167.
(4)      Or the  equivalent  thereof in other  currencies,  including  composite
         currencies.

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


         Offers to purchase the Program Securities are being solicited from time
to time by Morgan Stanley & Co. International  Limited,  Bank Morgan Stanley AG,
Morgan Stanley S.A. (the French Franc  arranger) and Morgan Stanley Bank AG (the
Deutsche Mark  arranger),  each of which is an affiliate of the Company (each an
"Agent" and, together,  the "Agents").  The Agents have agreed to use reasonable
efforts to solicit  purchases of such Program  Securities.  The Company may also
sell Program  Securities  to an Agent acting as principal for its own account or
otherwise,  as determined by such Agent. No termination date for the offering of
the  Program  Securities  has been  established.  The  Company or the Agents may
reject any order in whole or in part. There can be no assurance that the Program
Securities  offered hereby will be sold or that there will be a secondary market
for the Program Securities. See "Plan of Distribution."

         This Prospectus Supplement and the accompanying  Prospectus may be used
by the Agents in connection  with offers and sales of the Program  Securities in
market-making  transactions  at negotiated  prices related to prevailing  market
prices at the time of sale or  otherwise.  The  Agents may act as  principal  or
agent in such transactions.
                           ---------------------------
                              MORGAN STANLEY & CO.
                                  International

February 20, 1997


                                 


         No dealer, salesman or any other person has been authorized to give any
information or to make any  representations  other than those  contained in this
Prospectus Supplement, any Pricing Supplement and the accompanying Prospectus in
connection with the offer contained in this Prospectus  Supplement,  any Pricing
Supplement  and  the  accompanying  Prospectus  and,  if  given  or  made,  such
information or representations must not be relied upon as having been authorized
by the  Company  or by the  Agents.  This  Prospectus  Supplement,  any  Pricing
Supplement and the accompanying Prospectus do not constitute an offer to sell or
a solicitation  of an offer to buy Securities by anyone in any  jurisdiction  in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such offer or solicitation.

         References  herein  to  "U.S.  dollars"  or  "U.S.$"  or "$" are to the
currency of the United States of America.

         A copy of this Prospectus  Supplement and the  accompanying  Prospectus
dated January 24, 1997, which together comprise listing  particulars with regard
to the  issuance  by the  Company of the Series D Notes in  compliance  with the
rules  of the  London  Stock  Exchange  and in  accordance  with  Part IV of the
Financial Services Act 1986, will be delivered for registration to the Registrar
of  Companies  in England and Wales as required by Section 149 of such Act.  The
issuance  of Notes or Units  denominated  in  French  Francs,  or Notes or Units
denominated  in another  currency but which provide for payments that are linked
directly or indirectly to French Francs  ("French Franc Notes" and "French Franc
Units," respectively) will comply with the rules and regulations relating to the
Marche de  l'eurofranc  from time to time of the Comite des  Emissions  ("French
EuroFranc Regulations") and the Principes Generaux etablis par la Commission des
Operations de Bourse ("COB") et de Conseil des Bourse de Valeurs ("CBV" that has
since  changed its name to "CMF")  relatifs a l'emission en France sur le marche
International et a l'admission a la cote officielle de warrants et d'obligations
complexes (the "General Principles"). The French EuroFranc Regulations recommend
the  listing of French  Franc Notes and French  Franc Units on the Paris  Bourse
where (i) such French  Franc Notes or French Franc Units are, or are intended to
be, listed on any other stock exchange or (ii) such French Franc Notes or French
Franc Units are, or are intended to be,  distributed  as a public offer  (within
the  meaning  of  the  French  EuroFranc  Regulations).  The  minimum  aggregate
principal  amount of Series D French  Franc Notes or Series D French Franc Units
listed on the Paris  Bourse  ("Series D French Franc Notes" and "Series D French
Franc  Units,"  respectively)  and  distributed  in  a  public  offer  shall  be
300,000,000 French Francs. Under current applicable French regulations, "private
placements"  shall be  construed as issuances of Notes or Units placed on a firm
basis with a small number of predetermined nonresident investors. So long as any
Notes or Units  are  listed  on the  Paris  Bourse,  copies  of this  Prospectus
Supplement and the accompanying Prospectus (and all publicly available documents
incorporated by reference herein) will be available from the principal office of
Morgan Stanley S.A. as the listing agent for Notes and Units listed on the Paris
Bourse. The Company accepts responsibility for the information contained in this
Prospectus  Supplement  and  the  accompanying  Prospectus.  To the  best of the
knowledge  and belief of the  Company  (which has taken all  reasonable  care to
ensure that such is the case),  the  information  contained  in this  Prospectus
Supplement and the  accompanying  Prospectus  (including  the existing  publicly
available documents incorporated by reference therein) is in accordance with the
facts  and  does  not  omit  anything  likely  to  affect  the  import  of  such
information.

         IN  CONNECTION  WITH THIS  OFFERING,  THE AGENT WHO IS SPECIFIED IN THE
RELEVANT  PRICING  SUPPLEMENT  MAY  OVER-ALLOT  OR  EFFECT   TRANSACTIONS  WHICH
STABILIZE  OR  MAINTAIN  THE  MARKET  PRICE OF THE  PROGRAM  SECURITIES,  OR ANY
SECURITIES THE PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON SUCH PROGRAM
SECURITIES, AT LEVELS WHICH MIGHT NOT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING,  IF COMMENCED,  MAY BE DISCONTINUED AT ANY TIME. SUCH  TRANSACTIONS
WILL BE  CARRIED  OUT IN  ACCORDANCE  WITH ALL  RELEVANT  LAWS AND  REGULATIONS.
- -------------------



                                       S-2





                               RECENT DEVELOPMENTS

         On February 5, 1997, the Company and Dean Witter, Discover & Co. ("Dean
Witter")  announced a definitive  agreement to merge. The combined company would
be a preeminent global financial  services firm with a market  capitalization of
approximately  $21  billion  (as of the merger  announcement)  and with  leading
market  positions  in the  securities,  asset  management  and  credit  services
businesses.  The new company will be named Morgan Stanley, Dean Witter, Discover
& Co. The merger would combine Morgan Stanley's  strengths in investment banking
and  institutional  sales and trading  with Dean  Witter's  strengths  in retail
distribution,  asset  gathering and credit  services.  Dean Witter has the third
largest retail  brokerage  operation with over 9,000 account  executives and 361
branches  throughout  the U.S.  and manages  more than $100  billion in customer
assets.  Led by the Discover(R) Card, Dean Witter is the nation's largest credit
card  issuer  with 39 million  accounts,  and the third  largest in credit  card
receivables.  Under the terms of the merger agreement,  unanimously  approved by
the  Boards of both  companies,  each of the  Company's  common  shares  will be
exchanged for 1.65 Dean Witter common shares. The transaction, which is expected
to be completed by mid-1997, is intended to be a tax-free exchange and accounted
for as a pooling of interests  and is subject to customary  closing  conditions,
including certain regulatory  approvals and the approval of shareholders of both
companies.

                              DESCRIPTION OF NOTES

         The following  description of the particular terms of the Notes offered
hereby  supplements  the  description of the general terms and provisions of the
Debt Securities set forth in the Prospectus,  to which reference is hereby made.
Unless otherwise  defined,  the terms used herein shall have the same meaning as
those set forth in the  Prospectus.  In particular,  as used under this caption,
the term "Company"  means Morgan Stanley Group Inc. The particular  terms of the
Notes sold pursuant to any pricing  supplement (a "Pricing  Supplement") will be
described therein.  The terms and conditions set forth in "Description of Notes"
will apply to each Note unless  otherwise  specified in the  applicable  Pricing
Supplement  and in such Note. The Notes  described  herein may be offered either
alone or as part of a Unit. See "Description of Units."

         If any Note is not to be  denominated in U.S.  dollars,  the applicable
Pricing Supplement will specify the currency or currencies,  including composite
currencies  such as the  European  Currency  Unit  (the  "ECU"),  in  which  the
principal,  premium, if any, and interest, if any, with respect to such Note are
to be  paid,  along  with  any  other  terms  relating  to the  non-U.S.  dollar
denomination. See "Foreign Currency Risks."

General

         The Notes may be issued  either  alone or as part of a Unit,  under the
Senior  Debt  Indenture  ("Senior  Notes") or the  Subordinated  Debt  Indenture
("Subordinated Notes"). The Notes issued under each Indenture, together with the
Company's Global Medium-Term  Notes,  Series C, referred to below under "Plan of
Distribution,"  will constitute a single series under such  Indenture,  together
with any  medium-term  notes of the  Company  issued in the  future  under  such
Indenture which are designated by the Company as constituting a single series of
securities  with the  Notes  and the  Global  Medium-Term  Notes,  Series C, for
purposes of such Indenture.  Neither  Indenture  limits the amount of additional
indebtedness  that the Company may incur.  At August 31,  1996,  the Company had
approximately  U.S.$11.6 billion aggregate principal amount of medium-term notes
outstanding under the Senior Debt Indenture and approximately  U.S.$91.2 million
aggregate   principal  amount  of  medium-term   notes   outstanding  under  the
Subordinated Debt Indenture.  Such aggregate  principal amounts may be increased
from time to time as authorized  by, or pursuant to authority  delegated by, the
Board of Directors of the Company.  For the purpose of this  paragraph,  (i) the
principal  amount of any Original  Issue  Discount Note (as defined below) means
the Issue Price (as defined below) of such Note and (ii) the principal amount of
any Note  issued in a foreign  currency  or  composite  currency  means the U.S.
dollar equivalent on the date of issue of the Issue Price of such Note.

         Notes issued under the Senior Debt  Indenture will rank pari passu with
all other Senior  Indebtedness  of the Company and with all other  unsecured and
unsubordinated  indebtedness of the Company. Notes issued under the Subordinated
Debt Indenture will rank pari passu with all other subordinated  indebtedness of
the Company and,  together with such other  subordinated  indebtedness,  will be
subordinated in right of payment to the prior payment

                                       S-3





in full of the Senior  Indebtedness  of the Company.  See  "Description  of Debt
Securities -- Subordinated  Debt" in the Prospectus.  At August 31, 1996,  there
was  outstanding   approximately   U.S.$22.4  billion  of  Senior  Indebtedness,
approximately  U.S.$1.3 billion of subordinated  indebtedness and  approximately
U.S.$865.3   million  of  Capital  Units.   Each  Capital  Unit  consists  of  a
subordinated  debenture  of Morgan  Stanley  Finance  plc, a  subsidiary  of the
Company,  guaranteed  by the  Company  on a  subordinated  basis  and a  related
purchase  contract  issued by the Company  requiring  the holder to purchase one
depositary share representing  ownership of a fraction or multiple of a share of
the Company's preferred stock.

         Fixed Rate Notes,  Amortizing  Notes and Original  Issue Discount Notes
will  mature  on any day more than nine  months  from the date of issue,  as set
forth in the applicable Pricing  Supplement.  Floating Rate Notes will mature on
an Interest  Payment Date (as defined below) more than nine months from the date
of issue, as set forth in the applicable Pricing  Supplement.  Notes denominated
or payable in  Deutsche  Marks will  mature at least two years after the date of
issue and Notes  denominated or payable in pounds  sterling will mature at least
one year,  but not more than five years,  after the date of issue.  French Franc
Notes will  mature at least one year after the date of issue.  The Notes will be
offered on a continuing basis, and any Note purchased on original issuance by or
on behalf of a United States person must,  subject to certain  exceptions,  be a
Registered Note (as defined below). Bearer Notes (as defined below) purchased on
original  issuance by any other  purchaser  initially  will be  represented by a
temporary global Bearer Note to be deposited with a common depositary for Morgan
Guaranty  Trust  Company  of New  York,  Brussels  office,  as  operator  of the
Euroclear System (the "Euroclear Operator"), Cedel Bank, societe anonyme ("Cedel
Bank") and/or any other relevant clearing system (including Sicovam S.A. and the
Intermediaires  financiers  habilites  authorized to maintain  accounts  therein
("SICOVAM")).   Interests  in  each   temporary   global  Bearer  Note  will  be
exchangeable  for interests in permanent  global Bearer Notes or for  definitive
Registered or Bearer Notes in the manner and upon compliance with the procedures
described  under  "Description  of Notes -- Forms,  Denominations,  Exchange and
Transfer."

         The applicable  Pricing  Supplement  will specify the price (the "Issue
Price") of each Note to be sold pursuant thereto,  the interest rate or interest
rate  formula,  ranking,  maturity,  currency or composite  currency,  principal
amount and any other terms on which each such Note will be issued.

         As used herein,  the following  terms shall have the meanings set forth
below:

         "Business Day" means any day, other than a Saturday or Sunday,  that is
neither a legal holiday nor a day on which banking  institutions  are authorized
or required by law or regulation to close in The City of New York or in The City
of London and (i) with respect to LIBOR Notes (as defined below), that is also a
London  Banking  Day,  (ii) with  respect to Notes  denominated  in a  Specified
Currency other than U.S. dollars,  Australian  dollars or ECUs, in the principal
financial center of the country of the Specified Currency, (iii) with respect to
Notes  denominated  in  Australian  dollars,  in Sydney and (iv) with respect to
Notes  denominated in ECUs, that is not a non-ECU clearing day, as determined by
the ECU Banking Association in Paris.

         An "Interest  Payment Date" with respect to any Note shall be a date on
which,  under the terms of such  Note,  regularly  scheduled  interest  shall be
payable.

         "London Banking Day" means any day on which dealings in deposits in the
relevant  Index  Currency  (as  defined  below)  are  transacted  in the  London
interbank market.

         "Original  Issue  Discount  Note" means any Note that  provides  for an
amount  less than the  principal  amount  thereof to be due and  payable  upon a
declaration of  acceleration  of the maturity  thereof  pursuant to the relevant
Indenture.

         The  "Record  Date" with  respect to any  Interest  Payment  Date for a
Registered  Note  shall  be the date 15  calendar  days  prior to such  Interest
Payment Date, whether or not such date shall be a Business Day.


                                       S-4





Payment Currency

         If the applicable Pricing  Supplement  provides for all or a portion of
payments of interest and principal on a non-U.S.  dollar  denominated Note to be
made, at the option of the holder of such Note, in U.S.  dollars,  conversion of
the  Specified  Currency  into U.S.  dollars  will be based on the  highest  bid
quotation  in The City of New York  received  by the  Exchange  Rate  Agent  (as
defined  below) at  approximately  11:00 A.M., New York City time, on the second
Business Day preceding the applicable payment date from three recognized foreign
exchange  dealers  (one of which  may be the  Exchange  Rate  Agent  unless  the
Exchange  Rate Agent is an  affiliate  of the  Company)  for the purchase by the
quoting dealer of the Specified Currency for U.S. dollars for settlement on such
payment date in the aggregate  amount of the Specified  Currency  payable to the
holders  of Notes  and at which  the  applicable  dealer  commits  to  execute a
contract. If such bid quotations are not available, payments will be made in the
Specified Currency.  All currency exchange costs will be borne by the holders of
Notes by  deductions  from such  payments.  Unless  otherwise  indicated  in the
applicable Pricing Supplement,  the Exchange Rate Agent will be Morgan Stanley &
Co. International Limited.

         Except as set forth below,  if the  principal of,  premium,  if any, or
interest on, any Note is payable in a Specified Currency other than U.S. dollars
and such Specified  Currency is not available to the Company for making payments
thereof due to the imposition of exchange controls or other circumstances beyond
the control of the Company or is no longer used by the government of the country
issuing  such  currency  or  for  the  settlement  of   transactions  by  public
institutions within the international  banking community,  then the Company will
be entitled to satisfy  its  obligations  to holders of the Notes by making such
payments in U.S.  dollars on the basis of the Market  Exchange  Rate (as defined
below)  on the date of such  payment  or,  if the  Market  Exchange  Rate is not
available  on such  date,  as of the most  recent  practicable  date;  provided,
however,  that if such Specified  Currency is replaced by the Euro (as described
under "Special  Provisions  Relating to Notes  Denominated  in ECU" below),  the
payment of principal of, premium, if any, or interest on any Note denominated in
such currency  shall be effected in Euro in conformity  with legally  applicable
measures  taken  pursuant  to, or by virtue  of,  the  treaty  establishing  the
European Community (the "EC"), as amended by the treaty on European Union (as so
amended,  the  "Treaty").  Any  payment  made under such  circumstances  in U.S.
dollars (or, if applicable,  Euro) where the required  payment is in a Specified
Currency  other  than U.S.  dollars  will not  constitute  an Event of  Default.
"Market Exchange Rate" means the noon U.S. dollar buying rate in The City of New
York for wire  transfers  of the  relevant  currency  or  composite  currency as
certified for customs purposes by the Federal Reserve Bank of New York.

Special Provisions Relating to Notes Denominated in ECU

         Valuation of the ECU

         Subject to the  provisions  under  "Payment  in a  Component  Currency"
below,  the value of the ECU,  in which the Notes may be  denominated  or may be
payable,  is equal to the value of the ECU that is from time to time used as the
unit of account of the EC and which is at the date hereof valued on the basis of
specified  amounts of the  currencies  of 12 of the 15 member  states of the EC.
Under Article 109G of the Treaty, the currency composition of the ECU may not be
changed.  Other changes to the ECU may be made by the EC in  conformity  with EC
law, in which event the ECU will change accordingly. From the start of the third
stage of European monetary union, the value of the ECU as against the currencies
of member states  participating in the third stage will be irrevocably fixed and
the ECU will  become a currency in its own right,  replacing  all or some of the
currencies of the 15 member states of the EC (as of the date of this  Prospectus
Supplement, such currencies include the Austrian shilling, Belgian franc, Danish
krone, Dutch guilder,  Finnish markka, French franc, German mark, Greek drachma,
Irish pound, Italian lira, Luxembourg franc,  Portuguese escudo, Spanish peseta,
Swedish krona and pound  sterling).  In  contemplation  of the third stage,  the
European Council meeting in Madrid on December 16, 1995 decided that the name of
the new  currency  will be the Euro and that,  in  accordance  with the  Treaty,
substitution  of the  Euro  for the ECU  will be at the rate of one Euro for one
ECU. From the start of the third stage of European  monetary union, all payments
in respect of the Notes denominated or payable in ECU will be payable in Euro at
the rate then established in accordance with the Treaty.


                                       S-5





         Payment in a Component Currency

         With  respect  to each due date for the  payment  of  principal  of, or
interest  on, the Notes on or after the first  business day in Brussels on which
the ECU  ceases to be used as the unit of account of the EC and has not become a
currency in its own right  replacing all or some of the currencies of the member
states of the EC, the Company  shall choose a substitute  currency  (the "Chosen
Currency"),  which may be any  currency  which was, on the last day on which the
ECU was used as the unit of account of the EC, a  component  currency of the ECU
or U.S. dollars, in which all payments due on or after that date with respect to
the Notes and coupons shall be made.  Notice of the Chosen  Currency so selected
shall,  where  practicable,  be published  in the manner  described in "Notices"
below.  The amount of each payment in such Chosen  Currency shall be computed on
the basis of the equivalent of the ECU in that currency, determined as described
below, as of the fourth business day in Brussels prior to the date on which such
payment is due.

         On the first  business  day in  Brussels  on which the ECU ceases to be
used as the unit of account  of the EC and has not become a currency  in its own
right  replacing  all or some of the  currencies of the member states of the EC,
the Company shall select a Chosen Currency in which all payments with respect to
Notes and  coupons  having a due date prior  thereto but not yet  presented  for
payment are to be made.  Notice of the Chosen Currency so selected shall,  where
practicable, be published in the manner described in "Notices" below. The amount
of each  payment in such Chosen  Currency  shall be computed on the basis of the
equivalent of the ECU in that  currency,  determined as described  below,  as of
such first business day.

         The  equivalent  of the ECU in the relevant  Chosen  Currency as of any
date (the "Day of  Valuation")  shall be  determined  by, or on behalf  of,  the
Exchange Rate Agent on the following basis. The amounts and components composing
the ECU for this purpose (the "Components")  shall be the amounts and components
that  composed the ECU as of the last date on which the ECU was used as the unit
of account of the EC. The equivalent of the ECU in the Chosen  Currency shall be
calculated by, first, aggregating the U.S. dollar equivalents of the Components;
and then, in the case of a Chosen  Currency other than U.S.  dollars,  using the
rate used for determining  the U.S.  dollar  equivalent of the Components in the
Chosen  Currency as set forth below,  calculating  the  equivalent in the Chosen
Currency of such aggregate amount in U.S. dollars.

         The  U.S.  dollar  equivalent  of  each  of  the  Components  shall  be
determined  by, or on behalf  of,  the  Exchange  Rate Agent on the basis of the
middle spot delivery  quotations  prevailing at 2:30 P.M., Brussels time, on the
Day of Valuation,  as obtained by, or on behalf of, the Exchange Rate Agent from
one or more major banks, as selected by the Company,  in the country of issue of
the component currency in question.

         If for any reason no direct quotations are available for a Component as
of a Day of  Valuation  from any of the  banks  selected  for this  purpose,  in
computing the U.S. dollar equivalent of such Component,  the Exchange Rate Agent
shall (except as provided below) use the most recent direct  quotations for such
Component  obtained by it or on its behalf,  provided that such  quotations were
prevailing  in the country of issue not more than two Business  Days before such
Day of  Valuation.  If such most recent  quotations  were so  prevailing  in the
country of issue more than two Business Days before such Day of  Valuation,  the
Exchange Rate Agent shall determine the U.S. dollar equivalent of such Component
on the basis of cross rates derived from the middle spot delivery quotations for
such  component  currency  and for the  U.S.  dollar  prevailing  at 2:30  P.M.,
Brussels  time, on such Day of  Valuation,  as obtained by, or on behalf of, the
Exchange Rate Agent from one or more major banks, as selected by the Company, in
a  country  other  than  the  country  of  issue  of  such  component  currency.
Notwithstanding the foregoing,  the Exchange Rate Agent shall determine the U.S.
dollar  equivalent  of such  Component  on the basis of such cross  rates if the
Company  or  such  agent  judges  that  the  equivalent  so  calculated  is more
representative  than the U.S.  dollar  equivalent  calculated as provided in the
first sentence of this paragraph.  Unless otherwise specified by the Company, if
there is more than one market for dealing in any component currency by reason of
foreign exchange  regulations or for any other reason, the market to be referred
to in respect of such currency shall be that upon which a nonresident  issuer of
securities denominated in such currency would purchase such currency in order to
make payments in respect of such securities.


                                       S-6





         Payments in the Chosen Currency will be made at the specified office of
a paying  agent in the country of the Chosen  Currency,  or, if none,  or at the
option of the holder,  at the  specified  office of any Paying Agent either by a
check drawn on, or by transfer to an account  maintained  by the holder  with, a
bank in the principal financial center of the country of the Chosen Currency.

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

         Notes Denominated in the Currencies of EC Member States

         If, pursuant to the Treaty, all or some of the currencies of the member
countries  of the EC are  replaced  by the Euro,  the payment of  principal  of,
premium,  if any, or interest on, the Notes denominated in such currencies shall
be  effected  in Euro in  conformity  with  legally  applicable  measures  taken
pursuant to, or by virtue of, the Treaty.

Forms, Denominations, Exchange and Transfer

         Unless otherwise  specified in the applicable Pricing  Supplement,  the
Notes may be issued,  either alone or as part of a Unit, (i) in fully registered
definitive  form  without  coupons  ("Registered  Notes") or (ii) in  definitive
bearer form with coupons  attached or in temporary  or permanent  global  bearer
form  without  coupons  attached  (in  each  case,  "Bearer  Notes")  or in  any
combination of the above such registered or bearer forms.

         Except as provided  below or as otherwise  specified in the  applicable
Pricing  Supplement,  Notes  denominated in U.S.  dollars will be issued only in
denominations  of U.S.$1,000 or any amount in excess thereof that is an integral
multiple of U.S.$1,000, Notes denominated in Japanese yen ("(Y)") will be issued
with a minimum denomination of (Y)1,000,000 and Notes denominated in a Specified
Currency other than U.S. dollars or Japanese yen will be issued in denominations
of the equivalent of U.S.$1,000  (rounded to an integral multiple of 1,000 units
of such  Specified  Currency),  or any  amount  in  excess  thereof  which is an
integral  multiple of 1,000 units of such Specified  Currency,  as determined by
reference to the Market Exchange Rate of such Specified Currency on the Business
Day immediately preceding the date of issuance;  provided, however, that, in the
case of the  ECU,  the  Market  Exchange  Rate  shall  be the  rate of  exchange
determined  by the  Commission  of the European  Communities  (or any  successor
thereto) as published in the Official  Journal of the European  Communities,  or
any successor publication, on the Business Day immediately preceding the date of
issuance.

         Each Bearer Note and interest  coupon,  if any, will bear the following
legend:  "Any United States person who holds this  obligation will be subject to
limitations  under the United States income tax laws,  including the limitations
provided in Sections  165(j) and 1287(a) of the United States  Internal  Revenue
Code of 1986."

         Registered  Notes will be  exchangeable  for Registered  Notes in other
authorized  denominations,  in an equal aggregate principal amount in accordance
with the provisions set forth in the applicable Indenture. Bearer Notes will not
be issuable in exchange for Registered Notes.  Registered Notes may be presented
for  registration  of transfer or exchange at the offices of the  Registrar  (as
defined below) or at the offices of any transfer agent designated by the Company
for such purpose.  See  "Registrar,  Paying Agents and Transfer  Agents." Bearer
Notes may be presented  for  exchange in the manner set forth below.  No service
charge  will be made for any  registration  of transfer or exchange of Notes but
the Company may require  payment of a sum  sufficient  to cover any tax or other
governmental  charge  payable  in  connection  therewith.  Bearer  Notes and any
coupons appertaining thereto will be transferable by delivery.

         Each Bearer Note will be  represented  initially by a temporary  global
Bearer Note, without interest coupons,  and which, unless otherwise specified in
the applicable Pricing Supplement, will be deposited with a common depositary (a
"Common  Depositary")  for the Euroclear  Operator and Cedel Bank, for credit to
the account designated by or on behalf of the subscriber  thereof.  Upon deposit
of each such temporary global Bearer Note, the Euroclear Operator or Cedel Bank,
as the case may be, will credit each subscriber with a principal amount of Notes

                                       S-7





equal to the principal  amount thereof for which it has subscribed and paid. The
interests of the  beneficial  owner or owners in a temporary  global Bearer Note
will be exchangeable, after the date (the "Exchange Date") that is 40 days after
the date on which the  Company  receives  the  proceeds of the sale of such Note
(the "Closing  Date"),  for an interest in a permanent  global Bearer Note to be
held by a Common  Depositary  for the  Euroclear  Operator  and Cedel Bank,  for
credit  to the  account  designated  by or on  behalf  of the  beneficial  owner
thereof;  provided  that (i) the Exchange  Date for any Note held by an Agent as
part of an unsold allotment or subscription  more than 40 days after the Closing
Date for such  Note  shall be the day  after  the date such Note is sold by such
Agent  and (ii)  such  exchange  will be made only  upon  receipt  of  Ownership
Certificates  (as defined  below).  No  principal  or interest  may be paid on a
temporary  global Bearer Note until the person entitled to receive such interest
furnishes an  Ownership  Certificate.  An  "Ownership  Certificate"  is a signed
certificate in writing (or an electronic  certificate described in United States
Treasury  Regulations Section  1.163-5(c)(2)(i)(D)(3)(ii))  stating that on such
date  such  Bearer  Note (i) is owned  by a person  that is not a United  States
person (as defined in the  Prospectus),  (ii) is owned by a United States person
that (a) is a  foreign  branch  of a United  States  financial  institution  (as
defined in United States  Treasury  Regulations  Section  1.165-12(c)(1)(v))  (a
"financial institution") purchasing for its own account or for resale, or (b) is
acquiring such Bearer Note through a foreign branch of a United States financial
institution  and who holds the Bearer Note  through such  financial  institution
through  such date  (and in either  case (a) or (b),  each  such  United  States
financial  institution  agrees, on its own behalf or through its agent, that the
Company  may be advised  that it will comply  with the  requirements  of Section
165(j)(3)(A),  (B) or (C) of the Internal Revenue Code of 1986, as amended,  and
the  regulations  thereunder),  or (iii) is owned by a United  States or foreign
financial  institution  for the purposes of resale during the restricted  period
(as defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)
(the "Restricted Period")),  and in addition if the owner of such Bearer Note is
a United States or foreign financial institution described in clause (iii) above
(whether  or  not  also  described  in  clause  (i)  or  (ii)),  such  financial
institution  certifies  that it has not acquired the Bearer Note for purposes of
resale  directly or  indirectly  to a United States person or to a person within
the United States or its possessions.

         The beneficial owner of a Note represented by a permanent global Bearer
Note may, upon 30 days' written notice to the Principal Paying Agent (as defined
below),  given by the beneficial owner through either the Euroclear  Operator or
Cedel Bank,  exchange such owner's interest in such permanent global Bearer Note
for a definitive  Bearer Note or Notes,  which will be serially  numbered,  with
coupons,  if any,  attached or a  definitive  Registered  Note or Notes,  of any
authorized  denominations.  Upon  receipt by the  Principal  Paying  Agent of an
initial request to exchange an interest in a permanent  global Bearer Note for a
definitive  Bearer Note or Notes,  all other interests in such permanent  global
Bearer  Note  shall  be  exchanged  for  definitive  Bearer  Notes.  The  Common
Depositary for the Euroclear Operator and Cedel Bank will instruct the Principal
Paying Agent  regarding  the aggregate  principal  amount and  denominations  of
definitive  Bearer Notes that must be authenticated and delivered to each of the
Euroclear  Operator and Cedel Bank.  Such exchanges shall occur at no expense to
the beneficial  owners as soon as  practicable  after the receipt of the initial
request for  definitive  Bearer  Notes.  No Bearer Note will be delivered in the
United States. References herein to "Bearer Notes" shall, except where otherwise
indicated,  include  interests in a permanent or temporary global Bearer Note as
well as definitive Bearer Notes and any appurtenant coupons.

         At the option of the holder, and subject to the terms of the applicable
Indenture or procedures  established  pursuant thereto,  definitive Bearer Notes
(with all unmatured coupons,  and all matured coupons,  if any, in default) will
be exchangeable  into Registered  Notes of any authorized  denominations of like
tenor and in an equal aggregate  principal amount at the office of the Registrar
(as defined  below) or at the office of any  transfer  agent  designated  by the
Company for such purpose.  See "Registrar,  Paying Agents and Transfer  Agents."
Definitive  Bearer Notes  surrendered in exchange for Registered Notes after the
close of  business  at any such  office on any  Record  Date for the  payment of
interest on a Registered  Note and before the opening of business at such office
on the relevant  Interest  Payment Date shall be surrendered  without the coupon
relating  to  such  payment  of  interest.   Definitive  Bearer  Notes  will  be
exchangeable for definitive Bearer Notes in other authorized  denominations,  in
an equal aggregate  principal  amount,  in accordance with the provisions of the
applicable Indenture and at the offices of the Principal Paying Agent in London,
England or at the office of any  transfer  agent  designated  by the Company for
such purpose. See "Registrar, Paying Agents and Transfer Agents."

         The Company  will not be required  (i) to register  the  transfer of or
exchange  Notes to be redeemed for a period of fifteen  calendar days  preceding
the first publication of the relevant notice of redemption, or if Registered

                                       S-8





Notes are outstanding  and there is no publication,  the mailing of the relevant
notice of  redemption,  or (ii) to register  the  transfer  of or  exchange  any
Registered Note selected for redemption or surrendered  for optional  repayment,
in whole  or in part,  except  the  unredeemed  or  unpaid  portion  of any such
Registered Note being redeemed or repaid,  as the case may be, in part, or (iii)
to exchange any Bearer Note selected for redemption or surrendered  for optional
repayment,  except that such Bearer Note may be exchanged for a Registered  Note
of like  tenor,  provided  that such  Registered  Note  shall be  simultaneously
surrendered for redemption or repayment, as the case may be.

Interest and Principal Payments

         Interest  payable on a Bearer Note  represented  by a temporary  global
Bearer Note or any portion  thereof  will,  unless  otherwise  specified  in the
applicable  Pricing  Supplement,  be paid to each of the Euroclear  Operator and
Cedel Bank,  as the case may be, with respect to that portion of such  temporary
global Bearer Note held for its account upon  delivery to the  Principal  Paying
Agent of an  Ownership  Certificate  signed by the  Euroclear  Operator or Cedel
Bank,  as the case may be, dated no earlier  than such  Interest  Payment  Date,
which  certificate  must be  based on  Ownership  Certificates  provided  to the
Euroclear   Operator  or  Cedel  Bank,  as  the  case  may  be,  by  its  member
organizations.  Each of the  Euroclear  Operator  and  Cedel  Bank  will in such
circumstances  credit the interest  received by it in respect of such  temporary
global  Bearer  Note  or any  portion  thereof  to the  accounts  of or for  the
beneficial  owners thereof to the extent that they have furnished such Ownership
Certificates.

         Each permanent global Bearer Note will,  unless otherwise  specified in
the applicable Pricing  Supplement,  provide that principal of, and premium,  if
any, and interest on such  permanent  global Bearer Note will be paid to each of
the Euroclear  Operator and Cedel Bank, as the case may be, with respect to that
portion of such permanent  global Bearer Note held for its account.  Each of the
Euroclear  Operator  and  Cedel  Bank  will in such  circumstances  credit  such
principal,  premium,  if any, and any interest received by it in respect of such
permanent global Bearer Note to the respective accounts of or for the beneficial
owners of such permanent global Bearer Note at maturity, redemption or repayment
or on an Interest  Payment  Date,  as the case may be. If a  Registered  Note is
issued in exchange for any portion of a permanent  global  Bearer Note after the
close of  business  at the office or agency  where such  exchange  occurs on any
Record  Date and before the  opening of business at such office or agency on the
relevant  Interest  Payment Date, any interest (or any principal and interest in
the case of an  Amortizing  Note) will not be payable on such  Interest  Payment
Date in respect of such  Registered  Note,  but will be payable on such Interest
Payment Date only to the  Euroclear  Operator and Cedel Bank,  and the Euroclear
Operator and Cedel Bank will in such  circumstances  credit any such interest to
the account of or for the  beneficial  owner of such  portion of such  permanent
global  Bearer Note on such Record Date.  Payment of principal of,  premium,  if
any,  and any  interest  in respect of any  permanent  global  Bearer Note will,
unless otherwise specified in the applicable Pricing Supplement,  be made to the
Euroclear Operator and Cedel Bank in immediately available funds.

         Payment  of  principal  of,  premium,  if any,  and any  interest  on a
definitive  Bearer Note at maturity or upon redemption or repayment will be made
in immediately  available funds, subject to any applicable laws and regulations,
only  against  presentation  and  surrender  of such Note and any coupons at the
offices of a Paying Agent (as defined below)  outside the United States,  at the
option of the  holder,  by check or by wire  transfer of  immediately  available
funds to an account  maintained  by the payee with a bank  located  outside  the
United States if appropriate wire transfer  instructions have been received by a
Paying Agent not less than 15 calendar days prior to an applicable payment date.
Payment of interest on a definitive Bearer Note due on any Interest Payment Date
will be made only against  presentation  and surrender of the coupon relating to
such Interest Payment Date.

         No payment  with  respect to any Bearer Note will be made at any office
or agency of the Company in the United  States or by check mailed to any address
in the United  States or by wire transfer to an account  maintained  with a bank
located in the United  States  except as may be permitted  under  United  States
federal tax laws and regulations then in effect without adverse tax consequences
to the  Company.  Notwithstanding  the  foregoing,  payments  of  principal  of,
premium,  if any, and interest on Bearer Notes  payable in U.S.  dollars will be
made at the office of the  Company's  paying agent in the Borough of  Manhattan,
The City of New York,  if, and only if (i) payment of the full amount thereof in
U.S.  dollars at all offices or agencies outside the United States is illegal or
effectively  precluded by exchange  controls or other similar  restrictions  and
(ii) such paying agent in the Borough of Manhattan,  The City of New York, under
applicable law and regulations, would be able to make such payment.

                                       S-9






         Interest  will be payable on a  Registered  Note to the person in whose
name  the  Registered  Note  is  registered  at the  close  of  business  on the
applicable  Record  Date;  provided  that the interest  payable  upon  maturity,
redemption  or  repayment  (whether or not the date of maturity,  redemption  or
repayment  is an  Interest  Payment  Date) will be payable to the person to whom
principal is payable.  The initial interest payment on a Registered Note will be
made on the first  Interest  Payment Date falling after the date the  Registered
Note is issued;  provided,  however,  that (i) payments of interest  (or, in the
case of an  Amortizing  Note,  principal  and  interest)  on a  Registered  Note
originally  issued less than 15 calendar  days before an Interest  Payment  Date
will be paid on the next  succeeding  Interest  Payment  Date to the  holder  of
record on the Record Date with respect to such succeeding  Interest Payment Date
and (ii) payments of interest (or, in the case of an Amortizing Note,  principal
and  interest)  on a  Registered  Note issued in  exchange  for an interest in a
permanent  global  Bearer  Note less than 15  calendar  days  before an Interest
Payment Date will be paid as described above.

         U.S.  dollar  payments  of interest on a  Registered  Note,  other than
interest  payable at maturity (or on the date of redemption  or repayment,  if a
Note is redeemed or repaid by the Company  prior to  maturity),  will be made by
check mailed to the address of the person entitled  thereto as shown on the Note
register. U.S. dollar payments of principal,  premium, if any, and interest upon
maturity,  redemption  or  repayment  of a  Registered  Note  will  be  made  in
immediately  available  funds  against  presentation  and surrender of the Note.
Notwithstanding  the foregoing,  a holder of U.S.$10,000,000 (or the equivalent)
or more in  aggregate  principal  amount of  Registered  Notes  having  the same
Interest  Payment Date shall be entitled to receive payments of interest by wire
transfer of immediately available funds upon written request to the Paying Agent
not later than 15 calendar days prior to the applicable  Interest  Payment Date.
See "United States Federal Taxation."

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

         Certain  Notes,   including  Original  Issue  Discount  Notes,  may  be
considered to be issued with original issue discount. Unless otherwise specified
in the  applicable  Pricing  Supplement,  if the principal of any Original Issue
Discount Note is declared to be due and payable  immediately as described  under
"Description  of Debt  Securities -- Events of Default" in the  Prospectus,  the
amount of  principal  due and payable with respect to such Note shall be limited
to the  aggregate  principal  amount of such Note  multiplied  by the sum of its
Issue Price (expressed as a percentage of the aggregate  principal  amount) plus
the  original  issue  discount  amortized  from the date of issue to the date of
declaration,  which amortization shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting  principles in effect
on the date of declaration). Special considerations applicable to any such Notes
will be set forth in the applicable Pricing Supplement.

Registrar, Paying Agents and Transfer Agents

         The Company has initially designated The Chase Manhattan Bank (formerly
known as Chemical Bank),  acting through its principal corporate trust office in
the Borough of  Manhattan,  The City of New York,  as its registrar and transfer
agent for the  Registered  Notes  (the  "Registrar,"  which  term  includes  any
successor  Registrar appointed by the Company) and as the Company's paying agent
for Registered Notes in the United States,  and The Chase Manhattan Bank, London
Branch,  as transfer and paying agent for the Notes and as its principal  paying
agent for the Notes outside the United  States (the  "Principal  Paying  Agent,"
which term  includes  any  successor  principal  paying  agent  appointed by the
Company).  Any initial designation by the Company of the Registrar or a transfer
agent may be  rescinded at any time,  except  that,  so long as any Notes remain
outstanding,  the Company will maintain in the Borough of Manhattan, The City of
New  York,  one or more  offices  or  agencies  where  Registered  Notes  may be
presented for registration of transfer and exchange. The Company may at any time
appoint additional

                                      S-10





transfer  agents  with  respect to the Notes and may appoint  additional  paying
agents for the Notes  outside the United  States (each a "Paying  Agent,"  which
term includes the Principal  Paying Agent and any additional or successor paying
agent appointed by the Company). So long as the Series D Notes are listed on the
London Stock Exchange and such exchange so requires, the Company will maintain a
transfer  agent and a Paying  Agent in London.  So long as any Series D Notes or
Series D Units are listed on the Paris Bourse and such exchange so requires, the
Company will maintain a Paying Agent in Paris.

Fixed Rate Notes

         Each Fixed Rate Note will bear  interest  from the date of  issuance at
the annual rate stated on the face thereof until the  principal  thereof is paid
or made  available for payment.  Unless  otherwise  specified in the  applicable
Pricing  Supplement,  such  interest  will be computed on the basis of a 360-day
year of twelve  30-day  months.  Unless  otherwise  specified in the  applicable
Pricing  Supplement,  payments  of  interest  on Fixed  Rate  Notes  other  than
Amortizing  Notes will be made  annually on each March 1 and at maturity or upon
any  earlier  redemption  or  repayment.   Unless  otherwise  specified  in  the
applicable Pricing Supplement,  payments of principal and interest on Amortizing
Notes, which are securities on which payments of principal and interest are made
in  equal  installments  over  the  life of the  security,  will be made  either
quarterly on each March 1, June 1, September 1 and December 1 or semiannually on
each March 1 and September 1, as set forth in the applicable Pricing Supplement,
and at maturity or upon any  earlier  redemption  or  repayment.  Payments  with
respect to  Amortizing  Notes will be applied  first to interest due and payable
thereon and then to the  reduction of the unpaid  principal  amount  thereof.  A
table setting forth  repayment  information in respect of each  Amortizing  Note
will be provided to the original  purchaser and will be available,  upon request
made to the Company, to subsequent holders.

         If any  Interest  Payment  Date for any Fixed Rate Note would fall on a
day that is not a Business  Day, the interest  payment shall be postponed to the
next day that is a Business  Day, and no interest on such  payment  shall accrue
for the period from and after the Interest  Payment  Date.  If the maturity date
(or date of  redemption or repayment) of any Fixed Rate Note would fall on a day
that is not a Business Day, the payment of interest and principal  (and premium,
if any) may be made on the next succeeding Business Day, and no interest on such
payment shall accrue for the period from and after the maturity date (or date of
redemption or repayment).

         Interest  payments for Fixed Rate Notes will include  accrued  interest
from and  including  the date of issue or from and  including  the last  date in
respect of which  interest has been paid, as the case may be, to, but excluding,
the  Interest  Payment  Date or the date of  maturity or earlier  redemption  or
repayment,  as the case may be. The interest rates the Company will agree to pay
on newly  issued  Fixed Rate Notes are subject to change  without  notice by the
Company  from time to time,  but no such change will affect any Fixed Rate Notes
theretofore issued or that the Company has agreed to issue.

Floating Rate Notes

         Each  Floating  Rate Note will bear  interest from the date of issuance
until the  principal  thereof is paid or made  available  for  payment at a rate
determined  by reference to an interest rate basis or formula (the "Base Rate"),
which may be  adjusted by a Spread  and/or  Spread  Multiplier  (each as defined
below).  The  applicable  Pricing  Supplement  will designate one or more of the
following  Base Rates as applicable to each Floating Rate Note:  (a) the CD Rate
(a "CD Rate Note"),  (b) the  Commercial  Paper Rate (a  "Commercial  Paper Rate
Note"),  (c) the Federal Funds Rate (a "Federal Funds Rate Note"),  (d) LIBOR (a
"LIBOR Note"),  (e) the Prime Rate (a "Prime Rate Note"),  (f) the Treasury Rate
(a "Treasury Rate Note"), (g) the  Constant-Maturity  Treasury Rate (a "CMT Rate
Note") or (h) such other Base Rate or interest  rate  formula as is set forth in
such Pricing Supplement and in such Floating Rate Note. The "Index Maturity" for
any Floating Rate Note is the period of maturity of the instrument or obligation
from which the Base Rate is calculated  and will be specified in the  applicable
Pricing Supplement.

         Unless otherwise  specified in the applicable Pricing  Supplement,  the
interest  rate on each Floating Rate Note will be calculated by reference to the
specified Base Rate (i) plus or minus the Spread, if any, and/or (ii) multiplied
by the Spread  Multiplier,  if any.  The  "Spread" is the number of basis points
(one  one-hundredth of a percentage  point) specified in the applicable  Pricing
Supplement to be added to or subtracted from the Base Rate

                                      S-11





for such  Floating  Rate Note,  and the "Spread  Multiplier"  is the  percentage
specified in the  applicable  Pricing  Supplement to be applied to the Base Rate
for such Floating Rate Note.

         As specified in the applicable Pricing Supplement, a Floating Rate Note
may also have  either or both of the  following:  (i) a maximum  limitation,  or
ceiling,  on the rate of interest  which may accrue  during any interest  period
("Maximum Interest Rate"); and (ii) a minimum limitation,  or floor, on the rate
of  interest  that may accrue  during any  interest  period  ("Minimum  Interest
Rate").  In addition to any Maximum  Interest Rate that may be applicable to any
Floating  Rate Note  pursuant to the above  provisions,  the interest  rate on a
Floating Rate Note will in no event be higher than the maximum rate permitted by
New York law,  as the same may be  modified  by  United  States  law of  general
application.  Under current New York law, the maximum rate of interest,  subject
to certain  exceptions,  for any loan in an amount less than U.S.$250,000 is 16%
and  for  any  loan  in the  amount  of  U.S.$250,000  or  more  but  less  than
U.S.$2,500,000 is 25% per annum on a simple interest basis.  These limits do not
apply to loans of U.S.$2,500,000 or more.

         Unless otherwise  specified in the applicable Pricing  Supplement,  the
rate of  interest  on each  Floating  Rate  Note  will be reset  daily,  weekly,
monthly,  quarterly,  semiannually  or annually (such period being the "Interest
Reset  Period" for such Note,  and the first day of each  Interest  Reset Period
being  an  "Interest  Reset  Date"),  as  specified  in the  applicable  Pricing
Supplement.  The  determination of the rate of interest at which a Floating Rate
Note  will be reset on any  Interest  Reset  Date  will be made on the  Interest
Determination  Date (as defined  below)  pertaining to such Interest Reset Date.
Unless otherwise  specified in the Pricing  Supplement,  the Interest Reset Date
will be, in the case of Floating  Rate Notes which reset  daily,  each  Business
Day; in the case of Floating  Rate Notes (other than  Treasury Rate Notes) which
reset  weekly,  the  Wednesday of each week;  in the case of Treasury Rate Notes
which reset weekly,  the Tuesday of each week,  except as provided below; in the
case of Floating  Rate Notes which reset  monthly,  the third  Wednesday of each
month;  in the case of  Floating  Rate Notes which  reset  quarterly,  the third
Wednesday of March, June,  September and December;  in the case of Floating Rate
Notes which reset semiannually,  the third Wednesday of two months of each year,
as specified in the applicable Pricing  Supplement;  and in the case of Floating
Rate Notes which reset annually,  the third Wednesday of one month of each year,
as specified in the applicable Pricing Supplement;  provided,  however, that (a)
the interest rate in effect from the date of issue to the first  Interest  Reset
Date with respect to a Floating Rate Note will be the initial  interest rate set
forth in the applicable Pricing Supplement (the "Initial Interest Rate") and (b)
unless otherwise  specified in the applicable Pricing  Supplement,  the interest
rate  in  effect  for the ten  calendar  days  immediately  prior  to  maturity,
redemption  or  repayment  will be that in  effect  on the  tenth  calendar  day
preceding  such  maturity,  redemption or repayment  date. If any Interest Reset
Date for any Floating Rate Note would  otherwise be a day that is not a Business
Day, such Interest Reset Date shall be postponed to the next succeeding Business
Day,  except that in the case of a LIBOR Note,  if such  Business  Day is in the
next  succeeding   calendar  month,  such  Interest  Reset  Date  shall  be  the
immediately preceding Business Day.

         Except as provided below,  unless otherwise specified in the applicable
Pricing Supplement,  interest on Floating Rate Notes will be payable: (i) in the
case of Floating Rate Notes with a daily, weekly or monthly Interest Reset Date,
on the third Wednesday of each month or on the third  Wednesday of March,  June,
September and December, as specified in the applicable Pricing Supplement;  (ii)
in the case of Floating Rate Notes with a quarterly  Interest Reset Date, on the
third  Wednesday of March,  June,  September and December;  (iii) in the case of
Floating  Rate  Notes  with a  semiannual  Interest  Reset  Date,  on the  third
Wednesday of the two months specified in the applicable Pricing Supplement;  and
(iv) in the case of Floating Rate Notes with an annual  Interest  Reset Date, on
the third Wednesday of the month specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if any Interest
Payment  Date  (other  than  the  maturity  date or any  earlier  redemption  or
repayment  date) for any  Floating  Rate Note  would fall on a day that is not a
Business Day with respect to such Floating Rate Note, such Interest Payment Date
will be the  following  day that is a Business Day with respect to such Floating
Rate Note,  except that, in the case of a LIBOR Note, if such Business Day is in
the next  succeeding  calendar  month,  such Interest  Payment Date shall be the
immediately  preceding  day that is a  Business  Day with  respect to such LIBOR
Note.  If the maturity  date or any earlier  redemption  or repayment  date of a
Floating  Rate Note would fall on a day that is not a Business  Day, the payment
of principal,  premium, if any, and interest will be made on the next succeeding
Business  Day, and no interest on such payment  shall accrue for the period from
and after such maturity, redemption or repayment date, as the case may be.

                                      S-12






         Unless  otherwise  specified  in  the  applicable  Pricing  Supplement,
interest  payments  for  Floating  Rate Notes  shall be the  amount of  interest
accrued from and including the date of issue or from and including the last date
to which interest has been paid to, but excluding,  the Interest Payment Date or
maturity date or date of redemption or repayment.

         With  respect  to a  Floating  Rate  Note,  accrued  interest  shall be
calculated by multiplying the principal  amount of such Floating Rate Note by an
accrued interest factor. Such accrued interest factor will be computed by adding
the interest factors calculated for each day in the period for which interest is
being paid. Unless otherwise specified in the applicable Pricing Supplement, the
interest  factor for each such day is  computed by dividing  the  interest  rate
applicable  to such day by 360, in the case of CD Rate Notes,  Commercial  Paper
Rate Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes or by the
actual  number of days in the year,  in the case of Treasury  Rate Notes and CMT
Rate Notes.  All  percentages  used in or resulting from any  calculation of the
rate of interest on a Floating Rate Note will be rounded,  if necessary,  to the
nearest one  hundred-thousandth  of a  percentage  point  (.0000001),  with five
one-millionths of a percentage point rounded upward, and all dollar amounts used
in or resulting from such  calculation on Floating Rate Notes will be rounded to
the nearest cent, with one-half cent rounded upward. The interest rate in effect
on any Interest  Reset Date will be the  applicable  rate as reset on such date.
The interest  rate  applicable  to any other day is the  interest  rate from the
immediately  preceding  Interest Reset Date (or, if none,  the Initial  Interest
Rate).

         The applicable  Pricing  Supplement  shall specify a calculation  agent
(the "Calculation Agent") with respect to any issue of Floating Rate Notes. Upon
the request of the holder of any Floating Rate Note, the Calculation  Agent will
provide the interest rate then in effect and, if  determined,  the interest rate
that will become  effective on the next Interest Reset Date with respect to such
Floating Rate Note. The Calculation  Agent will notify the London Stock Exchange
(in the case of the  Series D Notes  listed  on such  exchange)  and the  Paying
Agents of each  determination  of the interest  rate  applicable to any Floating
Rate Note promptly after such determination is made.

         The "Interest  Determination Date" pertaining to an Interest Reset Date
for CD Rate Notes,  Commercial Paper Rate Notes, Federal Funds Rate Notes, Prime
Rate Notes and CMT Rate Notes will be the  second  Business  Day next  preceding
such  Interest  Reset Date.  The Interest  Determination  Date  pertaining to an
Interest  Reset  Date for a LIBOR  Note will be the second  London  Banking  Day
preceding such Interest Reset Date, except that the Interest  Determination Date
pertaining  to an  Interest  Reset  Date for a LIBOR  Note for  which  the Index
Currency is pounds  sterling  will be such  Interest  Reset Date.  The  Interest
Determination Date pertaining to an Interest Reset Date for a Treasury Rate Note
will be the day of the week in which  such  Interest  Reset  Date falls on which
Treasury bills would normally be auctioned.  Treasury bills are normally sold at
auction on Monday of each week,  unless  that day is a legal  holiday,  in which
case the auction is normally held on the following Tuesday, but such auction may
be held on the  preceding  Friday.  If,  as the  result of a legal  holiday,  an
auction is so held on the  preceding  Friday,  such Friday will be the  Interest
Determination  Date  pertaining to the Interest Reset Date occurring in the next
succeeding  week. If an auction  falls on a day that is an Interest  Reset Date,
such Interest Reset Date will be the next following Business Day.

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

         Interest rates will be determined by the Calculation Agent as follows:

         CD Rate Notes

         CD Rate Notes will bear interest at the interest rate  (calculated with
reference to the CD Rate and the Spread  and/or Spread  Multiplier,  if any, and
subject to the Minimum  Interest  Rate and the Maximum  Interest  Rate,  if any)
specified in the CD Rate Notes and in the applicable Pricing Supplement.

         Unless otherwise  specified in the applicable Pricing  Supplement,  "CD
Rate" means, with respect to any Interest  Determination  Date, the rate on such
date for negotiable certificates of deposit having the Index Maturity

                                      S-13





designated  in the  applicable  Pricing  Supplement as published by the Board of
Governors  of the Federal  Reserve  System in  "Statistical  Release  H.15(519),
Selected Interest Rates," or any successor publication of the Board of Governors
of the Federal  Reserve System  ("H.15(519)")  under the heading "CDs (Secondary
Market),"  or, if not so  published  by 9:00 A.M.,  New York City  time,  on the
Calculation  Date  pertaining to such Interest  Determination  Date, the CD Rate
will be the rate on such Interest Determination Date for negotiable certificates
of deposit of the Index Maturity designated in the applicable Pricing Supplement
as  published by the Federal  Reserve Bank of New York in its daily  statistical
release  "Composite 3:30 P.M.  Quotations for U.S.  Government  Securities" (the
"Composite  Quotations")  under the heading  "Certificates  of Deposit." If such
rate is not yet  published in either  H.15(519) or the  Composite  Quotations by
3:00 P.M.,  New York City  time,  on the  Calculation  Date  pertaining  to such
Interest  Determination  Date, the CD Rate on such Interest  Determination  Date
will be calculated by the  Calculation  Agent and will be the arithmetic mean of
the secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest  Determination  Date for  certificates  of deposit in an amount that is
representative  for a single  transaction at that time with a remaining maturity
closest to the Index  Maturity  designated  in the Pricing  Supplement  of three
leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by the Calculation  Agent for negotiable  certificates
of deposit of major United States money center banks; provided, however, that if
the dealers  selected as aforesaid by the  Calculation  Agent are not quoting as
set forth above,  the "CD Rate" in effect for the applicable  period will be the
same as the CD Rate for the immediately  preceding Interest Reset Period (or, if
there was no such Interest Reset Period,  the rate of interest payable on the CD
Rate  Notes  for which  such CD Rate is being  determined  shall be the  Initial
Interest Rate).

         Commercial Paper Rate Notes

         Commercial  Paper Rate Notes will bear  interest at the  interest  rate
(calculated  with reference to the  Commercial  Paper Rate and the Spread and/or
Spread  Multiplier,  if any,  and subject to the Minimum  Interest  Rate and the
Maximum  Interest Rate, if any) specified in the Commercial Paper Rate Notes and
in the applicable Pricing Supplement.

         Unless  otherwise  specified  in  the  applicable  Pricing  Supplement,
"Commercial Paper Rate" means, with respect to any Interest  Determination Date,
the  Money  Market  Yield  (as  defined  below)  of the  rate on such  date  for
commercial paper having the Index Maturity  specified in the applicable  Pricing
Supplement,  as such rate shall be  published  in  H.15(519),  under the heading
"Commercial  Paper." In the event that such rate is not  published by 9:00 A.M.,
New  York  City  time,  on the  Calculation  Date  pertaining  to such  Interest
Determination  Date,  then the  Commercial  Paper Rate shall be the Money Market
Yield of the rate on such Interest  Determination  Date for commercial  paper of
the  specified  Index  Maturity as published in Composite  Quotations  under the
heading  "Commercial  Paper."  If by 3:00  P.M.,  New York  City  time,  on such
Calculation Date such rate is not yet available in either H.15(519) or Composite
Quotations,  then the  Commercial  Paper Rate shall be the Money Market Yield of
the  arithmetic  mean of the offered rates as of 11:00 A.M., New York City time,
on such Interest Determination Date of three leading dealers of commercial paper
in The City of New York selected by the Calculation  Agent for commercial  paper
of the specified  Index  Maturity,  placed for an  industrial  issuer whose bond
rating is "AA," or the equivalent,  from a nationally  recognized rating agency;
provided,  however, that if the dealers selected as aforesaid by the Calculation
Agent  are  not  quoting  offered  rates  as  mentioned  in this  sentence,  the
"Commercial  Paper Rate" in effect for the applicable period will be the same as
the Commercial  Paper Rate for the immediately  preceding  Interest Reset Period
(or, if there was no such Interest Reset Period, the rate of interest payable on
the Commercial  Paper Rate Notes for which such  Commercial  Paper Rate is being
determined shall be the Initial Interest Rate).

         "Money Market Yield" shall be a yield calculated in accordance with the
following formula:

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


where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount  basis and expressed as a decimal,  and "M" refers to the actual
number of days in the Index Maturity.


                                      S-14





         Federal Funds Rate Notes

         Federal  Funds Rate  Notes  will bear  interest  at the  interest  rate
(calculated  with  reference  to the  Federal  Funds Rate and the Spread  and/or
Spread  Multiplier,  if any,  and subject to the Minimum  Interest  Rate and the
Maximum  Interest Rate, if any) specified in the Federal Funds Rate Notes and in
the applicable Pricing Supplement.

         Unless otherwise  specified in the applicable Pricing  Supplement,  the
"Federal Funds Rate" means, with respect to any Interest Determination Date, the
rate on such date for Federal funds as published in H.15(519)  under the heading
"Federal Funds (Effective)," or, if not so published by 9:00 A.M., New York City
time, on the Calculation  Date pertaining to such Interest  Determination  Date,
the Federal Funds Rate will be the rate on such Interest  Determination  Date as
published in the Composite Quotations under the heading "Federal Funds/Effective
Rate." If such rate is not yet  published in either  H.15(519) or the  Composite
Quotations by 3:00 P.M., New York City time, on the Calculation  Date pertaining
to such Interest  Determination  Date,  the Federal Funds Rate for such Interest
Determination  Date will be calculated by the Calculation  Agent and will be the
arithmetic  mean of the  rates for the last  transaction  in  overnight  Federal
funds,  as of 11:00 A.M.,  New York City time,  on such  Interest  Determination
Date,  arranged by three leading  brokers of Federal funds  transactions  in The
City of New York selected by the Calculation Agent;  provided,  however, that if
the brokers  selected as aforesaid by the  Calculation  Agent are not quoting as
set forth above,  the "Federal Funds Rate" in effect for the  applicable  period
will be the  same as the  Federal  Funds  Rate  for  the  immediately  preceding
Interest Reset Period (or, if there was no such Interest Reset Period,  the rate
of interest payable on the Federal Funds Rate Notes for which such Federal Funds
Rate is being determined shall be the Initial Interest Rate).

         LIBOR Notes

         LIBOR Notes will bear  interest at the interest rate  (calculated  with
reference to LIBOR and the Spread and/or Spread Multiplier,  if any, and subject
to the Minimum Interest Rate and the Maximum Interest Rate, if any) specified in
the LIBOR Notes and in the applicable Pricing Supplement.

         Unless  otherwise  specified  in  the  applicable  Pricing  Supplement,
"LIBOR"  for  each  Interest  Determination  Date  will  be  determined  by  the
Calculation Agent as follows:

                  (i) As of the Interest  Determination  Date,  the  Calculation
         Agent  will  determine  (a) if  "LIBOR  Reuters"  is  specified  in the
         applicable Pricing Supplement, the arithmetic mean of the offered rates
         (unless the specified  Designated  LIBOR Page (as defined below) by its
         terms  provides  only for a single rate, in which case such single rate
         shall be used) for deposits in the Index Currency for the period of the
         Index   Maturity,   each  as  designated  in  the  applicable   Pricing
         Supplement,  commencing  on the second London  Banking Day  immediately
         following  such  Interest  Determination  Date,  which  appear  on  the
         Designated LIBOR Page at approximately 11:00 A.M., London time, on such
         Interest  Determination Date, if at least two such offered rates appear
         (unless,  as  aforesaid,  only a  single  rate  is  required)  on  such
         Designated  LIBOR Page, or (b) if "LIBOR  Telerate" is specified in the
         applicable  Pricing  Supplement,  the rate for  deposits  in the  Index
         Currency for the period of the Index  Maturity,  each as  designated in
         the  applicable  Pricing  Supplement,  commencing  on the second London
         Banking Day following such Interest  Determination  Date (or, if pounds
         sterling  is  the  Index   Currency,   commencing   on  such   Interest
         Determination  Date),  that  appears  on the  Designated  LIBOR Page at
         approximately  11:00 A.M., London time, on such Interest  Determination
         Date.  If fewer than two offered  rates  appear (if "LIBOR  Reuters" is
         specified in the applicable Pricing Supplement and calculation of LIBOR
         is based on the  arithmetic  mean of the  offered  rates) or if no rate
         appears (if the  applicable  Pricing  Supplement  specifies  either (x)
         "LIBOR  Reuters" and the  Designated  LIBOR Page by its terms  provides
         only for a single  rate or (y) "LIBOR  Telerate"),  LIBOR in respect of
         that Interest  Determination  Date will be determined as if the parties
         had specified the rate described in (ii) below.

                  (ii) With respect to an Interest  Determination  Date on which
         fewer than two offered rates appear (if "LIBOR Reuters" is specified in
         the applicable  Pricing Supplement and calculation of LIBOR is based on
         the  arithmetic  mean of the offered  rates) or no rate appears (if the
         applicable Pricing

                                      S-15





         Supplement  specifies  either (x) "LIBOR  Reuters"  and the  Designated
         LIBOR Page by its terms  provides  only for a single rate or (y) "LIBOR
         Telerate"),  the  Calculation  Agent will request the principal  London
         offices of each of four major reference  banks in the London  interbank
         market, as selected by the Calculation  Agent (after  consultation with
         the  Company),  to  provide  the  Calculation  Agent  with its  offered
         quotations  for  deposits in the Index  Currency  for the period of the
         specified Index  Maturity,  commencing on the second London Banking Day
         immediately  following such Interest  Determination  Date (or if pounds
         sterling  is  the  Index   Currency,   commencing   on  such   Interest
         Determination  Date), to prime banks in the London  interbank market at
         approximately  11:00 A.M., London time, on such Interest  Determination
         Date and in a  principal  amount  equal to an  amount  of not less than
         U.S.$1 million (or the equivalent in the Index  Currency,  if the Index
         Currency is not the U.S.  dollar)  that is  representative  of a single
         transaction  in such Index  Currency in such market at such time. If at
         least  two such  quotations  are  provided,  LIBOR  determined  on such
         Interest  Determination  Date  will  be the  arithmetic  mean  of  such
         quotations. If fewer than two quotations are provided, LIBOR determined
         on such  Interest  Determination  Date will be the  arithmetic  mean of
         rates quoted at approximately  11:00 A.M. (or such other time specified
         in the applicable  Pricing  Supplement),  in the  applicable  principal
         financial center for the country of the Index Currency on such Interest
         Determination  Date, by three major banks in such  principal  financial
         center selected by the Calculation  Agent (after  consultation with the
         Company)  on such  Interest  Determination  Date for loans in the Index
         Currency to leading  European  banks,  for the period of the  specified
         Index Maturity  commencing on the second London Banking Day immediately
         following such Interest  Determination  Date (or, if pounds sterling is
         the Index Currency, commencing on such Interest Determination Date) and
         in a  principal  amount  of  not  less  than  U.S.$1  million  (or  the
         equivalent in the Index Currency, if the Index Currency is not the U.S.
         dollar) that is  representative  of a single  transaction in such Index
         Currency in such market at such time;  provided,  however,  that if the
         banks  selected as aforesaid by the  Calculation  Agent are not quoting
         rates as mentioned in this  sentence,  "LIBOR" for such Interest  Reset
         Period will be the same as LIBOR for the immediately preceding Interest
         Reset Period (or, if there was no such Interest Reset Period,  the rate
         of  interest  payable  on the  LIBOR  Notes  for  which  LIBOR is being
         determined shall be the Initial Interest Rate).

         "Index Currency" means the currency  (including  composite  currencies)
specified in the applicable  Pricing  Supplement as the currency for which LIBOR
shall be calculated.  If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.

         "Designated  LIBOR  Page"  means  either  (a)  if  "LIBOR  Reuters"  is
designated  in the  applicable  Pricing  Supplement,  the display on the Reuters
Monitor Money Rates Service for the purpose of displaying  the London  interbank
rates of  major  banks  for the  applicable  Index  Currency,  or (b) if  "LIBOR
Telerate" is designated in the applicable Pricing Supplement, the display on the
Dow Jones Telerate  Service for the purpose of displaying  the London  interbank
rates of major banks for the applicable Index Currency. If neither LIBOR Reuters
nor LIBOR Telerate is specified in the applicable Pricing Supplement,  LIBOR for
the  applicable  Index Currency will be determined as if LIBOR Telerate (and, if
the U.S. dollar is the Index Currency, Page 3750) had been specified.

         Prime Rate Notes

         Prime Rate Notes will bear  interest at the interest  rate  (calculated
with  reference to the Prime Rate and the Spread  and/or Spread  Multiplier,  if
any, and subject to the Minimum  Interest Rate and the Maximum Interest Rate, if
any) specified in the Prime Rate Notes and in the applicable Pricing Supplement.

         Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date, the rate set forth
in H.15(519)  for such date opposite the caption "Bank Prime Loan." If such rate
is not yet published by 9:00 A.M., New York City time, on the  Calculation  Date
pertaining to such Interest Determination Date, the Prime Rate for such Interest
Determination Date will be the arithmetic mean of the rates of interest publicly
announced  by each bank named on the Reuters  Screen  USPRIME1  Page (as defined
below) as such  bank's  prime  rate or base  lending  rate as in effect for such
Interest  Determination  Date as quoted on the Reuters  Screen  USPRIME1 Page on
such Interest  Determination  Date,  or, if fewer than four such rates appear on
the Reuters Screen USPRIME1 Page for such Interest  Determination Date, the rate
shall be the arithmetic

                                      S-16





mean of the prime rates quoted on the basis of the actual  number of days in the
year divided by 360 as of the close of business on such  Interest  Determination
Date by at least two of the three  major money  center  banks in The City of New
York selected by the Calculation  Agent from which quotations are requested.  If
fewer than two  quotations  are provided,  the Prime Rate shall be calculated by
the  Calculation  Agent and shall be  determined as the  arithmetic  mean on the
basis of the prime  rates in The City of New York by the  appropriate  number of
substitute banks or trust companies  organized and doing business under the laws
of the United  States,  or any State  thereof,  in each case having total equity
capital  of at least  U.S.$500  million  and being  subject  to  supervision  or
examination by federal or state authority,  selected by the Calculation Agent to
quote  such  rate or  rates;  provided,  however,  that if the  banks  or  trust
companies  selected as aforesaid by the Calculation  Agent are not quoting rates
as set forth above,  the "Prime Rate" in effect for such  Interest  Reset Period
will be the same as the Prime Rate for the immediately  preceding Interest Reset
Period (or, if there was no such  Interest  Reset  Period,  the rate of interest
payable on the Prime  Rate  Notes for which such Prime Rate is being  determined
shall be the Initial  Interest  Rate).  "Reuters Screen USPRIME1 Page" means the
display designated as Page "USPRIME1" on the Reuters Monitor Money Rates Service
(or such other page as may replace  the  USPRIME1  Page on that  service for the
purpose of  displaying  prime rates or base lending rates of major United States
banks).

         Treasury Rate Notes

         Treasury Rate Notes will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier,  if
any, and subject to the Minimum  Interest Rate and the Maximum Interest Rate, if
any)  specified  in the  Treasury  Rate  Notes  and in  the  applicable  Pricing
Supplement.

         Unless otherwise  specified in the applicable Pricing  Supplement,  the
"Treasury Rate" means, with respect to any Interest Determination Date, the rate
for the auction  held on such date of direct  obligations  of the United  States
("Treasury  Bills")  having  the Index  Maturity  designated  in the  applicable
Pricing Supplement,  as published in H.15(519) under the heading "Treasury Bills
- -- auction average  (investment)" or, if not so published by 9:00 A.M., New York
City time, on the  Calculation  Date  pertaining to such Interest  Determination
Date, the auction average rate on such Interest Determination Date (expressed as
a bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury.  In the event that the results of the auction of Treasury Bills
having the Index Maturity  designated in the applicable  Pricing  Supplement are
not published or reported as provided above by 3:00 P.M., New York City time, on
such  Calculation  Date  or  if  no  such  auction  is  held  on  such  Interest
Determination   Date,  then  the  Treasury  Rate  shall  be  calculated  by  the
Calculation  Agent  and  shall  be a  yield  to  maturity  (expressed  as a bond
equivalent,  on the  basis  of a year of 365 or 366  days,  as  applicable,  and
applied on a daily basis)  calculated using the arithmetic mean of the secondary
market bid rates,  as of  approximately  3:30 P.M.,  New York City time, on such
Interest  Determination  Date, of three leading primary United States government
securities  dealers selected by the Calculation  Agent for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity  designated in the
applicable Pricing Supplement;  provided,  however, that if the dealers selected
as aforesaid by the Calculation  Agent are not quoting bid rates as mentioned in
this sentence, the "Treasury Rate" for such Interest Reset Date will be the same
as the Treasury Rate for the immediately preceding Interest Reset Period (or, if
there was no such  Interest  Reset Period,  the rate of interest  payable on the
Treasury Rate Notes for which the Treasury Rate is being determined shall be the
Initial Interest Rate).

         CMT Rate Notes

         CMT Rate Notes will bear interest at the interest rate (calculated with
reference to the CMT Rate and the Spread and/or Spread  Multiplier,  if any, and
subject to the Minimum  Interest  Rate and the Maximum  Interest  Rate,  if any)
specified in the CMT Rate Notes and in the applicable Pricing Supplement.

         Unless otherwise  indicated in an applicable Pricing  Supplement,  "CMT
Rate" means, with respect to any Interest Determination Date, the rate displayed
for the Index  Maturity  designated in such CMT Rate Note on the  Designated CMT
Telerate  Page (as defined  below)  under the  caption  "...  Treasury  Constant
Maturities  ...  Federal  Reserve  Board  Release H.15" under the column for the
Designated  CMT Maturity  Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such Interest  Determination Date and (ii) if
the Designated

                                      S-17





CMT  Telerate  Page  is  7052,  the  week or the  month,  as  applicable,  ended
immediately preceding the week in which the related Interest  Determination Date
occurs.  If such rate is no longer  displayed  on the relevant  page,  or if not
displayed by 3:00 P.M.,  New York City time,  on the related  Calculation  Date,
then the CMT Rate for such  Interest  Determination  Date will be such  Treasury
Constant Maturity rate for the Designated CMT Maturity Index as published in the
relevant H.15(519).  If such rate is no longer published, or if not published by
3:00 P.M.,  New York City time, on the related  Calculation  Date,  then the CMT
Rate  for  such  Interest  Determination  Date  will be such  Treasury  Constant
Maturity  rate for the  Designated  CMT Maturity  Index (or other United  States
Treasury  rate  for  the  Designated  CMT  Maturity   Index)  for  the  Interest
Determination  Date with respect to the related  Interest Reset Date as may then
be published by either the Board of Governors of the Federal  Reserve  System or
the  United  States  Department  of the  Treasury  that  the  Calculation  Agent
determines to be comparable to the rate formerly displayed on the Designated CMT
Telerate Page and published in the relevant  H.15(519).  If such  information is
not provided by 3:00 P.M., New York City time, on the related  Calculation Date,
then the CMT Rate for the Interest  Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity,  based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 P.M.,
New York City time, on the Interest  Determination  Date reported,  according to
their  written  records,  by three  leading  primary  United  States  government
securities  dealers (each, a "Reference  Dealer") in The City of New York (which
may include the Agents or their  affiliates)  selected by the Calculation  Agent
(from five such  Reference  Dealers  selected by the  Calculation  Agent,  after
consultation with the Company, and eliminating the highest quotation (or, in the
event of  equality,  one of the highest)  and the lowest  quotation  (or, in the
event of equality,  one of the  lowest)),  for the most  recently  issued direct
noncallable fixed rate obligations of the United States ("Treasury  notes") with
an original  maturity of  approximately  the  Designated  CMT Maturity Index and
remaining  term to maturity of not less than such  Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury notes
quotations, the CMT Rate for such Interest Determination Date will be calculated
by the Calculation Agent and will be a yield to maturity based on the arithmetic
mean of the secondary  market offer side prices as of  approximately  3:30 P.M.,
New York  City  time,  on the  Interest  Determination  Date of three  Reference
Dealers in The City of New York (from five such  Reference  Dealers  selected by
the Calculation Agent, after consultation with the Company,  and eliminating the
highest  quotation  (or, in the event of  equality,  one of the highest) and the
lowest  quotation  (or,  in the  event of  equality,  one of the  lowest)),  for
Treasury notes with an original maturity of the number of years that is the next
highest to the  Designated  CMT Maturity  Index and a remaining term to maturity
closest  to the  Designated  CMT  Maturity  Index  and in an  amount of at least
U.S.$100,000,000.  If three or four (and not five) of such Reference Dealers are
quoting as described  above,  then the CMT Rate will be based on the  arithmetic
mean of the offer prices obtained and neither the highest nor the lowest of such
quotes will be eliminated; provided, however, that if fewer than three Reference
Dealers selected by the Calculation Agent are quoting as described  herein,  the
CMT Rate for such  Interest  Reset Date will be the same as the CMT Rate for the
immediately  preceding  Interest Reset Period (or, if there was no such Interest
Reset Period,  the rate of interest  payable on the CMT Rate Notes for which the
CMT Rate is  being  determined  shall  be the  Initial  Interest  Rate).  If two
Treasury  notes with an original  maturity as described in the second  preceding
sentence have  remaining  terms to maturity  equally close to the Designated CMT
Maturity Index, the quotes for the Treasury note with the shorter remaining term
to maturity will be used.

         "Designated  CMT  Telerate  Page"  means the  display  on the Dow Jones
Telerate Service on the page designated in an applicable  Pricing Supplement (or
any other  page as may  replace  such page on that  service  for the  purpose of
displaying  Treasury  Constant  Maturities  as reported in  H.15(519)),  for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519).  If
no such page is specified in the applicable Pricing  Supplement,  the Designated
CMT Telerate Page shall be 7052, for the most recent week.

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


                                      S-18



Exchangeable Notes

         Notes  may be  issued,  from  time to  time,  that  are  optionally  or
mandatorily  exchangeable into the securities of an entity unaffiliated with the
Company,  into a basket of such  securities,  into an index or  indices  of such
securities  or into any  combination  of the  above,  as may be set forth in the
applicable Pricing Supplement (the "Exchangeable Notes"). The Exchangeable Notes
may or may not bear interest or be issued with original  issue  discount or at a
premium.

         Unless  otherwise  specified  in  the  applicable  Pricing  Supplement,
optionally Exchangeable Notes (the "Optionally Exchangeable Notes") will entitle
the holder of such a Note,  during a period,  or at specific  times, to exchange
such Note for the underlying security,  basket of securities or index or indices
of securities (or  combination  thereof) at a specified rate of exchange.  If so
specified in the applicable Pricing  Supplement,  Optionally  Exchangeable Notes
will be redeemable at the option of the Company prior to maturity. If the holder
of an Optionally Exchangeable Note does not elect to exchange such Note prior to
maturity  or any  applicable  redemption  date,  such  holder  will  receive the
principal amount of such Note.

         Unless  otherwise  specified  in  the  applicable  Pricing  Supplement,
mandatorily  Exchangeable  Notes (the "Mandatorily  Exchangeable  Notes") do not
entitle the holder of such a Note to exchange  such Note prior to  maturity;  at
maturity,  the  holder is  required  to  exchange  such Note for the  underlying
security, basket of securities or index or indices of securities (or combination
thereof)  at a  specified  rate of  exchange,  and,  therefore,  the holder of a
Mandatorily Exchangeable Note may receive less than the principal amount of such
Note at maturity.  If so indicated in the  applicable  Pricing  Supplement,  the
specified  rate at which a  Mandatorily  Exchangeable  Note may be exchanged may
vary depending on the value of the underlying security,  basket of securities or
index or indices (or  combination  thereof) so that,  upon exchange,  the holder
participates in a percentage,  which may be less than, equal to, or greater than
100% of the change in value of the underlying security,  basket of securities or
index or indices (or combination thereof).

         Upon exchange, at maturity or otherwise,  the holder of an Exchangeable
Note may receive, at the specified exchange rate, either the underlying security
or the securities  constituting  the relevant  basket or index or indices at the
specified  exchange  rate or the  cash  value  of such  underlying  security  or
securities,  as may be  specified  in the  applicable  Pricing  Supplement.  The
underlying security or securities  constituting any basket, index or indices may
be the  securities  of  either  U.S.  or  foreign  entities  or  both,  and  the
Exchangeable Notes may or may not provide for protection against fluctuations in
the rate of  currency  exchange  between  the  currency  in which  such  Note is
denominated  and the currency or  currencies  in which the market prices of such
underlying  security  or  securities  are  quoted,  as may be  specified  in the
applicable  Pricing  Supplement.  Exchangeable Notes may have other terms, which
will be specified in the applicable Pricing  Supplement.  Exchangeable Notes for
which a holder may receive the underlying security or securities  constituting a
basket of  securities  or an index or  indices  will not be listed on the London
Stock Exchange unless listing  particulars  with respect thereto are approved by
the London Stock Exchange.

         If an Optionally  Exchangeable  Note is  represented by a global Bearer
Note or by definitive Notes that remain on deposit with a Common  Depositary for
the Euroclear Operator or Cedel Bank, the exercise of the right to exchange must
be made through the  Euroclear  Operator or Cedel Bank.  In order to ensure that
the  Euroclear  Operator or Cedel Bank will timely  exercise a right to exchange
with respect to a particular  Note on behalf of a beneficial  owner of such Note
or an interest in such Note, the beneficial owner of such Note must instruct the
broker  or  other  direct  or  indirect  participant  through  which it holds an
interest  in such Note to notify  the  Euroclear  Operator  or Cedel Bank of its
desire to exercise a right to exchange in  accordance  with the then  applicable
operating  procedures of the Euroclear  Operator or Cedel Bank.  Different firms
have different  deadlines for accepting  instructions  from their customers and,
accordingly,  each beneficial owner should consult the broker or other direct or
indirect  participant  through  which it holds an interest in a Note in order to
ascertain the deadline for such an  instruction in order for timely notice to be
delivered to the Euroclear Operator or Cedel Bank.

         Payments upon Acceleration of Maturity or upon Tax Redemption

         If the principal amount payable at maturity of any Exchangeable Note is
declared  due and  payable  prior to  maturity or is redeemed as set forth below
under "Tax Redemption," and unless otherwise specified in the applicable Pricing
Supplement,  the amount  payable with respect to (i) an Optionally  Exchangeable
Note will equal

                                      S-19





the face amount of such Note plus accrued interest, if any, to but excluding the
date of payment,  provided  that if a holder shall have  exchanged an Optionally
Exchangeable Note prior to such time without having received the amount due upon
such  exchange,  the amount  payable  shall be the amount due upon  exchange and
shall not  include  any  accrued  but unpaid  interest,  and (ii) a  Mandatorily
Exchangeable  Note  will  equal  an  amount  determined  as if the  date of such
declaration or tax redemption were the maturity date plus accrued  interest,  if
any, to but excluding the date of payment.

Currency Linked Notes

         Notes may be issued from time to time with the principal amount payable
on any principal payment date, or the amount of interest payable on any interest
payment  date,  to be  determined  by  reference  to the  value  of one or  more
currencies  (or  composite  currencies)  as compared to the value of one or more
other   currencies  (or  composite   currencies)   ("Currency   Linked  Notes").
Information as to the one or more currencies (or composite  currencies) to which
the  principal  amount  payable on any  principal  payment date or the amount of
interest payable on any interest payment date is indexed,  the currency in which
the face amount of the Currency  Linked Note is  denominated  (the  "Denominated
Currency"),  the currency in which principal on the Currency Linked Note will be
paid (the "Payment Currency"),  specific historic exchange rate information, any
currency  risks  relating  to the  specific  currencies  selected,  and  certain
additional  tax  considerations,  if any,  will be set  forth in the  applicable
Pricing Supplement. The Denominated Currency and the Payment Currency may be the
same  currency  or  different  currencies.  Unless  otherwise  specified  in the
applicable Pricing Supplement, interest on Currency Linked Notes will be paid in
the Denominated Currency based on the face amount of the Currency Linked Note at
the rate  per  annum  and on the  dates  set  forth  in the  applicable  Pricing
Supplement.  Currency Linked Notes may include, but are not limited to, Notes of
the types described below. The issuance of Currency Linked Notes  denominated or
payable  in  Deutsche  Marks will be made in  compliance  with the policy of the
German  Central  Bank,  as amended from time to time,  regarding  indexation  of
Deutsche Mark-denominated debt obligations.

         Principal Exchange Rate Linked Securities (PERLS)

         PERLS are Currency Linked Notes pursuant to which the principal  amount
payable on any principal payment date equals the Payment Currency  equivalent at
such date of a fixed amount of a designated  currency  (or  composite  currency)
(the "Indexed  Currency").  Generally,  the fixed amount of Indexed  Currency to
which the  principal  of a PERLS will be linked will be  approximately  equal in
value to the face amount of the PERLS in the  Denominated  Currency based on the
exchange  rate  between the Indexed  Currency  and the  Denominated  Currency in
effect at the time of pricing.  The Denominated  Currency,  the Indexed Currency
and  the  Payment  Currency  will  be  identified  in  the  applicable   Pricing
Supplement.  In addition,  the fixed amount of the Indexed Currency to which the
principal  of the PERLS is linked  will be set forth in the  applicable  Pricing
Supplement for a specific representative face amount of the PERLS as well as for
the  aggregate  face  amount of all PERLS  forming  part of the same  issue (the
"Conversion Reference Amount").

         Holders of PERLS may receive an amount of principal  greater than, less
than or equal in value to the face amount of the PERLS, depending on the change,
if any, in the relative exchange rates of the Denominated Currency,  the Payment
Currency  and the Indexed  Currency  from the issue date to the date that is two
Exchange Rate Days (as defined below) preceding the maturity date.

         The Payment  Currency  equivalent of any Indexed Currency amount on any
date will be determined by an exchange rate agent  (identified in the applicable
Pricing  Supplement) based on the arithmetic mean of the quotations  obtained by
such  agent  from  reference  dealers  (identified  in  the  applicable  Pricing
Supplement) at 11:00 A.M.,  New York City time, on the second  Exchange Rate Day
preceding such date for the purchase by the reference  dealers of the Conversion
Reference  Amount  of  the  Indexed  Currency  with  the  Payment  Currency  for
settlement  on such  date;  provided  that if  there is no  cross-exchange  rate
available  in New  York  City  between  the  Indexed  Currency  and the  Payment
Currency,  the  quotations  will be calculated by the exchange rate agent at the
time referred to above using the U.S. dollar  equivalent of the Indexed Currency
and  the  Payment  Currency  as the  basis  for  comparing  the  values  of such
currencies;  and provided  further that if the Payment  Currency and the Indexed
Currency are  identical,  then the Payment  Currency  equivalent  of any Indexed
Currency amount will be such amount.

                                      S-20






         "Exchange Rate Day" means, with respect to any currency conversion, any
day other than a Saturday or Sunday or a day on which  banking  institutions  in
New York City are authorized or required by law or executive  order to close and
that  is a  business  day  in  each  of the  cities  designated  in the  Pricing
Supplement  for the currencies  being  converted and, in the case of conversions
involving  ECUs,  that is not a non-ECU  clearing  day, as determined by the ECU
Banking Association in Paris.

         Reverse Principal Exchange Rate Linked Securities (Reverse PERLS)

         Reverse PERLS are Currency Linked Notes pursuant to which the principal
amount  payable  on any  principal  payment  date  equals the  Payment  Currency
equivalent at such date of a fixed amount of a designated currency (or composite
currency) (the "First Indexed  Currency") minus the Payment Currency  equivalent
at maturity  of a fixed  amount of another  designated  currency  (or  composite
currency) (the "Second Indexed  Currency");  provided that the minimum principal
amount  payable at maturity  will be zero.  Generally,  the fixed  amount of the
First Indexed  Currency to which the principal of a Reverse PERLS will be linked
will be  approximately  equal in value to twice the face  amount of the  Reverse
PERLS in the  Denominated  Currency,  and the fixed amount of the Second Indexed
Currency  to which the  principal  of a  Reverse  PERLS  will be linked  will be
approximately  equal in value to the face  amount  of the  Reverse  PERLS in the
Denominated  Currency,  in each case based on the  exchange  rate  between  each
Indexed Currency and the Denominated Currency in effect at the time of pricing.

         Holders of Reverse  PERLS may  receive an amount of  principal  greater
than, less than (with a minimum of zero) or equal in value to the face amount of
the Reverse  PERLS,  depending on the change,  if any, in the relative  exchange
rates of the Denominated Currency, the Payment Currency and the First and Second
Indexed  Currencies  from the issue date to the date that is two  Exchange  Rate
Days preceding the maturity date.

         The Denominated  Currency,  the First and Second Indexed Currencies and
the Payment Currency will be identified in the applicable Pricing Supplement. In
addition,  the fixed amounts of the First and Second Indexed Currencies to which
the principal of the Reverse PERLS is linked will be set forth in the applicable
Pricing  Supplement  for a specific  representative  face  amount of the Reverse
PERLS as well as for the aggregate face amount of all Reverse PERLS forming part
of the same issue (respectively, the "First Conversion Reference Amount" and the
"Second Conversion Reference Amount").

         The Payment Currency equivalent of any First Indexed Currency amount on
any date  will be  determined  by an  exchange  rate  agent  (identified  in the
applicable  Pricing  Supplement)  based on the arithmetic mean of the quotations
obtained by such agent from  reference  dealers  (identified  in the  applicable
Pricing  Supplement) at 11:00 A.M.,  New York City time, on the second  Exchange
Rate Day preceding  such date for the purchase by the  reference  dealers of the
First Conversion Reference Amount of the First Indexed Currency with the Payment
Currency  for   settlement   on  such  date;   provided  that  if  there  is  no
cross-exchange  rate  available  in New York  City  between  the  First  Indexed
Currency and the Payment  Currency,  the  quotations  will be  calculated by the
exchange  rate  agent  at the  time  referred  to above  using  the U.S.  dollar
equivalent of the First Indexed  Currency and the Payment  Currency as the basis
for comparing the values of such currencies;  provided further that if the First
Indexed  Currency  and the  Payment  Currency  are  identical,  then the Payment
Currency equivalent of any First Indexed Currency amount will be such amount.

         The Payment  Currency  equivalent of any Second Indexed Currency amount
on any date will be  determined  by an exchange  rate agent  (identified  in the
applicable  Pricing  Supplement)  based on the arithmetic mean of the quotations
obtained by such agent from the reference dealers  (identified in the applicable
Pricing  Supplement) at 11:00 A.M.,  New York City time, on the second  Exchange
Rate Day preceding such date for the sale by the reference dealers of the Second
Conversion  Reference  Amount of the Second  Indexed  Currency  for the  Payment
Currency  for   settlement   on  such  date;   provided  that  if  there  is  no
cross-exchange  rate  available  in New York City  between  the  Second  Indexed
Currency and the Payment  Currency,  the  quotations  will be  calculated by the
exchange  rate  agent  at the  time  referred  to above  using  the U.S.  dollar
equivalent of the Second Indexed  Currency and the Payment Currency as the basis
for comparing the values of such currencies; provided further that if the Second
Indexed  Currency  and the  Payment  Currency  are  identical,  then the Payment
Currency equivalent of any Second Indexed Currency amount will be such amount.

                                      S-21






         Multicurrency Principal Exchange Rate Linked Securities  (Multicurrency
PERLS)

         Multicurrency  PERLS are Currency  Linked  Notes  pursuant to which the
principal  amount  payable on any  principal  payment  date  equals the  Payment
Currency  equivalent at such date of a fixed amount of a designated currency (or
composite  currency)  (the "First Indexed  Currency")  plus or minus the Payment
Currency  equivalent  at  maturity  of a fixed  amount  of a  second  designated
currency (or composite  currency) (the "Second Indexed  Currency") plus or minus
the  Payment  Currency  equivalent  at  maturity  of a fixed  amount  of a third
designated  currency (or composite  currency)  (the "Third  Indexed  Currency");
provided  that the minimum  principal  amount  payable at maturity will be zero.
Generally, the added and subtracted fixed amounts of the First, Second and Third
Indexed  Currencies  (each,  an "Indexed  Currency") to which the principal of a
Multicurrency  PERLS will be linked will have an aggregate  value  approximately
equal to the face amount of the Multicurrency PERLS in the Denominated  Currency
based on exchange  rates  between  each  Indexed  Currency  and the  Denominated
Currency in effect at the time of pricing.

         Holders  of  Multicurrency  PERLS may  receive  an amount of  principal
greater  than,  less than (with a minimum of zero) or equal in value to the face
amount of the  Multicurrency  PERLS,  depending  on the  change,  if any, in the
relative exchange rates for the Denominated  Currency,  the Payment Currency and
the First,  Second and Third Indexed  Currencies from the issue date to the date
that is two Exchange Rate Days preceding the maturity date.

         The Denominated Currency,  each Indexed Currency,  the Payment Currency
and whether the fixed amounts of the Second and Third Indexed  Currencies are to
be added or subtracted to determine the principal  amount payable at maturity of
the Multicurrency  PERLS will be set forth in the applicable Pricing Supplement.
In addition, the fixed amounts of the First, Second and Third Indexed Currencies
to which the principal of the Multicurrency PERLS is linked will be set forth in
the applicable Pricing Supplement for a specific  representative  face amount of
the  Multicurrency  PERLS  as well  as for  the  aggregate  face  amount  of all
Multicurrency  PERLS  forming part of the same issue  (respectively,  the "First
Conversion  Reference Amount," the "Second Conversion  Reference Amount" and the
"Third Conversion Reference Amount," each, a "Conversion  Reference Amount"). As
used herein,  "Added Indexed  Currency" means the First Indexed Currency and any
other Indexed  Currency that is added to determine the principal  amount payable
at maturity of the Multicurrency PERLS and a "Subtracted Indexed Currency" means
an Indexed Currency that is subtracted to determine the principal amount payable
at maturity of the Multicurrency PERLS.

         The Payment Currency equivalent of any Added Indexed Currency amount on
any date  will be  determined  by an  exchange  rate  agent  (identified  in the
applicable  Pricing  Supplement)  based on the arithmetic mean of the quotations
obtained by such agent from  reference  dealers  (identified  in the  applicable
Pricing  Supplement) at 11:00 A.M.,  New York City time, on the second  Exchange
Rate Day preceding  such date for the purchase by the  reference  dealers of the
applicable  Conversion  Reference  Amount of the Added Indexed Currency with the
Payment  Currency  for  settlement  on such date;  provided  that if there is no
cross-exchange  rate  available  in New York  City  between  the  Added  Indexed
Currency and the Payment  Currency,  the  quotations  will be  calculated by the
exchange  rate  agent  at the  time  referred  to above  using  the U.S.  dollar
equivalent of the Added Indexed  Currency and the Payment  Currency as the basis
for comparing the values of such currencies;  provided further that if the Added
Indexed  Currency  and the  Payment  Currency  are  identical,  then the Payment
Currency equivalent of any Added Indexed Currency amount will be such amount.

         The Payment  Currency  equivalent of any  Subtracted  Indexed  Currency
amount on any date will be determined by an exchange rate agent  (identified  in
the  applicable  Pricing  Supplement)  based  on  the  arithmetic  mean  of  the
quotations  obtained by such agent from  reference  dealers  (identified  in the
applicable Pricing  Supplement) at 11:00 A.M., New York City time, on the second
Exchange Rate Day preceding  such date for the sale by the reference  dealers of
the applicable  Conversion  Reference Amount of the Subtracted  Indexed Currency
for the Payment Currency for settlement on such date;  provided that if there is
no cross-exchange rate available in New York City between the Subtracted Indexed
Currency and the Payment  Currency,  the  quotations  will be  calculated by the
exchange  rate  agent  at the  time  referred  to above  using  the U.S.  dollar
equivalent of the Subtracted  Indexed  Currency and the Payment  Currency as the
basis for comparing the values of such currencies; provided further that

                                      S-22





if the Subtracted Indexed Currency and the Payment Currency are identical,  then
the Payment Currency  equivalent of any Subtracted  Indexed Currency amount will
be such amount.

         Payments upon Acceleration of Maturity or upon Tax Redemption

         If the principal amount payable at maturity of any PERLS, Reverse PERLS
or Multicurrency PERLS is declared due and payable prior to maturity,  or if any
PERLS,  Reverse  PERLS or  Multicurrency  PERLS are  redeemed as set forth below
under "Tax Redemption," and unless otherwise specified in the applicable Pricing
Supplement,  the amount  payable  with  respect to such Note will be paid in the
Denominated  Currency  and will equal the face amount of such Note plus  accrued
interest to but excluding the date of payment.

Notes Linked to Commodity Prices, Single Securities, Baskets of Securities or 
Indices

         Notes may be  issued,  from  time to time,  with the  principal  amount
payable on any principal  payment date, or the amount of interest payable on any
interest  payment date,  to be determined by reference to one or more  commodity
prices,  securities of entities  unaffiliated with the Company,  baskets of such
securities  or  indices  and on such  other  terms  as may be set  forth  in the
relevant Pricing Supplement. The issuance of such Notes (excluding Notes indexed
to interest  indices)  denominated  or payable in Deutsche Marks will be made in
compliance  with German law and with the policies and  guidelines  of the German
Central  Bank,  as amended from time to time,  regarding  indexation of Deutsche
Mark-denominated  debt  obligations,  which currently  prohibits the issuance of
Deutsche  Mark-denominated  Notes  whose  payments  are  linked to oil,  gold or
similar  commodities,  any index  related  thereto or consumer  price or similar
indices. Each issue of index-linked French Franc Notes which are to be listed on
the Paris Bourse must be made in compliance  with the general  principles of the
COB and the Conseil des Bourses de Valeurs  ("CBV")  published  on July 26, 1996
(Decisions et Avis No.  96-2580  published by the Societe de Bourses  Francaises
("SBF")) or any other general  principles  that could  replace  those  mentioned
above.

Optional Redemption

         The Pricing  Supplement  will indicate  either that the Notes cannot be
redeemed prior to maturity (other than as provided under "Tax Redemption" below)
or will  indicate the terms on which the Notes will be  redeemable at the option
of the Company. Notes denominated or payable in French Francs or pounds sterling
may not be  redeemed  at the option of the  Company  during the first year after
issuance and Notes  denominated or payable in Deutsche Marks may not be redeemed
during the first two years after issuance, except in each case pursuant to a Tax
Redemption.  Unless otherwise  specified in the applicable  Pricing  Supplement,
notice of  redemption  to  holders  of Notes  will be  published  in the  manner
described  under  "Notices"  below,  once in each of three  successive  calendar
weeks, the first  publication to be not less than 30 nor more than 60 days prior
to the date set for  redemption.  Unless  otherwise  specified in the applicable
Pricing  Supplement,  notice of redemption  shall also be provided to holders of
Registered Notes in the manner described under "Notices" below, not less than 30
days and not more  than 60 days  prior to the date  fixed  for  redemption.  The
Notes, except for Amortizing Notes, will not be subject to any sinking fund.

Repayment at the Noteholders' Option; Repurchase

         If  applicable,  the  Pricing  Supplement  relating  to each  Note will
indicate  that the Note will be  repayable at the option of the holder on a date
or dates  specified  prior to its  maturity  date  (which,  in the case of Notes
denominated or payable in French Francs or pounds  sterling may not occur during
the first year after issuance and, in the case of Deutsche Marks,  may not occur
during the first two years after  issuance) and, unless  otherwise  specified in
such  Pricing  Supplement,  at a price  equal  to 100% of the  principal  amount
thereof,  together with accrued  interest to the date of repayment,  unless such
Note  was  issued  with  original  issue  discount,  in which  case the  Pricing
Supplement will specify the amount payable upon such repayment.

         In order for such a Note to be repaid,  the Principal Paying Agent must
receive at least 15 days but not more than 30 days prior to the  repayment  date
(i) the Note with the form entitled  "Option to Elect  Repayment" on the reverse
of the Note duly completed,  together with any coupons appertaining  thereto, or
(ii) a telegram, telex,

                                      S-23





facsimile transmission or letter from a member of a national securities exchange
or the  National  Association  of  Securities  Dealers,  Inc.  (the "NASD") or a
commercial  bank or trust company in the United States,  Western Europe or Japan
setting  forth  the  name of the  holder  of the  Note  (in the  case  only of a
Registered  Note), the principal amount of the Note, the principal amount of the
Note to be repaid,  the  certificate  number or a  description  of the tenor and
terms of the Note,  a  statement  that the  option to elect  repayment  is being
exercised thereby and a guarantee that the Note to be repaid,  together with the
duly completed form entitled  "Option to Elect  Repayment" on the reverse of the
Note, together with any coupons  appertaining  thereto,  will be received by the
Principal  Paying Agent not later than the fifth  Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided,  however, that
such telegram,  telex,  facsimile transmission or letter shall only be effective
if such Note and form duly  completed,  together  with any coupons  appertaining
thereto,  are received by the Principal Paying Agent by such fifth Business Day.
Unless otherwise specified in the applicable Pricing Supplement, exercise of the
repayment  option by the  holder of a Note will be  irrevocable.  The  repayment
option  may be  exercised  by the  holder  of a Note  for less  than the  entire
principal  amount of the Note but, in that event,  the  principal  amount of the
Note remaining outstanding after repayment must be an authorized denomination.

         The  Company  may  purchase  Notes at any  price in the open  market or
otherwise.  Notes so  purchased  by the Company  may, at the  discretion  of the
Company,  be  held  or  resold  or  surrendered  to  the  relevant  Trustee  for
cancellation.

Tax Redemption

         All Notes

         Notes may be redeemed  as a whole,  at the option of the Company at any
time prior to maturity,  upon the giving of a notice of  redemption as described
below,  at a  redemption  price equal to 100% of the  principal  amount  thereof
(except as otherwise  specified in the applicable  Pricing  Supplement or unless
such Note is a Mandatorily Exchangeable Note), together with accrued interest to
the date fixed for redemption,  if the Company  determines  that, as a result of
any  change  in or  amendment  to  the  laws  (or  any  regulations  or  rulings
promulgated  thereunder) of the United States or of any political subdivision or
taxing  authority  thereof  or  therein  affecting  taxation,  or any  change in
official  position  regarding the  application or  interpretation  of such laws,
regulations or rulings,  which change or amendment becomes effective on or after
the date of the Pricing Supplement in connection with the issuance of such Notes
(or other date specified in the applicable Pricing Supplement),  the Company has
or will become obligated to pay Additional Amounts with respect to such Notes as
described  below under "Payment of Additional  Amounts."  Prior to the giving of
any notice of redemption  pursuant to this paragraph,  the Company shall deliver
to the applicable Trustee (i) a certificate stating that the Company is entitled
to effect such  redemption  and setting  forth a statement of facts showing that
the conditions  precedent to the right of the Company to so redeem have occurred
(the  date  on  which  such  certificate  is  delivered  to the  Trustee  is the
"Redemption  Determination  Date"),  and (ii) an opinion of independent  counsel
satisfactory  to such Trustee to such effect  based on such  statement of facts;
provided that no such notice of  redemption  shall be given earlier than 60 days
prior to the earliest  date on which the Company  would be obligated to pay such
Additional Amounts if a payment in respect of such Note were then due.

         Notice  of  redemption  will be given not less than 30 nor more than 60
days  prior to the date  fixed for  redemption,  which  date and the  applicable
redemption  price will be specified in the notice.  Such notice will be given in
accordance with "Notices" below.

         If any date fixed for  redemption is a date prior to the Exchange Date,
definitive Bearer Notes will be issuable on and after such redemption date as if
such redemption date had been the Exchange Date, subject to receipt of Ownership
Certificates   described  above  under  "Forms,   Denominations,   Exchange  and
Transfer,"  delivery of which is a condition  to delivery of  definitive  Bearer
Notes.


                                      S-24





         Special Tax Redemption of Bearer Notes

         If the Company shall determine that any payment made outside the United
States by the  Company or any Paying  Agent of  principal,  premium,  if any, or
interest due in respect of any Bearer Note or coupon would, under any present or
future  laws  or  regulations   of  the  United   States,   be  subject  to  any
certification,  identification or other information reporting requirement of any
kind, the effect of which is the disclosure to the Company,  any Paying Agent or
any  governmental  authority  of the  nationality,  residence  or  identity of a
beneficial  owner of such Bearer Note or coupon who is a United States Alien (as
defined below in "Payment of Additional Amounts") (other than such a requirement
(a) that would not be  applicable to a payment made by the Company or any Paying
Agent (i) directly to the  beneficial  owner or (ii) to a custodian,  nominee or
other  agent of the  beneficial  owner,  or (b) that  can be  satisfied  by such
custodian,  nominee or other agent certifying to the effect that such beneficial
owner is a United  States  Alien;  provided  that in each  case  referred  to in
clauses  (a)(ii)  and (b)  payment by such  custodian,  nominee or agent to such
beneficial owner is not otherwise subject to any such requirement),  the Company
shall redeem the Bearer Notes, as a whole,  at a redemption  price equal to 100%
of the principal  amount  thereof,  together  with accrued  interest to the date
fixed for  redemption,  or, at the election of the Company if the  conditions of
the next paragraph are satisfied,  pay the additional  amounts specified in such
paragraph.  The Company  shall make such  determination  and election as soon as
practicable  and publish  prompt  notice  thereof (the  "Determination  Notice")
stating  the  effective  date of such  certification,  identification  or  other
information reporting  requirements,  whether the Company will redeem the Bearer
Notes  or has  elected  to pay the  additional  amounts  specified  in the  next
paragraph,  and (if  applicable)  the last date by which the  redemption  of the
Bearer Notes must take place,  as provided in the next sentence.  If the Company
redeems the Bearer Notes,  such  redemption  shall take place on such date,  not
later than one year after the publication of the  Determination  Notice,  as the
Company shall elect by notice to the  applicable  Trustee at least 60 days prior
to the date fixed for redemption.  Notice of such redemption of the Bearer Notes
will be given to the holders of the Bearer  Notes not more than 60 nor less than
30 days prior to the date fixed for  redemption.  Such  redemption  notice shall
include a statement as to the last date by which the Bearer Notes to be redeemed
may be exchanged  for  Registered  Notes.  Notwithstanding  the  foregoing,  the
Company shall not so redeem the Bearer Notes if the Company  shall  subsequently
determine,  not less than 30 days prior to the date fixed for  redemption,  that
subsequent   payments   would  not  be  subject   to  any  such   certification,
identification or other  information  reporting  requirement,  in which case the
Company  shall  publish  prompt  notice of such  determination  and any  earlier
redemption  notice shall be revoked and of no further  effect.  The right of the
holders of Bearer  Notes  called for  redemption  pursuant to this  paragraph to
exchange  Bearer  Notes for  Registered  Notes  will  terminate  at the close of
business of the  Principal  Paying Agent on the  fifteenth day prior to the date
fixed for  redemption,  and no further  exchanges of Bearer Notes for Registered
Notes shall be permitted.

         If  and  so  long  as  the   certification,   identification  or  other
information reporting  requirements referred to in the preceding paragraph would
be fully satisfied by payment of a backup withholding tax or similar charge, the
Company may elect to pay as additional  amounts such amounts as may be necessary
so that every net payment made outside the United States following the effective
date of such  requirements  by the  Company  or any Paying  Agent of  principal,
premium or interest due in respect of any Bearer Note or any coupon of which the
beneficial  owner is a United States Alien (but without any requirement that the
nationality,  residence or identity of such beneficial owner be disclosed to the
Company,  any Paying Agent or any  governmental  authority,  with respect to the
payment of such  additional  amounts),  after deduction or withholding for or on
account of such backup  withholding  tax or similar  charge (other than a backup
withholding  tax or  similar  charge  that (i)  would not be  applicable  in the
circumstances  referred  to in the  second  parenthetical  clause  of the  first
sentence  of the  preceding  paragraph,  or  (ii)  is  imposed  as a  result  of
presentation  of such Bearer Note or coupon for payment  more than 15 days after
the date on which such  payment  becomes  due and  payable  or on which  payment
thereof is duly provided for, whichever occurs later), will not be less than the
amount provided for in such Bearer Note or coupon to be then due and payable. In
the event the  Company  elects to pay any  additional  amounts  pursuant to this
paragraph,  the  Company  shall have the right to redeem  the Bearer  Notes as a
whole  at any  time  pursuant  to the  applicable  provisions  of the  preceding
paragraph and the redemption  price of such Bearer Notes will not be reduced for
applicable  withholding  taxes. If the Company elects to pay additional  amounts
pursuant to this paragraph and the condition  specified in the first sentence of
this paragraph  should no longer be satisfied,  then the Company will redeem the
Bearer Notes as a whole,  pursuant to the applicable provisions of the preceding
paragraph.


                                      S-25





Payment of Additional Amounts

         Except as otherwise provided in the applicable Pricing Supplement,  the
Company will, subject to certain exceptions and limitations set forth below, pay
such additional amounts (the "Additional  Amounts") to the holder of any Note or
of any  coupon  appertaining  thereto  who is a  United  States  Alien as may be
necessary  in order that every net payment of the  principal  of and interest on
such Note and any other amounts payable on such Note,  after  withholding for or
on account of any  present or future  tax,  assessment  or  governmental  charge
imposed  upon or as a  result  of such  payment  by the  United  States  (or any
political subdivision or taxing authority thereof or therein),  will not be less
than the amount  provided for in such Note or coupon to be then due and payable.
The Company  will not,  however,  be required to make any payment of  Additional
Amounts to any such holder for or on account of:

                  (a) any such tax, assessment or other governmental charge that
         would not have been so imposed but for (i) the existence of any present
         or former  connection  between  such  holder (or  between a  fiduciary,
         settlor,  beneficiary,  member or shareholder  of such holder,  if such
         holder is an estate,  a trust, a partnership or a corporation)  and the
         United States and its possessions,  including, without limitation, such
         holder (or such fiduciary, settlor, beneficiary, member or shareholder)
         being or having been a citizen or  resident  thereof or being or having
         been  engaged in a trade or business or present  therein or having,  or
         having had, a permanent  establishment therein or (ii) the presentation
         by the  holder of any such Note or coupon  for  payment  on a date more
         than 15 days  after  the  date on which  such  payment  became  due and
         payable  or the date on which  payment  thereof is duly  provided  for,
         whichever occurs later;

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

                  (c) any tax,  assessment or other governmental  charge imposed
         by reason of such holder's past or present status as a personal holding
         company or foreign  personal  holding  company  or  controlled  foreign
         corporation or passive foreign  investment  company with respect to the
         United States or as a corporation  that  accumulates  earnings to avoid
         United States  federal  income tax or as a private  foundation or other
         tax-exempt organization;

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

                  (e) any tax,  assessment or other governmental charge required
         to be withheld by any Paying Agent from any payment of principal of, or
         interest  on,  any  Note,  if such  payment  can be made  without  such
         withholding by any other Paying Agent in a city in Western Europe;

                  (f) any tax,  assessment  or other  governmental  charge  that
         would  not  have  been  imposed  but for the  failure  to  comply  with
         certification,  information or other reporting requirements  concerning
         the  nationality,  residence  or identity  of the holder or  beneficial
         owner of such Note,  if such  compliance  is  required by statute or by
         regulation  of the United  States or of any  political  subdivision  or
         taxing  authority  thereof or therein  as a  precondition  to relief or
         exemption from such tax, assessment or other governmental charge;

                  (g) any tax,  assessment or other governmental  charge imposed
         by reason of such  holder's  past or  present  status as the  actual or
         constructive owner of 10% or more of the total combined voting power of
         all classes of stock  entitled to vote of the Company or as a direct or
         indirect subsidiary of the Company; or

                  (h) any  combination  of item (a),  (b), (c), (d), (e), (f) or
         (g);

nor shall Additional  Amounts be paid with respect to any payment on a Note to a
United  States  Alien who is a fiduciary or  partnership  or other than the sole
beneficial owner of such payment to the extent such payment would be required by
the laws of the  United  States (or any  political  subdivision  thereof)  to be
included in the income, for

                                      S-26





tax purposes,  of a beneficiary  or settlor with respect to such  fiduciary or a
member  of such  partnership  or a  beneficial  owner  who  would  not have been
entitled to the  Additional  Amounts had such  beneficiary,  settlor,  member or
beneficial owner been the holder of the Note.

         The term "United  States Alien" means any person who, for United States
federal  income tax purposes,  is a foreign  corporation,  a  nonresident  alien
individual,  a nonresident  alien  fiduciary of a foreign estate or trust,  or a
foreign  partnership  one  or  more  of  the  members  of  which  is  a  foreign
corporation,  a nonresident alien individual or a nonresident alien fiduciary of
a foreign estate or trust.

Replacement of Notes and Coupons

         Any Notes or coupons that become mutilated,  destroyed,  lost or stolen
or are apparently  destroyed,  lost or stolen will be replaced by the Company at
the expense of the holder upon delivery of such Notes or coupons or satisfactory
evidence of the destruction, loss or theft thereof to the Company, the Principal
Paying Agent, the Registrar (in the case of Registered Notes) and the applicable
Trustee. In each case, an indemnity  satisfactory to the Company,  the Principal
Paying Agent, the Registrar (in the case of Registered Notes) and the applicable
Trustee  may be  required  at the  expense  of the holder of such Note or coupon
before a replacement Note or coupon will be issued.

Notices

         Notices  to  holders  of the Notes  will be given 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  publication is expected to be made in The
Wall Street Journal and the Financial Times. In respect of Notes that are listed
on the Paris  Bourse,  and so long as required by the Paris  Bourse,  notices to
holders of the Notes will be given by  publication  in a French  language  daily
newspaper  published  in Paris  (which is  expected to be either Les Echos or la
Tribune  Desfosses  or,  if such  publication  is not  practicable,  in a French
language  newspaper  with general  circulation  in 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.

         Notices to holders  of  Registered  Notes will also be given by mailing
such  notices  to each  holder by first  class  mail,  postage  prepaid,  at the
respective  address of each holder as that address appears upon the books of the
Company.

                              DESCRIPTION OF UNITS

         The following  description of the Units offered  hereby,  including the
designation  and  the  terms  of the  Notes,  Universal  Warrants  and  Purchase
Contracts  that may be included in a Unit,  supplements  the  description of the
Units, Universal Warrants and Purchase Contracts set forth in the Prospectus, to
which  reference  is hereby  made.  In  particular,  the terms of the  Universal
Warrants  and  Purchase  Contracts  offered  hereby  relate  solely to Universal
Warrants and Purchase  Contracts  issued in conjunction  with Notes as part of a
Unit.  The terms and  conditions of Notes issued as part of a Unit are set forth
above under "Description of Notes."

         The  particular  terms of the Units,  including the terms of the Notes,
Universal  Warrants  and  Purchase  Contracts  that may be  included  in a Unit,
offered pursuant to any Pricing Supplement will be described therein.  The terms
and  conditions  set  forth in the  Prospectus  under  "Description  of  Units,"
"Description of Warrants,"  "Description of Purchase Contracts" and "Description
of Debt  Securities"  and those set forth below under "--  General," "-- Certain
Provisions  of the Unit  Agreement,"  "--  Purchase  Contracts,"  "--  Universal
Warrants" and "-- Certain  Provisions of the Universal  Warrant  Agreement"  and
above under  "Description of Notes" will apply to each Unit and to any Universal
Warrant,  Purchase Contract or Note included in such Unit, respectively,  unless
otherwise specified in the applicable Pricing Supplement.


                                      S-27





General

         The  Company  may issue from time to time Units  that may  include,  in
addition  to  Notes,  one or more  Universal  Warrants  or  Purchase  Contracts.
Reference is made to the applicable  Pricing  Supplement for (i) the designation
and the  terms of the  Units  and of the  Notes,  Universal  Warrants,  Purchase
Contracts, or any combination thereof,  comprising such Units, including whether
and  under  what  circumstances  such  Notes,  Universal  Warrants  or  Purchase
Contracts may be traded  separately,  (ii) a description of any additional terms
of the  Unit  Agreement  (as  defined  below)  and  (iii) a  description  of any
additional  provisions  for  the  issuance,  payment,  settlement,  transfer  or
exchange of the Units or of the securities comprised by the Units.

         The Units will be issued  pursuant  to the Unit  Agreement  dated as of
January 24, 1997 (the "Unit Agreement")  among the Company,  The Chase Manhattan
Bank, as Unit Agent for the Units (the "Unit Agent"),  as Collateral  Agent (the
"Collateral  Agent"),  and as Trustee  and Paying  Agent  under the Senior  Debt
Indenture and as Warrant Agent under the Universal Warrant Agreement (as defined
below),  and the  holders  from  time to time  of the  Units.  Unless  otherwise
specified in the applicable Pricing Supplement,  the Units will be issued in the
form  corresponding  to the  form of the  Notes  comprised  by such  Units  and,
therefore,  will be issued (i) in fully registered  definitive form ("Registered
Units") or (ii) in  definitive  bearer form or in temporary or permanent  global
bearer form (in each case,  "Bearer  Units") or in any  combination of the above
such registered or bearer forms. Each other security comprised by a Unit will be
in the corresponding form.

         Unless otherwise specified in the applicable Pricing Supplement,  Units
will be issued  in  denominations  of a single  Unit and any  integral  multiple
thereof,  with face amounts as indicated in the applicable  Pricing  Supplement,
generally  corresponding  to the principal amount of the Notes comprised by such
Units. See "Description of Notes -- Forms, Denominations, Exchange and Transfer"
above.

         Registered  Units will be  exchangeable  for Registered  Units in other
authorized  denominations,  in an equal aggregate principal amount in accordance
with the  provisions set forth in the Unit  Agreement.  Bearer Units will not be
issuable in exchange for Registered Units. Registered Units may be presented for
registration  of transfer or exchange at the offices of the Unit Agent or at the
offices of any other agent  designated by the Company for such  purpose.  Bearer
Units may be presented  for  exchange in the manner set forth below.  No service
charge  will be made for any  registration  of transfer or exchange of Units but
the Company may require  payment of a sum  sufficient  to cover any tax or other
governmental charge payable in connection therewith. Bearer Units (together with
the securities comprised by such Unit) will be transferable by delivery.

         Each Bearer Unit will be  represented  initially by a temporary  global
Bearer  Unit  which,  unless  otherwise  specified  in  the  applicable  Pricing
Supplement, will be deposited with a Common Depositary for credit to the account
designated by or on behalf of the subscriber thereof.  Upon deposit of each such
temporary global Bearer Unit, the Euroclear  Operator or Cedel Bank, as the case
may be, will credit each subscriber with a number (and specified face amount) of
Units equal to the number (and specified  face amount)  thereof for which it has
subscribed  and  paid.  The  interests  of the  beneficial  owner or owners in a
temporary global Bearer Unit will be exchangeable, after the date (the "Exchange
Date") that is 40 days after the date on which the Company receives the proceeds
of the sale of the Note  comprised  by such Unit (the  "Closing  Date"),  for an
interest in a permanent global Bearer Unit to be held by a Common Depositary for
the Euroclear  Operator and Cedel Bank, for credit to the account  designated by
or on behalf of the beneficial owner thereof.  The exchange of such interests of
the  beneficial  owner or owners in a temporary  global  Bearer Unit (and in the
temporary global form of any Universal Warrant or Purchase Contract comprised by
such Unit) will be made at the time, and to the extent,  of the exchange of such
interests  in the  temporary  global  Bearer  Note  comprised  by  such  Unit in
accordance with the procedures  described  above under  "Description of Notes --
Forms, Denominations, Exchange and Transfer."

         The beneficial owner of a Unit represented by a permanent global Bearer
Unit may, upon 30 days' written notice to the Unit Agent given by the beneficial
owner through either the Euroclear Operator or Cedel Bank, exchange such owner's
interest in such  permanent  global Bearer Unit for a definitive  Bearer Unit or
Units, which will be serially numbered, or a definitive Registered Unit or Units
(consisting of the  definitive  registered  forms of each security  comprised by
such Unit or Units), in any authorized  denominations.  Upon receipt by the Unit
Agent of an initial request to exchange an interest in a permanent global Bearer
Unit for a definitive Bearer Unit or Units,

                                      S-28





all other interests in such permanent  global Bearer Unit shall be exchanged for
a definitive  Bearer Unit or Units  (consisting of the definitive  forms of each
security  comprised  by such  Unit).  The Common  Depositary  for the  Euroclear
Operator and Cedel Bank will  instruct the Unit Agent  regarding  the  aggregate
face  amount  and   denominations  of  definitive  Bearer  Units  that  must  be
authenticated  and delivered to each of the  Euroclear  Operator and Cedel Bank.
Such  exchanges  shall occur at no expense to the  beneficial  owners as soon as
practicable  after the receipt of the  initial  request  for  definitive  Bearer
Units. No Bearer Unit will be delivered in the United States.  References herein
to "Bearer Units" shall, except where otherwise indicated,  include interests in
a permanent or temporary global Bearer Unit as well as definitive  Bearer Units.
At the option of the holder,  and subject to the terms of the Unit  Agreement or
procedures  established  pursuant  thereto,  definitive  Bearer  Units  will  be
exchangeable  into Registered Units  (consisting of the registered forms of each
security  comprised by such Unit) of any authorized  denominations of like tenor
and in an equal number and aggregate face amount at the office of the Unit Agent
or at the office of any other agent designated by the Company for such purpose.

         If a Unit  represented  by a global Bearer Unit or by definitive  Units
that remain on deposit with a Common  Depositary  for the Euroclear  Operator or
Cedel Bank (i) includes a Universal Warrant entitling the holder to exercise the
Universal Warrant to purchase or sell Warrant Property (as defined below),  (ii)
includes  any Note or Purchase  Contract  that  entitles  the holder  thereof to
redeem,  accelerate  or take any  other  action  with  respect  to such  Note or
Purchase Contract or (iii) otherwise entitles the holder of the Unit to take any
action with  respect to the Unit or any  security  comprised  by such Unit,  the
exercise  of such right must be made  through  the  Euroclear  Operator or Cedel
Bank. In order to ensure that the  Euroclear  Operator or Cedel Bank will timely
exercise a right  conferred  by a Unit (or by the  securities  comprised by such
Unit) with respect to a particular Unit (or any security comprised by such Unit)
or any portion  thereof,  the  beneficial  owner of such Unit must  instruct the
broker  or  other  direct  or  indirect  participant  through  which it holds an
interest  in such Unit to notify  the  Euroclear  Operator  or Cedel Bank of its
desire to exercise any such right.  Different firms have different deadlines for
accepting  instructions from their customers and,  accordingly,  each beneficial
owner should consult the broker or other direct or indirect  participant through
which it holds an interest in a Unit in order to ascertain the deadline for such
an  instruction  in order for timely  notice to be  delivered  to the  Euroclear
Operator or Cedel Bank.

         Payments with respect to Units and  Securities  Comprised by Units.  At
the office of the Unit Agent in the Borough of Manhattan,  The City of New York,
maintained  by the  Company  for such  purpose,  or at the  office  of The Chase
Manhattan Bank,  London Branch, as Unit Agent and Collateral Agent for the Units
outside the United States, (i) the Units,  accompanied by each of the securities
comprised by such Unit (unless the applicable Pricing Supplement  indicates that
any such securities are separable from such Unit),  may be presented for payment
or delivery of Warrant Property or Purchase Contract Property (as defined below)
or any other amounts due with respect  thereto,  (ii) transfer of the Units will
be registrable  and (iii) the Units will be  exchangeable,  provided that global
Bearer Units will be exchangeable only in the manner and to the extent set forth
above.  The  Company  may at any time  appoint  additional  unit agents or other
agents with respect to the Units outside the United States (each a "Unit Agent,"
which term  includes  the initial Unit Agent named above and any  additional  or
successor unit agent  appointed by the Company).  No service charge will be made
for any  registration  of transfer or exchange of the Units (or of any  security
comprised  by such  Unit)  or  interest  therein,  except  for any tax or  other
governmental charge that may be imposed in connection therewith.

Certain Provisions of the Unit Agreement

         Under the terms of the Unit Agreement, each holder of a definitive Unit
and each  beneficial  owner of a global Unit,  by its  acceptance  thereof,  (i)
consents to and agrees to be bound by the terms of the Unit  Agreement  and (ii)
appoints the Unit Agent as its authorized agent to execute,  deliver and perform
any Purchase  Contract  included in such Unit in which such holder or beneficial
owner has an interest on behalf of such holder or beneficial  owner, as the case
may be. Under the terms of the Unit Agreement,  each holder of a definitive Unit
and each beneficial owner of a global Unit, by acceptance  thereof,  irrevocably
agrees  to be a party  to and be bound by the  terms  of any  Purchase  Contract
included in such Unit in which such holder or beneficial  owner has an interest.
Upon the  registration  of  transfer  of a  registered  Unit or the  transfer by
delivery of a Bearer Unit,  the  transferee  will assume the  obligations of the
transferor under any Purchase Contract included in such Unit and under any other
security  comprised by such Unit in which such holder or beneficial owner has an
interest, and the transferor will

                                      S-29





be released from such obligations.  Pursuant to the terms of the Unit Agreement,
the  Company  has  consented  to the  transfer  of any such  obligations  to the
transferee,  to the  assumption of such  obligations  by the  transferee and the
release of the  transferor,  if such  transfer  is made in  accordance  with the
provisions of the Unit Agreement.

         Remedies. The Unit Agreement provides that upon the acceleration of the
Notes  comprised by any Units,  the  obligations  of the Company and the holders
under any Purchase Contracts comprised by such Units may also be accelerated, on
behalf of all such holders, upon the request of the holders of not less than 25%
of the Purchase  Contracts  that  constitute a part of Units that  comprise such
accelerated  Notes.  No holder of any Unit or  interest  therein  shall have any
right by virtue of or by availing  itself of any provision of the Unit Agreement
to institute  any action or  proceeding  at law or in equity or in bankruptcy or
otherwise  upon or  under or with  respect  to the  Unit  Agreement,  or for the
appointment  of a trustee,  receiver,  liquidator,  custodian  or other  similar
official,  unless such holder shall have given written  notice to the Unit Agent
and the Company of the occurrence and  continuance of a default  thereunder and,
(i) in the  case of an Event of  Default  under  the  Notes or the  Senior  Debt
Indenture,  unless  the  procedures  (including  notice to the  Trustee  and the
Company)  described  in Article  Five of the  Senior  Debt  Indenture  have been
complied  with and (ii) in the  case of  certain  defaults  under  any  Purchase
Contracts  included in such Unit, unless the holders of not less than 25% of the
affected Purchase  Contracts  comprised by all Units then outstanding shall have
made written  request upon the Unit Agent to institute such action or proceeding
in its own name as Unit Agent under the Unit Agreement and shall have offered to
the Unit Agent such reasonable  indemnity as it may require,  and the Unit Agent
for 60 days after its receipt of such  notice,  request  and offer of  indemnity
shall have failed to institute any such action or  proceedings  and no direction
inconsistent  with such request shall have been given to the Unit Agent pursuant
to the Unit Agreement in writing by the holders of a majority of the outstanding
affected  Units.  If such  conditions  have  been  satisfied,  any  holder of an
affected  Unit may then (but only then)  institute  such  action or  proceeding.
Notwithstanding the above, the holder of any Unit or Purchase Contract will have
the  unconditional  right  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.

         Except as may be  described  in a Pricing  Supplement  applicable  to a
particular  series of Units,  there are no covenants or other  provisions in the
Unit Agreement providing for a put or increased interest or otherwise that would
afford holders of Units additional protection in the event of a recapitalization
transaction,  a  change  of  control  of  the  Company  or  a  highly  leveraged
transaction.

         Modification.  The  Unit  Agreement  and  the  terms  of  the  Purchase
Contracts and the Purchase  Contract  Certificates may be amended by the Company
and the Unit  Agent,  without  the  consent of the  holders,  for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision therein or in any other manner which the Company may deem
necessary or desirable and which will not adversely  affect the interests of the
affected holders in any material respect.

         The Unit Agreement will contain  provisions  permitting the Company and
the Unit  Agent,  with the consent of the holders of not less than a majority of
all  series  of Units at the time  outstanding  under  such Unit  Agreement  and
affected  thereby (voting as one class),  to modify the rights of the holders of
the Units of each  series so  affected  or the terms of any  Purchase  Contracts
included  in any such  series  of  Units  and the  terms  of the Unit  Agreement
relating to the Purchase  Contracts  of each series so affected,  except that no
such  modification  may,  without the consent of the holder of each  outstanding
Unit  affected  thereby,  (i)  impair  the  right  to  institute  suit  for  the
enforcement  of any Purchase  Contract,  (ii)  materially  adversely  affect the
holders'  rights  under  any  Purchase  Contract  or Unit or  (iii)  reduce  the
aforesaid  percentage of outstanding Units issued under the Unit Agreement,  the
consent of the holders of which is required for the modification or amendment of
the provisions of the Unit Agreement  relating to any such Purchase Contracts or
for any waiver of compliance  with certain  provisions of the Unit  Agreement or
waiver  of  certain   defaults   relating  to  any  such   Purchase   Contracts.
Modifications  of any Notes  comprised  by Units may only be made in  accordance
with  the  Senior  Debt  Indenture,   as  described  in  the  Prospectus   under
"Description   of  Debt   Securities  --   Modification   of  the   Indentures."
Modifications of any Universal  Warrants  comprised by Units may only be made in
accordance with the terms of the Universal  Warrant Agreement as described below
under "Certain Provisions of the Universal Warrant Agreement."


                                      S-30





         Title. The Company,  the Unit Agent and any agent of the Company or the
Unit Agent will treat the registered  owner of any Registered Unit or registered
Purchase  Contract  and the bearer of any Bearer  Unit or  Purchase  Contract in
bearer form as the owner thereof (whether or not the Note constituting a part of
such Unit shall be overdue and  notwithstanding  any notice to the contrary) for
the  purpose  of making  payment,  the  performance  of any  Purchase  Contracts
included in any series of Units and for all other purposes;  provided that, with
respect to Units consisting of Purchase Contracts together with securities,  the
Company agrees,  and each beneficial  holder of such Unit shall be deemed by its
acceptance  thereof to agree,  that none of  Euroclear,  Cedel Bank or any other
relevant clearing system (or any securities  intermediary through which any such
clearing system  directly or indirectly  holds any interest in any such Unit and
that is not itself the  beneficial  owner  thereof) shall have any obligation by
virtue  of being  the  holder  of such Unit to  perform  the  Purchase  Contract
included in such Unit.

         Replacement of Unit Certificates or Purchase Contract Certificates. Any
mutilated certificate  evidencing a definitive Unit or Purchase Contract will be
replaced at the expense of the holder upon surrender of such  certificate to the
Unit  Agent.  Certificates  that have  been  destroyed,  lost or stolen  will be
replaced at the expense of the holder upon  delivery to the Company and the Unit
Agent of evidence of the destruction,  loss or theft thereof satisfactory to the
Company  and the  Unit  Agent.  In the  case  of a  destroyed,  lost  or  stolen
certificate,  an indemnity satisfactory to the Unit Agent and the Company may be
required  at the  expense  of the  holder  of the  Units or  Purchase  Contracts
evidenced by such certificate before a replacement will be issued.

         The Unit Agreement  provides that,  notwithstanding  the foregoing,  no
such  replacement  certificate need be delivered (i) during the period beginning
15 days before the day of mailing of or  publishing a notice of redemption or of
any other exercise of any right held by the Company with respect to the Unit (or
any security comprised by such Unit) evidenced by the mutilated, destroyed, lost
or stolen  certificate and ending on the day of the giving of such notice,  (ii)
if such mutilated,  destroyed, lost or stolen certificate evidences any security
selected  or called  for  redemption  or other  exercise  of a right held by the
Company or (iii) at any time on or after the date of settlement  or  redemption,
as applicable, with respect to any Purchase Contract included in the Unit (or at
any time on or after  the last  exercise  date  with  respect  to any  Universal
Warrant  included in the Unit) evidenced by such mutilated,  destroyed,  lost or
stolen certificate,  except with respect to any Units that remain or will remain
outstanding  following  such  date of  settlement  or  redemption  or such  last
exercise date.

         Governing Law. The Unit Agreement, the Units and the Purchase Contracts
will be governed by, and construed in accordance  with, the laws of the State of
New York.

Purchase Contracts

         The Company may, issue from time to time, as part of a Unit with one or
more Notes or Universal Warrants, Purchase Contracts for the purchase or sale of
(a)  securities  of an entity  unaffiliated  with the Company,  a basket of such
securities,  and index or indices of such  securities or any  combination of the
above, (b) currencies or composite currencies or (c) commodities  (collectively,
"Purchase Contract  Property").  Such Purchase Contracts will be governed by the
terms and provisions of the Unit Agreement.  See "Description of  Units--Certain
Provisions of the Unit  Agreements."  The  applicable  Pricing  Supplement  will
specify  whether  or not a  Purchase  Contract  issued  as part of a Unit may be
separated  from  the  other  securities  comprised  by such  Unit  prior to such
Purchase Contract's  settlement date. Purchase Contracts may not be so separated
prior to the 91st day after the issuance of a Unit,  unless otherwise  specified
in the applicable  Pricing  Supplement.  The applicable  Pricing Supplement will
also specify the methods by which the holders may purchase or sell such Purchase
Contract Property and any acceleration,  cancellation or termination  provisions
or other provisions relating to the settlement of a Purchase Contract.  The Unit
Agreement will not be qualified as an indenture under the Trust Indenture Act of
1939,  as  amended  (the  "Trust  Indenture  Act"),  the Unit  Agent will not be
required  to  qualify  as a  trustee  thereunder  and the  holders  of Units and
Purchase  Contracts  will not have the benefits of the  protections of the Trust
Indenture Act. However,  any Notes issued as part of a Unit will be issued under
an indenture  qualified under the Trust Indenture Act and the trustee thereunder
will have qualified as a trustee under the Trust Indenture Act.

         The Purchase  Contracts  may be issued in fully  registered  definitive
form or in global or definitive  bearer form or in any  combination of the above
such registered or bearer forms, as specified in the applicable Pricing

                                      S-31





Supplement.  In each case, the form of the Purchase  Contract included in a Unit
will  correspond  to the form of the  Unit  and of the  Note  and any  Universal
Warrant included in such Unit.

         Under  circumstances  specified in the applicable  Pricing  Supplement,
payments in respect of  principal  of Notes that are part of Units that  include
Purchase Contracts  requiring the holders to purchase Purchase Contract Property
may be applied  by the Unit  Agent in  satisfaction  of the  obligations  of the
holders of the Units under the related Purchase  Contracts  (unless a holder has
delivered cash in respect of its obligations under such Purchase Contract). Upon
settlement of any such Purchase Contract, the Purchase Contract Property will be
delivered only upon  presentation and surrender of the  certificates  evidencing
Units at the office of the Unit Agent.  If a holder  delivers cash in settlement
of its obligations under a Purchase Contract that is part of a Unit, the related
Note that is a part of such Unit will remain outstanding if the maturity extends
beyond  the  relevant  settlement  date  and,  as more  fully  described  in the
applicable Pricing Supplement,  the holder will receive a definitive Bearer Note
or an interest in a global Bearer Note.

         In order to secure the observance and  performance of the covenants and
agreements of the holders of Purchase Contracts  contained in the Unit Agreement
and in such Purchase Contracts, holders of Purchase Contracts acting through the
Unit Agent, as their  attorney-in-fact,  shall be deemed to grant, sell, convey,
assign,  transfer and pledge unto The Chase  Manhattan  Bank, in its capacity as
Collateral Agent, for the benefit of the Company, as collateral security for the
performance when due by such holders of their respective  obligations  under the
Unit Agreement and under such Purchase Contracts, 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 Notes that are part of Units that  include
such  Purchase  Contracts,  or such other  property as may be  specified  in the
applicable Pricing  Supplement (the "Pledged Items");  (ii) all additions to and
substitutions  for such Pledged Items as may be permissible,  if so specified in
the applicable Pricing  Supplement;  (iii) all income,  proceeds and collections
received or to be received,  or derived or to be derived, at any time from or in
connection  with (i) and (ii)  above;  and (iv) all powers  and rights  owned or
thereafter  acquired  under or with respect to the Pledged  Items.  All payments
with respect to any Pledged Items received by the Collateral Agent shall be paid
by the Collateral Agent, unless such payments have been released from the Pledge
pursuant to the Unit Agreement, to the Company in 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.

         Unless otherwise specified in the applicable Pricing Supplement, in the
event  that a  holder  does not  elect  to  deliver  cash in  settlement  of its
obligations  under a  Purchase  Contract  that is part of a Unit  and  fails  to
present and surrender the  certificate  evidencing the Units held by such holder
to the Unit Agent when required,  the Purchase Contract Property to be purchased
by  such  holder  under  the  Purchase  Contracts  evidenced  thereby  shall  be
registered in the name of, and together with any distributions  thereon shall be
held by,  the Unit  Agent in trust for the  benefit  of such  holder  until such
certificate  is presented and  surrendered or the holder  provides  satisfactory
evidence that such certificate has been destroyed, lost or stolen, together with
any  indemnity  that may be required by the Unit Agent or the Company in respect
thereof.  In the event that a certificate is not presented (or such evidence and
indemnity are not provided) on or prior to the date two years after the relevant
settlement  date with  respect to the related  Purchase  Contract,  any payments
received  by the  Unit  Agent  in  respect  of the  Purchase  Contract  Property
delivered in respect of the Units evidenced by such  certificate will be paid by
the Unit Agent to the Company and such  holder  will  thereafter  be required to
look  solely to the Company  for  payment  thereof.  The Unit Agent will have no
obligation  to invest or to pay  interest on any amounts  held by the Unit Agent
pending distribution, as described above.

         Unsecured  Obligations  of the  Company.  The  Purchase  Contracts  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. Most of the assets of the Company are owned
by its  subsidiaries.  Therefore,  the  Company's  rights  and the rights of its
creditors,  including  holders of  Purchase  Contracts,  to  participate  in the
distribution of assets of any subsidiary upon such  subsidiary's  liquidation or
recapitalization  will be  subject  to the  prior  claims  of such  subsidiary's
creditors,  except to the extent that the Company may itself be a creditor  with
recognized  claims against the  subsidiary.  In addition,  dividends,  loans and
advances from certain

                                      S-32





of the Company's  principal  subsidiaries  to the Company are  restricted by net
capital requirements under the Exchange Act and under rules of certain exchanges
and various domestic and foreign regulatory bodies.

Universal Warrants

         The Company may issue from time to time,  as part of a Unit with one or
more Notes or  Purchase  Contracts,  Universal  Warrants 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  (collectively,
"Warrant  Property").  The Company may satisfy  its  obligations,  if any,  with
respect to any Universal  Warrants by delivering the Warrant Property or, in the
case of underlying  securities or  commodities,  the cash value thereof,  as set
forth in the applicable  Pricing  Supplement.  The applicable Pricing Supplement
will specify whether or not a Universal  Warrant issued as part of a Unit may be
separated  from  the  other  securities  comprised  by such  Unit  prior to such
Universal Warrant's expiration. Universal Warrants may not be so separated prior
to the 91st day after the issuance of a Unit, unless otherwise  specified in the
applicable Pricing Supplement.

         The Universal  Warrants  comprising part of a Unit will be issued under
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  (the  "Warrant  Agent"),  and may be issued in one or more  series as set
forth in the applicable Pricing  Supplement.  The following summaries of certain
provisions of the  Universal  Warrant  Agreement  and Universal  Warrants do not
purport to be complete and such summaries are subject to the detailed provisions
of the Universal  Warrant Agreement to which reference is hereby made for a full
description of such  provisions,  including the definition of certain terms used
herein, and for other information regarding the Universal Warrants.

         Reference  is  made  to  the  applicable  Pricing  Supplement  for  the
following terms of and information  relating to any Universal Warrants:  (i) the
specific  designation  and  aggregate  number  of and the  price  at  which  the
Universal  Warrants will be issued;  (ii) the currency or composite currency for
which the Universal Warrants may be purchased; (iii) the date on which the right
to exercise the  Universal  Warrants  shall  commence and the date on which such
right  shall  expire  or,  if  the  Universal   Warrants  are  not  continuously
exercisable  throughout  such period,  the specific  date or dates on which they
will be exercisable; (iv) the identity of any depositaries,  execution or paying
agents, transfer agents, registrars or calculation or other agents in respect of
the Universal Warrants;  (v) whether such Universal Warrants are put Warrants or
call Warrants;  (vi) (a) the specific  Warrant Property (and the amount thereof)
purchasable or saleable upon exercise of each Universal  Warrant;  (b) the price
at which and the currency or composite currency with which such Warrant Property
may be purchased or sold upon such  exercise (or the method of  determining  the
same);  (c) whether such exercise  price may be paid in cash, by the exchange of
any other security  offered with such Universal  Warrants or both and the method
of such exercise;  and (d) whether the exercise of such Universal Warrants is to
be settled in cash or by delivery of the underlying securities or commodities or
both; and (vii) any other terms of the Universal Warrants.

         Unless otherwise  specified in the applicable Pricing  Supplement,  the
Universal  Warrants  may be  issued  (i) in  fully  registered  definitive  form
("Registered  Warrants"),  (ii) in  global  bearer  or  definitive  bearer  form
("Bearer  Warrants")  or (iii) any  combination  thereof,  as  specified  in the
applicable Pricing  Supplement.  In each case, the form of the Universal Warrant
included  in a Unit  will  correspond  to the form of the Unit and of any  other
security included in such Unit.

         At the option of the  holder,  upon  request  confirmed  in writing and
subject to the terms of the Universal Warrant  Agreement,  Registered  Universal
Warrants in definitive  form may be presented for exchange and for  registration
of transfer (with the form of transfer endorsed thereon duly executed), but only
in  connection  with  the  transfer  of the  applicable  Unit  and  each  of the
securities  comprised by such Unit, unless otherwise specified in the applicable
Pricing  Supplement,  at the corporate trust office of the Warrant Agent (or any
other  office  indicated  in  the  Pricing  Supplement  relating  to  the  Units
comprising such Universal  Warrants)  without service charge and upon payment of
any taxes and other governmental  charges as described in such Universal Warrant
Agreement.  Such transfer or exchange will be effected only if the Warrant Agent
is satisfied  with the  documents of title and identity of the person making the
request.


                                      S-33





Certain Provisions of the Universal Warrant Agreement

         Modifications.  The  Universal  Warrant  Agreement and the terms of the
Universal Warrants and the Universal Warrant  Certificates may be amended by the
Company and the Warrant  Agent,  without  the  consent of the  holders,  for the
purpose of curing any ambiguity,  or of curing,  correcting or supplementing any
defective  or  inconsistent  provision  therein or in any other manner which the
Company may deem necessary or desirable and which will not adversely  affect the
interests of the affected holders in any material respect.

         The  Company  and the  Warrant  Agent  may also  modify  or  amend  the
Universal  Warrant Agreement and the terms of the Universal  Warrants,  with the
consent  of the  owners  of not  less  than a  majority  in  number  of the then
outstanding  unexercised  Universal  Warrants  affected,  provided  that no such
modification  or  amendment  that changes the  exercise  price of the  Universal
Warrants,   reduces  the  amount  receivable  upon  exercise,   cancellation  or
expiration,  shortens the period of time during which the Universal Warrants may
be exercised or otherwise  materially  and  adversely  affects the rights of the
owners of the  Universal  Warrants  or reduces  the  percentage  of  outstanding
Universal Warrants,  the consent of whose owners is required for modification or
amendment  of the  Universal  Warrant  Agreement  or the terms of the  Universal
Warrants, may be made without the consent of the owners affected thereby.

         Merger, Consolidation,  Sale or Other Disposition. If at any time there
shall be a merger or consolidation of the Company or a transfer of substantially
all of its assets, as permitted under the applicable  Indentures,  the successor
corporation  thereunder  shall  succeed  to and assume  all  obligations  of the
Company  under  the  Universal  Warrant  Agreement  and  the  Universal  Warrant
Certificates.  The Company shall thereupon be relieved of any further obligation
under the Universal  Warrant Agreement and the Universal  Warrants.  The Company
shall  notify  the  Warrantholders  of the  occurrence  of any such  event.  See
"Description of Debt Securities -- Certain Covenants" in the Prospectus.

         Enforceability of Rights of Warrantholders;  Governing Law. The Warrant
Agent  will act  solely  as an  agent  of the  Company  in  connection  with the
Universal   Warrant   Certificates   and  will  not  assume  any  obligation  or
relationship  of agency or trust for or with any  holders of  Universal  Warrant
Certificates or beneficial owners of Universal Warrants. Any holder of Universal
Warrant Certificates and any beneficial owner of Universal Warrants may, without
the consent of the Warrant Agent, any other holder or beneficial owner,  enforce
by  appropriate  legal  action,  on its own behalf,  its right to  exercise  the
Universal  Warrants  evidenced by such Universal  Warrant  Certificates,  in the
manner provided therein and in the Universal Warrant Agreement. No holder of any
Universal  Warrant  Certificate  or beneficial  owner of any Universal  Warrants
shall be  entitled  to any of the  rights  of a holder of the  Warrant  Property
purchasable upon exercise of such Universal Warrants. The Universal Warrants and
the Universal Warrant Agreement will be governed by, and construed in accordance
with, the laws of the State of New York.

         Unsecured  Obligations  of the  Company.  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. Most of the assets of the Company are owned
by its  subsidiaries.  Therefore,  the  Company's  rights  and the rights of its
creditors,  including  Warrantholders,  to  participate in the  distribution  of
assets of any subsidiary upon such subsidiary's  liquidation or recapitalization
will be subject to the prior claims of such  subsidiary's  creditors,  except to
the extent  that the  Company may itself be a creditor  with  recognized  claims
against the subsidiary. In addition,  dividends, loans and advances from certain
of the Company's  principal  subsidiaries  to the Company are  restricted by net
capital requirements under the Exchange Act and under rules of certain exchanges
and various domestic and foreign regulatory bodies.


                                      S-34





                             FOREIGN CURRENCY RISKS

Exchange Rates and Exchange Controls

         An investment  in Notes,  Units or any of the  securities  constituting
such Units that are  denominated  in, or the  payment of which is related to the
value of, a Specified  Currency  other than the currency of the country in which
the  purchaser is a resident or the currency  (including  the ECU,  Euro and any
other such composite  currency) in which the purchaser  conducts its business or
activities  (the  "home  currency")  entails  significant  risks  that  are  not
associated  with a similar  investment  in a  security  denominated  in the home
currency. Such risks include, without limitation, the possibility of significant
changes in rates of exchange  between the home currency and the various  foreign
currencies (or composite  currencies)  and the  possibility of the imposition or
modification  of exchange  controls  by either the U.S. or foreign  governments.
Such risks  generally  depend on economic  and  political  events over which the
Company  has no  control.  In  recent  years,  rates  of  exchange  for  certain
currencies  have been highly  volatile  and such  volatility  may be expected to
continue in the future.  Fluctuations in any particular  exchange rate that have
occurred in the past are not necessarily indicative, however, of fluctuations in
such rate that may occur during the term of any Note, Unit or security  included
in such  Unit.  Depreciation  of the  Specified  Currency  for a  Note,  Unit or
security  included in such Unit against the relevant home currency  would result
in a decrease  in the  effective  yield of such Note below its coupon rate or in
the  payout  of such  Unit  (or  security  included  therein)  and,  in  certain
circumstances,  could result in a loss to the investor on a home currency basis.
In addition,  depending on the specific terms of a Currency Linked Note, changes
in exchange  rates  relating to any of the  currencies  involved may result in a
decrease in its effective yield and, in certain circumstances, could result in a
loss of all or a substantial portion of the principal of a Note to the investor.

         Fluctuations in the rates of exchange between the home currency and any
other currency (i) in which payment of the exercise price of a Universal Warrant
is to be made,  (ii) in which the Warrant  Property is denominated or (iii) that
is to be purchased or sold by exercise of such Universal Warrant (or between any
of the currencies noted in clauses (i) through (iii) above) may change the value
of such Universal  Warrant or of the Unit comprising such Universal  Warrant and
could  result in a loss to the  investor  even if the spot price of the  Warrant
Property  were such that the  Universal  Warrant  appeared to be "in the money."
Similarly,  currency fluctuations between any of the home currency, the currency
in which the purchase price is  denominated,  the currency in which the Purchase
Contract Property is denominated or, if applicable, the currency to be purchased
or sold pursuant to such Purchase  Contract could adversely  affect the value of
any Purchase Contract or of the Unit comprising such Purchase Contract and could
result in a loss to the investor.

         EACH  PROSPECTIVE  INVESTOR  SHOULD CONSULT ITS OWN FINANCIAL AND LEGAL
ADVISORS AS TO ANY SPECIFIC  RISKS ENTAILED BY AN INVESTMENT BY SUCH INVESTOR IN
NOTES,  UNITS  OR  ANY  OF THE  SECURITIES  CONSTITUTING  SUCH  UNITS  THAT  ARE
DENOMINATED  IN, OR THE  PAYMENT OF WHICH IS  RELATED  TO THE VALUE OF,  FOREIGN
CURRENCY.  SUCH NOTES, UNITS OR OTHER SECURITIES  INCLUDED IN SUCH UNITS ARE NOT
AN APPROPRIATE  INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.

         Foreign  exchange  rates  can  either  float or be  fixed by  sovereign
governments. Exchange rates of most economically developed nations are permitted
to  fluctuate  in value  relative  to the  U.S.  dollar.  National  governments,
however,  rarely  voluntarily allow their currencies to float freely in response
to economic  forces.  From time to time governments use a variety of techniques,
such as  intervention  by a country's  central bank or  imposition of regulatory
controls or taxes, to affect the exchange rate of their currencies.  Governments
may also  issue a new  currency  to replace an  existing  currency  or alter the
exchange rate or relative exchange characteristics by devaluation or revaluation
of a currency. Thus, a special risk in purchasing non-home  currency-denominated
Notes or Currency  Linked  Notes (or  Universal  Warrants or Purchase  Contracts
where the exercise or purchase price and the underlying  property is denominated
in  currencies  differing  from one another or from the home  currency)  is that
their  home   currency-equivalent   yields  or  payouts  could  be  affected  by
governmental  actions,  which could change or interfere with theretofore  freely
determined currency valuation,  fluctuations in response to other market forces,
and the movement of currencies  across  borders.  There will be no adjustment or
change in the terms of such

                                      S-35





Notes, Units or any of the securities  constituting such Units in the event that
exchange  rates  should  become  fixed,  or in the event of any  devaluation  or
revaluation or imposition of exchange or other regulatory  controls or taxes, or
in the event of other  developments  affecting the U.S. dollar or any applicable
Specified Currency.

         Governments  have  imposed  from  time to time,  and may in the  future
impose,  exchange  controls  that  could  affect  exchange  rates as well as the
availability of a specified  foreign  currency (or of securities  denominated in
such  currency)  at the time of payment of  principal  of,  premium,  if any, or
interest on a Note (or of any payment due with respect to a Unit or any security
constituting  such Unit). Even if there are no actual exchange  controls,  it is
possible that the Specified  Currency for any particular Note not denominated in
U.S. dollars (or the applicable  currency for any payment with respect to a Unit
(or any of the securities  constituting  such Unit)) would not be available when
payments on such Note are due,  including as a result of the replacement of such
Specified  Currency by the Euro. In that event,  the Company would make required
payments in U.S. dollars on the basis of the Market Exchange Rate on the date of
such payment or, if such rate of exchange is not then available, on the basis of
the Market  Exchange  Rate as of the most  recent  practicable  date;  provided,
however, that if the Specified Currency for any Note (or the applicable currency
for any payment  with respect to a Unit (or any of the  securities  constituting
such  Unit)) is not  available  because it has been  replaced  by the Euro,  the
Company would make such payments in Euro in conformity  with legally  applicable
measures taken  pursuant to, or by virtue of, the Treaty.  See  "Description  of
Notes -- Payment Currency."

Governing Law and Judgments

         The Notes,  Units,  Universal  Warrants and Purchase  Contracts will be
governed by and construed in accordance  with the laws of the State of New York.
The courts of the States of New York and Delaware  will have  jurisdiction  over
claims  relating to the Series D Notes.  If a court in the United States were to
grant a judgment in an action based on Notes denominated in a Specified Currency
other  than U.S.  dollars  or on any  Units,  Universal  Warrants  and  Purchase
Contracts  denominated in any such currency,  it is likely that such court would
grant  judgment  only in U.S.  dollars.  If the  court  were a New  York  court,
however, such court would grant a judgment in the Specified Currency or currency
in  respect of which any  payment  on a Unit,  Universal  Warrant,  or  Purchase
Contract was due. Such judgment would then be converted into U.S. dollars at the
rate of exchange prevailing on the date of entry of the judgment.

                         UNITED STATES FEDERAL TAXATION

         In the  opinion of  Shearman & Sterling,  counsel to the  Company,  the
following  summary  accurately  describes  the principal  United States  federal
income and estate tax  consequences  of ownership and disposition of the Program
Securities by a Foreign Holder (as defined below).  This summary is based on the
Internal  Revenue  Code of 1986,  as amended  (the  "Code"),  and  existing  and
proposed Treasury regulations,  revenue rulings,  administrative interpretations
and judicial  decisions (all as currently in effect and all of which are subject
to change,  possibly with retroactive effect). This summary does not discuss all
of the tax  consequences  that  may be  relevant  to  holders  in light of their
particular circumstances or to holders subject to special rules, such as persons
other than Foreign Holders,  nonresident  alien individuals who have lost United
States  citizenship  or who  have  ceased  to be  treated  as  resident  aliens,
corporations that are treated as foreign or domestic personal holding companies,
controlled foreign  corporations,  or passive foreign  investment  companies and
Foreign Holders that are owned or controlled by persons subject to United States
federal income tax. Persons  considering the purchase of the Program  Securities
should  consult  their own tax advisors  with regard to the  application  of the
United States federal income and estate tax laws to their particular  situations
as well as to any tax consequences arising under the laws of any state, local or
foreign jurisdiction.

         As used herein, the term "Foreign Holder" means a beneficial owner of a
Program  Security who or that is for United States  federal  income tax purposes
(i) a nonresident  alien  individual,  (ii) a corporation,  partnership or other
entity  that was not  created  or  organized  in or under the laws of the United
States or any political subdivision thereof, (iii) an estate the income of which
is not subject to United  States  federal  income tax on a net basis,  or (iv) a
trust if either (A) primary  supervision over the administration of the trust is
unable to be exercised

                                      S-36





by a United  States  court,  or (B) the  authority  to control  all  substantial
decisions of the trust does not rest with one or more United States  trustees or
fiduciaries.

Income Taxes

         Notes

         Except as otherwise  discussed  below,  a Foreign Holder will generally
not be subject to United States federal income tax,  including  withholding tax,
on payments of principal of, premium,  if any, or interest  (including  original
issue  discount,  if any) on, a Note or  coupon,  or  proceeds  from the sale or
disposition of a Note or coupon, provided that (i) such payments or proceeds are
not effectively connected with the conduct of a trade or business by such holder
within  the  United  States,  (ii)  such  holder  does not own  (directly  or by
attribution)  ten  percent  or more of the total  combined  voting  power of all
classes of stock of the  Company  entitled  to vote,  (iii) such holder does not
have a "tax home" (as defined in section  911(d)(3) of the Code) or an office or
other fixed  place of  business  in the United  States and (iv) in the case of a
Note  issued  in  registered  form,  required  certification  of  such  holder's
non-United States status is provided to the Company or the Agent.

         Exchangeable Notes

         A Foreign Holder will generally not be subject to United States federal
income tax,  including  withholding tax, with regard to an Exchangeable  Note if
(i) the  Exchangeable  Note is treated as indebtedness of the Company for United
States federal income tax purposes,  (ii) the Exchangeable  Note is exchangeable
only into securities that are actively traded,  into a basket of securities that
are  actively  traded or an index or indices  of  securities  that are  actively
traded,  and (iii) the  requirements  for exemption  from tax listed above under
"--Notes"   are  met.  With  regard  to  the  above   requirements,   Optionally
Exchangeable  Notes for which the  principal  amount  payable in cash  equals or
exceeds the issue price (i.e., the initial offering price to the public at which
price a substantial  amount of the respective  Optionally  Exchangeable Notes is
sold) will be treated as  indebtedness  of the Company for United States federal
income tax purposes.  Under current  United States federal income tax law, it is
unclear  how a  Mandatorily  Exchangeable  Note  will  be  treated.  Prospective
purchasers of Mandatorily  Exchangeable Notes are urged to review the applicable
Pricing Supplement and consult with their tax advisors.  No opinion is expressed
herein as to the impact of the "United  States real  property  holding  company"
rules,   which  could  affect  the  taxation  of  Foreign   Holders  in  certain
circumstances.  Persons  considering the purchase of  Exchangeable  Notes should
refer to the  discussion  relating  to United  States  federal  taxation  in the
applicable  Pricing  Supplement  for  disclosure,  if any is  deemed  necessary,
concerning the applicability of such rules. For information regarding the United
States  federal  income tax  consequence  of ownership  and  disposition  of the
property  received in exchange  for an  Exchangeable  Note,  please refer to the
publicly available documents described in the applicable Pricing Supplement.

         Notes  Linked  to  Commodity  Prices,  Single  Securities,  Baskets  of
Securities or Indices

         The United States federal income tax  consequences  to a Foreign Holder
of the  ownership  and  disposition  of Notes that have  principal  or  interest
determined by reference to commodity prices, securities of entities unaffiliated
with the Company,  baskets of such securities or indices may vary depending upon
the exact terms of the Notes and related factors.  Certain Notes containing such
features  may be subject to rules that differ from the general  rules  discussed
above under "-- Notes." In such  circumstances,  persons  intending  to purchase
such Notes  should refer to the  discussion  relating to United  States  federal
taxation in the applicable Pricing Supplement for additional disclosure,  if any
is deemed necessary.

         Units

         Under current  United States federal income tax law, the treatment of a
Foreign  Holder of a Unit  (including  a Foreign  Holder of the Note  and/or the
Universal  Warrants  or  Purchase  Contracts  comprising  a  Unit)  is  unclear.
Prospective  purchasers of Units are urged to review the discussion  relating to
United States federal taxation in the applicable  Pricing Supplement and consult
with their tax advisors.


                                      S-37





Backup Withholding

         A Foreign  Holder  of a Bearer  Note or coupon  will  generally  not be
subject to backup withholding or information  reporting with respect to payments
on, and to proceeds of the sale before  maturity  of, the Bearer Note or coupon.
Such requirements  will likewise  generally not apply to such payments made on a
Registered  Note if required  certification  of the holder's  non-United  States
status is provided to the Company or the Agent.

         Foreign Holders of Program Securities should consult their tax advisors
regarding the  application  of information  reporting and backup  withholding in
their particular situations, the availability of an exemption therefrom, and the
procedure for obtaining such an exemption,  if available.  Any amounts  withheld
from a payment to a Foreign  Holder under the backup  withholding  rules will be
allowed as a credit  against such  holder's  United  States  federal  income tax
liability  and may entitle such holder to a refund,  provided  that the required
information  is furnished to the United  States  Internal  Revenue  Service (the
"Service").

Estate Taxes

         A Note  held by an  individual  who at the  time of his  death is not a
citizen or  domiciliary  of the United  States will  generally not be subject to
United  States  federal  estate  tax as a  result  of such  individual's  death,
provided  that (i) income  derived by such  individual  on the Note would not be
subject to United States  federal  income tax or (ii) an  applicable  estate tax
treaty provides an exemption  therefrom.  Unless an applicable estate tax treaty
provides  otherwise,  the fair market  value of Program  Securities  (other than
Notes  that were not  issued as part of a Unit) may be  includible  in the gross
estate of a non-resident  alien  individual for United States federal estate tax
purposes.

         THE UNITED STATES  FEDERAL  INCOME AND ESTATE TAX  DISCUSSION SET FORTH
ABOVE  IS  INCLUDED  FOR  GENERAL  INFORMATION  ONLY  AND MAY NOT BE  APPLICABLE
DEPENDING ON A FOREIGN HOLDER'S  PARTICULAR  SITUATION.  PERSONS CONSIDERING THE
PURCHASE OF PROGRAM SECURITIES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH REGARD
TO THE TAX  CONSEQUENCES  TO THEM OF THE  OWNERSHIP AND  DISPOSITION  OF PROGRAM
SECURITIES.


                              PLAN OF DISTRIBUTION

         The Program  Securities are being offered on a continuing  basis by the
Company  exclusively  through  the  Agents,  who have  agreed to use  reasonable
efforts to solicit offers to purchase such Program Securities.  The Company will
have the sole right to accept  offers to  purchase  Program  Securities  and may
reject any offer in whole or in part.  The Agents  will have the right to reject
any offer to purchase Program Securities  solicited by them in whole or in part.
Payment of the purchase price of the Program  Securities  will be required to be
made  in  immediately   available  funds.  Unless  otherwise  specified  in  the
applicable Pricing Supplement, the Company will pay an Agent, in connection with
sales of Program  Securities  resulting from a solicitation  made or an offer to
purchase received by such Agent, a commission ranging from .125% to .750% of the
initial offering price of the Program Securities to be sold,  depending upon the
maturity of the Program  Securities;  provided,  however,  that commissions with
respect to Program  Securities  having a maturity of 30 years or greater will be
negotiated.

         The Company may also sell Program  Securities  to an Agent as principal
for its own account at  discounts  to be agreed  upon at the time of sale.  Such
Program  Securities  may be resold to investors and other  purchasers at a fixed
offering price or at prevailing  market prices, or prices related thereto at the
time of such resale or  otherwise,  as determined by such Agent and specified in
the applicable Pricing Supplement.  An Agent may offer the Program Securities it
has  purchased as principal  to other  dealers.  Such Agent may sell the Program
Securities to any dealer at a discount and,  unless  otherwise  specified in the
applicable Pricing  Supplement,  such discount allowed to any dealer will not be
in excess of the discount to be received by such Agent from the  Company.  After
the initial public  offering of Program  Securities  that are to be resold by an
Agent to investors and other  purchasers on a fixed public offering price basis,
the public offering price, concession and discount may be changed.


                                      S-38





         In  compliance   with  United  States   federal  income  tax  laws  and
regulations,  the  Company  and each  Agent  has  agreed  that it will  not,  in
connection  with the  original  issuance of any Bearer  Notes either alone or as
part of a Unit or during the Restricted Period (as defined above in "Description
of Notes -- Forms, Denominations,  Exchange and Transfer"),  offer, sell, resell
or deliver, directly or indirectly,  any Bearer Notes either alone or as part of
a Unit in the  United  States or its  possessions  or to United  States  persons
(other than as permitted by the applicable Treasury  Regulations).  In addition,
each Agent has  represented  and agreed  that it will have in effect  procedures
reasonably  designed to ensure  that its  employees  or agents who are  directly
engaged  in  selling  Bearer  Notes are aware of the above  restrictions  on the
offering, sale, resale or delivery of Bearer Notes.

         With respect to Program  Securities to be offered or sold in the United
Kingdom,  each Agent,  underwriter,  dealer,  other agent and  remarketing  firm
participating in the distribution of such Program Securities has represented and
agreed, or will represent and agree, that: (i) in relation to Program Securities
which have a maturity of one year or more and in respect of which  admission  to
such listing in accordance with Part IV of the Financial  Services Act 1986 (the
"Act") is to be  sought,  it has not  offered or sold and will not offer or sell
any such Program  Securities to persons in the United Kingdom prior to admission
of such Program  Securities  to such listing  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 or the Act; (ii) in relation to Program
Securities  which  have a  maturity  of one year or more and in respect of which
admission to such  listing is not to be sought,  it has 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;  (iii) it has  complied  and will comply with all
applicable provisions of the Act with respect to anything done by it in relation
to such Program  Securities in, from or otherwise  involving the United Kingdom;
and (iv) it has only  issued or passed on and will only  issue or pass on in the
United Kingdom any document  received by it in connection with the issue of such
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 1996 or is a
person to whom such document may otherwise lawfully be issued or passed on.

         The Program Securities have not been, and will not be, registered under
the Securities and Exchange Law of Japan.  Accordingly,  the Program  Securities
may not be offered or sold,  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  reoffering  or  resale,  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.

         Program Securities denominated or payable in Deutsche Marks may only be
offered and sold from time to time by the Company  through  Morgan  Stanley Bank
AG,  acting  as  agent  for the  Company  or as  lead  manager  in a  syndicated
transaction.  The  issuance  of  Program  Securities  denominated  or payable in
Deutsche  Marks will take place in compliance  with the guidelines of the German
Central  Bank,  as  amended  from  time to  time,  regarding  the  issue of debt
securities  denominated  in Deutsche  Marks.  The Program  Securities may not be
offered or sold 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.

         Program Securities denominated or payable in or indexed to Swiss francs
may only be  offered  and sold from  time to time by the  Company  through  Bank
Morgan  Stanley  AG,  acting as agent for the  Company  or as lead  manager in a
syndicated  transaction.  The  issuance  of Program  Securities  denominated  or
payable in or indexed to

                                      S-39





Swiss  francs  will take place in  compliance  with  Swiss law and the  relevant
regulations of the Swiss National Bank in effect from time to time.

         Morgan  Stanley S.A. has  represented  and agreed,  and any dealers for
French Franc Notes or French Franc Units will  represent and 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, Morgan Stanley S.A. and
such dealers 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 this  Prospectus  Supplement,  the  accompanying  Prospectus or any other
offering  material  relating to French Franc Notes or French  Franc  Units.  The
Company has also undertaken that it will not offer, directly or indirectly,  any
Notes or Units to the  public in the  Republic  of  France.  At the date of this
Prospectus  Supplement  only a credit  establishment  or investment  institution
incorporated  in a member state of the  European  Union which is  authorized  to
lead-manage  euro-bond  issues by the competent  authority of its home state may
(i) act as a dealer in respect of private  placements  of French  Franc Notes or
French  Franc  Units or (ii) act as lead  manager of public  offers  (within the
meaning of the French  EuroFranc  Regulations)  of French  Franc Notes or French
Franc Units issued on a syndicated basis.

         Each of the  Agents  may be deemed to be an  "underwriter"  within  the
meaning of the Securities Act of 1933 (the  "Securities  Act").  The Company and
the Agents have agreed to  indemnify  each other  against  certain  liabilities,
including  liabilities  under the  Securities  Act, or to contribute to payments
made in respect thereof. The Company has also agreed to reimburse the Agents for
certain expenses.

         Morgan  Stanley & Co.  International  Limited,  Bank Morgan Stanley AG,
Morgan  Stanley  S.A.  and Morgan  Stanley  Bank AG are each an affiliate of the
Company.  The Company has been  advised by the Agents that they intend to make a
market  in  the  Program  Securities,   as  permitted  by  applicable  laws  and
regulations.  The Agents are not obligated to do so, however, and the Agents may
discontinue  making a market at any time without  notice.  No  assurance  can be
given as to the liquidity of any trading market for the Program Securities.

         Concurrently with the offering of Program Securities through the Agents
as described herein, the Company may issue other Debt Securities pursuant to the
Indentures  referred to herein.  Such Debt  Securities  may include  medium-term
notes ("Global  Medium-Term Notes,  Series C") that may have terms substantially
similar to the terms of the Notes offered hereby and that may be offered,  alone
or as units containing  warrants,  purchase contracts or any combination thereof
("Global  Units,  Series  C"),  concurrently  with the  offering  of the Program
Securities,  on a continuing  basis in the United States by the Company pursuant
to a distribution  agreement  (the "U.S.  Distribution  Agreement")  with Morgan
Stanley & Co. Incorporated, an affiliate of the Company ("MS&Co."), as agent for
the Company,  the terms of which are  substantially  similar to the terms of the
distribution  agreement  (the "Euro  Distribution  Agreement")  with the Agents,
except for  certain  selling  restrictions  specified  in the Euro  Distribution
Agreement.  Any Global Medium-Term Notes, Series C or any Global Units, Series C
sold pursuant to such U.S. Distribution Agreement, and any Debt Securities, Debt
Warrants or pre-paid  purchase  contracts  issued by the Company pursuant to the
Indentures or any preferred stock,  warrants or purchase  contacts issued by the
Company, will reduce the aggregate offering price of Program Securities that may
be offered by this Prospectus Supplement,  any Pricing Supplement hereto and the
Prospectus.

                                  LEGAL MATTERS

         The  validity of the Notes,  Units,  Universal  Warrants  and  Purchase
Contracts  will be passed  upon for the  Company by  Jonathan  M.  Clark,  Esq.,
General Counsel and Secretary of the Company and a Managing  Director of MS&Co.,
Ralph L.  Pellecchio,  Assistant  Secretary  and  Counsel of the  Company  and a
Managing  Director of MS&Co., or other counsel who is satisfactory to the Agents
and an officer of the Company.  Mr. Clark, Mr. Pellecchio and such other counsel
beneficially  own, or have rights to acquire  under an employee  benefit plan of
the  Company,  an  aggregate of less than 1% of the common stock of the Company.
Certain  legal  matters  relating to the Notes,  Units,  Universal  Warrants and
Purchase  Contracts will be passed upon for the Agents by Davis Polk & Wardwell.
Davis Polk & Wardwell has in the past represented and continues to represent the
Company on a regular basis and in a variety of matters,  including in connection
with its merchant banking and leveraged capital activities. Shearman & Sterling,
which is opining on the accuracy of the summary of certain tax matters described

                                      S-40





under the captions "United States Federal Taxation," represents the Company on a
regular  basis and in a variety of matters,  including  in  connection  with its
merchant banking and leveraged capital activities.

                                      S-41





                                 CAPITALIZATION

         The   following   table   sets   forth   the   unaudited   consolidated
capitalization  of the  Company at August 31,  1996.  As of the date  hereof and
except as described in the footnotes to the following  table,  there has been no
material  change  in the  capitalization  of the  Company  and its  consolidated
subsidiaries,  taken as a whole,  since August 31, 1996. The following should be
read in conjunction with the Company's  consolidated  financial statements,  the
notes thereto and "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  in the Company's  Annual Report on Form 10-K for the
fiscal period ended November 30, 1995 and Quarterly Reports on Form 10-Q for the
quarters  ended  February  29,  1996,  May 30,  1996 and August 31,  1996,  each
incorporated herein by reference.



                                                                              At August 31, 1996
                                                                              ------------------
                                                                          (In thousands, except share
                                                                                 and unit data)
                                                                                       
Short-term borrowings.....................................................      U.S.$  11,580,506
Current portion of long-term borrowings...................................              3,107,999
                                                                                       ----------
       Total..............................................................      U.S.$  14,688,505
                                                                                       ==========

Long-term borrowings (1)..................................................      U.S.$  10,756,508
Capital Units (2).........................................................                865,283
                                                                                       ----------

Stockholders' equity:
   Preferred stock, no par value; authorized 30,000,000 shares (3):
     ESOP Convertible Preferred Stock, liquidation preference
       U.S.$35.88; outstanding 3,711,165 shares...........................                133,138
     8.88% Cumulative Preferred Stock, stated value U.S.$200;
       outstanding 975,000 shares (4).....................................                195,000
     8 3/4% Cumulative Preferred Stock, stated value U.S.$200;
       outstanding 750,000 shares.........................................                150,000
     7 3/8% Cumulative Preferred Stock, stated value U.S.$200;
       outstanding 1,000,000 shares.......................................                200,000
     7 3/4% Cumulative Preferred Stock, stated value U.S.$200;
       outstanding 1,000,000 shares.......................................                200,000
   Common stock, U.S.$1.00 par value; authorized 600,000,000 shares;
       issued 166,366,653 shares..........................................                166,367
   Paid-in capital........................................................                689,806
   Retained earnings......................................................              4,472,989
   Cumulative translation adjustments.....................................               (14,504)
                                                                                       ----------
                        Subtotal..........................................              6,192,796

   Less:
     Note receivable related to sale of preferred stock to ESOP...........                 86,773
     Common stock held in treasury, at cost 13,946,864 shares.............                575,105
                                                                                       ----------
                        Total stockholders' equity........................              5,530,918
                                                                                       ----------

Total capitalization......................................................      U.S.$  17,152,709
                                                                                       ==========







                                  (footnotes are located on the following page)

                                      S-42






(1)  In May 1996, a shelf  registration  statement  became  effective  for up to
     U.S.$4,286,271  of debt  securities,  warrants to purchase debt securities,
     preferred   stock  and  depositary   shares.   In  January  1997,  a  shelf
     registration  statement became effective for up to  U.S.$6,000,000  of debt
     securities,   warrants,   preferred  stock,   depositary  shares,  purchase
     contracts and units.  Additional  senior notes  aggregating  U.S.$2,171,506
     were issued after August 31, 1996 and through  February 21, 1997,  pursuant
     to such shelf registration statements.*
(2)  On December 18, 1996, the Company caused to be issued 134,000 8.03% Capital
     Units, each Capital Unit consisting of an 8.03%  Subordinated  Debenture of
     Morgan Stanley  Finance plc in the principal  amount of U.S.$1,000,  (ii) a
     full and  unconditional  subordinated  Guarantee by the Company and (iii) a
     related contract issued by the Company requiring the purchase by the holder
     thereof of one Depositary Share representing ownership of 5 shares of 8.03%
     Cumulative  Preferred Stock with a stated value of U.S.$200.00 per share at
     a sale price of U.S.$1,000.00 per Depositary Share.
(3)  On November 14, 1996, the Company caused to be issued 6,900,000  Depositary
     Shares,  each Depositary Share representing  ownership of 1/4 of a share of
     Series A  Fixed/Adjustable  Rate  Preferred  Stock  with a stated  value of
     U.S.$200.00 per share at a sale price of U.S.$50.00 per Depositary Share.
(4)  All 975,000 shares of the 8.88% Cumulative  Preferred Stock were called for
     redemption on December 3, 1996 and were redeemed on January 3, 1997.

*    Amounts in this footnote are in thousands of U.S. dollars.


                                      S-43





                               BOARD OF DIRECTORS

         The current  Directors of the Company and their  principal  occupations
are listed below.  The business  address of each director is 1585 Broadway,  New
York, New York 10036.

Richard B. Fisher ...............   Chairman, Managing Director and Director
John J. Mack ....................   President, Managing Director and Director
Barton M. Biggs..................   Managing Director and Director
Peter F. Karches.................   Managing Director and Director
Sir David A. Walker..............   Managing Director and Director
Robert P. Bauman.................   Director
Daniel B. Burke..................   Director
S. Parker Gilbert................   Director
Allen E. Murray..................   Director
Paul J. Rizzo....................   Director

                               GENERAL INFORMATION

         The listing of the Series D Notes on the London Stock  Exchange will be
expressed as a percentage of their principal amount excluding  accrued interest.
Listing of the Series D Notes  offered  hereby is  expected to be granted by the
London Stock  Exchange on or about February 24, 1997 subject only to issuance of
Series D Notes  (including  temporary  global  notes).  The  listing  agent with
respect to the  application  for the listing of the Series D Notes on the London
Stock Exchange is Morgan Stanley Securities Limited.

         The French  Franc  arranger,  any  dealers  for French  Franc Notes and
French  Franc  Units and the  Company  will  comply  with the  French  EuroFranc
Regulations.

         Ernst & Young LLP, independent auditors,  have audited the consolidated
statement of financial condition of the Company as of November 30, 1995, January
31,  1995,  January 31,  1994,  January 31, 1993 and  December  31, 1991 and the
related   consolidated   statements  of  income,   cash  flows  and  changes  in
stockholders'  equity for the fiscal  period ended  November  30, 1995,  for the
fiscal  years ended  January 31, 1995,  January 31,  1994,  January 31, 1993 and
December 31, 1991 and for the one-month period ended January 31, 1992.

         Shearman & Sterling has given and not withdrawn its written  consent to
the inclusion in this Prospectus  Supplement of its opinion under "United States
Federal  Taxation" and has  authorized  the contents of that part of the listing
particulars for the purposes of Section 152(1)(e) of the Financial  Services Act
1986.

         The obligation of a prospective purchaser (including the Agents) to pay
for any Notes or Units it has agreed to purchase is subject to the  satisfaction
of certain  conditions  which, if not satisfied or waived,  would result in such
purchaser having no obligation to pay for any such Notes or Units.

         The issuance of the Notes,  the Units,  the Universal  Warrants and the
Purchase Contracts was authorized  pursuant to resolutions  adopted by unanimous
written consent of the Board of Directors of the Company dated December 20, 1996
and  unanimous  written  consent  of the  Executive  Committee  of the  Board of
Directors of the Company dated January 23, 1997.

         The Company is  incorporated  in Delaware,  U.S.A.,  and its registered
office is located at 32 Loockerman Square, Suite L-100, Dover, Delaware 19901.

         Since  August  31,  1996,  the date of the latest  published  unaudited
financial statements, there has been no material adverse change in the financial
or business position of the Company and its consolidated subsidiaries,  taken as
a whole.


                                      S-44





         As  of  the  date   hereof,   there  are  no  legal,   arbitration   or
administrative proceedings including any pending or, to the Company's knowledge,
threatened  involving the Company or any of its consolidated  subsidiaries which
may have or have had during  the  previous  12 months a  material  effect on the
Company's consolidated financial condition.

         The Notes and  Units  have been  accepted  for  clearance  through  the
Euroclear Operator,  Cedel Bank and (in the case of (i) French Franc Notes, (ii)
French Franc Units and (iii) Purchase  Contracts and Universal Warrants included
in any French Franc Unit (collectively, "French Franc Securities")) SICOVAM. The
appropriate code for each issue allocated by the Euroclear Operator,  Cedel Bank
and (in the case of French  Franc  Securities)  SICOVAM will be contained in the
applicable  Pricing  Supplement.  Transactions  will  normally be  effected  for
settlement not earlier than two business days after the date of the transaction.

                  Copies of the Euro  Distribution  Agreement dated February 21,
1997 among the Company and the Agents,  the U.S.  Distribution  Agreement  dated
January 24, 1997  between the Company and MS&Co.,  each of the  Indentures,  the
opinion of Shearman & Sterling referred to in the last paragraph of page 36, the
Company's  Annual  Reports on Form 10-K for the fiscal period ended November 30,
1995 and for the fiscal  years  ended  January 31, 1995 and January 31, 1994 and
Quarterly  Reports on Form 10-Q for 1993,  1994,  1995 and 1996 (each  excluding
exhibits),  the  Company's  listing  particulars,  all of the  Company's  future
Annual,  Quarterly and Current Reports,  supplementary  listing  particulars and
Pricing Supplements and the Company's Restated Certificate of Incorporation,  as
amended, and By-laws, as amended,  will, from the date hereof and so long as any
Note, Unit, Universal Warrant or Purchase Contract is outstanding and throughout
the term of the  medium-term  note program  (the  "Program"),  be available  for
inspection  during  business hours at the corporate  trust office of each of the
Trustees  in The City of New  York,  the  office  of each  Paying  Agent and the
principal  executive  offices  of the  Company  specified  in  the  accompanying
Prospectus.  The  Company's  Quarterly  Reports on Form 10-Q  contain  unaudited
quarterly financial statements.

         Documents  incorporated  by  reference  herein  and  any  part  of  the
Registration  Statement  not  included  herein do not form  part of the  listing
particulars.

         Any statement contained herein or in a document  incorporated or deemed
to be  incorporated  by  reference  herein  shall be  deemed to be  modified  or
superseded  for  purposes  of this  Prospectus  Supplement  (but not the listing
particulars)  to  the  extent  that  a  statement  contained  herein  or in  any
subsequently  filed  document  that also is or is deemed to be  incorporated  by
reference  herein modifies or supersedes  such statement.  Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus Supplement.

                            PARIS LISTING INFORMATION

         The French EuroFranc  Regulations recommend the listing of French Franc
Notes and French  Franc Units on the Paris  Bourse  where (i) such French  Franc
Notes and French  Franc  Units are, or are  intended to be,  listed on any other
stock  exchange or (ii) such French  Franc Notes and French  Franc Units are, or
are intended to be,  distributed  as a public  offer  (within the meaning of the
French EuroFranc Regulations).

         At the date of this Prospectus Supplement,  only a credit establishment
or investment  institution  incorporated in a member state of the European Union
which is authorized to lead-manage  euro-bond issues by the competent  authority
of its home state may (i) act as a dealer in respect  of private  placements  of
French Franc Notes and French Franc Units and (ii) act as lead manager of public
offers (within the meaning of the French Eurofranc  Regulations) of French Franc
Notes and French Franc Units issued on a syndicated basis. The minimum aggregate
principal  amount of Series D French Franc Notes and Series D French Franc Units
listed  on  the  Paris  Bourse  and  distributed  in a  public  offer  shall  be
300,000,000 French Francs. In addition, Series D French Franc Notes and Series D
French Franc Units which are listed on the Paris  Bourse will be issued  subject
to the requirements of the Paris Bourse. Under the current regulations, "private
placements"  shall be  construed as issuances of Series D French Franc Notes and
Series D French  Franc  Units  placed  on a firm  basis  with a small  number of
predetermined  nonresident  investors.  Index-linked Series D French Franc Notes
and Series D French  Franc Units which are to be listed on the Paris Bourse will
be issued in compliance with the regulations of the COB and the CBV published

                                      S-45





on July 26,  1996 in  Decisions  et Avis No.  96-2580  published  by the SBF, as
amended as of the date of such issuance.

Commission des Operations de Bourse ("COB")

         Prior to  listing of any Series D Notes and Series D Units on the Paris
Bourse,  the COB is  required  to approve  this  Prospectus  Supplement  and the
accompanying Prospectus.  In addition, the Pricing Supplement applicable to each
issue of Series D Notes and  Series D Units to be listed on the Paris  Bourse is
currently  required  to be  approved  at the  time of the  relevant  issue.  The
relevant  approval  in  relation to the Program and each such issue will each be
evidenced  by the issue of a visa by the COB. The visa numbers will be disclosed
in the Pricing Supplement applicable to the relevant Series D Notes and Series D
Units.

Societe des Bourses Francaises ("SBF")

         The listing of Series D Notes and Series D Units on the Paris Bourse is
subject to approval by the SBF. Such  approval will be evidenced by  publication
in the Bulletin  Officiel de la Cote. At the option of the Company,  publication
may be made in one notice  published in  connection  with a particular  issue of
Series D Notes and  Series D Units or in two  notices,  the first  published  in
relation to the Program  generally and the second published in connection with a
particular issue of Series D Notes and Series D Units  incorporated by reference
to the  contents of the first  notice (to the extent not  modified in the second
notice).

Bulletin des Annonces Legales Obligatoires ("BALO")

         Series D Notes and Series D Units to be listed on the Paris  Bourse may
not  be  offered  in  France  and  the  publication  of the  Pricing  Supplement
applicable  thereto must not be made before such listing  becomes  effective and
details  of the  relevant  Series D Notes  and  Series D Units (in the form of a
notice legale) have been published in the BALO.

Documents available for inspection

         In the case of  Series D Notes and  Series D Units  listed on the Paris
Bourse,  the applicable Pricing Supplement will specify the additional places in
Paris at which documents incorporated by reference herein (or otherwise required
to be made available for  inspection)  may be inspected  during normal  business
hours.  The  Company  has  undertaken  to make such  documents  available  as so
required.



                                      S-46





                      PARIS BOURSE RESPONSIBILITY STATEMENT

                             PERSONNES QUI ASSUMENT
         LA RESPONSABILITE DU "PROSPECTUS" ET DU "PROSPECTUS SUPPLEMENT"
         EN CE QUI CONCERNE LES INSTRUMENTS QUI SONT ADMIS A LA COTATION
             SUR LE COMPARTIMENT INTERNATIONAL DE LA BOURSE DE PARIS

AU NOM DE L'EMETTEUR ET DE LA BANQUE PRESENTATRICE

A la connaissance de l'emetteur et de la banque  presentatrice,  les donnees des
presents  documents  denommes  "Prospectus"  et  "Prospectus   Supplement"  sont
conformes a la realite et ne comportent pas d'omission de nature a en alterer la
portee.



- ------------------                              ------------------------
Associate                                       Eileen K. Murray
Attorney-in-fact                                Treasurer
Morgan Stanley S.A.                             Morgan Stanley Group Inc.


                     LA COMMISSION DES OPERATIONS DE BOURSE

         En vue de la  cotation a Paris des titres  eventuellement  emis dans le
cadre  de ce  present  Programme,  et par  application  des  articles  6 et 7 de
l'ordonnance  No. 67-833 du 28 septembre 1967 telle que modifiee,  la Commission
des Operations de Bourse a enregistre  les documents  denommes  "Prospectus"  et
"Prospectus Supplement" sous le No. P 97-022 du 19 fevrier 1997.

                                      S-47




 PRINCIPAL EXECUTIVE OFFICES                       REGISTERED OFFICE OF THE
       OF THE COMPANY                                 COMPANY IN DELAWARE

        1585 Broadway                          32 Loockerman Square, Suite L-100
  New York, New York  10036                         Dover, Delaware  19901
           U.S.A.                                           U.S.A.

                                TRUSTEES

       (Senior Notes)                                (Subordinated Notes)

  The Chase Manhattan Bank                    The First National Bank of Chicago
    450 West 33rd Street                           One First National Plaza
  New York, New York  10001                        Chicago, Illinois  60670
           U.S.A.                                           U.S.A.


                   PRINCIPAL PAYING AGENT, EXCHANGE AGENT AND
              TRANSFER AGENT FOR BEARER NOTES AND REGISTERED NOTES
                    UNIT AGENT AND COLLATERAL AGENT FOR UNITS
                      WARRANT AGENT FOR UNIVERSAL WARRANTS

                            The Chase Manhattan Bank
                                 Woolgate House
                                 Coleman Street
                                 London EC2P2HD
                                     England
                        Attention: Global Trust Services

                         OTHER PAYING AGENT AND TRANSFER
                           AGENT FOR REGISTERED NOTES

                            The Chase Manhattan Bank
                              450 West 33rd Street
                            New York, New York 10001
                                     U.S.A.

LEGAL ADVISORS TO THE COMPANY                      LEGAL ADVISORS TO THE AGENTS

     Shearman & Sterling                               Davis Polk & Wardwell
    599 Lexington Avenue                              450 Lexington Avenue
  New York, New York  10022                          New York, New York  10017
           U.S.A.                                             U.S.A.

                                  LISTING AGENT

                        Morgan Stanley Securities Limited
                                 25 Cabot Square
                                  Canary Wharf
                                 London E14 4QA
                                     England

                               PARIS LISTING AGENT

                               Morgan Stanley S.A.
                                 25, rue Balzac
                                   75008 Paris
                                     France

                             AUDITORS OF THE COMPANY

                                Ernst & Young LLP
                               787 Seventh Avenue
                            New York, New York 10019
                                     U.S.A.