<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>c34450_424b3.txt
<TEXT>
The information in this pricing supplement and accompanying prospectus
supplement and prospectus is not complete and may be changed. The pricing
supplement and the accompanying prospectus supplement and prospectus do not
constitute an offer to sell or the solicitation of an offer to buy and we will
not sell these securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful.

                              SUBJECT TO COMPLETION
                              DATED MARCH 21, 2005

PRICING SUPPLEMENT                                   PRICING SUPPLEMENT NO. 7 TO
(TO PROSPECTUS DATED                                      REGISTRATION STATEMENT
SEPTEMBER 23, 2004                                                NO. 333-117770
AND PROSPECTUS SUPPLEMENT DATED                          DATED APRIL      , 2005
SEPTEMBER 23, 2004)                                               RULE 424(b)(3)

[GRAPHIC OMITTED]

$
JPMORGAN CHASE & CO.
RETURN ENHANCED NOTES LINKED TO THE S&P 500(R) INDEX DUE AUGUST 9, 2006

GENERAL

o    Senior unsecured obligations of JPMorgan Chase & Co. maturing August 9,
     2006 (subject to market disruption events).

o    Payment linked to the S&P 500(R) Index as described below.

o    At maturity the notes will pay an amount in cash that will vary depending
     upon the performance of the S&P 500(R) Index over the term of the notes.
     The notes do not pay interest and do not guarantee any return of principal
     at maturity. You may lose some or all of your investment.

o    Minimum denominations of $100,000 and integral multiples of $1,000 in
     excess thereof.

o    The notes are expected to price on or about April 22, 2005 and to settle on
     or about April 27, 2005.

o    The notes will not be listed on any securities exchange.

o    Investing in the notes is not equivalent to investing in the Index or any
     of its component stocks.

KEY TERMS

  INDEX:                The S&P 500(R) Index (the "Index").

  PAYMENT AT MATURITY:  If the Ending Index Level is greater than the Initial
                        Index Level, you will receive a cash payment per note
                        that provides you with a return on your investment of
                        twice the Index Return, subject to the Maximum Total
                        Return on the note. The "Maximum Total Return" is a
                        percentage which we will determine on the pricing date
                        and which will be at least 14%. Assuming a Maximum Total
                        Return of 14%, the maximum final payment per $1,000
                        principal amount note is $1,140.00.

                        If the Ending Index Level is equal to the Initial Index
                        Level, you will receive a cash payment of $1,000 per
                        $1,000 principal amount note.

                        Your investment will be fully exposed to any decline in
                        the Index. For each 1% decline in the Ending Index Level
                        relative to the Initial Index Level, you will lose 1% of
                        your investment in the notes.

                        YOU WILL LOSE SOME OR ALL OF YOUR INVESTMENT IF THE
                        INDEX RETURN IS NEGATIVE.

  INDEX RETURN:         Ending Index Level - Initial Index Level
                        ----------------------------------------
                                   Initial Index Level

  INITIAL INDEX LEVEL:  The Index closing level on the pricing date, which will
                        be on or about April 22, 2005.

  ENDING INDEX LEVEL:   The arithmetic average of the Index closing levels on
                        each of the five Averaging Dates.

  AVERAGING DATES:      July 31, 2006*, August 1, 2006*, August 2, 2006*, August
                        3, 2006* and August 4, 2006* (the "final Averaging
                        Date")

     *    Subject to postponement in the event of a market disruption event and
          as described under "Description of Notes - Payment at Maturity."

INVESTING IN THE RETURN ENHANCED NOTES INVOLVES A NUMBER OF RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE PS-6.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the notes or passed upon the accuracy
or the adequacy of this pricing supplement or the accompanying prospectus
supplement and prospectus. Any representation to the contrary is a criminal
offense.

------------------------------------------------------------------------------
                 PRICE TO         JPMSI'S           PROCEEDS
                 PUBLIC           COMMISSION (1)    TO US
------------------------------------------------------------------------------
Per note         $                $                 $
------------------------------------------------------------------------------
Total            $                $                 $
------------------------------------------------------------------------------

(1)  J.P. Morgan Securities Inc., acting as agent for us, will receive a
     commission of $        per $1,000 principal amount note and may pay selling
     concessions to other dealers of $         per $1,000 principal amount note.
     See "Underwriting" on page PS-23.

The notes are not bank deposits and are not insured by the Federal Deposit
Insurance Corporation or any other governmental agency, nor are they obligations
of, or guaranteed by, a bank.

Our affiliate, J.P. Morgan Securities Inc., may use this pricing supplement and
the accompanying prospectus supplement and prospectus in connection with offers
and sales of the notes in the secondary market. J.P. Morgan Securities Inc. may
act as principal or agent in those transactions. Secondary market sales will be
made at prices related to market prices at the time of sale.

                                    JPMORGAN

April      , 2005


<PAGE>


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

                                     SUMMARY

     THE FOLLOWING SUMMARY DESCRIBES THE NOTES WE ARE OFFERING TO YOU IN GENERAL
TERMS  ONLY.  YOU  SHOULD  READ THE  SUMMARY  TOGETHER  WITH  THE MORE  DETAILED
INFORMATION   CONTAINED  IN  THE  REST  OF  THIS  PRICING   SUPPLEMENT  AND  THE
ACCOMPANYING   PROSPECTUS  SUPPLEMENT  AND  PROSPECTUS.   YOU  SHOULD  CAREFULLY
CONSIDER,  AMONG OTHER THINGS,  THE MATTERS SET FORTH IN "RISK  FACTORS," AS THE
NOTES INVOLVE RISKS NOT ASSOCIATED WITH  CONVENTIONAL  DEBT SECURITIES.  WE URGE
YOU TO CONSULT YOUR INVESTMENT, LEGAL, TAX, ACCOUNTING AND OTHER ADVISERS BEFORE
YOU INVEST IN THE NOTES.

WHAT ARE THE RETURN ENHANCED NOTES?

     The Return  Enhanced  Notes are senior  unsecured  obligations  of JPMorgan
Chase & Co.  ("JPMorgan  Chase")  that are  linked  to the S&P  500(R)  Index as
described  below.  The notes do not pay interest and do not guarantee any return
of  principal  at  maturity.  Instead,  you will  receive a  payment  in cash at
maturity which will vary depending on the  performance of the Index as described
below.

     The amount you will  receive at maturity is based on the Ending Index Level
relative to the Initial Index Level.

          o    If the Ending Index Level is greater than the Initial Index
               Level, you will receive a cash payment per note that provides you
               with a return on your investment of twice the Index Return,
               subject to the Maximum Total Return. The Maximum Total Return is
               a percentage which we will determine on the pricing date and
               which will be at least 14%. Assuming a Maximum Total Return of
               14%, the maximum final payment per $1,000 principal amount note
               is $1,140.

          o    If the Ending Index Level is equal to the Initial Index Level,
               you will receive a cash payment of $1,000 per $1,000 principal
               amount note.

          o    Your investment will be fully exposed to any decline in the
               Index. For each 1% decline in the Ending Index Level relative to
               the Initial Index Level, you will lose 1% of your investment in
               the notes.

     The Initial Index Level is the Index closing level on the pricing date. The
Ending Index Level is the arithmetic  average of the Index closing levels on the
five Averaging  Dates listed on the cover page of this pricing  supplement.  The
Index closing level on any trading day will equal the closing level of the Index
or any successor  index (as defined in this pricing  supplement)  or alternative
calculation   of  the   Index   described   under   "Description   of  Notes  --
Discontinuation of the S&P 500(R) Index; Alteration of Method of Calculation" at
the regular official weekday close of the principal trading session of the NYSE,
the American  Stock  Exchange  LLC, the NASDAQ  National  Market or the relevant
exchange or market for the successor index.

     The Index Return,  as calculated by the  calculation  agent, is the number,
expressed as a percentage, that results from comparing the Ending Index Level to
the Initial  Index  Level.  The Index  Return may be positive or negative and is
calculated as follows:

                             Ending Index Level - Initial Index Level
          Index Return =  -------------------------------------------
                                       Initial Index Level

     YOU  WILL  LOSE  SOME OR ALL OF YOUR  INVESTMENT  IF THE  INDEX  RETURN  IS
NEGATIVE.

WHAT IS THE S&P 500(R) INDEX?

     The S&P 500(R) Index is intended to provide a performance benchmark for the
U.S. equity  markets.  The calculation of the level of the Index is based on the
relative  aggregate  market  value of the common  stocks of 500  companies  (the
"component stocks") as of a particular time as compared to the aggregate average
market  value of the  common  stocks of 500  similar  companies  during the base
period of the years 1941 through 1943.  For purposes of the Index,  historically
the market value of any  component  stock was  calculated  as the product of the
market price per share and the number of  outstanding  shares of such  component
stock. On March 21, 2005 Standard & Poor's ("S&P") began to calculate the market
value of the component  stocks on a  float-adjusted  basis.  The  float-adjusted
calculation  excludes  certain  stocks  that  do not  publicly  trade,  such  as
significant  blocks of stock held by affiliates of the issuer or by governments.
The component  stocks are not stocks of the 500 largest  companies listed on the
New York Stock  Exchange ("NYSE"),  nor are all component  stocks listed on such
exchange.  S&P  chooses  companies  for  inclusion  in the Index  with an aim of
achieving a distribution  by broad  industry  groupings  that  approximates  the


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

                                      PS-1
<PAGE>


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

distribution  of these  groupings  in the common  stock  population  of the U.S.
equity market. S&P may from time to time, in its sole discretion,  add companies
to,  or  delete  companies  from,  the  Index to  achieve  this  objective.  For
additional  discussion of the S&P 500(R) Index,  see "Description of Notes - S&P
500(R) Index."

SELECTED PURCHASE CONSIDERATIONS

     o    APPRECIATION  POTENTIAL - The notes provide the opportunity to enhance
          equity  returns by doubling a positive  Index Return up to the Maximum
          Total  Return,  which we will  determine on the pricing date and which
          will be at least 14%.

     o    DIVERSIFICATION  OF THE S&P 500(R)  INDEX - The return on the notes is
          linked to the  performance of the S&P 500(R) Index,  which consists of
          500 stocks  chosen for market  size,  liquidity,  and  industry  group
          representation.  Historically,  the Index was a market-value  weighted
          index,  with each  stock's  weight in the Index  proportionate  to its
          market value. On March 21, 2005 S&P began to use a revised methodology
          for  calculating  the Index.  See  "Description  of Notes--S&P  500(R)
          Index."  The "S&P 500" is one of the most widely  used  benchmarks  of
          U.S. equity market performance.

     o    CAPITAL  GAINS TAX  TREATMENT  - If you hold the notes for more than a
          year, your gains or losses on the notes should be treated as long term
          capital gains or losses.  However,  alternative  characterizations are
          possible, which could affect the timing and character of any income or
          loss on the notes.  See "Tax  Treatment"  and  "Certain  U.S.  Federal
          Income Tax Consequences" for more detailed information.

     o    MINIMUM  PURCHASE  REQUIREMENT  - You can purchase  notes in a minimum
          investment  amount  of  $100,000  and  integral  multiples  of  $1,000
          thereafter.

SELECTED RISK CONSIDERATIONS

     An  investment in the notes  involves  significant  risks.  These risks are
explained  in  more  detail  in the  "Risk  Factors"  section  of  this  pricing
supplement.

     o    YOUR  INVESTMENT  IN THE NOTES MAY RESULT IN A LOSS - The notes do not
          guarantee any return of  principal.  The return on the notes is linked
          to the  performance  of the Index and will depend on whether,  and the
          extent  to which,  the Index  Return is  positive  or  negative.  Your
          investment will be fully exposed to any decline in the Index.

     o    THE  MAXIMUM  RETURN ON AN  INVESTMENT  IN THE NOTES IS LIMITED TO THE
          MAXIMUM  TOTAL  RETURN - If the Ending Index Level is greater than the
          Initial Index Level,  for each $1,000  principal  amount note you will
          receive at  maturity  $1,000 plus an  additional  amount that will not
          exceed a predetermined percentage of the principal amount,  regardless
          of the  appreciation  in the Index. We refer to this percentage as the
          Maximum Total Return,  which we will determine on the pricing date and
          which will be at least 14%.

     o    NO INTEREST OR DIVIDEND PAYMENTS OR VOTING RIGHTS - As a holder of the
          notes, you will not receive interest  payments,  and you will not have
          voting   rights  or  rights  to  receive   cash   dividends  or  other
          distributions or other rights that holders of securities composing the
          S&P 500(R) Index would have.

     o    LACK OF  LIQUIDITY  - The notes  will not be listed on any  securities
          exchange. J.P. Morgan Securities Inc. intends to offer to purchase the
          notes in the secondary market but is not required to do so.

     o    NOT FDIC INSURED - The notes are not deposits insured or guaranteed by
          the Federal  Deposit  Insurance  Corporation  or any other  government
          authority.

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


                                      PS-2
<PAGE>


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

WHAT  IS THE  TOTAL  RETURN  ON THE  NOTES  AT  MATURITY  ASSUMING  A  RANGE  OF
PERFORMANCE FOR THE S&P 500(R) INDEX?

     The  following  table  and  graph  illustrate  the  hypothetical  return at
maturity on the notes. The "Total Return" as used in this pricing  supplement is
the number,  expressed as a percentage,  that results from comparing the payment
at maturity per $1,000 principal amount note to $1,000.  The hypothetical  Total
Returns set forth below assume a Maximum Total Return of 14%. The actual Maximum
Total Return will be  determined  by us on the pricing  date.  The  hypothetical
Total Returns set forth below are for illustrative  purposes only and may not be
the actual Total  Returns  applicable  to a purchaser of the notes.  The numbers
appearing in the following table have been rounded for ease of analysis.

                               [GRAPHIC OMITTED]

--------------------------------------------------------------------------------
  ENDING INDEX LEVEL          INDEX RETURN             TOTAL RETURN ON THE NOTE
--------------------------------------------------------------------------------
         2,400                   100.00%                         14.00%
         1,800                    50.00%                         14.00%
         1,560                    30.00%                         14.00%
         1,440                    20.00%                         14.00%
         1,320                    10.00%                         14.00%
                                                      --------------------------
         1,284                     7.00%                         14.00%
                                                      --------------------------
         1,260                     5.00%                         10.00%
         1,230                     2.50%                          5.00%
         1,212                     1.00%                          2.00%
--------------------------------------------------------------------------------
         1,200                     0.00%                          0.00%
--------------------------------------------------------------------------------
         1,140                    -5.00%                         -5.00%
         1,080                   -10.00%                        -10.00%
           960                   -20.00%                        -20.00%
           840                   -30.00%                        -30.00%
           720                   -40.00%                        -40.00%
           600                   -50.00%                        -50.00%
           480                   -60.00%                        -60.00%
             0                  -100.00%                       -100.00%
--------------------------------------------------------------------------------

     The  hypothetical  Total  Returns  set  forth  above  do not  represent  an
annualized  compounded  return,  but  rather  the  Total  Return  of the note at
maturity.

     The notes are intended to be long-term  investments and as such,  should be
held until maturity. They are not intended to be short-term trading instruments.
The price at which you will be able to sell the notes prior to  maturity  may be
at a substantial  discount from your original  investment in the notes,  even in
cases where the Index has appreciated  since the pricing date. The  hypothetical
Total Returns described herein assume that the notes are held to maturity.

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


                                      PS-3
<PAGE>


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

HYPOTHETICAL EXAMPLES OF AMOUNTS PAYABLE AT MATURITY

     The following examples illustrate the payment at maturity on the notes on a
hypothetical investment of $1,000 under various scenarios. Each scenario assumes
a  hypothetical  Initial Index Level of 1,200, a Maximum Total Return of 14% and
that the  notes  are held to  maturity.  The  examples  are  simplified  and the
calculations are rounded for ease of analysis.

<TABLE>
<CAPTION>
                                                             EXAMPLE #1      EXAMPLE #2      EXAMPLE #3
                                                             ----------      ----------      ----------
<S>                                                            <C>            <C>              <C>
INITIAL INDEX LEVEL                                             1,200           1,200           1,200
  INDEX CLOSING LEVEL ON FIRST AVERAGING DATE                   1,250           1,150           1,500
  INDEX CLOSING LEVEL ON SECOND AVERAGING DATE                  1,255           1,145           1,505
  INDEX CLOSING LEVEL ON THIRD AVERAGING DATE                   1,245           1,160           1,495
  INDEX CLOSING LEVEL ON FOURTH AVERAGING DATE                  1,255           1,150           1,510
  INDEX CLOSING LEVEL ON FIFTH AVERAGING DATE                   1,245           1,145           1,490
ENDING INDEX LEVEL                                              1,250           1,150           1,500
INDEX RETURN                                                    4.17%          -4.17%             25%
PAYMENT AT MATURITY PER $1,000 PRINCIPAL AMOUNT NOTE           $1,083.33      $958.33          $1,140.00

</TABLE>


EXAMPLE 1: THE LEVEL OF THE INDEX  INCREASES  FROM THE  INITIAL  INDEX  LEVEL OF
1,200 TO AN ENDING  INDEX  LEVEL (THE  ARITHMETIC  AVERAGE OF THE INDEX  CLOSING
LEVELS  ON EACH OF THE FIVE  AVERAGING  DATES AS SHOWN IN THE  TABLE  ABOVE)  OF
1,250.

Payment at Maturity per $1,000 note = $1,000 + (1,000 x (4.17% x 2)) = $1,083.33

Because the Ending Index Level of 1,250 is greater than the Initial  Index Level
of 1,200 and the Index Return of 4.17% does not exceed the hypothetical  Maximum
Total Return of 14%,  the  investor  receives a payment at maturity of $1,083.33
per $1,000 principal amount note.


                 1,250 - 1,200
Index Return = ( ------------- ) = 4.17%
                     1,200


EXAMPLE 2: THE LEVEL OF THE INDEX  DECREASES  FROM THE  INITIAL  INDEX  LEVEL OF
1,200 TO AN ENDING  INDEX  LEVEL (THE  ARITHMETIC  AVERAGE OF THE INDEX  CLOSING
LEVELS  ON EACH OF THE FIVE  AVERAGING  DATES AS SHOWN IN THE  TABLE  ABOVE)  OF
1,150.

Payment at Maturity per $1,000 note = $1,000 + (1,000 x (-4.17%)) = $958.33

Because the Ending Index Level of 1,150 is less than the Initial  Index Level of
1,200,  the Index Return is negative and the investor will receive less than the
principal  amount of their  investment  at  maturity.  The  investor  receives a
payment at maturity of $958.33 per $1,000 principal amount note.

                 1,150 - 1,200
Index Return = ( ------------- ) = -4.17%
                     1,200

EXAMPLE 3: THE LEVEL OF THE INDEX  INCREASES  FROM THE  INITIAL  INDEX  LEVEL OF
1,200 TO AN ENDING  INDEX  LEVEL (THE  ARITHMETIC  AVERAGE OF THE INDEX  CLOSING
LEVELS  ON EACH OF THE FIVE  AVERAGING  DATES AS SHOWN IN THE  TABLE  ABOVE)  OF
1,500.

Payment at Maturity per $1,000 note = $1,140.00

Because the Index Return of 25.00% exceeds the hypothetical Maximum Total Return
of 14%,  the  investor  receives a payment at maturity of  $1,140.00  per $1,000
principal amount note, the maximum return on the notes.

                 1,500 - 1,200
Index Return = ( ------------- ) = 25%
                     1,200

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


                                      PS-4
<PAGE>


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

TAX TREATMENT

     In the opinion of our special tax counsel, Davis Polk & Wardwell,  based on
certain factual representations received from us, your purchase and ownership of
the notes should be treated as an "open transaction" for U.S. federal income tax
purposes. If your notes are so treated, you should not be required to accrue any
income during the term of the notes.

     You should  recognize  capital  gains or losses  upon the  maturity of your
notes (or upon the sale,  exchange or other  disposition  of your notes prior to
maturity) in an amount equal to the  difference  between the amount  realized at
such time and your tax basis in such  notes,  which  should  equal the price you
paid for them.  Your capital gains or losses should be long-term if your holding
period for the notes at the time they  mature  (or are  otherwise  disposed  of)
exceeds one year.

     Other  characterizations  are  possible,  and you should  consult  your tax
adviser  concerning these  alternative  characterizations.  You should carefully
review the section called "Certain U.S. Federal Income Tax Consequences."

     YOU ARE URGED TO CONSULT YOUR TAX ADVISER  REGARDING  THE TAX  TREATMENT OF
THE NOTES AND  WHETHER A  PURCHASE  OF THE NOTES IS  ADVISABLE  IN LIGHT OF YOUR
PARTICULAR SITUATION.

HISTORICAL PERFORMANCE

     You can review the  historical  performance  of the Index under the heading
"Description of Notes -- Historical Information" in this pricing supplement.

LISTING

     The notes will not be listed on any securities exchange.

HOW TO REACH US

     You may contact us at our principal  executive  offices at 270 Park Avenue,
New York, New York 10017-2070 (telephone number (212) 270-4040).

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


                                      PS-5
<PAGE>


                                  RISK FACTORS

     YOUR INVESTMENT IN THE NOTES WILL INVOLVE  CERTAIN RISKS.  THE NOTES DO NOT
PAY INTEREST OR GUARANTEE  ANY RETURN OF  PRINCIPAL  AT, OR PRIOR TO,  MATURITY.
INVESTING IN THE NOTES IS NOT  EQUIVALENT TO INVESTING  DIRECTLY IN THE INDEX OR
ANY OF THE COMPONENT  STOCKS OF THE INDEX.  IN ADDITION,  YOUR INVESTMENT IN THE
NOTES ENTAILS OTHER RISKS NOT ASSOCIATED WITH AN INVESTMENT IN CONVENTIONAL DEBT
SECURITIES.  YOU SHOULD  CONSIDER  CAREFULLY THE  FOLLOWING  DISCUSSION OF RISKS
BEFORE YOU DECIDE THAT AN INVESTMENT IN THE NOTES IS SUITABLE FOR YOU.

THE NOTES DO NOT PAY INTEREST OR GUARANTEE RETURN OF YOUR INVESTMENT.

     The notes do not pay  interest  and may not return any of your  investment.
The  amount  payable  at  maturity  will be  determined  pursuant  to the  terms
described in this pricing supplement.  At the final Averaging Date, if the Index
Return based on the Ending Index Level is negative, you will lose some or all of
your investment in the notes.

THE APPRECIATION POTENTIAL OF THE NOTES IS LIMITED TO THE MAXIMUM TOTAL RETURN.

     The  appreciation  potential  of the notes is limited to the Maximum  Total
Return.  The Maximum Total Return is a percentage which we will determine on the
pricing date and which will be at least 14.0%.  Assuming a Maximum  Total Return
of 14%, the appreciation  potential of the notes will be limited to a maximum of
14% of the principal value of the notes (or $140.00 per $1,000  principal amount
note) even if the Index Return is greater than 14.00%.

YOUR RETURN ON THE NOTES WILL NOT REFLECT  DIVIDENDS ON THE COMMON STOCKS OF THE
COMPANIES IN THE INDEX.

     Your return on the notes will not  reflect the return you would  realize if
you actually owned the common stocks of the companies  included in the Index and
received the  dividends  paid on those stocks.  This is because the  calculation
agent will  calculate  the amount  payable  to you at  maturity  of the notes by
reference to the Ending Index Level.  The Ending Index Level reflects the prices
of the common  stocks in the Index on the Averaging  Dates  without  taking into
consideration the value of dividends paid on those stocks.

SECONDARY TRADING MAY BE LIMITED.

     The notes will not be listed on an organized securities exchange. There may
be little or no  secondary  market for the notes.  Even if there is a  secondary
market,  it may not provide  enough  liquidity to allow you to trade or sell the
notes easily.

     J.P. Morgan Securities Inc. intends to act as a market maker for the notes,
but is not required to do so.  Because we do not expect that other market makers
will participate  significantly in the secondary market for the notes, the price
at which you may be able to trade  your  notes is likely to depend on the price,
if any, at which J.P. Morgan  Securities Inc. is willing to transact.  If at any
time J.P. Morgan  Securities Inc. was not acting as a market maker, it is likely
that there would be little or no secondary market for the notes.

THE ENDING INDEX LEVEL MAY BE LESS THAN THE INDEX  CLOSING LEVEL AT THE MATURITY
DATE OF THE NOTES OR AT OTHER TIMES DURING THE TERM OF THE NOTES.

     Because  the  Ending  Index  Level  will be  calculated  based on the Index
closing level on five  Averaging  Dates,  the level of the Index at the maturity
date or at other  times  during the term of the notes  could be higher  than the
Ending Index Level.  This difference  could be particularly  large if there is a
significant increase in the level of the Index after the final Averaging Date.

     Because  the  Ending  Index  Level  will be  calculated  based on the Index
closing  level on five  days  near the end of the term of the  notes,  the Index
closing  level at various  other  times  during  the term of the notes  could be
higher than the Ending Index Level. This difference could be particularly  large
if there is a  significant  decrease in the level of the Index during the latter
portion of the term of the notes or if there is  significant  volatility  in the
Index  closing  level during the term of the notes.  For  example,  if the Index
closing levels  steadily  increase during the initial term of the notes and then
steadily decrease back to the Initial Index Level, the Ending Index Level may be
significantly  less  than the  Index  closing  level at its  peak.  Under  these
circumstances, you may lose some or all of your initial investment in the notes.


                                      PS-6
<PAGE>



THE NOTES ARE NOT DESIGNED TO BE SHORT-TERM TRADING INSTRUMENTS.

     The  price  at  which  you  will be able to sell  your  notes  to us or our
affiliates prior to maturity,  if at all, may be at a substantial  discount from
the principal amount of the notes, even in cases where the Index has appreciated
since  the  pricing  date.  The  potential  returns  described  in this  pricing
supplement  assume that your  notes,  which are not  designed  to be  short-term
trading instruments, are held to maturity.

PRIOR  TO  MATURITY,   THE  VALUE  OF  THE  NOTES  MAY  BE  INFLUENCED  BY  MANY
UNPREDICTABLE FACTORS.

     You should not expect the price at which we or our  affiliates  are willing
to  repurchase  the notes,  if at all, to vary in  proportion  to changes in the
level of the S&P 500(R) Index. Prior to maturity, the value of the notes will be
affected by a number of economic and market  factors  that may either  offset or
magnify each other. We expect that, generally, the level of the S&P 500(R) Index
on any day will affect the value of the notes more than any other single factor.
Other relevant factors include:

     o    the expected volatility in the Index;

     o    the time left to maturity of the notes;

     o    the dividend rate on the stocks in the Index;

     o    interest and yield rates in the market;

     o    economic,  financial,  political,  regulatory or judicial  events that
          affect the stocks  represented in the Index or stock markets generally
          and which may affect the Index closing  level on any  Averaging  Date;
          and

     o    our creditworthiness.

     You  cannot  predict  the  future  performance  of the  Index  based on its
historical  performance.  The value of the Index may decrease  such that you may
not receive the full return of your investment. In addition, should the value of
the Index decline, you may lose some or all of your initial investment.

THE INCLUSION IN THE ORIGINAL ISSUE PRICE OF THE AGENT'S COMMISSION AND THE COST
OF HEDGING OUR OBLIGATIONS UNDER THE NOTES THROUGH ONE OR MORE OF OUR AFFILIATES
IS LIKELY TO ADVERSELY AFFECT THE VALUE OF THE NOTES PRIOR TO MATURITY.

     The original issue price of the notes  includes the agent's  commission and
the cost of hedging our  obligations  under the notes through one or more of our
affiliates.  Such cost includes our affiliates'  expected cost of providing such
hedge, as well as the profit our affiliates  expect to realize in  consideration
for assuming the risks inherent in providing such hedge.  As a result,  assuming
no change in market conditions or any other relevant factors, the price, if any,
at which J.P. Morgan  Securities Inc. will be willing to purchase notes from you
in  secondary  market  transactions,  if at all,  will  likely be lower than the
original  issue  price.  In  addition,  any such  prices may differ  from values
determined by pricing models used by J.P. Morgan Securities Inc., as a result of
such compensation or other transaction costs.

S&P MAY ADJUST THE S&P 500(R) INDEX IN A WAY THAT AFFECTS ITS LEVEL, AND S&P HAS
NO OBLIGATION TO CONSIDER YOUR INTERESTS.

     S&P is responsible for calculating and maintaining the Index.  S&P can add,
delete  or   substitute   the  stocks   underlying   the  Index  or  make  other
methodological  changes that could  change the level of the Index.  On March 21,
2005, S&P began to use a revised  methodology  for  calculating  the Index.  See
"Description  of Notes--S&P  500(R) Index." You should realize that the changing
of companies included in the Index may affect the Index as a newly added company
may  perform  significantly  better or worse than the  company or  companies  it
replaces.  Additionally,  S&P may alter,  discontinue or suspend  calculation or
dissemination  of the Index.  Any of these  actions could  adversely  affect the
value  of the  notes.  S&P has no  obligation  to  consider  your  interests  in
calculating or revising the Index.

WE ARE ONE OF THE  COMPANIES  THAT MAKE UP THE  INDEX BUT WE ARE NOT  AFFILIATED
WITH ANY OTHER COMPANY INCLUDED IN THE INDEX.

     We are  one of the  companies  that  make  up  the  Index,  but we are  not
affiliated  with any of the other  companies  whose stock is  represented in the
Index. As a result, we will have no ability to control the actions of such other
companies,  including  actions  that  could  affect  the  value  of  the  stocks
underlying the Index or your notes.  None of the money you pay us will go to S&P
or any of the other companies  included in the Index and none of those companies
will


                                      PS-7
<PAGE>


be involved in the  offering of the notes in any way.  Neither  they nor we will
have any  obligation  to  consider  your  interests  as a holder of the notes in
taking any corporate actions that might affect the value of your notes.

     As a holder  of the  notes,  you will not have  voting  rights or rights to
receive  dividends  or other  distributions  or other rights that holders of the
securities composing the Index would have.

WE OR OUR AFFILIATES MAY HAVE ADVERSE  ECONOMIC  INTERESTS TO THE HOLDERS OF THE
NOTES.

     J.P. Morgan  Securities Inc. and other  affiliates of ours trade the stocks
underlying the Index and other  financial  instruments  related to the Index and
component  stocks of the Index on a regular  basis,  for their  accounts and for
other accounts under their  management.  J.P.  Morgan  Securities Inc. and these
affiliates may also issue or underwrite or assist  unaffiliated  entities in the
issuance or  underwriting  of other  securities  or financial  instruments  with
returns  linked to the  Index.  To the extent  that we or one of our  affiliates
serves  as  issuer,  agent or  underwriter  for  such  securities  or  financial
instruments, our or their interests with respect to such products may be adverse
to those of the  holders of the notes.  Any of these  trading  activities  could
potentially  affect the level of the S&P 500(R)  Index and,  accordingly,  could
affect the value of the notes and the amount, if any, payable to you at maturity

     We or our  affiliates may currently or from time to time engage in business
with companies whose stock is included in the Index,  including  extending loans
to, or making equity  investments  in, or providing  advisory  services to them,
including  merger  and  acquisition  advisory  services.  In the  course of this
business,  we or our affiliates  may acquire  non-public  information  about the
companies,  and we will not disclose any such  information  to you. In addition,
one or more of our affiliates may publish  research  reports about the companies
whose stock is included in the Index. Any prospective  purchaser of notes should
undertake an independent  investigation  of each company whose stock is included
in the Index as in its judgment is appropriate to make an informed decision with
respect to an investment in the notes.

     Additionally,  we or one of our  affiliates  may serve as issuer,  agent or
underwriter for additional  issuances of notes with returns linked or related to
changes  in the level of the Index or the stocks  that  comprise  the Index.  By
introducing competing products into the marketplace in this manner, we or one or
more of our affiliates could adversely affect the value of the notes.

     We may  have  hedged  our  obligations  under  the  notes  through  certain
affiliates, who would expect to make a profit on such hedge. Because hedging our
obligations  entails risk and may be  influenced  by market forces beyond our or
our  affiliates'  control,  such  hedging may result in a profit that is more or
less than expected, or it may result in a loss.

     J.P.  Morgan  Securities  Inc.,  one of  our  affiliates,  will  act as the
calculation agent. The calculation agent will determine, among other things, the
amount, if any, we will pay you at maturity.  The calculation agent will also be
responsible  for  determining  whether a market  disruption  event has occurred,
whether the Index has been  discontinued  and whether  there has been a material
change in the method of  calculation of the Index.  In performing  these duties,
J.P. Morgan  Securities Inc. may have interests  adverse to the interests of the
holders of the notes,  which may affect your  return on the notes,  particularly
where J.P.  Morgan  Securities  Inc., as the  calculation  agent, is entitled to
exercise discretion.

MARKET DISRUPTIONS MAY ADVERSELY AFFECT YOUR RETURN.

     The calculation agent may, in its sole discretion,  decide that the markets
have been affected in a manner that prevents it from properly  valuing the Index
closing  level on an  Averaging  Date and  calculating  the  amount  that we are
required  to pay  to  you,  if  any,  at  maturity.  These  events  may  include
disruptions  or  suspensions  of  trading  in the  markets  as a  whole.  If the
calculation agent, in its sole discretion,  determines that these events prevent
us or any of our  affiliates  from properly  hedging our  obligations  under the
notes,  it is possible that one or more of the Averaging  Dates and the maturity
date will be postponed and your return will be adversely affected.

THE TAX CONSEQUENCES OF AN INVESTMENT IN THE NOTES ARE UNCLEAR.

     There is no direct legal authority as to the proper U.S. federal income tax
characterization of the notes, and we do not intend to request a ruling from the
Internal Revenue Service regarding the notes. No assurance can be given that the
Internal  Revenue  Service  will  accept,  or  that a  court  will  uphold,  the
characterization  and tax  treatment  of the notes  described  in "Certain  U.S.
Federal  Income  Tax   Consequences."  If  the  Internal  Revenue  Service  were
successful  in


                                      PS-8
<PAGE>


asserting  an  alternative  characterization  for  the  notes,  the  timing  and
character of income on the notes could differ  materially  from our  description
herein. Generally, Non-U.S. Holders may be withheld upon at a rate of 30% unless
they have  submitted a properly  completed IRS Form W-8BEN or otherwise  satisfy
the applicable documentation requirements. You are urged to review carefully the
section entitled "Certain U.S. Federal Income Tax Consequences" and consult your
tax adviser regarding your particular circumstances.


                                      PS-9
<PAGE>


                                 USE OF PROCEEDS

     The net  proceeds  we  receive  from the sale of the notes will be used for
general  corporate  purposes  and,  in  part,  by us or by  one or  more  of our
subsidiaries  in connection with hedging our  obligations  under the notes.  The
original issue price of the notes includes the agent's  commissions (as shown on
the cover page of this pricing supplement) paid with respect to the notes, which
commissions include the reimbursement of certain issuance costs, and the cost of
hedging  our  obligations  under the  notes.  The cost of hedging  includes  the
projected  profit that our  affiliates  expect to realize in  consideration  for
assuming the risks inherent in hedging our obligations under the notes.  Because
hedging our  obligations  entails risk and may be  influenced  by market  forces
beyond our or our affiliates' control,  such hedging may result in a profit that
is more or less  than  expected,  or could  result  in a loss.  See also "Use of
Proceeds" in the accompanying prospectus.

     On or  prior  to the  date of this  pricing  supplement,  we,  through  our
affiliates  or others,  may hedge  some or all of our  anticipated  exposure  in
connection  with  the  notes  by  taking  positions  in the  Index,  the  stocks
underlying the Index,  or  instruments  whose value is derived from the Index or
its underlying stocks. While we cannot predict an outcome, such hedging activity
could  potentially  increase the Initial Index Level, and therefore  effectively
establish a higher  level that the Index must achieve for you to obtain a return
on your investment or avoid a loss of principal at maturity.  From time to time,
prior to maturity of the notes, we may pursue a dynamic  hedging  strategy which
may involve taking long or short positions in the Index,  the stocks  underlying
the  Index,  or  instruments  whose  value  is  derived  from  the  Index or its
underlying  stocks.  Although  we have no  reason to  believe  that any of these
activities will have a material impact on the level of the Index or the value of
the notes,  we cannot  assure you that  these  activities  will not have such an
effect.


                                     PS-10
<PAGE>


                              DESCRIPTION OF NOTES

     THE FOLLOWING  DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES SUPPLEMENTS
THE  DESCRIPTION OF THE GENERAL TERMS OF THE DEBT SECURITIES SET FORTH UNDER THE
HEADINGS  "DESCRIPTION OF NOTES" IN THE ACCOMPANYING  PROSPECTUS  SUPPLEMENT AND
"DESCRIPTION OF DEBT  SECURITIES" IN THE  ACCOMPANYING  PROSPECTUS.  CAPITALIZED
TERMS USED BUT NOT DEFINED IN THIS PRICING SUPPLEMENT HAVE THE MEANINGS ASSIGNED
IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND PROSPECTUS. THE TERM "NOTE" REFERS
TO EACH $1,000  PRINCIPAL  AMOUNT OF OUR RETURN ENHANCED NOTES LINKED TO THE S&P
500(R) INDEX DUE AUGUST 9, 2006.

GENERAL

     The Return  Enhanced  Notes are senior  unsecured  obligations  of JPMorgan
Chase & Co. that are linked to the S&P 500(R) Index (the "Index"). The notes are
a series of securities referred to in the accompanying prospectus supplement and
prospectus.  The notes will be issued by JPMorgan Chase & Co. under an indenture
dated May 25, 2001, as may be amended or supplemented from time to time, between
us and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as
trustee, and will be initially limited to $          aggregate principal amount.

     The notes do not pay interest and do not  guarantee any return of principal
at,  or prior to  maturity.  Instead,  you will  receive  a  payment  in cash at
maturity which will vary depending on the performance of the Index. The notes do
not guarantee any return of your investment at maturity.

     The notes are not bank deposits and are not insured by the Federal  Deposit
Insurance  Corporation  or by  any  other  governmental  agency,  nor  are  they
obligations of, or guaranteed by, a bank.

     The notes are our unsecured and  unsubordinated  obligations  and will rank
PARI PASSU with all of our other unsecured and unsubordinated obligations.

     The  notes  will be  issued  in  denominations  of  $100,000  and  integral
multiples of $1,000 in excess thereof.  The principal  amount and issue price of
each note is $1,000.  The notes  will be  represented  by one or more  permanent
global notes  registered in the name of DTC or its nominee,  as described  under
"Description of Notes -- Forms of Notes" in the prospectus supplement and "Forms
of Securities -- Global Securities" in the prospectus.

PAYMENT AT MATURITY

     The maturity  date for the notes is August 9, 2006 subject to adjustment if
the final  Averaging Date is postponed as described  below.  The amount you will
receive at maturity is based on the value of the Ending Index Level  relative to
the Initial Index Level.

     o    If the Ending Index Level is greater than the Initial Index Level, you
          will receive a cash  payment per note that  provides you with a return
          on your  investment of twice the Index Return,  subject to the Maximum
          Total Return on the note.  The "Maximum  Total Return" is a percentage
          which we will determine on the pricing date and which will be at least
          14%. Assuming a Maximum Total Return of 14%, the maximum final payment
          per $1,000 principal amount note is $1,140.00.  Subject to the Maximum
          Total  Return,  your  final  payment  per note will be  calculated  as
          follows:

                     $1,000 + ($1,000 x (Index Return x 2))

     o    If the Ending  Index Level is equal to the Initial  Index  Level,  you
          will  receive a cash  payment of $1,000 per  $1,000  principal  amount
          note.

     o    Your investment will be fully exposed to any decline in the Index. For
          each 1% decline in the Ending  Index  Level  relative  to the  Initial
          Index Level, you will lose 1% of your investment in the notes.

         The "Index  Return," as calculated  by the  calculation  agent,  is the
number, expressed as a percentage,  that results from comparing the Ending Index
Level to the Initial  Index Level.  The Index Return may be positive or negative
and is calculated as follows:

                            Ending Index Level - Initial Index Level
        Index Return =     -------------------------------------------
                                      Initial Index Level

     YOU  WILL  LOSE  SOME OR ALL OF YOUR  INVESTMENT  IF THE  INDEX  RETURN  IS
NEGATIVE.


                                     PS-11
<PAGE>


     The "Initial  Index Level" is the Index  closing level on the pricing date.
The "Ending Index Level" is the  arithmetic  average of the Index closing levels
on five dates near the end of the term of the notes.

     The five  "Averaging  Dates" are July 31, 2006,  August 1, 2006,  August 2,
2006,  August 3, 2006 and August 4, 2006,  subject to  adjustment  as  described
below.  If an  Averaging  Date is not a  trading  day or if  there  is a  market
disruption  event on such day,  such  Averaging  Date will be  postponed  to the
immediately succeeding trading day during which no market disruption event shall
have occurred;  PROVIDED that the Index closing level for an Averaging Date will
not be  determined  on a date later than the tenth  scheduled  trading day after
August 4, 2006,  and if such day is not a trading  day,  or if there is a market
disruption  event on such date, the  calculation  agent will determine the Index
closing level for the Averaging Date on such date in accordance with the formula
for and method of  calculating  the Index  closing level last in effect prior to
commencement of the market  disruption event (or prior to the non-trading  day),
using the closing  price (or,  if trading in the  relevant  securities  has been
materially  suspended  or  materially  limited,  its good faith  estimate of the
closing price that would have prevailed but for such suspension or limitation or
non-trading  day) on such tenth  scheduled  trading  day of each  security  most
recently constituting the Index.

     If, due to a market disruption event or otherwise, the final Averaging Date
is  postponed  so that it falls  less  than  three  business  days  prior to the
scheduled  maturity  date,  the  maturity  date will be the third  business  day
following that final Averaging Date as postponed.

     The "Index  closing  level" on any trading day will equal the closing level
of  the  Index  or  any  successor  index  (as  defined  below)  or  alternative
calculation of the Index  described  under  "Description  of Notes -- S&P 500(R)
Index  --Discontinuation  of the S&P  500(R)  Index;  Alteration  of  Method  of
Calculation"  at the regular  official  weekday close of the  principal  trading
session of the NYSE,  the  American  Stock  Exchange  (the  "AMEX"),  the NASDAQ
National Market or the relevant exchange or market for the successor index.

     A "trading day" is a day, as determined by the calculation  agent, on which
trading is generally  conducted on the NYSE,  AMEX, the NASDAQ National  Market,
the Chicago  Mercantile  Exchange Inc. and the Chicago  Board Options  Exchange,
Incorporated  and in the  over-the-counter  market for equity  securities in the
United States.

     We will irrevocably  deposit with DTC no later than the opening of business
on the maturity date funds  sufficient  to make  payments of the amount  payable
with  respect  to  the  notes  on  such  date.  We  will  give  DTC  irrevocable
instructions  and  authority  to pay such  amount  to the  holders  of the notes
entitled thereto.  A "business day" is any day other than a day on which banking
institutions  in The City of New York are or  required by law or  regulation  to
close or a day on which transactions in dollars are not conducted.

     Subject  to  the  foregoing  and  to  applicable  law  (including,  without
limitation,  United States federal laws),  we or our affiliates may, at any time
and from time to time,  purchase  outstanding notes by tender, in open market or
by private agreement.

CALCULATION AGENT

     J.P.  Morgan  Securities  Inc.  will  act as  the  calculation  agent.  The
calculation agent will determine, among other things, the Index closing level on
the pricing date and the  Averaging  Dates,  the Index Return and the payment at
maturity,  if any,  on the  notes.  In  addition,  the  calculation  agent  will
determine  whether there has been a market  disruption event or a discontinuance
of the  Index and  whether  there has been a  material  change in the  method of
calculating the Index. All determinations  made by the calculation agent will be
at the sole  discretion  of the  calculation  agent and will,  in the absence of
manifest  error, be conclusive for all purposes and binding on you and on us. We
may  appoint a different  calculation  agent from time to time after the date of
this pricing supplement without your consent and without notifying you.

     All  calculations  with respect to the Ending Index Level,  Index Return or
Index closing level will be rounded to the nearest one hundred-thousandth,  with
five one-millionths  rounded upward (E.G.,  .876545 would be rounded to .87655);
all dollar amounts related to  determination of the payment per $1,000 principal
amount note at maturity, if any, will be rounded to the nearest  ten-thousandth,
with five one hundred-thousandths  rounded upward (E.G., .76545 would be rounded
up to .7655);  and all dollar amounts paid on the aggregate  principal amount of
notes will be rounded to the nearest cent, with one-half cent rounded upward.


                                     PS-12
<PAGE>


MARKET DISRUPTION EVENTS

     Certain events may prevent the calculation agent from calculating the Index
closing level on an Averaging  Date or calculating  the amount,  if any, that we
will pay to you at maturity of the notes.  These events may include  disruptions
or  suspensions  of trading on the markets as a whole.  We refer to these events
individually as a "market disruption event."

     With respect to the Index, a "market disruption event" means:

     o    a suspension, absence or material limitation of trading of stocks then
          constituting  20  percent  or more of the  level of the  Index (or the
          relevant successor index) on the relevant exchanges (as defined below)
          for such  securities  for more than two hours of  trading  during,  or
          during  the one hour  period  preceding  the close of,  the  principal
          trading session on such relevant exchange; or

     o    a breakdown or failure in the price and trade reporting systems of any
          relevant exchange as a result of which the reported trading prices for
          stocks then  constituting 20 percent or more of the level of the Index
          (or the relevant  successor  index) during the one hour  preceding the
          close of the principal  trading session on such relevant  exchange are
          materially inaccurate; or

     o    the suspension, absence or material limitation of trading on any major
          securities  market for trading in futures or options contracts related
          to the Index (or the relevant successor index) for more than two hours
          of trading during,  or during the one hour period  preceding the close
          of, the principal trading session on such market; or

     o    a decision to permanently  discontinue trading in the relevant futures
          or options contracts,

in each case as determined by the calculation agent in its sole discretion;  and

     o    a determination  by the calculation  agent in its sole discretion that
          the event  described above  materially  interfered with its ability or
          the  ability  of any of our  affiliates  to adjust or unwind  all or a
          material portion of any hedge with respect to the notes.

     For the purpose of determining  whether a market disruption event exists at
any time, if trading in a security included in the Index is materially suspended
or materially limited at that time, then the relevant percentage contribution of
that security to the level of the Index shall be based on a comparison of:

     o    the portion of the level of the Index  attributable  to that  security
          relative to

     o    the overall level of the Index,

in each case immediately before that suspension or limitation.

     For purposes of determining whether a market disruption event has occurred:

     o    a  limitation  on the  hours or  number  of days of  trading  will not
          constitute a market  disruption  event if it results from an announced
          change in the  regular  business  hours of the  relevant  exchange  or
          market;

     o    limitations  pursuant to the rules of any relevant exchange similar to
          NYSE  Rule  80A  (or any  applicable  rule or  regulation  enacted  or
          promulgated  by  any  other   self-regulatory   organization   or  any
          government  agency of scope  similar to NYSE Rule 80A as determined by
          the   calculation   agent)  on  trading  during   significant   market
          fluctuations  will  constitute  a  suspension,   absence  or  material
          limitation of trading;

     o    a suspension  of trading in futures or options  contracts on the Index
          by the primary  securities  market trading in such contracts by reason
          of

          o    a price change exceeding limits set by such exchange or market,

          o    an imbalance of orders relating to such contracts, or

          o    a disparity in bid and ask quotes relating to such contracts

will, in each such case, constitute a suspension, absence or material limitation
of  trading  in futures  or  options  contracts  related  to the Index;  and

     o    a  "suspension,  absence or  material  limitation  of  trading" on any
          relevant exchange or on the primary market on which futures or options
          contracts  related to the Index are traded  will not  include any time
          when  such  market  is  itself  closed  for  trading  under   ordinary
          circumstances.


                                     PS-13
<PAGE>


     "Relevant  exchange" means the primary U.S. organized exchange or market of
trading for any security (or any combination thereof) then included in the Index
or any successor index.

S&P 500(R) INDEX

     We have  derived  all  information  contained  in this  pricing  supplement
regarding  the Index,  including,  without  limitation,  its make-up,  method of
calculation and changes in its components,  from publicly available information.
Such information reflects the policies of, and is subject to change by, S&P. The
Index was developed by S&P and is  calculated,  maintained and published by S&P.
We make no representation or warranty as to the accuracy or completeness of such
information.

     The Index is  intended  to  provide a  performance  benchmark  for the U.S.
equity markets.  The calculation of the level of the Index  (discussed  below in
further detail) is based on the relative value of the aggregate Market Value (as
defined below) of the common stocks of 500 companies (the "Component Stocks") as
of a particular  time as compared to the aggregate  average  Market Value of the
common stocks of 500 similar  companies during the base period of the years 1941
through  1943.  Historically,  the  "Market  Value" of any  Component  Stock was
calculated  as the  product of the market  price per share and the number of the
then  outstanding  shares of such Component  Stock. As discussed below, on March
21, 2005,  S&P began to use a new  methodology  to calculate the Market Value of
the Component Stocks. The 500 companies are not the 500 largest companies listed
on the NYSE and not all 500 companies are listed on such  exchange.  S&P chooses
companies for inclusion in the Index with an aim of achieving a distribution  by
broad industry  groupings that  approximates the distribution of these groupings
in the common stock  population of the U.S. equity market.  S&P may from time to
time, in its sole  discretion,  add companies to, or delete  companies from, the
Index to achieve the objectives stated above.  Relevant criteria employed by S&P
include  the  viability  of the  particular  company,  the  extent to which that
company  represents  the industry  group to which it is assigned,  the extent to
which the company's common stock is widely-held and the Market Value and trading
activity of the common stock of that company.

         On March 21,  2005,  S&P began to  calculate  the Index based on a half
float-adjusted  formula,  and on or about  September  16, 2005 the Index will be
fully float adjusted. S&P's criteria for selecting stocks for the Index will not
be changed by the shift to float  adjustment.  However,  the adjustment  affects
each company's weight in the Index (i.e., its Market Value).

         Under float adjustment,  the share counts used in calculating the Index
will  reflect only those shares that are  available to  investors,  not all of a
company's  outstanding  shares.  S&P defines three groups of shareholders  whose
holdings are subject to float adjustment:

     o    holdings by other publicly traded corporations, venture capital firms,
          private equity firms, strategic partners, or leveraged buyout groups;

     o    holdings by government entities, including all levels of government in
          the United States or foreign countries; and

     o    holdings by current or former  officers and  directors of the company,
          founders of the company, or family trusts of officers,  directors,  or
          founders, as well as holdings of trusts,  foundations,  pension funds,
          employee  stock  ownership   plans,  or  other   investment   vehicles
          associated with and controlled by the company.

         However,  treasury  stock,  stock options,  restricted  shares,  equity
participation units,  warrants,  preferred stock,  convertible stock, and rights
are not part of the float.  In cases where holdings in a group exceed 10% of the
outstanding  shares of a company,  the  holdings  of that group will be excluded
from the  float-adjusted  count of shares  to be used in the Index  calculation.
Mutual funds,  investment  advisory  firms,  pension funds,  or foundations  not
associated with the company and investment funds in insurance companies,  shares
of a United States company  traded in Canada as  "exchangeable  shares,"  shares
that trust  beneficiaries  may buy or sell  without  difficulty  or  significant
additional expense beyond typical brokerage fees, and, if a company has multiple
classes of stock outstanding,  shares in an unlisted or non-traded class if such
shares are  convertible by  shareholders  without undue delay and cost, are also
part of the float.

         For each stock,  an investable  weight factor  ("IWF") is calculated by
dividing the  available  float shares,  defined as the total shares  outstanding
less shares held in one or more of the three groups listed above where the group
holdings exceed 10% of the outstanding  shares, by the total shares outstanding.
(On March 21, 2005, the Index moved half way


                                     PS-14
<PAGE>


to float adjustment, meaning that if a stock has an IWF of 0.80, the IWF used to
calculate the Index between March 21, 2005 and September 16, 2005 will be 0.90.)
The float-adjusted  Index will then be calculated by dividing the sum of the IWF
multiplied by both the price and the total shares  outstanding for each stock by
the index  divisor.  For  companies  with  multiple  classes of stock,  S&P will
calculate  the weighted  average IWF for each stock using the  proportion of the
total company market capitalization of each share class as weights.

     Currently,   the  Index  is  calculated  using  a  base-weighted  aggregate
methodology:  the level of the Index  reflects the total Market Value of all 500
Component  Stocks  relative  to the Index's  base  period of 1941-43  (the "Base
Period").

     An indexed  number is used to represent the results of this  calculation in
order to make the value easier to work with and track over time.

     The actual  total  Market  Value of the  Component  Stocks  during the Base
Period has been set equal to an indexed value of 10. This is often  indicated by
the notation  1941-43=10.  In practice,  the daily  calculation  of the Index is
computed by dividing the total Market Value of the Component  Stocks by a number
called the Index Divisor.  By itself,  the Index Divisor is an arbitrary number.
However,  in the context of the calculation of the Index, it is the only link to
the original  Base Period level of the Index.  The Index Divisor keeps the Index
comparable  over time and is the  manipulation  point for all adjustments to the
Index ("Index Maintenance").

     Index  Maintenance  includes  monitoring and completing the adjustments for
company additions and deletions,  share changes,  stock splits, stock dividends,
and stock price adjustments due to company restructurings or spinoffs.

     To prevent the level of the Index from  changing due to corporate  actions,
all  corporate  actions which affect the total Market Value of the Index require
an Index  Divisor  adjustment.  By adjusting the Index Divisor for the change in
total Market Value, the level of the Index remains constant. This helps maintain
the level of the Index as an accurate  barometer of stock market performance and
ensures that the movement of the Index does not reflect the corporate actions of
individual  companies in the Index. All Index Divisor adjustments are made after
the close of trading and after the calculation of the Index closing level.  Some
corporate  actions,  such as stock splits and stock  dividends,  require  simple
changes in the common shares  outstanding  and the stock prices of the companies
in the Index and do not require Index Divisor adjustments.

     The table below summarizes the types of Index  maintenance  adjustments and
indicates whether or not an Index Divisor adjustment is required.

                                                                      DIVISOR
             TYPE OF                                                ADJUSTMENT
        CORPORATE ACTION               ADJUSTMENT FACTOR             REQUIRED

   Stock split                    Shares Outstanding                    No
   (e.g., 2-for-1)                multiplied by 2; Stock
                                  Price divided by 2

   Share Issuance                 Shares Outstanding plus               Yes
   (i.e., change [greater than    newly issued Shares
   or equal to] 5%)

   Share Repurchase               Shares Outstanding minus              Yes
   (i.e., change [greater than    Repurchased Shares
   or equal to] 5%)

   Special Cash Dividends         Share Price minus Special             Yes
                                  Dividend

   Company Change                 Add new company Market                Yes
                                  Value minus old company
                                  Market Value

   Rights offering                Price of parent company               Yes
                                  minus

                                      Price of Rights
                                  (   ---------------   )
                                        Right Ratio

   Spinoffs                       Price of parent company               Yes
                                  minus


                                     PS-15
<PAGE>


                                      Price of Spinoff Co.
                                 ( ------------------------- )
                                    (Share Exchange Ratio)

     Stock  splits and stock  dividends  do not affect the Index  Divisor of the
Index,  because following a split or dividend both the stock price and number of
shares  outstanding are adjusted by S&P so that there is no change in the Market
Value of the Component Stock. All stock split and dividend  adjustments are made
after the close of trading on the day before the ex-date.

     Each  of the  corporate  events  exemplified  in  the  table  requiring  an
adjustment  to the Index  Divisor has the effect of altering the Market Value of
the Component Stock and  consequently of altering the aggregate  Market Value of
the Component  Stocks (the "Post-Event  Aggregate Market Value").  In order that
the level of the Index (the  "Pre-Event  Index  Value")  not be  affected by the
altered  Market Value (whether  increase or decrease) of the affected  Component
Stock, a new Index Divisor ("New Divisor") is derived as follows:

   Post-Event Aggregate Market Value
   ---------------------------------   =   Pre-Event Index Value
              New Divisor

                               Post-Event Aggregate Market Value
                 New Divisor = ----------------------------------
                                      Pre-Event Index Value


     A large part of the Index maintenance process involves tracking the changes
in the number of shares outstanding of each of the Index companies. Four times a
year, on a Friday close to the end of each calendar quarter, the share totals of
companies  in the Index are  updated as required by any changes in the number of
shares outstanding.  After the totals are updated, the Index Divisor is adjusted
to  compensate  for the net change in the total  Market  Value of the Index.  In
addition,  any changes over 5% in the current common shares  outstanding for the
Index companies are carefully  reviewed on a weekly basis, and when appropriate,
an immediate adjustment is made to the Index Divisor.

LICENSE AGREEMENT BETWEEN S&P AND J.P. MORGAN SECURITIES INC.

     S&P and J.P.  Morgan  Securities  Inc.  have entered  into a  non-exclusive
license  agreement  providing  for the  sub-license  to us,  and  certain of our
affiliated or subsidiary  companies,  in exchange for a fee, of the right to use
the Index,  which is owned and  published  by S&P, in  connection  with  certain
securities, including the notes.

     The notes are not  sponsored,  endorsed,  sold or  promoted  by  Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., which we refer to as S&P.
S&P makes no  representation or warranty,  express or implied,  to the owners of
the notes or any member of the public regarding the advisability of investing in
securities  generally  or in the notes  particularly,  or the ability of the S&P
500(R) Index to track general stock market performance.  S&P's only relationship
to JPMorgan  Chase & Co. is the licensing of certain  trademarks and trade names
of S&P  without  regard  to  JPMorgan  Chase  & Co.  or the  notes.  S&P  has no
obligation to take the needs of JPMorgan Chase & Co. or the holders of the notes
into  consideration  in  determining,  composing or  calculating  the S&P 500(R)
Index. S&P is not responsible for and has not participated in the  determination
of  the  timing,  price  or  quantity  of  the  notes  to be  issued  or in  the
determination or calculation of the amount due at maturity of the notes. S&P has
no obligation or liability in connection with the  administration,  marketing or
trading of the notes.

     S&P DOES NOT  GUARANTEE  THE ACCURACY  AND/OR THE  COMPLETENESS  OF THE S&P
500(R) INDEX OR ANY DATA  INCLUDED  THEREIN AND S&P SHALL HAVE NO LIABILITY  FOR
ANY ERRORS,  OMISSIONS OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY,  EXPRESS
OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY JPMORGAN CHASE & CO., HOLDERS OF THE
NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500(R) INDEX OR ANY
DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF  MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH  RESPECT  TO THE S&P  500(R)  INDEX OR ANY  DATA  INCLUDED  THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING,  IN NO EVENT SHALL S&P HAVE ANY LIABILITY
FOR ANY SPECIAL,  PUNITIVE,  INDIRECT,  OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.


                                     PS-16
<PAGE>


     "STANDARD  &  POOR'S",  "S&P",  "S&P 500" AND "500" ARE  TRADEMARKS  OF THE
MCGRAW-HILL  COMPANIES,  INC.  AND HAVE  BEEN  LICENSED  FOR USE BY J.P.  MORGAN
SECURITIES  INC.  AND  SUB-LICENSED  FOR  USE BY  JPMORGAN  CHASE  &  CO..  THIS
TRANSACTION IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY S&P AND S&P MAKES NO
REPRESENTATION REGARDING THE ADVISABILITY OF PURCHASING ANY OF THE NOTES.

DISCONTINUATION OF THE S&P 500(R) INDEX; ALTERATION OF METHOD OF CALCULATION

     If S&P discontinues  publication of the S&P 500(R) Index and S&P or another
entity  publishes a successor or  substitute  index that the  calculation  agent
determines,  in its sole discretion,  to be comparable to the discontinued Index
(such index being  referred to herein as a  "successor  index"),  then any Index
closing  level will be  determined  by reference to the level of such  successor
index at the close of trading on the NYSE, the AMEX, the NASDAQ  National Market
or the  relevant  exchange  or market for the  successor  index on the  relevant
Averaging Date.

     Upon any  selection  by the  calculation  agent of a successor  index,  the
calculation agent will cause written notice thereof to be promptly  furnished to
the trustee, to us and to the holders of the notes.

     If  S&P   discontinues   publication  of  the  Index  prior  to,  and  such
discontinuance  is continuing  on, an Averaging Date and the  calculation  agent
determines, in its sole discretion, that no successor index is available at such
time, then the calculation agent will determine the Index closing level for such
date.  The Index  closing  level will be  computed by the  calculation  agent in
accordance  with the  formula  for and method of  calculating  the Index last in
effect prior to such discontinuance,  using the closing price (or, if trading in
the relevant securities has been materially suspended or materially limited, its
good faith  estimate of the closing price that would have prevailed but for such
suspension or limitation) at the close of the principal  trading session on such
date of each security most recently comprising the Index.  Notwithstanding these
alternative arrangements,  discontinuance of the publication of the Index on the
relevant exchange may adversely affect the value of the notes.

     If at any time the method of calculating the Index or a successor index, or
the level  thereof,  is  changed  in a  material  respect,  or if the Index or a
successor index is in any other way modified so that the Index or such successor
index does not, in the opinion of the calculation  agent,  fairly  represent the
level of the Index or such successor index had such changes or modifications not
been made,  then, from and after such time, the  calculation  agent will, at the
close of business in New York City on each date on which the Index closing level
is to be determined,  make such  calculations  and  adjustments  as, in the good
faith judgment of the calculation  agent, may be necessary in order to arrive at
a level of a stock index comparable to the Index or such successor index, as the
case may be, as if such  changes or  modifications  had not been  made,  and the
calculation  agent will  calculate the Index closing level with reference to the
Index or such  successor  index,  as  adjusted.  Accordingly,  if the  method of
calculating the Index or a successor index is modified so that the level of such
Index or  successor  index is a fraction of what it would have been if there had
been  no such  modification  (e.g.,  due to a  split  in the  Index),  then  the
calculation  agent will  adjust  such Index in order to arrive at a level of the
Index or such successor index as if there had been no such  modification  (e.g.,
as if such split had not occurred).

HISTORICAL INFORMATION

     The  following  graph sets forth the  historical  performance  of the Index
based on the weekly Index  closing  level from January 1, 2000 through March 18,
2005.  The Index closing  level on March 18, 2005 was 1,189.65.  We obtained the
Index  closing  levels  and other  information  below from  Bloomberg  Financial
Markets.   We  make  no  representation  or  warranty  as  to  the  accuracy  or
completeness of the information so obtained from Bloomberg Financial Markets.

     The historical  levels of the Index should not be taken as an indication of
future performance,  and no assurance can be given as to the Index closing level
on any Averaging  Date. We cannot give you assurance that the performance of the
Index will result in the return of any of your initial investment.


                                     PS-17
<PAGE>


             [Data below represents line chart in the printed piece]

                                Date        Px Last
                             ---------      --------
                              1/7/2000      1441.47
                             1/14/2000      1465.15
                             1/21/2000      1441.36
                             1/28/2000      1360.16

                              2/4/2000      1424.37
                             2/11/2000      1387.12
                             2/18/2000      1346.09
                             2/25/2000      1333.36

                              3/3/2000      1409.17
                             3/10/2000      1395.07
                             3/17/2000      1464.47
                             3/24/2000      1527.46
                             3/31/2000      1498.58

                              4/7/2000      1516.35
                             4/14/2000      1356.56
                             4/21/2000      1434.54
                             4/28/2000      1452.43

                              5/5/2000      1432.63
                             5/12/2000      1420.96
                             5/19/2000      1406.95
                             5/26/2000      1378.02

                              6/2/2000      1477.26
                              6/9/2000      1456.95

                             6/16/2000      1464.46
                             6/23/2000      1441.48
                             6/30/2000      1454.60

                              7/7/2000      1478.90
                             7/14/2000      1509.98
                             7/21/2000      1480.19
                             7/28/2000      1419.89

                              8/4/2000      1462.93
                             8/11/2000      1471.84
                             8/18/2000      1491.72
                             8/25/2000      1506.45

                              9/1/2000      1520.77
                              9/8/2000      1494.50

                             9/15/2000      1465.81
                             9/22/2000      1448.72
                             9/29/2000      1436.51
                             10/6/2000      1408.99

                            10/13/2000      1374.17
                            10/20/2000      1396.93
                            10/27/2000      1379.58

                             11/3/2000      1426.69
                            11/10/2000      1365.98
                            11/17/2000      1367.72
                            11/24/2000      1341.77

                             12/1/2000      1315.23
                             12/8/2000      1369.89

                            12/15/2000      1312.15
                            12/22/2000      1305.97
                            12/29/2000      1320.28

                              1/5/2001      1298.35
                             1/12/2001      1318.32
                             1/19/2001      1342.55
                             1/26/2001      1354.95

                              2/2/2001      1349.47
                              2/9/2001      1314.76

                             2/16/2001      1301.53
                             2/23/2001      1245.86

                              3/2/2001      1234.18
                              3/9/2001      1233.42

                             3/16/2001      1150.53
                             3/23/2001      1139.83
                             3/30/2001      1160.33

                              4/6/2001      1128.43
                             4/13/2001      1183.50
                             4/20/2001      1242.98
                             4/27/2001      1253.05

                              5/4/2001      1266.61
                             5/11/2001      1245.67
                             5/18/2001      1291.96
                             5/25/2001      1277.89

                              6/1/2001      1260.67
                              6/8/2001      1264.96

                             6/15/2001      1214.36
                             6/22/2001      1225.35
                             6/29/2001      1224.42

                              7/6/2001      1190.59
                             7/13/2001      1215.68
                             7/20/2001      1210.85
                             7/27/2001      1205.82

                              8/3/2001      1214.35
                             8/10/2001      1190.16
                             8/17/2001      1161.97
                             8/24/2001      1184.93
                             8/31/2001      1133.58

                              9/7/2001      1085.78
                             9/14/2001      1092.54
                             9/21/2001       965.80
                             9/28/2001      1040.94
                             10/5/2001      1071.38

                            10/12/2001      1091.65
                            10/19/2001      1073.48
                            10/26/2001      1104.61

                             11/2/2001      1087.20
                             11/9/2001      1120.31

                            11/16/2001      1138.65
                            11/23/2001      1150.34
                            11/30/2001      1139.45

                             12/7/2001      1158.31
                            12/14/2001      1123.09
                            12/21/2001      1144.89
                            12/28/2001      1161.02

                              1/4/2002      1172.51
                             1/11/2002      1145.60
                             1/18/2002      1127.58
                             1/25/2002      1133.28

                              2/1/2002      1122.20
                              2/8/2002      1096.22

                             2/15/2002      1104.18
                             2/22/2002      1089.84

                              3/1/2002      1131.78
                              3/8/2002      1164.31

                             3/15/2002      1166.16
                             3/22/2002      1148.70
                             3/29/2002      1147.39

                              4/5/2002      1122.73
                             4/12/2002      1111.01
                             4/19/2002      1125.17
                             4/26/2002      1076.32

                              5/3/2002      1073.43
                             5/10/2002      1054.99
                             5/17/2002      1106.59
                             5/24/2002      1083.82
                             5/31/2002      1067.14

                              6/7/2002      1027.53
                             6/14/2002      1007.27
                             6/21/2002       989.14
                             6/28/2002       989.82

                              7/5/2002       989.03
                             7/12/2002       921.39
                             7/19/2002       847.76
                             7/26/2002       852.84

                              8/2/2002       864.24
                              8/9/2002       908.64

                             8/16/2002       928.77
                             8/23/2002       940.86
                             8/30/2002       916.07

                              9/6/2002       893.92
                             9/13/2002       889.81
                             9/20/2002       845.39
                             9/27/2002       827.37
                             10/4/2002       800.58

                            10/11/2002       835.32
                            10/18/2002       884.39
                            10/25/2002       897.65

                             11/1/2002       900.96
                             11/8/2002       894.74

                            11/15/2002       909.83
                            11/22/2002       930.55
                            11/29/2002       936.31

                             12/6/2002       912.23
                            12/13/2002       889.48
                            12/20/2002       895.75
                            12/27/2002       875.40

                              1/3/2003       908.59
                             1/10/2003       927.57
                             1/17/2003       901.78
                             1/24/2003       861.40
                             1/31/2003       855.70

                              2/7/2003       829.69
                             2/14/2003       834.89
                             2/21/2003       848.17
                             2/28/2003       841.15

                              3/7/2003       828.89
                             3/14/2003       833.27
                             3/21/2003       895.79
                             3/28/2003       863.50

                              4/4/2003       878.85
                             4/11/2003       868.30
                             4/18/2003       893.58
                             4/25/2003       898.81

                              5/2/2003       930.08
                              5/9/2003       933.41

                             5/16/2003       944.30
                             5/23/2003       933.22
                             5/30/2003       963.59

                              6/6/2003       987.76
                             6/13/2003       988.61
                             6/20/2003       995.69
                             6/27/2003       976.22

                              7/4/2003       985.70
                             7/11/2003       998.14
                             7/18/2003       993.32
                             7/25/2003       998.68

                              8/1/2003       980.15
                              8/8/2003       977.59

                             8/15/2003       990.67
                             8/22/2003       993.06
                             8/29/2003      1008.01

                              9/5/2003      1021.39
                             9/12/2003      1018.63
                             9/19/2003      1036.30
                             9/26/2003       996.85
                             10/3/2003      1029.85

                            10/10/2003      1038.06
                            10/17/2003      1039.32
                            10/24/2003      1028.91
                            10/31/2003      1050.71

                             11/7/2003      1053.21
                            11/14/2003      1050.35
                            11/21/2003      1035.28
                            11/28/2003      1058.20

                             12/5/2003      1061.50
                            12/12/2003      1074.14
                            12/19/2003      1088.67
                            12/26/2003      1095.89

                              1/2/2004      1108.48
                              1/9/2004      1121.86

                             1/16/2004      1139.83
                             1/23/2004      1141.55
                             1/30/2004      1131.13

                              2/6/2004      1142.76
                             2/13/2004      1145.81
                             2/20/2004      1144.11
                             2/27/2004      1144.94

                              3/5/2004      1156.86
                             3/12/2004      1120.57
                             3/19/2004      1109.78
                             3/26/2004      1108.06

                              4/2/2004      1141.81
                              4/9/2004      1139.32

                             4/16/2004      1134.61
                             4/23/2004      1140.60
                             4/30/2004      1107.30

                              5/7/2004      1098.70
                             5/14/2004      1095.70
                             5/21/2004      1093.56
                             5/28/2004      1120.68

                              6/4/2004      1122.50
                             6/11/2004      1136.47
                             6/18/2004      1135.02
                             6/25/2004      1134.43

                              7/2/2004      1125.38
                              7/9/2004      1112.81

                             7/16/2004      1101.39
                             7/23/2004      1086.20
                             7/30/2004      1101.72

                              8/6/2004      1063.97
                             8/13/2004      1064.80
                             8/20/2004      1098.35
                             8/27/2004      1107.77

                              9/3/2004      1113.63
                             9/10/2004      1123.92
                             9/17/2004      1128.55
                             9/24/2004      1110.11
                             10/1/2004      1131.50
                             10/8/2004      1122.14
                            10/15/2004      1108.20
                            10/22/2004      1095.74
                            10/29/2004      1130.20

                             11/5/2004      1166.17
                            11/12/2004      1184.17
                            11/19/2004      1170.34
                            11/26/2004      1182.65

                             12/3/2004      1191.17
                            12/10/2004      1188.00
                            12/17/2004      1194.22
                            12/24/2004      1210.13
                            12/31/2004      1211.92

                              1/7/2005      1186.19
                             1/14/2005      1184.52
                             1/21/2005      1167.87
                             1/28/2005      1171.36

                              2/4/2005      1203.03
                             2/11/2005      1205.30
                             2/18/2005      1201.59
                             2/25/2005      1211.37

                              3/4/2005      1222.12
                             3/11/2005      1200.08
                             3/17/2005      1190.21
                             3/18/2005      1189.65



EVENTS OF DEFAULT

     Under the heading  "Description  of Debt  Securities  -- Events of Default,
Waiver, Debt Securities in Foreign Currencies" in the accompanying prospectus is
a description  of events of default  relating to debt  securities  including the
notes.

PAYMENT UPON AN EVENT OF DEFAULT

     In case an event of default with  respect to the notes shall have  occurred
and be  continuing,  the  amount  declared  due and  payable  per note  upon any
acceleration of the notes shall be determined by the calculation agent and shall
be an  amount  in cash  equal to the  amount  payable  at  maturity  per  $1,000
principal  amount note as described  under the caption  "Description of Notes --
Payment at Maturity,"  calculated as if the date of acceleration  were the final
Averaging  Date and the four  business  days  immediately  preceding the date of
acceleration were the first, second, third and fourth Averaging Dates.

     If the maturity of the notes is accelerated  because of an event of default
as described  above, we shall, or shall cause the calculation  agent to, provide
written  notice to the  trustee  at its New York  office,  on which  notice  the
trustee may conclusively rely, and to DTC of the cash amount due with respect to
the notes as promptly as possible and in no event later than two  business  days
after the date of acceleration.

MODIFICATION

     Under the heading  "Description  of Debt  Securities -- Modification of the
Indenture; Waiver of Compliance" in the accompanying prospectus is a description
of when the consent of each  affected  holder of debt  securities is required to
modify the indenture.

DEFEASANCE

     The provisions  described in the accompanying  prospectus under the heading
"Description   of  Debt   Securities  --  Discharge,   Defeasance  and  Covenant
Defeasance" are not applicable to the notes.

LISTING

     The notes will not be listed on any securities exchange.


                                     PS-18
<PAGE>


BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY

     The Depository Trust Company, or DTC, will act as securities depositary for
the  notes.  The  notes  will  be  issued  only as  fully-registered  securities
registered   in  the  name  of  Cede  &  Co.  (DTC's   nominee).   One  or  more
fully-registered  global notes  certificates,  representing  the total aggregate
principal  amount of the notes,  will be issued and will be deposited  with DTC.
See the descriptions  contained in the accompanying  prospectus supplement under
the headings "Description of Notes -- Forms of Notes" and "The Depositary."

REGISTRAR, TRANSFER AGENT AND PAYING AGENT

     Payment of amounts  due at  maturity  on the notes will be payable  and the
transfer  of the notes will be  registrable  at the  principal  corporate  trust
office of JPMorgan Chase Bank in The City of New York.

     JPMorgan  Chase Bank or one of its  affiliates  will act as  registrar  and
transfer agent for the notes.  JPMorgan Chase Bank will also act as paying agent
and may designate additional paying agents.

     Registration  of transfers of the notes will be effected  without charge by
or on behalf of JPMorgan  Chase Bank,  but upon payment (with the giving of such
indemnity  as  JPMorgan  Chase Bank may  require) in respect of any tax or other
governmental charges that may be imposed in relation to it.

GOVERNING LAW

     The notes will be governed by and  interpreted in accordance  with the laws
of the State of New York.


                                     PS-19
<PAGE>


                  CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

     The  following  is a  summary  of the  material  U.S.  federal  income  tax
consequences  of the purchase,  ownership  and  disposition  of the notes.  This
summary applies to you only if you are an initial holder of the notes purchasing
the notes at the issue price and if you will hold them as capital  assets within
the meaning of Section  1221 of the Internal  Revenue  Code of 1986,  as amended
(the "Code").

     This summary does not address all aspects of U.S. federal income and estate
taxation of the notes that may be  relevant  to you in light of your  particular
circumstances,  nor does it address  all of your tax  consequences  if you are a
holder of notes who is  subject  to  special  treatment  under the U.S.  federal
income tax laws, such as:

     o    one of certain financial institutions;

     o    a tax-exempt organization;

     o    a dealer in securities or foreign currencies;

     o    a person holding the notes as part of a hedging transaction, straddle,
          synthetic  security,   conversion  transaction,  or  other  integrated
          transaction,  or entering into a  "constructive  sale" with respect to
          the notes;

     o    a U.S. Holder (as defined below) whose functional  currency is not the
          U.S. dollar;

     o    a trader in securities who elects to apply a mark-to-market  method of
          tax accounting; or

     o    a partnership  or other entity  classified  as a partnership  for U.S.
          federal income tax purposes.

     This summary is based on the Code, administrative pronouncements,  judicial
decisions and final,  temporary and proposed Treasury regulations as of the date
of this pricing supplement,  changes to any of which,  subsequent to the date of
this pricing  supplement,  may affect the tax consequences  described herein. IF
YOU ARE CONSIDERING THE PURCHASE OF NOTES, YOU ARE URGED TO CONSULT YOUR OWN TAX
ADVISER CONCERNING THE APPLICATION OF U.S. FEDERAL INCOME AND ESTATE TAX LAWS TO
YOUR PARTICULAR  SITUATION,  AS WELL AS ANY TAX  CONSEQUENCES  ARISING UNDER THE
LAWS OF ANY STATE, LOCAL OR FOREIGN JURISDICTIONS.

TAX TREATMENT OF THE NOTES

     In the opinion of our special tax counsel, Davis Polk & Wardwell,  which is
based on certain  factual  representations  received  from us, your purchase and
ownership  of the notes  should be  treated  as an "open  transaction"  for U.S.
federal income tax purposes. While other characterizations of the notes could be
asserted by the Internal  Revenue Service (the "IRS"),  as discussed  below, the
following  discussion  assumes  that  this  characterization  of  the  notes  is
respected.

TAX CONSEQUENCES TO U.S. HOLDERS

     You are a "U.S. Holder" if you are a beneficial owner of notes that is, for
U.S. federal income tax purposes:

     o    a citizen or resident of the United States;

     o    a corporation,  or other entity  taxable as a corporation,  created or
          organized in or under the laws of the United  States or any  political
          subdivision thereof; or

     o    an estate or trust the  income  of which is  subject  to U.S.  federal
          income taxation regardless of its source.

TAX TREATMENT OF THE NOTES

     TAX  TREATMENT  PRIOR TO MATURITY.  You should not be required to recognize
taxable income over the term of the notes prior to maturity, other than pursuant
to a sale or exchange as described below.

     SALE,  EXCHANGE OR  REDEMPTION  OF THE NOTES.  Upon a sale or exchange of a
note  (including  redemption  of the notes at  maturity),  you should  recognize
capital gain or loss equal to the difference between the amount realized on such
sale,  exchange or redemption and your tax basis in the note, which should equal
the amount you paid to acquire the note.  Such gain or loss should be  long-term
capital  gain or loss if you have  held the note for more  than one year at such
time. The deductibility of capital losses, however, is subject to limitations.


                                     PS-20
<PAGE>


   POSSIBLE ALTERNATIVE TAX TREATMENTS OF AN INVESTMENT IN THE NOTES

     Due  to the  absence  of  authorities  that  directly  address  the  proper
characterization  of the notes and because we are not  requesting  a ruling from
the IRS with respect to the notes,  no assurance  can be given that the IRS will
accept, or that a court will uphold, the  characterization  and tax treatment of
the  notes  described  above.  If  the  IRS  were  successful  in  asserting  an
alternative  characterization  for the notes, the timing and character of income
on the notes could differ materially from our description  herein.  For example,
the IRS might treat the notes as debt  instruments  issued by us, in which event
the  taxation of the notes would be  governed  by certain  Treasury  regulations
relating to the taxation of contingent payment debt instruments.  In such event,
regardless  of whether you are an accrual  method or cash method  taxpayer,  you
would be required to accrue into income  original issue  discount,  or "OID," on
the notes at our "comparable yield" for similar  noncontingent debt,  determined
at the time of the  issuance of the notes,  in each year that you hold the notes
(even  though you will not receive any cash with respect to the notes during the
term of the notes) and any gain  recognized  at expiration or upon sale or other
disposition  of the  notes  would  generally  be  treated  as  ordinary  income.
Additionally,  if you were to  recognize a loss above  certain  thresholds,  you
could be required to file a disclosure statement with the IRS.

     Other  alternative U.S. federal income tax  characterizations  of the notes
might also require you to include amounts in income during the term of the notes
and/or  might  treat  all or a  portion  of the  gain  or  loss  on the  sale or
settlement of the notes as short-term  gain or loss,  without regard to how long
you held the  notes.  Accordingly,  you are urged to  consult  your tax  adviser
regarding  the U.S.  federal  income tax  consequences  of an  investment in the
notes.

TAX CONSEQUENCES TO NON-U.S. HOLDERS

     You are a "Non-U.S. Holder" if you are a beneficial owner of notes that is,
for U.S. federal income tax purposes:

     o    a nonresident alien individual;

     o    a foreign corporation; or

     o    a foreign estate or trust.

     If you are a Non-U.S.  Holder of the notes and if the  characterization  of
your  purchase and ownership of the notes as an open  transaction  is respected,
any  payments  on the notes  should  not be subject  to U.S.  federal  income or
withholding  tax,  except  that gain from the sale or  exchange  of the notes or
their cash  settlement at maturity may be subject to U.S.  federal income tax if
(1) such gain is  effectively  connected  with your  conduct of a United  States
trade or business or (2) you are a nonresident alien individual, you are present
in the United States for 183 days or more during the taxable year of the sale or
exchange (or maturity) and certain other conditions are satisfied.

     If the notes were  recharacterized,  any  payments or accruals on the notes
nonetheless  should not be subject to U.S.  withholding tax, provided  generally
that the  certification  requirement  described in the next  paragraph  has been
fulfilled and neither the payments on the notes nor any gain realized on a sale,
exchange  or other  disposition  of notes is  effectively  connected  with  your
conduct  of  a  trade  or   business   in  the  United   States.   Because   the
characterization  of the notes is unclear,  payments made to you with respect to
the notes may be withheld  upon at a rate of 30% unless you have  fulfilled  the
certification requirements described in the following paragraph.

     The certification  requirement  referred to in the preceding paragraph will
be  fulfilled  if you,  as the  beneficial  owner of notes,  certify on IRS Form
W-8BEN, under penalties of perjury,  that you are not a United States person and
provide  your name and address or  otherwise  satisfy  applicable  documentation
requirements.

     If you are  engaged in a trade or  business  in the United  States,  and if
payments on the notes are  effectively  connected with the conduct of that trade
or business,  although exempt from the withholding tax discussed above, you will
generally be taxed in the same manner as a U.S. Holder,  except that you will be
required  to provide a properly  executed  IRS Form  W-8ECI in order to claim an
exemption from withholding. If this paragraph applies to you, you should consult
your  own tax  adviser  with  respect  to other  U.S.  tax  consequences  of the
ownership and disposition of the notes,  including the possible  imposition of a
30% branch profits tax.


                                     PS-21
<PAGE>


BACKUP WITHHOLDING AND INFORMATION REPORTING

     You may be subject to information  reporting and backup  withholding at the
rates specified in the Code on the amounts paid to you, unless you provide proof
of an  applicable  exemption  or a correct  taxpayer  identification  number and
otherwise comply with applicable  requirements of the backup  withholding rules.
If you are a Non-U.S.  Holder,  you will not be subject to backup withholding if
you comply with the certification  procedures  described in the second preceding
paragraph.  Amounts  withheld  under  the  backup  withholding  rules are not an
additional tax and may be refunded or credited  against your U.S. federal income
tax liability, provided the required information is furnished to the IRS.

FEDERAL ESTATE TAX

     Individual  Non-U.S.  Holders,  and  entities  the  property  of  which  is
potentially  includible  in such  individuals'  gross  estates for U.S.  federal
estate tax purposes (for example,  a trust funded by such an individual and with
respect to which the  individual  has  retained  certain  interests  or powers),
should note that,  absent an applicable  treaty benefit,  a note is likely to be
treated  as U.S.  situs  property  subject  to U.S.  federal  estate  tax.  Such
individuals  and entities  should  consult their own tax advisers  regarding the
U.S. federal estate tax consequences of investing in a note.

     THE TAX CONSEQUENCES TO YOU OF OWNING THE NOTES ARE UNCLEAR.  YOU ARE URGED
TO CONSULT YOUR OWN TAX ADVISER  REGARDING THE TAX  CONSEQUENCES  OF PURCHASING,
OWNING AND DISPOSING OF THE NOTES,  INCLUDING THE TAX CONSEQUENCES  UNDER STATE,
LOCAL,  FOREIGN AND OTHER TAX LAWS AND THE  POSSIBLE  EFFECTS OF CHANGES IN U.S.
FEDERAL OR OTHER TAX LAWS.


                                     PS-22
<PAGE>


                                  UNDERWRITING

     Under the terms and  subject  to the  conditions  contained  in the  Master
Agency  Agreement  entered into  between  JPMorgan  Chase & Co. and J.P.  Morgan
Securities  Inc. as agent (the "Agent" or "JPMSI"),  acting as principal for its
own account,  has agreed to purchase,  and we have agreed to sell, the principal
amount  of notes  set  forth  on the  cover of this  pricing  supplement.  JPMSI
proposes  initially  to offer the notes  directly  to the  public at the  public
offering  price set forth on the cover page of this  pricing  supplement.  JPMSI
will allow a concession of  $              per $1,000  principal  amount note to
other dealers.  We expect to deliver the notes against  payment  therefor in New
York, New York on April 27, 2005. After the initial offering of the notes, JPMSI
may vary the offering price and other selling terms from time to time.

     We own, directly or indirectly, all of the outstanding equity securities of
J.P. Morgan  Securities  Inc. The  underwriting  arrangements  for this offering
comply  with the  requirements  of Rule  2720 of the  Conduct  Rules of the NASD
regarding an NASD member firm's  underwriting of securities of an affiliate.  In
accordance with Rule 2720, no underwriter may make sales in this offering to any
discretionary account without the prior approval of the customer.

     Our affiliate, J.P. Morgan Securities Inc., may use this pricing supplement
and the  accompanying  prospectus  supplement and prospectus in connection  with
offers and sales of the notes in the secondary  market.  J.P. Morgan  Securities
Inc. may act as principal or agent in those transactions. Secondary market sales
will be made at prices related to market prices at the time of sale.

     In order to facilitate the offering of the notes,  J.P.  Morgan  Securities
Inc. may engage in transactions that stabilize, maintain or otherwise affect the
price of the notes.  Specifically,  J.P.  Morgan  Securities  Inc. may sell more
notes than it is obligated to purchase in connection with the offering, creating
a naked short position in the notes for its own account.  J.P. Morgan Securities
Inc. must close out any naked short position by purchasing the notes in the open
market.  A naked  short  position  is more  likely to be created if J.P.  Morgan
Securities Inc. is concerned that there may be downward pressure on the price of
the notes in the open market after pricing that could adversely affect investors
who  purchase  in the  offering.  As an  additional  means of  facilitating  the
offering,  J.P. Morgan  Securities Inc. may bid for, and purchase,  notes in the
open market to stabilize  the price of the notes.  Any of these  activities  may
raise or maintain the market price of the notes above independent  market levels
or prevent or retard a decline in the  market  price of the notes.  J.P.  Morgan
Securities Inc. is not required to engage in these  activities,  and may end any
of these activities at any time.


                                     PS-23
<PAGE>


                                  ERISA MATTERS

     Section 406 of the Employee  Retirement  Income  Security  Act of 1974,  as
amended ("ERISA") and Section 4975 of the Code prohibit pension,  profit-sharing
or other employee  benefit plans,  that are subject to Title I of ERISA,  or any
entity whose  underlying  assets  include  "plan assets" by reason of any Plan's
investment  in the  entity  (a  "Plan  Asset  Entity"),  as well  as  individual
retirement  accounts  and  Keogh  plans  subject  to  Section  4975 of the  Code
("Plans"),  from  engaging in certain  transactions  involving the "plan assets"
with persons who are "parties in interest" under ERISA or "disqualified persons"
under the Code ("Parties in Interest")  with respect to such Plans.  As a result
of its business,  the Company is a Party in Interest with respect to many Plans.
Where the Company is a Party in Interest with respect to a Plan (either directly
or by reason of its ownership of its subsidiaries),  the purchase and holding of
the notes by or on behalf of the Plan would be a prohibited lending  transaction
under  Section  406(a)(1) of ERISA and Section  4975(c)(1)  of the Code,  unless
exemptive relief were available under an applicable  administrative or statutory
exemption  (as  described  below)  or there  was some  other  basis on which the
transaction was not prohibited.

     Accordingly,  the  notes  may not be  purchased  or held by any Plan or any
person investing "plan assets" of any Plan,  unless such purchase and holding is
eligible for the exemptive relief available under Prohibited  Transaction  Class
Exemption  ("PTCE")  96-23,  95-60,  91-38,  90-1 or  84-14  issued  by the U.S.
Department  of Labor or there was some  other  basis on which the  purchase  and
holding  of the notes by the Plan  Asset  Entity is not  prohibited.  Unless the
applicable prospectus supplement explicitly provides otherwise, any purchaser or
holder of the notes or any interest  therein will be deemed to have  represented
by its  purchase of the notes that (a) its  purchase and holding of the notes is
not made on behalf of or with "plan  assets" of any Plan or (b) its purchase and
holding  of the notes is  eligible  and  satisfied  all the  conditions  for the
exemptive  relief  available under PTCE 96-23,  95-60,  91-38,  90-1 or 84-14 or
there is some other basis on which such purchase and holding is not prohibited.

     Employee benefit plans that are  governmental  plans (as defined in Section
3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and
foreign  plans (as  described  in Section  4(b)(4) of ERISA) are not  subject to
these "prohibited  transaction"  rules of ERISA or Section 4975 of the Code, but
may be  subject  to similar  rules  under  other  applicable  laws or  documents
("Similar  Laws").  Accordingly,  each purchaser or holder of the notes shall be
required to  represent  (and deemed to  constitute a  representation)  that such
purchase and holding is not prohibited under applicable Similar Laws or rules.

     Due to the complexity of the applicable rules, it is particularly important
that fiduciaries or other persons considering  purchasing the notes on behalf of
or with "plan  assets" of any Plan  consult  with their  counsel  regarding  the
relevant  provisions  of ERISA and the Code and the  availability  of  exemptive
relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or any Similar Laws.

     Each  purchaser  and holder of the notes has exclusive  responsibility  for
ensuring  that its  purchase  and  holding  of the notes  does not  violate  the
fiduciary  or  prohibited  transaction  rules of ERISA,  the Code or any Similar
Laws. The sale of any notes to a Plan or US governmental plan is in no respect a
representation  by us or any of our affiliates or  representatives  that such an
investment meets all relevant legal  requirements with respect to investments by
such plans  generally or any particular  Plan or US  governmental  plan, or that
such an investment is  appropriate  for such plans  generally or any  particular
Plan or US governmental plan.


                                     PS-24
<PAGE>


PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 23, 2004)

[GRAPHIC OMITTED]
JPMORGAN CHASE & CO.
270 PARK AVENUE, NEW YORK, NEW YORK 10017 (212) 270-6000
GLOBAL MEDIUM-TERM NOTES, SERIES E
GLOBAL WARRANTS, SERIES E
GLOBAL UNITS, SERIES E

We may offer our global medium-term notes, at one or more times. We describe the
terms that will generally apply to those notes in this prospectus supplement and
the attached  prospectus.  We will describe the specific terms of any particular
notes we are offering in an attached pricing supplement.

The following terms may apply to particular notes we may offer:

     MATURITY:  The notes will  mature  more than nine  months  from the date of
     issue.

     INTEREST: The notes will bear interest at either a fixed rate or a floating
     rate that varies  during the  lifetime of the  relevant  notes,  which,  in
     either case may be zero. Floating rates will be based on rates specified in
     the applicable pricing supplement.

     FLOATING RATES:
     o   CD Rate                o   Treasury Rate            o   Prime Rate
     o   Federal Funds Rate     o   Commercial Paper Rate    o   CMT Rate
     o   EURIBOR                o   LIBOR

     Any  floating  interest  rate may be  adjusted by adding or  subtracting  a
     specified spread or margin or by applying a spread multiplier.

     CURRENCIES:  The applicable  pricing  supplement  will specify  whether the
     notes will be denominated in U.S. dollars or some other currency.

     REDEMPTION: The notes may be either callable by us or puttable by you.

     EXCHANGEABLE:  The notes may be optionally or mandatorily  exchangeable for
     securities of an entity that is affiliated or not affiliated with us, for a
     basket  or  index  of  those  securities,  or for the  cash  value of those
     securities.

     PAYMENTS:  Payments  on  the  notes  may  be  linked  to  currency  prices,
     commodities,  rates,  debt or  equity  securities  or other  debt or equity
     instruments of entities  affiliated or not  affiliated  with us, baskets of
     those securities or an index or indices of those  securities,  quantitative
     measures  associated  with  an  occurrence,  extent  of an  occurrence,  or
     contingency   associated   with  a  financial,   commercial,   or  economic
     consequence,  or economic or  financial  indices or measures of economic or
     financial risk or value.

     OTHER  TERMS:  As  specified  under  "Description  of the Notes" and in the
     attached pricing supplement.

We may offer from time to time global warrants that are debt warrants,  currency
warrants, interest rate warrants or universal warrants. Each warrant will either
entitle or require you to purchase or sell (1) securities  issued by us or by an
entity  affiliated or not affiliated with us, a basket of those  securities,  an
index or indices  of those  securities  or any  combination  of the  above,  (2)
currencies or (3) commodities.  The specific terms of any warrants that we offer
will be included in the applicable pricing supplement.

We may offer from time to time  global  units that  include any  combination  of
notes or warrants.  The specific terms of any units we offer will be included in
the applicable pricing  supplement.

INVESTING  IN THE  SECURITIES  INVOLVES  RISKS.  SEE  "FOREIGN  CURRENCY  RISKS"
BEGINNING ON PAGE S-6.

Unless otherwise specified in the applicable pricing supplement,  the securities
will not be listed on any securities exchange.

The  securities  are not  deposits  or other  obligations  of a bank and are not
insured by the Federal Deposit Insurance  Corporation or any other  governmental
agency. The securities are not secured.

These  securities  have not been  approved  by the SEC or any  state  securities
commission,  nor  have  these  organizations  determined  that  this  prospectus
supplement  is accurate or  complete.  Any  representation  to the contrary is a
criminal  offense.

J.P.  Morgan  Securities  Inc. has agreed to use  reasonable  efforts to solicit
offers to purchase  these  securities  as our selling  agent to the extent it is
named in the applicable pricing  supplement.  Certain other selling agents to be
named in the  applicable  pricing  supplement  may also be used to solicit  such
offers on a  reasonable  efforts  basis.  The  agents  may also  purchase  these
securities  as  principal  at prices to be agreed upon at the time of sale.  The
agents may resell any securities they purchase as principal at prevailing market
prices, or at other prices, as the agents determine.

J.P.  Morgan  Securities  Inc.  may  use  this  prospectus  supplement  and  the
accompanying prospectus in connection with offers and sales of the securities in
market-making transactions.

                                    JPMORGAN

September 23, 2004


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

PROSPECTUS SUPPLEMENT                            PAGE   PROSPECTUS                                     PAGE
--------------------------------               ------   ---------------                              ------
<S>                                              <C>    <C>                                              <C>
About this Prospectus Supplement ...............  S-1   Where You Can Find More Information About Us ...  1
Where You Can Find Out More About Us ...........  S-2   JPMorgan Chase & Co. ...........................  2
JPMorgan Chase & Co. ...........................  S-3   Consolidated Ratios of Earnings to Fixed Charges  4
Consolidated Ratios of Earnings to Fixed Charges  S-5   Use of Proceeds ................................  4
Foreign Currency Risks .........................  S-6   Description of Debt Securities .................  5
Description of Notes ...........................  S-8   Description of Warrants ........................ 11
Description of Warrants ........................ S-26   Description of Units ........................... 15
Description of Units ........................... S-27   Forms of Securities ............................ 17
The Depositary ................................. S-29   Plan of Distribution ........................... 20
Series E Securities Offered on a Global Basis .. S-31   Experts ........................................ 22
United States Federal Taxation ................. S-35   Legal Opinions ................................. 22
Plan of Distribution ........................... S-43   ERISA Matters for Pension Plans and Insurance
Legal Matters .................................. S-44     Companies .................................... 22

</TABLE>

     You  should  rely only on the  information  contained  or  incorporated  by
reference  in  this  prospectus  supplement,  the  prospectus  and  any  pricing
supplement.  We have not authorized anyone else to provide you with different or
additional  information.  We are offering to sell these  securities  and seeking
offers to buy these securities only in jurisdictions  where offers and sales are
permitted.

     You should not assume that the information in this  prospectus  supplement,
the prospectus,  the applicable pricing supplement or any document  incorporated
by reference is accurate as of any date other than their respective dates.


                                       i
<PAGE>


                        ABOUT THIS PROSPECTUS SUPPLEMENT

     We may  offer  from  time to time up to  $1,000,000,000,  less the  initial
public offering price of any other debt securities, warrants or units previously
issued and to be issued or the equivalent of this amount in other currencies, of
the  medium-term  notes,   warrants  and  units  described  in  this  prospectus
supplement.  We will sell the notes, the warrants and the units primarily in the
United  States,  but we may also sell them outside the United  States or both in
and outside the United States  simultaneously.  We refer to the notes,  warrants
and units offered under this prospectus  supplement as our "Series E medium-term
notes,  " our  "Series E  warrants"  and our  "Series E units."  We refer to the
offering of the Series E medium-term notes, the Series E warrants and the Series
E units as our "Series E Program."

     As used in this prospectus supplement,  the "Company," "we," "us," or "our"
refer to JPMorgan Chase & Co.


                                      S-1
<PAGE>


                      WHERE YOU CAN FIND OUT MORE ABOUT US

     We file annual,  quarterly and current reports,  proxy statements and other
information  with the  Commission.  You may read and copy these documents at the
Commission's  public  reference room at Room 1024,  Judiciary  Plaza,  450 Fifth
Street, N.W.,  Washington,  D.C. 20549, and at the Commission's regional offices
at Northeast Regional Office, 233 Broadway, New York, New York 10279 and Midwest
Regional Office,  Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois  60661.  Copies of this  material can also be obtained  from the Public
Reference Room of the  Commission at Judiciary  Plaza,  450 Fifth Street,  N.W.,
Washington,  D.C.  20549 at  prescribed  rates.  Please call the  Commission  at
1-800-732-0330  for further  information  about the Public  Reference  Room. The
Commission also maintains an Internet website that contains  reports,  proxy and
information   statements  and  other   materials  that  are  filed  through  the
Commission's  Electronic Data Gathering,  Analysis and Retrieval (EDGAR) System.
This website can be accessed at http://www.sec.gov.  You can find information we
have filed  with the  Commission  by  reference  to file  number  001-05805.  In
addition, you may inspect our reports, proxy statements and other information at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.

     This prospectus  supplement and the  accompanying  prospectus are part of a
registration statement we filed with the Commission.  This prospectus supplement
and  the  accompanying   prospectus  omit  some  information  contained  in  the
registration statement in accordance with Commission rules and regulations.  You
should review the  information  and exhibits in the  registration  statement for
further information on us and our consolidated subsidiaries and the notes we are
offering.   Statements  in  this  prospectus  supplement  and  the  accompanying
prospectus  concerning  any document we filed as an exhibit to the  registration
statement or that we otherwise  filed with the Commission are not intended to be
comprehensive and are qualified by reference to these filings. You should review
the complete document to evaluate these statements.

     The  Commission   allows  us  to  incorporate  by  reference  much  of  the
information  we file with  them,  which  means  that we can  disclose  important
information to you by referring you to those publicly available  documents.  The
information  that we incorporate by reference in this prospectus  supplement and
the  accompanying  prospectus  is  considered  to be  part  of  this  prospectus
supplement and the  accompanying  prospectus.  Because we are  incorporating  by
reference future filings with the Commission, this prospectus supplement and the
accompanying  prospectus  are  continually  updated and those future filings may
modify or supersede some of the  information  included or  incorporated  in this
prospectus supplement and the accompanying prospectus.  This means that you must
look at all of the  Commission  filings  that we  incorporate  by  reference  to
determine  if any of the  statements  in  this  prospectus  supplement  and  the
accompanying  prospectus or in any document previously incorporated by reference
have  been  modified  or  superseded.   This   prospectus   supplement  and  the
accompanying  prospectus incorporate by reference the documents listed below and
any future filings we make with the Commission  under Sections 13(a),  13(c), 14
or 15(d) of the  Securities  Exchange Act of 1934 until we complete our offering
of the notes to be issued under the  registration  statement  or, if later,  the
date on which any of our affiliates cease offering and selling these securities:

     (a) our Annual  Report on Form 10-K for the year ended  December  31,  2003
         (filed on February 18, 2004 as amended on June 28, 2004);

     (b) our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2004
         (filed on May 10,  2004) and June 30,  2004  (filed on August 9, 2004);
         and

     (c) our Current Reports on Form 8-K filed on January 28, 2004,  February 3,
         2004,  March 1, 2004,  March 4, 2004,  April 21, 2004 (but only Exhibit
         12.1  thereto),  May 3, 2004, May 11, 2004, May 14, 2004, May 27, 2004,
         June 3, 2004,  June 8, 2004, June 15, 2004, July 1, 2004 (as amended on
         July 30, 2004 and August 13,  2004),  July 8, 2004,  July 21, 2004 (two
         reports  filed),  September 8, 2004 and September 23, 2004 (two reports
         filed) (other than, in each case,  the portions of those  documents not
         deemed to be filed).

     You may request,  at no cost to you, a copy of these documents  (other than
exhibits  to such  documents)  by writing or  telephoning  us at:  Office of the
Secretary,  JPMorgan Chase & Co., 270 Park Avenue, New York, New York 10017-2070
(Telephone: (212) 270-4040).


                                      S-2
<PAGE>


                              JPMORGAN CHASE & CO.

     On July 1, 2004,  J.P. Morgan Chase & Co.  ("JPMorgan  Chase") and Bank One
Corporation  consummated  the  merger  of Bank  One  Corporation  with  and into
JPMorgan Chase.

     JPMorgan Chase is a financial holding company  incorporated  under Delaware
law in 1968.  JPMorgan Chase is one of the largest  banking  institutions in the
United States,  with more than $1 trillion in assets and operations in more than
50 countries.  Its principal  bank  subsidiaries  are JPMorgan Chase Bank, a New
York banking corporation,  Chase Manhattan Bank USA, National Association,  Bank
One Ohio,  N.A., Bank One Illinois,  N.A. and Bank One Delaware,  N.A.  JPMorgan
Chase's  principal  nonbank  subsidiary is its  investment  banking  subsidiary,
JPMorgan Securities. The bank and nonbank subsidiaries of JPMorgan Chase operate
nationally as well as through overseas branches and subsidiaries, representative
offices and affiliated banks.

     JPMorgan  Chase's  activities  are  internally  organized,  for  management
reporting purposes, into six major business segments:  Investment Bank; Treasury
& Securities  Services;  Asset & Wealth  Management;  Card Services;  Commercial
Banking; and Retail Financial Services.  The following is a brief description of
those businesses.

INVESTMENT BANK

     The Investment  Bank is one of the world's  leading  investment  banks with
broad client relationships and product capabilities.  JPMorgan Chase's customers
are  corporations,   financial   institutions,   governments  and  institutional
investors  worldwide.  The Investment Bank provides a complete  platform for its
clients, including advising on corporate strategy and structure, equity and debt
capital raising,  sophisticated  risk management,  research and market-making in
cash securities and derivative instruments around the world. The Investment Bank
also participates in proprietary investing and trading.

TREASURY & SECURITIES SERVICES

     Treasury & Securities Services is a global leader in providing transaction,
investment  and  information  services  to  support  the  needs of  issuers  and
investors  worldwide.  JPMorgan  Chase  is  one  of  the  world's  largest  cash
management providers and one of the world's largest custodians.

ASSET & WEALTH MANAGEMENT

     Asset  &  Wealth  Management  provides  investment  and  wealth  management
services  to  institutional,  high net  worth  and  retail  investors  and their
advisors.   For  wealthy   individuals  and  families,   JPMorgan  Chase  offers
personalized financial solutions that integrate investment  management,  capital
markets,  trust and banking  products.  JPMorgan Chase provides  retirement plan
services and brokerage for retail clients.

CARD SERVICES

     JPMorgan  Chase is the second  largest issuer of credit cards in the United
States and the largest merchant  acquirer.  JPMorgan Chase offers a wide variety
of cards to satisfy  the needs of its  cardmembers,  including  cards  issued on
behalf of major airlines, hotels,  universities,  top retailers, other financial
institutions and other well-known brands.

COMMERCIAL BANKING

     Commercial  Banking includes three client segments:  Middle Market Banking,
which  serves  companies  with  revenues  between $10 million and $500  million;
Mid-Corporate Banking, which focuses on clients with more significant Investment
Banking  needs;  and  Commercial  Real Estate.  Commercial  Banking also has two
product segments: Asset Based Lending and Commercial Leasing.


                                      S-3
<PAGE>


RETAIL FINANCIAL SERVICES

     Retail  Financial  Services  provides  consumer  banking,   small  business
banking,  auto and  education  finance,  insurance  and home  finance.  JPMorgan
Chase's  extensive  branch network of 2,400 retail banking  centers in 17 states
makes it the fourth-largest retail bank in the United States.  JPMorgan Chase is
one of the industry's  leading  providers of mortgages and home equity loans and
is the largest U.S. bank originator of auto loans and leases.

     Our principal executive office is located at 270 Park Avenue, New York, New
York 10017 and our telephone number is (212) 270-6000.


                                      S-4
<PAGE>


                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
                                     SIX MONTHS                 YEAR ENDED DECEMBER 31,
                                   ENDED JUNE 30,   ---------------------------------------------
                                        2004         2003     2002      2001      2000      1999
                                   --------------   ------   ------    ------    ------    ------
<S>                                     <C>          <C>      <C>       <C>       <C>       <C>
Earnings to Fixed Charges:
  Excluding Interest on Deposits        1.46         2.27     1.28      1.18      1.52      1.93
  Including Interest on Deposits        1.32         1.87     1.17      1.11      1.31      1.54

</TABLE>


     For purposes of computing the above ratios,  earnings  represent net income
from  continuing  operations plus total taxes based on income and fixed charges.
Fixed charges,  excluding interest on deposits,  include interest expense (other
than on  deposits),  one-third  (the  proportion  deemed  representative  of the
interest  factor)  of  rents,  net of income  from  subleases,  and  capitalized
interest.  Fixed charges,  including interest on deposits,  include all interest
expense, one-third (the proportion deemed representative of the interest factor)
of rents, net of income from subleases, and capitalized interest.


                                      S-5
<PAGE>


                             FOREIGN CURRENCY RISKS

     YOU SHOULD  CONSULT YOUR  FINANCIAL  AND LEGAL  ADVISORS AS TO ANY SPECIFIC
RISKS ENTAILED BY AN INVESTMENT IN NOTES, WARRANTS OR UNITS THAT ARE DENOMINATED
OR  PAYABLE  IN, OR THE  PAYMENT  OF WHICH IS  LINKED  TO THE VALUE OF,  FOREIGN
CURRENCY.  THESE NOTES,  WARRANTS OR UNITS ARE NOT  APPROPRIATE  INVESTMENTS FOR
INVESTORS WHO ARE NOT SOPHISTICATED IN FOREIGN CURRENCY TRANSACTIONS.

     The  information  set forth in this  prospectus  supplement  is directed to
prospective  purchasers  who  are  United  States  residents.  We  disclaim  any
responsibility to advise  prospective  purchasers who are residents of countries
other than the United  States of any matters  arising under foreign law that may
affect the  purchase of or holding of, or the receipt of payments on, the notes,
warrants or units.  These persons  should  consult their own legal and financial
advisors concerning these matters.

EXCHANGE RATES AND EXCHANGE CONTROLS MAY AFFECT THE SECURITIES' VALUE OR RETURN

     GENERAL  EXCHANGE RATE AND EXCHANGE CONTROL RISKS. An investment in a note,
warrant or unit that is  denominated  or payable  in, or the payment of which is
linked to the value of,  currencies other than U.S. dollars entails  significant
risks.  These risks include the  possibility of significant  changes in rates of
exchange  between the U.S.  dollar and the relevant  foreign  currencies and the
possibility of the imposition or modification of exchange controls by either the
U.S. or foreign  governments.  These  risks  generally  depend on  economic  and
political events over which we have no control.

     EXCHANGE  RATES WILL  AFFECT YOUR  INVESTMENT.  In recent  years,  rates of
exchange  between  U.S.  dollars and some  foreign  currencies  have been highly
volatile and this  volatility  may continue in the future.  Fluctuations  in any
particular  exchange  rate that have  occurred  in the past are not  necessarily
indicative, however, of fluctuations that may occur during the term of any note,
warrant or unit. Depreciation against the U.S. dollar of the currency in which a
note,  warrant or unit is payable  would  result in a decrease in the  effective
yield of the note below its coupon rate or in the payout of the note, warrant or
unit and could  result in an  overall  loss to you on a U.S.  dollar  basis.  In
addition,  depending on the specific terms of a currency-linked note, changes in
exchange  rates  relating to any of the  relevant  currencies  could result in a
decrease in its effective yield and in your loss of all or a substantial portion
of the value of that note.

     THERE  MAY  BE  SPECIFIC   EXCHANGE  RATE  RISKS  APPLICABLE  TO  WARRANTS.
Fluctuations  in the  rates of  exchange  between  U.S.  dollars  and any  other
currency (i) in which the exercise price of a warrant is payable,  (ii) in which
the  value  of the  property  underlying  a  warrant  is  quoted  or (iii) to be
purchased or sold by exercise of a warrant or in the rates of exchange among any
of these  foreign  currencies  may  change the value of a warrant or a unit that
includes a warrant. You could lose money on your investment as a result of these
fluctuations, even if the spot price of the property underlying the warrant were
such that the warrant appeared to be "in the money."

     WE HAVE NO CONTROL OVER EXCHANGE RATES.  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  and to each  other.  However,  from time to time  governments  may use a
variety of techniques,  such as  intervention  by a country's  central bank, the
imposition  of  regulatory  controls  or taxes or changes in  interest  rates to
influence the exchange rates 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 a devaluation or revaluation of a currency.
These  governmental  actions could change or interfere with currency  valuations
and currency  fluctuations  that would  otherwise  occur in response to economic
forces, as well as in response to the movement of currencies across borders.  As
a  consequence,  these  government  actions  could  adversely  affect  the  U.S.
dollar-equivalent  yields or  payouts  for (i) notes  denominated  or payable in
currencies other than U.S. dollars,  (ii) currency-linked  notes, (iii) warrants
where the exercise price is denominated in a foreign currency or where the value
of the property underlying the warrants is quoted in a foreign currency and (iv)
warrants to purchase or sell foreign currency.

     We will  not make any  adjustment  or  change  in the  terms of the  notes,
warrants or 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 foreign currency. You will bear those risks.


                                      S-6
<PAGE>


     SOME FOREIGN  CURRENCIES MAY BECOME  UNAVAILABLE.  Governments have imposed
from time to time,  and may in the future impose,  exchange  controls that could
also affect the availability of a specified foreign currency.  Even if there are
no actual exchange controls, it is possible that the applicable currency for any
security not denominated in U.S. dollars would not be available when payments on
that security are due.

     ALTERNATIVE PAYMENT METHOD USED IF PAYMENT CURRENCY BECOMES UNAVAILABLE. If
a payment  currency  is  unavailable,  we would make  required  payments in U.S.
dollars on the basis of the market  exchange  rate.  However,  if the applicable
currency for any security is not available because the euro has been substituted
for that currency, we would make the payments in euro. The mechanisms for making
payments in these alternative  currencies are explained in "Description of Notes
-- Interest and Principal Payments" below.

     WE WILL PROVIDE CURRENCY EXCHANGE INFORMATION IN PRICING  SUPPLEMENTS.  The
applicable  pricing  supplement  will  include  information   regarding  current
applicable exchange controls, if any, and historic exchange rate information for
any note,  warrant  or unit  denominated  or payable  in a foreign  currency  or
requiring  payments  that are related to the value of a foreign  currency.  That
information  will be furnished  only for  information  purposes.  You should not
assume that any historic information  concerning currency exchange rates will be
representative  of the range of or trends in fluctuations  in currency  exchange
rates that may occur in the future.

CURRENCY CONVERSIONS MAY AFFECT PAYMENTS ON SOME SECURITIES

     The  applicable  pricing  supplement  may  provide  for (i)  payments  on a
non-U.S.  dollar denominated note, warrant or unit to be made in U.S. dollars or
(ii) payments on a U.S. dollar denominated note, warrant or unit to be made in a
currency  other than U.S.  dollars.  In these  cases,  the  exchange  rate agent
identified in the pricing supplement will convert the currencies.  You will bear
the costs of conversion through deductions from those payments.

EXCHANGE  RATES MAY AFFECT THE VALUE OF A NEW YORK JUDGMENT  INVOLVING  NON-U.S.
DOLLAR SECURITIES

     The  notes,  warrants  and  units  will be  governed  by and  construed  in
accordance  with the laws of the State of New York.  Unlike  many  courts in the
United States outside the State of New York, the courts in the State of New York
customarily enter judgments or decrees for money damages in the foreign currency
in which notes, warrants and units are denominated.  These amounts would then be
converted  into U.S.  dollars at the rate of  exchange in effect on the date the
judgment or decree is entered.  You would bear the foreign  currency risk during
litigation.

ADDITIONAL  RISKS  SPECIFIC TO PARTICULAR  SECURITIES  ISSUED UNDER OUR SERIES E
PROGRAM WILL BE DETAILED IN THE APPLICABLE PRICING SUPPLEMENTS.


                                      S-7
<PAGE>


                              DESCRIPTION OF NOTES

     INVESTORS  SHOULD  CAREFULLY  READ THE GENERAL TERMS AND  PROVISIONS OF OUR
DEBT  SECURITIES IN "DESCRIPTION  OF DEBT  SECURITIES" IN THE  PROSPECTUS.  THIS
SECTION  SUPPLEMENTS THAT DESCRIPTION.  THE PRICING SUPPLEMENT WILL ADD SPECIFIC
TERMS  FOR  EACH  ISSUANCE  OF  NOTES  AND  MAY  MODIFY  OR  REPLACE  ANY OF THE
INFORMATION  IN THIS  SECTION AND IN  "DESCRIPTION  OF DEBT  SECURITIES"  IN THE
PROSPECTUS. IF A NOTE IS OFFERED AS PART OF A UNIT, INVESTORS SHOULD ALSO REVIEW
THE  INFORMATION  IN  "DESCRIPTION  OF  UNITS"  IN THE  PROSPECTUS  AND IN  THIS
PROSPECTUS SUPPLEMENT.

GENERAL TERMS OF NOTES

     We may issue notes under an Indenture  dated May 25,  2001,  between us and
Deutsche  Bank Trust  Company  Americas,  formerly  Bankers  Trust  Company,  as
trustee. We refer to the Indenture, as may be supplemented from time to time, as
the "Indenture." The Series E medium-term  notes issued under the Indenture will
constitute a single series under the  Indenture,  together with any  medium-term
notes  we have  issued  in the past or that we issue  in the  future  under  the
Indenture  that we  designate  as being part of that  series.  We may create and
issue  additional  notes with the same terms as previous  issuances  of Series E
medium-term  notes,  so that the additional  notes will be considered as part of
the same issuance as the earlier notes.

     OUTSTANDING  INDEBTEDNESS OF THE COMPANY.  The Indenture does not limit the
amount of additional  indebtedness  that we may incur.  At June 30, 2004, we had
approximately   $197,846,000  aggregate  principal  amount  of  debt  securities
outstanding under the Indenture.

     RANKING.  Notes issued under the Indenture  will  constitute  unsecured and
unsubordinated  obligations  of the  Company  and rank pari  passu  without  any
preference  among  them and with all other  present  and  future  unsecured  and
unsubordinated obligations of the Company.

     TERMS SPECIFIED IN PRICING  SUPPLEMENTS.  A pricing supplement will specify
the  following  terms of any issuance of our Series E  medium-term  notes to the
extent applicable:

     o    the specific designation of the notes;

     o    the issue price (price to public);

     o    the aggregate principal amount;

     o    the denominations or minimum denominations;

     o    the original issue date;

     o    the stated maturity date and any terms related to any extension of the
          maturity date;

     o    whether the notes are fixed rate notes,  floating  rate notes or notes
          with original issue discount;

     o    for fixed rate  notes,  the rate per year at which the notes will bear
          interest, if any, or the method of calculating that rate and the dates
          on which interest will be payable;

     o    for  floating  rate  notes,  the base rate,  the index  maturity,  the
          spread, the spread multiplier, the initial interest rate, the interest
          reset periods,  the interest payment dates, the maximum interest rate,
          the  minimum  interest  rate  and  any  other  terms  relating  to the
          particular method of calculating the interest rate for the note;

     o    whether the notes may be redeemed,  in whole or in part, at our option
          or repaid at your option,  prior to the stated  maturity date, and the
          terms of any redemption or repayment;

     o    whether the notes are  currency-linked  notes  and/or  notes linked to
          commodities,  rates, debt or equity securities or other debt or equity
          instruments of entities  affiliated or not affiliated with us, baskets
          of  those  securities  or an  index or  indices  of those  securities,
          quantitative  measures  associated  with an  occurrence,  extent of an
          occurrence, or contingency associated with a financial, commercial, or
          economic consequence,  or economic or financial indices or measures of
          economic or financial risk or value;

     o    the terms on which  holders of the notes may convert or exchange  them
          into or for stock or other  securities  of entities  affiliated or not
          affiliated  with us, or for the cash value of any of these  securities
          or for any


                                      S-8
<PAGE>


          other property,  any specific terms relating to the  adjustment of the
          conversion or exchange feature and the period during which the holders
          may effect the conversion or exchange;

     o    if any  note is not  denominated  and  payable  in U.S.  dollars,  the
          currency or currencies in which the  principal,  premium,  if any, and
          interest,  if any, will be paid,  which we refer to as the  "specified
          currency," along with any other terms relating to the non-U.S.  dollar
          denomination,  including  exchange rates as against the U.S. dollar at
          selected  times during the last five years and any  exchange  controls
          affecting that specified currency;

     o    whether and under what circumstances we will pay additional amounts on
          the notes for any tax,  assessment or governmental  charge withheld or
          deducted  and, if so,  whether we will have the option to redeem those
          debt securities rather than pay the additional amounts;

     o    whether the notes will be listed on any stock exchange;

     o    whether the notes will be issued in book-entry or certificated form;

     o    if the notes are in book-entry form, whether the notes will be offered
          on a global  basis to investors  through  Euroclear  and  Clearstream,
          Luxembourg as well as through the Depositary  (each as defined below);
          and

     o    any other terms on which we will issue the notes.

     SOME DEFINITIONS.  We have defined some of the terms that we use frequently
in this prospectus supplement below:

     A "business day" means any day,  other than a Saturday or Sunday,  (i) that
is  neither  a  legal  holiday  nor a day  on  which  banking  institutions  are
authorized or required by law or  regulation to close (a) for all notes,  in The
City of New York, (b) for notes  denominated in a specified  currency other than
U.S. dollars,  euro or Australian  dollars, in the principal financial center of
the country of the specified currency or (c) for notes denominated in Australian
dollars, in Sydney; and (ii) for notes denominated in euro, a day that is also a
TARGET Settlement Day.

     "Clearstream, Luxembourg" means Clearstream Banking, societe anonyme.

     "Depositary" means The Depository Trust Company, New York, New York.

     "Euro LIBOR notes" means LIBOR notes for which the index currency is euros.

     "Euroclear  operator" means  Euroclear Bank  S.A./N.V.,  as operator of the
Euroclear System.

     An "interest  payment  date" for any note means a date on which,  under the
terms of that note, regularly scheduled interest is payable.

     "London  banking  day" means any day on which  dealings  in deposits in the
relevant index currency are transacted in the London interbank market.

     The "record  date" for any  interest  payment  date is the date 15 calendar
days prior to that interest payment date, whether or not that date is a business
day, unless another date is specified in the applicable pricing supplement.

     "TARGET Settlement Day" means any day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer System ("TARGET") is open.

     References in this  prospectus  supplement to "U.S.  dollar," or "U.S.$" or
"$" are to the currency of the United States of America.

FORMS OF NOTES

     We will offer the notes on a continuing  basis and will issue notes only in
fully  registered form either as book-entry  notes or as certificated  notes. We
may issue the notes either alone or as part of a unit.  References  to "holders"
mean those who own notes  registered in their own names, on the books that we or
the  trustee  maintain  for  this  purpose,  and not  those  who own  beneficial
interests in notes  registered  in street name or in notes issued in  book-entry
form through one or more depositaries.


                                      S-9
<PAGE>


     BOOK-ENTRY  NOTES.  For notes in book-entry form, we will issue one or more
global certificates  representing the entire issue of notes. Except as set forth
in the prospectus under "Forms of Securities -- Global  Securities," you may not
exchange  book-entry  notes or interests in  book-entry  notes for  certificated
notes.

     Each  global  note  certificate   representing  book-entry  notes  will  be
deposited  with, or on behalf of, the  Depositary  and registered in the name of
the  Depositary  or  nominee  of the  Depositary.  These  certificates  name the
Depositary or its nominee as the owner of the notes. The Depositary  maintains a
computerized  system that will reflect the interests held by its participants in
the global  notes.  An investor's  beneficial  interest will be reflected in the
records of the Depositary's direct or indirect  participants  through an account
maintained by the investor with its broker/dealer,  bank, trust company or other
representative.  A further description of the Depositary's procedures for global
notes representing  book-entry notes is set forth in the prospectus under "Forms
of Securities -- Global  Securities."  The  Depositary  has confirmed to us, the
agents and the trustee that it intends to follow these procedures.

     CERTIFICATED NOTES. If we issue notes in certificated form, the certificate
will name the investor or the  investor's  nominee as the owner of the note. The
person named in the note register  will be considered  the owner of the note for
all purposes under the Indenture.  For example, if we need to ask the holders of
the notes to vote on a proposed  amendment to the notes, the person named in the
note  register will be asked to cast any vote  regarding  that note. If you have
chosen to have some other entity hold the certificates for you, that entity will
be considered the owner of your note in our records and will be entitled to cast
the vote  regarding  your  note.  You may not  exchange  certificated  notes for
book-entry notes or interests in book-entry notes.

     DENOMINATIONS. We will issue the notes:

     o    for U.S.  dollar-denominated  notes, in denominations of $1,000 or any
          amount greater than $1,000 that is an integral multiple of $1,000; or

     o    for notes denominated in a specified currency other than U.S. dollars,
          in denominations  of the equivalent of $1,000,  rounded to an integral
          multiple  of 1,000  units of the  specified  currency,  or any  larger
          integral  multiple  of  1,000  units  of the  specified  currency,  as
          determined by reference to the market  exchange rate, as defined under
          "--  Interest  and  Principal  Payments --  Unavailability  of Foreign
          Currency" below, on the business day immediately preceding the date of
          issuance.

     NEW YORK LAW TO GOVERN.  The notes will be governed  by, and  construed  in
accordance with, the laws of the State of New York.

INTEREST AND PRINCIPAL PAYMENTS

     PAYMENTS, EXCHANGES AND TRANSFERS. Holders may present notes for payment of
principal,  premium, if any, and interest,  if any, register the transfer of the
notes  and  exchange  the notes at  JPMorgan  Chase  Bank,  acting  through  its
corporate  trust office at 4 New York Plaza,  New York,  New York 10004,  as our
current agent for the payment,  transfer and exchange of the notes.  We refer to
JPMorgan  Chase Bank,  acting in this  capacity,  as the paying agent.  However,
holders of global  notes may  transfer  and  exchange  global  notes only in the
manner  and to the  extent  set  forth  under  "Forms  of  Securities  -- Global
Securities" in the prospectus.

     We will not be required to:

     o    register  the  transfer  or  exchange  of any note if the  holder  has
          exercised the holder's  right, if any, to require us to repurchase the
          note, in whole or in part, except the portion of the note not required
          to be repurchased;

     o    register the transfer or exchange of notes to be redeemed for a period
          of fifteen  calendar days preceding the mailing of the relevant notice
          of redemption; or

     o    register the transfer or exchange of any registered  note selected for
          redemption  in whole or in  part,  except  the  unredeemed  or  unpaid
          portion of that registered note being redeemed in part.

     No service charge will be made for any registration or transfer or exchange
of notes,  but we may require  payment of a sum  sufficient  to cover any tax or
other  governmental  charge  payable  in  connection  with the  registration  of
transfer or exchange of notes.


                                      S-10
<PAGE>


     Although we anticipate making payments of principal,  premium,  if any, and
interest,  if any, on most notes in U.S.  dollars,  some notes may be payable in
foreign currencies as specified in the applicable pricing supplement. Currently,
few facilities  exist in the United States to convert U.S.  dollars into foreign
currencies  and vice versa.  In addition,  most U.S. banks do not offer non-U.S.
dollar denominated checking or savings account facilities.  Accordingly,  unless
alternative  arrangements are made, we will pay principal,  premium, if any, and
interest,  if any, on notes that are payable in a foreign currency to an account
at a bank  outside the United  States,  which,  in the case of a note payable in
euro,  will be made by credit or transfer  to a euro  account  specified  by the
payee in a country for which the euro is the lawful currency.

     RECIPIENTS OF PAYMENTS. The paying agent will pay interest to the person in
whose name the note is  registered  at the close of business  on the  applicable
record date. However, upon maturity,  redemption or repayment,  the paying agent
will pay any  interest  due to the person to whom it pays the  principal  of the
note.  The  paying  agent  will  make the  payment  of  interest  on the date of
maturity,  redemption  or  repayment,  whether  or not that date is an  interest
payment date. The paying agent will make the initial  interest payment on a note
on the first  interest  payment date falling after the date of issuance,  unless
the date of issuance is less than 15  calendar  days before an interest  payment
date.  In that case,  the paying agent will pay interest on the next  succeeding
interest  payment date to the holder of record on the record date  corresponding
to the succeeding interest payment date.

     BOOK-ENTRY  NOTES.  The  paying  agent  will make  payments  of  principal,
premium,  if any, and  interest,  if any, to the account of the  Depositary,  as
holder of book-entry notes, by wire transfer of immediately  available funds. We
expect that the Depositary, upon receipt of any payment, will immediately credit
its  participants'   accounts  in  amounts  proportionate  to  their  respective
beneficial  interests  in the  book-entry  notes as shown on the  records of the
Depositary.  We also expect that payments by the  Depositary's  participants  to
owners of  beneficial  interests  in the  book-entry  notes will be  governed by
standing  customer   instructions  and  customary  practices  and  will  be  the
responsibility of those participants.

     CERTIFICATED  NOTES.  Except as indicated below for payments of interest at
maturity,  redemption  or  repayment,  the paying  agent  will make U.S.  dollar
payments of interest either:

     o    by check  mailed to the  address of the person  entitled to payment as
          shown on the note register; or

     o    for a holder of at least $10,000,000 in aggregate  principal amount of
          certificated  notes having the same  interest  payment  date,  by wire
          transfer  of  immediately  available  funds,  if the  holder has given
          written  notice to the paying  agent not later than 15  calendar  days
          prior to the applicable interest payment date.

     U.S. dollar payments of principal,  premium, if any, and interest,  if any,
upon  maturity,  redemption  or repayment on a note will be made in  immediately
available funds against presentation and surrender of the note.

     PAYMENT  PROCEDURES FOR BOOK-ENTRY NOTES DENOMINATED IN A FOREIGN CURRENCY.
Book-entry  notes payable in a specified  currency other than U.S.  dollars will
provide that a beneficial owner of interests in those notes may elect to receive
all or a portion of the payments of principal,  premium, if any, or interest, if
any, in U.S.  dollars.  In those cases, the Depositary will elect to receive all
payments with respect to the  beneficial  owner's  interest in the notes in U.S.
dollars, unless the beneficial owner takes the following steps:

     o    The beneficial owner must give complete  instructions to the direct or
          indirect  participant  through which it holds the book-entry  notes of
          its election to receive those payments in the specified currency other
          than U.S.  dollars by wire  transfer  to an account  specified  by the
          beneficial owner with a bank located outside the United States. In the
          case of a note payable in euro,  the account must be a euro account in
          a country for which the euro is the lawful currency.

     o    The participant  must notify the Depositary of the beneficial  owner's
          election on or prior to the third  business  day after the  applicable
          record date, for payments of interest,  and on or prior to the twelfth
          business day prior to the maturity date or any redemption or repayment
          date, for payment of principal or premium.

     o    The Depositary will notify the paying agent of the beneficial  owner's
          election on or prior to the fifth  business  day after the  applicable
          record date,  for  payments of interest,  and on or prior to the tenth
          business day prior to the maturity date or any redemption or repayment
          date, for payment of principal or premium.


                                      S-11
<PAGE>


     Beneficial  owners should consult their  participants in order to ascertain
the deadline for giving  instructions  to  participants  in order to ensure that
timely notice will be delivered to the Depositary.

     PAYMENT   PROCEDURES  FOR  CERTIFICATED  NOTES  DENOMINATED  IN  A  FOREIGN
CURRENCY. For certificated notes payable in a specified currency other than U.S.
dollars,  the notes may  provide  that the holder may elect to receive  all or a
portion of the  payments  on those notes in U.S.  dollars.  To do so, the holder
must send a written request to the paying agent:

     o    for payments of interest,  on or prior to the fifth business day after
          the applicable record date; or

     o    for payments of  principal,  at least ten  business  days prior to the
          maturity date or any redemption or repayment date.

     To  revoke  this  election  for all or a  portion  of the  payments  on the
certificated notes, the holder must send written notice to the paying agent:

     o    at least five business days prior to the  applicable  record date, for
          payment of interest; or

     o    at  least  ten  calendar  days  prior  to  the  maturity  date  or any
          redemption or repayment date, for payments of principal.

     If the holder does not elect to be paid in U.S.  dollars,  the paying agent
will  pay  the  principal,  premium,  if  any,  or  interest,  if  any,  on  the
certificated notes:

     o    by wire  transfer  of  immediately  available  funds in the  specified
          currency to the holder's  account at a bank located outside the United
          States,  and in the case of a note  payable in euro,  in a country for
          which  the  euro is the  lawful  currency,  if the  paying  agent  has
          received the holder's written wire transfer instructions not less than
          15 calendar days prior to the applicable payment date; or

     o    by check  payable in the specified  currency  mailed to the address of
          the person entitled to payment that is specified in the note register,
          if the holder has not provided wire instructions.

However, the paying agent will pay only the principal of the certificated notes,
any premium and  interest,  if any, due at  maturity,  or on any  redemption  or
repayment date, upon surrender of the certificated notes at the office or agency
of the paying agent.

     DETERMINATION  OF  EXCHANGE  RATE FOR  PAYMENTS  IN U.S.  DOLLARS FOR NOTES
DENOMINATED  IN A FOREIGN  CURRENCY.  The exchange rate agent  identified in the
relevant  pricing  supplement  will  convert the  specified  currency  into U.S.
dollars  for  holders  who elect to receive  payments  in U.S.  dollars  and for
beneficial  owners of book-entry notes that do not follow the procedures we have
described  immediately  above.  The conversion  will be based on the highest bid
quotation  in The  City of New  York  received  by the  exchange  rate  agent at
approximately  11:00  a.m.,  New York City  time,  on the  second  business  day
preceding the applicable  payment date from three  recognized  foreign  exchange
dealers for the purchase by the quoting dealer:

     o    of the  specified  currency  for U.S.  dollars for  settlement  on the
          payment date;

     o    in the  aggregate  amount of the specified  currency  payable to those
          holders or beneficial owners of notes; and

     o    at which the applicable dealer commits to execute a contract.

One of the dealers  providing  quotations  may be the exchange rate agent unless
the  exchange  rate  agent is our  affiliate.  If those bid  quotations  are not
available,  payments  will be made in the  specified  currency.  The  holders or
beneficial  owners of notes will pay all currency  exchange  costs by deductions
from the amounts payable on the notes.

     UNAVAILABILITY OF FOREIGN CURRENCY. The relevant specified currency may not
be available  to us for making  payments of principal  of,  premium,  if any, or
interest,  if any,  on any  note.  This  could  occur due to the  imposition  of
exchange controls or other circumstances  beyond our control or if the specified
currency  is no  longer  used by the  government  of the  country  issuing  that
currency or by public  institutions  within the international  banking community
for the settlement of transactions. If the specified currency is unavailable, we
may satisfy our


                                      S-12
<PAGE>


obligations  to holders  of the notes by making  those  payments  on the date of
payment in U.S.  dollars on the basis of the noon dollar buying rate in The City
of New York for cable transfers of the currency or currencies in which a payment
on any note was to be made,  published by the Federal  Reserve Bank of New York,
which we refer to as the "market exchange rate." If that rate of exchange is not
then available or is not published for a particular payment currency, the market
exchange rate will be based on the highest bid quotation in The City of New York
received by the exchange rate agent at  approximately  11:00 a.m., New York City
time,  on the second  business day preceding  the  applicable  payment date from
three  recognized  foreign  exchange  dealers  for the  purchase  by the quoting
dealer:

     o    of the  specified  currency  for U.S.  dollars for  settlement  on the
          payment date;

     o    in the  aggregate  amount of the specified  currency  payable to those
          holders or beneficial owners of notes; and

     o    at which the applicable dealer commits to execute a contract.

One of the dealers  providing  quotations  may be the exchange rate agent unless
the  exchange  rate  agent is our  affiliate.  If those bid  quotations  are not
available,  the exchange rate agent will  determine the market  exchange rate at
its sole discretion.

     These  provisions  do not  apply if a  specified  currency  is  unavailable
because it has been replaced by the euro. If the euro has been substituted for a
specified  currency,  we may at our option,  or will,  if required by applicable
law, without the consent of the holders of the affected notes, pay the principal
of,  premium,  if any,  or  interest,  if any,  on any note  denominated  in the
specified currency in euro instead of the specified currency, in conformity with
legally  applicable  measures  taken  pursuant  to, or by virtue  of, the Treaty
establishing the European Community, as amended by the treaty on European Union.
Any  payment  made in U.S.  dollars  or in euro as  described  above  where  the
required payment is in an unavailable  specified currency will not constitute an
event of default.

     DISCOUNT  NOTES.  Some notes may be  considered  to be issued with original
issue  discount,  which must be  included  in income for United  States  federal
income tax purposes at a constant yield.  See "United States Federal Taxation --
Notes -- Discount  Notes" below. If the principal of any note that is considered
to be issued  with  original  issue  discount  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 on that note
will be limited to:

     o    the aggregate principal amount of the note multiplied by the sum of

     o    its issue price,  expressed as a percentage of the aggregate principal
          amount, plus

     o    the original  issue  discount  amortized from the date of issue to the
          date  of  declaration,  expressed  as a  percentage  of the  aggregate
          principal amount.

The  amortization  will be calculated using the "interest  method,"  computed in
accordance with generally accepted  accounting  principles in effect on the date
of  declaration.   See  the  applicable   pricing  supplement  for  any  special
considerations applicable to these notes.

FIXED RATE NOTES

     Each fixed rate note will bear  interest  from the date of  issuance at the
annual rate stated on its face until the principal is paid or made available for
payment.

     HOW INTEREST IS  CALCULATED.  Interest on fixed rate notes will be computed
on the basis of a 360-day year of twelve 30-day months.

     HOW  INTEREST  ACCRUES.  Interest  on fixed rate notes will accrue from and
including the most recent interest  payment date to which interest has been paid
or duly  provided  for, or, if no interest has been paid or duly  provided  for,
from and  including  the issue  date or any other  date  specified  in a pricing
supplement  on which  interest  begins to accrue.  Interest  will  accrue to but
excluding the next interest payment date, or, if earlier,  the date on which the
principal has been paid or duly made available for payment,  except as described
below under "-- If a Payment Date Is Not a Business Day."


                                      S-13
<PAGE>


     WHEN  INTEREST  IS PAID.  Payments  of interest on fixed rate notes will be
made  on  the  interest  payment  dates  specified  in  the  applicable  pricing
supplement.  However,  if the first  interest  payment date is less than 15 days
after the date of  issuance,  interest  will not be paid on the  first  interest
payment date, but will be paid on the second interest payment date.

     AMOUNT OF INTEREST  PAYABLE.  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 relevant  interest payment date or date of maturity
or earlier redemption or repayment, as the case may be.

     IF A PAYMENT DATE IS NOT A BUSINESS DAY. If any scheduled  interest payment
date is not a business  day, we will pay interest on the next  business day, but
interest on that  payment  will not accrue  during the period from and after the
scheduled  interest  payment  date.  If the  scheduled  maturity date or date of
redemption or repayment is not a business day, we may pay interest,  if any, and
principal and premium, if any, on the next succeeding business day, but interest
on that payment will not accrue  during the period from and after the  scheduled
maturity date or date of redemption or repayment.

FLOATING RATE NOTES

     Each floating rate note will mature on the date specified in the applicable
pricing supplement.

     Each floating rate note will bear interest at a floating rate determined by
reference to an interest rate or interest rate formula, which we refer to as the
"base rate." The base rate may be one or more of the following:

     o    the CD rate,

     o    the commercial paper rate,

     o    EURIBOR,

     o    the federal funds rate,

     o    LIBOR,

     o    the prime rate,

     o    the Treasury rate,

     o    the CMT rate, or

     o    any other rate or interest  rate formula  specified in the  applicable
          pricing supplement and in the floating rate note.

     FORMULA FOR INTEREST  RATES.  The interest  rate on each floating rate note
will be calculated by reference to:

     o    the specified base rate based on the index maturity,

     o    plus or minus the spread, if any, and/or

     o    multiplied by the spread multiplier, if any.

     For any floating rate note,  "index  maturity" means 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. 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
for a floating rate note. The "spread multiplier" is the percentage specified in
the applicable  pricing supplement to be applied to the base rate for a floating
rate note.  The  interest  rate on any inverse  floating  rate note will also be
calculated by reference to a fixed rate.

     LIMITATIONS  ON INTEREST RATE. A floating rate note may also have either or
both of the following limitations on the interest rate:

     o    a maximum  limitation,  or ceiling,  on the rate of interest which may
          accrue during any interest  period,  which we refer to as the "maximum
          interest rate"; and/or


                                      S-14
<PAGE>


     o    a minimum  limitation,  or  floor,  on the rate of  interest  that may
          accrue during any interest  period,  which we refer to as the "minimum
          interest rate."

Any applicable  maximum interest rate or minimum interest rate will be set forth
in the applicable pricing supplement.

     In addition,  the interest  rate on a floating  rate note may not be higher
than the maximum rate permitted by New York law, as that rate may be modified by
United  States law of  general  application.  Under  current  New York law,  the
maximum rate of interest,  subject to some exceptions, for any loan in an amount
less than $250,000 is 16% and for any loan in the amount of $250,000 or more but
less than $2,500,000 is 25% per annum on a simple  interest basis.  These limits
do not apply to loans of $2,500,000 or more.

     HOW FLOATING INTEREST RATES ARE RESET. The interest rate in effect from the
date of issue to the first  interest reset date for a floating rate note will be
the initial  interest rate specified in the applicable  pricing  supplement.  We
refer to this rate as the "initial  interest  rate." The  interest  rate on each
floating rate note may be reset daily, weekly, monthly, quarterly,  semiannually
or annually.  This period is the  "interest  reset  period" and the first day of
each  interest  reset  period  is  the  "interest  reset  date."  The  "interest
determination date" for any interest reset date is the day the calculation agent
identified in the applicable  pricing  supplement will refer to when determining
the new interest rate at which a floating rate will reset,  and is applicable as
follows:

     o    for  federal  funds  rate  notes and prime rate  notes,  the  interest
          determination  date will be on the  business day prior to the interest
          rate reset date;

     o    for CD rate notes,  commercial paper rate notes,  prime rate notes and
          CMT rate notes,  the  interest  determination  date will be the second
          business day prior to the interest reset date;

     o    for EURIBOR notes or Euro LIBOR notes, the interest determination date
          will be the second TARGET  Settlement  Day, as defined above under "--
          General  Terms of Notes -- Some  Definitions,"  prior to the  interest
          reset date;

     o    for  LIBOR  notes  (other  than  Euro  LIBOR   notes),   the  interest
          determination  date will be the second London banking day prior to the
          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 the interest reset date; and

     o    for Treasury rate notes, the interest  determination  date will be the
          day of the  week in  which  the  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 the auction may be held on the preceding Friday. If, as
the result of a legal holiday, the auction is held on the preceding Friday, that
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,  that  interest  reset date will be the next  following
business day.

     The  interest  reset  dates will be  specified  in the  applicable  pricing
supplement.  If an interest reset date for any floating rate note falls on a day
that is not a business day, it will be postponed to the following  business day,
except that, in the case of a EURIBOR note or a LIBOR note, if that business day
is in the next calendar  month,  the interest reset date will be the immediately
preceding business day.

     The interest rate in effect for the ten calendar days immediately  prior to
maturity,  redemption  or  repayment  will be the  one in  effect  on the  tenth
calendar day preceding the maturity, redemption or repayment date.

     In the detailed  descriptions  of the various base rates which follow,  the
"calculation  date"  pertaining  to an  interest  determination  date  means the
earlier of (i) the tenth  calendar day after that interest  determination  date,
or, if that day is not a business  day, the next  succeeding  business  day, and
(ii) the business day immediately preceding the applicable interest payment date
or maturity  date or, for any  principal  amount to be  redeemed or repaid,  any
redemption or repayment date.

     HOW  INTEREST IS  CALCULATED.  Interest on floating  rate notes will accrue
from and including the most recent  interest  payment date to which interest has
been paid or duly provided for, or, if no interest has been paid or duly


                                      S-15
<PAGE>


provided for, from and including the issue date or any other date specified in a
pricing  supplement on which interest begins to accrue.  Interest will accrue to
but excluding the next interest  payment date or, if earlier,  the date on which
the  principal  has been  paid or duly made  available  for  payment,  except as
described below under "-- If a Payment Date Is Not a Business Day."

     The applicable  pricing supplement will specify a calculation agent for 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 for that floating rate note.

     For  a  floating  rate  note,   accrued  interest  will  be  calculated  by
multiplying  the  principal  amount  of the  floating  rate  note by an  accrued
interest  factor.  This accrued  interest  factor will be computed by adding the
interest  factors  calculated  for each day in the period for which  interest is
being  paid.  The  interest  factor for each day is  computed  by  dividing  the
interest rate applicable to that day:

     o    by 360,  in the case of CD rate  notes,  commercial  paper rate notes,
          EURIBOR notes, federal funds rate notes, LIBOR notes (except for LIBOR
          notes denominated in pounds sterling) and prime rate notes;

     o    by 365, in the case of LIBOR notes denominated in pounds sterling; or

     o    by the actual number of days in the year, in the case of Treasury rate
          notes and CMT rate notes.

For these  calculations,  the interest rate in effect on any interest reset date
will be the applicable  rate as reset on that 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.

     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 (with  0.000005%  rounded up to
0.00001%),  and  all  U.S.  dollar  amounts  used  in or  resulting  from  these
calculations  on floating  rate notes will be rounded to the nearest  cent (with
one-half  cent  rounded  upward).  All Japanese Yen amounts used in or resulting
from  these  calculations  will be  rounded  downward  to the next  lower  whole
Japanese Yen amount.  All amounts  denominated  in any other currency used in or
resulting  from these  calculations  will be rounded to the  nearest two decimal
places in that currency with 0.005 being rounded upward to 0.01.

     WHEN  INTEREST IS PAID.  We will pay interest on floating rate notes on the
interest payment dates specified in the applicable pricing supplement.  However,
if the  first  interest  payment  date is less  than 15 days  after  the date of
issuance, interest will not be paid on the first interest payment date, but will
be paid on the second interest payment date.

     IF A PAYMENT DATE IS NOT A BUSINESS DAY. If any scheduled  interest payment
date, other than the maturity date or any earlier  redemption or repayment date,
for any floating rate note falls on a day that is not a business day, it will be
postponed to the following  business day,  except that, in the case of a EURIBOR
note or a LIBOR  note,  if that  business  day would  fall in the next  calendar
month, the interest payment date will be the immediately preceding business day.
If the scheduled  maturity date or any earlier redemption or repayment date of a
floating  rate note falls on a day that is not a business  day,  the  payment of
principal,  premium,  if any,  and  interest,  if any,  will be made on the next
succeeding business day, but interest on that payment will not accrue during the
period from and after the maturity, redemption or repayment date.

BASE RATE NOTES

     CD RATE NOTES

     CD rate notes will bear interest at the interest rates  specified in the CD
rate notes and in the applicable pricing  supplement.  Those interest rates will
be based on the CD rate and any  spread  and/or  spread  multiplier  and will be
subject to the minimum interest rate and the maximum interest rate, if any.

     The "CD rate" means, for any interest  determination date, the rate on that
date for  negotiable  U.S.  dollar  certificates  of  deposit  having  the index
maturity  specified 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


                                      S-16
<PAGE>


any  successor  publication  of the Board of  Governors  of the Federal  Reserve
System ("H.15(519)") under the heading "CDs (Secondary Market)."

     The  following  procedures  will  be  followed  if the CD  rate  cannot  be
determined as described above:

     o    If the above rate is not published in H.15(519) by 3:00 p.m., New York
          City time, on the  calculation  date,  the CD rate will be the rate on
          that  interest  determination  date set forth in the  daily  update of
          H.15(519),  available  through the world wide  website of the Board of
          Governors of the Federal  Reserve  System,  or any  successor  site or
          publication, which is commonly referred to as the "H.15 Daily Update,"
          for the interest determination date for certificates of deposit having
          the index  maturity  specified in the applicable  pricing  supplement,
          under the caption "CDs (Secondary Market)."

     o    If the above rate is not yet published in either H.15(519) or the H.15
          Daily  Update by 3:00  p.m.,  New York City time,  on the  calculation
          date,  the  calculation  agent  will  determine  the CD rate to be the
          arithmetic  mean of the  secondary  market  offered  rates as of 10:00
          a.m., New York City time, on that interest determination date of three
          leading  nonbank  dealers in negotiable  U.S.  dollar  certificates of
          deposit in The City of New York,  which may  include the agent and its
          affiliates, selected by the calculation agent, after consultation with
          us, for negotiable U.S.  dollar  certificates of deposit of major U.S.
          money  center banks of the highest  credit  standing in the market for
          negotiable  certificates of deposit with a remaining  maturity closest
          to the index maturity  specified in the applicable  pricing supplement
          in an amount that is representative  for a single  transaction in that
          market at that time.

     o    If the dealers  selected by the  calculation  agent are not quoting as
          set forth above, the CD rate for that interest determination date will
          remain  the CD  rate  for the  immediately  preceding  interest  reset
          period,  or,  if  there  was no  interest  reset  period,  the rate of
          interest payable will be the initial interest rate.

     COMMERCIAL PAPER RATE NOTES

     Commercial  paper rate  notes  will bear  interest  at the  interest  rates
specified  in the  commercial  paper  rate notes and in the  applicable  pricing
supplement.  Those interest rates will be based on the commercial paper rate and
any spread and/or spread  multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.

     The "commercial paper rate" means, for any interest determination date, the
money market yield,  calculated as described below, of the rate on that date for
commercial paper having the index maturity  specified in the applicable  pricing
supplement,  as  that  rate  is  published  in  H.15(519),   under  the  heading
"Commercial Paper -- Nonfinancial."

     The  following  procedures  will be followed if the  commercial  paper rate
cannot be determined as described above:

     o    If the above rate is not  published by 3:00 p.m.,  New York City time,
          on the calculation  date,  then the commercial  paper rate will be the
          money market yield of the rate on that interest determination date for
          commercial  paper of the index  maturity  specified in the  applicable
          pricing  supplement  as published in the H.15 Daily  Update,  or other
          recognized  electronic  source used for the purpose of displaying  the
          applicable rate, under the heading "Commercial Paper -- Nonfinancial."

     o    If by 3:00 p.m., New York City time, on that calculation date the rate
          is not yet  published in either  H.15(519)  or the H.15 Daily  Update,
          then the calculation agent will determine the commercial paper rate to
          be the money market yield of the arithmetic  mean of the offered rates
          as of 11:00 a.m.,  New York City time, on that interest  determination
          date of three leading dealers of U.S. dollar  commercial  paper in The
          City of New York,  which  may  include  the agent and its  affiliates,
          selected by the calculation  agent,  after  consultation  with us, for
          commercial  paper of the index  maturity  specified in the  applicable
          pricing supplement,  placed for an industrial issuer whose bond rating
          is "AA," or the equivalent,  from a nationally recognized  statistical
          rating agency.

     o    If the dealers  selected by the  calculation  agent are not quoting as
          set  forth  above,   the  commercial  paper  rate  for  that  interest
          determination  date will  remain  the  commercial  paper  rate for the
          immediately


                                      S-17
<PAGE>


          preceding  interest  reset period,  or, if there was no interest reset
          period,  the rate of interest  payable  will be the  initial  interest
          rate.

     The "money market yield" will be a yield  calculated in accordance with the
following formula:

                                        D x 360
              money market yield =  ----------------  x 100
                                    360 - (D x M)

where "D" refers to the applicable per year 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 interest period for which interest is being calculated.

     EURIBOR NOTES

     EURIBOR  notes will bear  interest at the interest  rates  specified in the
EURIBOR notes and in the applicable pricing supplement.  That interest rate will
be based on EURIBOR and any spread and/or spread  multiplier and will be subject
to the minimum interest rate and the maximum interest rate, if any.

     "EURIBOR" means, for any interest determination date, the rate for deposits
in euros as sponsored,  calculated and published jointly by the European Banking
Federation  and  ACI  --  The  Financial  Market  Association,  or  any  company
established by the joint sponsors for purposes of compiling and publishing those
rates, for the index maturity  specified in the applicable pricing supplement as
that rate  appears  on the  display  on  Moneyline  Telerate,  or any  successor
service,  on page 248 or any other page as may replace page 248 on that service,
which is commonly referred to as "Telerate Page 248," as of 11:00 a.m. (Brussels
time).

     The following  procedures will be followed if the rate cannot be determined
as described above:

     o    If the above rate does not appear,  the calculation agent will request
          the  principal  Euro-zone  office of each of four  major  banks in the
          Euro-zone  interbank  market,  as selected by the  calculation  agent,
          after  consultation with us, to provide the calculation agent with its
          offered  rate for  deposits  in euros,  at  approximately  11:00  a.m.
          (Brussels time) on the interest  determination date, to prime banks in
          the Euro-zone interbank market for the index maturity specified in the
          applicable  pricing supplement  commencing on the applicable  interest
          reset date, and in a principal  amount not less than the equivalent of
          U.S.$1 million in euro that is representative of a single  transaction
          in euro, in that market at that time. If at least two  quotations  are
          provided, EURIBOR will be the arithmetic mean of those quotations.

     o    If  fewer  than  two  quotations  are  provided,  EURIBOR  will be the
          arithmetic  mean of the  rates  quoted  by  four  major  banks  in the
          Euro-zone  interbank  market,  as selected by the  calculation  agent,
          after  consultation  with us, at  approximately  11:00 a.m.  (Brussels
          time),  on the  applicable  interest  reset  date for loans in euro to
          leading  European  banks for a period of time  equivalent to the index
          maturity specified in the applicable pricing supplement  commencing on
          that  interest  reset  date in a  principal  amount  not less than the
          equivalent of U.S.$1 million in euro.

     o    If the banks so selected by the  calculation  agent are not quoting as
          set forth above,  EURIBOR for that  interest  determination  date will
          remain EURIBOR for the  immediately  preceding  interest reset period,
          or,  if there  was no  interest  reset  period,  the rate of  interest
          payable will be the initial interest rate.

     "Euro-zone" means the region comprising member states of the European Union
that have adopted the single  currency in accordance with the relevant treaty of
the European Union, as amended.

     FEDERAL FUNDS RATE NOTES

     Federal funds rate notes will bear interest at the interest rates specified
in the federal funds rate notes and in the applicable pricing supplement.  Those
interest  rates will be based on the  federal  funds rate and any spread  and/or
spread  multiplier  and will be subject  to the  minimum  interest  rate and the
maximum interest rate, if any.

     The "federal funds rate" means,  for any interest  determination  date, the
rate on that date for federal funds as published in H.15(519)  under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, or any successor
service,  on page 120 or any other page as may  replace the  applicable  page on
that service, which is commonly referred to as "Telerate Page 120."


                                      S-18
<PAGE>


     The following  procedures will be followed if the federal funds rate cannot
be determined as described above:

     o    If the above rate is not  published by 3:00 p.m.,  New York City time,
          on the  calculation  date,  the federal funds rate will be the rate on
          that  interest  determination  date as  published  in the  H.15  Daily
          Update, or other recognized  electronic source used for the purpose of
          displaying   the   applicable   rate,   under  the  heading   "Federal
          Funds/Effective Rate."

     o    If the above rate is not yet published in either H.15(519) or the H.15
          Daily  Update by 3:00  p.m.,  New York City time,  on the  calculation
          date, the  calculation  agent will determine the federal funds rate to
          be the  arithmetic  mean of the  rates  for the  last  transaction  in
          overnight U.S.  dollar federal funds by each of three leading  brokers
          of U.S.  dollar  federal funds  transactions  in The City of New York,
          which  may  include  the  agent and its  affiliates,  selected  by the
          calculation agent, after consultation with us, prior to 9:00 a.m., New
          York City time, on that interest determination date.

     o    If the brokers  selected by the  calculation  agent are not quoting as
          set  forth   above,   the  federal   funds  rate  for  that   interest
          determination  date  will  remain  the  federal  funds  rate  for  the
          immediately  preceding  interest  reset  period,  or,  if there was no
          interest  reset  period,  the  rate of  interest  payable  will be the
          initial interest rate.

     LIBOR NOTES

     LIBOR notes will bear interest at the interest rates specified in the LIBOR
notes and in the applicable pricing supplement. That interest rate will be based
on London Interbank  Offered Rate, which is commonly referred to as "LIBOR," and
any spread and/or spread  multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.

     The   calculation   agent  will   determine   "LIBOR"  for  each   interest
determination date as follows:

     o    As of the interest determination date, LIBOR will be either:

          o    if  "LIBOR  Reuters"  is  specified  in  the  applicable  pricing
               supplement, the arithmetic mean of the offered rates for deposits
               in the index currency having the index maturity designated in the
               applicable  pricing  supplement,  commencing on the second London
               banking day  immediately  following  that interest  determination
               date, that appear on the Designated LIBOR Page, as defined below,
               as of 11:00 a.m.,  London time,  on that  interest  determination
               date,  if at least two  offered  rates  appear on the  Designated
               LIBOR Page;  except that if the specified  Designated LIBOR Page,
               by its terms  provides  only for a single rate,  that single rate
               will be used; or

          o    if  "LIBOR  Telerate"  is  specified  in the  applicable  pricing
               supplement,  the rate for deposits in the index  currency  having
               the  index  maturity   designated  in  the   applicable   pricing
               supplement,   commencing  on  the  second   London   banking  day
               immediately  following  that interest  determination  date or, if
               pounds  sterling  is  the  index  currency,  commencing  on  that
               interest determination date, that appears on the Designated LIBOR
               Page at approximately  11:00 a.m.,  London time, on that interest
               determination date.

     o    If (i) fewer than two  offered  rates  appear and "LIBOR  Reuters"  is
          specified  in the  applicable  pricing  supplement,  or  (ii)  no rate
          appears and the applicable  pricing  supplement  specifies  either (a)
          "LIBOR  Telerate" or (b) "LIBOR Reuters" and the Designated LIBOR Page
          by its terms  provides  only for a single rate,  then 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  us,  to  provide  the
          calculation agent with its offered quotation for deposits in the index
          currency  for  the  period  of the  index  maturity  specified  in the
          applicable pricing supplement  commencing on the second London banking
          day  immediately  following  the  interest  determination  date or, if
          pounds  sterling is the index  currency,  commencing  on that interest
          determination  date, to prime banks in the London  interbank market at
          approximately 11:00 a.m., London time, on that interest  determination
          date and in a  principal  amount  that is  representative  of a single
          transaction in that index currency in that market at that time.

     o    If at least two  quotations  are  provided,  LIBOR  determined on that
          interest  determination  date  will be the  arithmetic  mean of  those
          quotations.  If fewer than two quotations are provided,  LIBOR will be



                                      S-19
<PAGE>


          determined  for the  applicable  interest reset date as the arithmetic
          mean of the rates quoted at approximately  11:00 a.m., London time, or
          some other time specified in the applicable pricing supplement, in the
          applicable  principal  financial  center for the  country of the index
          currency on that  interest  reset  date,  by three major banks in that
          principal  financial center selected by the calculation  agent,  after
          consultation  with us,  for loans in the  index  currency  to  leading
          European banks,  having the index maturity specified in the applicable
          pricing supplement and in a principal amount that is representative of
          a single  transaction  in that index  currency  in that market at that
          time.

     o    If the banks so selected by the  calculation  agent are not quoting as
          set forth  above,  LIBOR  for that  interest  determination  date will
          remain LIBOR for the immediately  preceding interest reset period, or,
          if there was no interest  reset period,  the rate of interest  payable
          will be the initial interest rate.

     The "index currency" means the currency specified in the applicable pricing
supplement as the currency for which LIBOR will be  calculated,  or, if the euro
is substituted  for that currency,  the index currency will be the euro. If that
currency  is not  specified  in the  applicable  pricing  supplement,  the index
currency will be U.S. dollars.

     "Designated  LIBOR Page" means either (i) 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 its designated successor,  or (ii) if
"LIBOR Telerate" is designated in the applicable pricing supplement, the display
on Moneyline  Telerate,  or any successor service,  on the page specified in the
applicable  pricing  supplement,  or any other page as may replace  that page on
that 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  were  specified,  and,  if the U.S.  dollar  is the index
currency, as if Page 3750, had been specified.

     PRIME RATE NOTES

     Prime rate notes will bear interest at the interest rates  specified in the
prime rate notes and in the applicable  pricing  supplement.  That interest rate
will be based on the prime rate and any spread  and/or  spread  multiplier,  and
will be subject to the minimum  interest rate and the maximum  interest rate, if
any.

     The "prime rate" means,  for any interest  determination  date, the rate on
that date as published in H.15(519) under the heading "Bank Prime Loan."

     The  following  procedures  will be  followed  if the prime rate  cannot be
determined as described above:

     o    If the above rate is not published  prior to 3:00 p.m.,  New York City
          time, on the calculation date, then the prime rate will be the rate on
          that  interest  determination  date as  published in H.15 Daily Update
          under the heading "Bank Prime Loan."

     o    If the rate is not  published  in either  H.15(519)  or the H.15 Daily
          Update by 3:00 p.m., New York City time, on the calculation date, then
          the  calculation  agent  will  determine  the  prime  rate  to be  the
          arithmetic  mean of the rates of interest  publicly  announced by each
          bank that  appears on the Reuters  Screen  USPRIME 1 Page,  as defined
          below, as that bank's prime rate or base lending rate as in effect for
          that interest determination date.

     o    If fewer than four rates appear on the Reuters  Screen  USPRIME 1 Page
          by 3:00 p.m.,  New York City  time,  for that  interest  determination
          date,  the  calculation  agent will determine the prime rate to be the
          arithmetic  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 that interest  determination  date by at least three major banks in
          The City of New  York,  which may  include  affiliates  of the  agent,
          selected by the calculation agent, after consultation with us.

     o    If the banks selected by the calculation  agent are not quoting as set
          forth above, the prime rate for that interest  determination date will
          remain the prime rate for the  immediately  preceding  interest  reset
          period,  or,  if  there  was no  interest  reset  period,  the rate of
          interest payable will be the initial interest rate.


                                      S-20
<PAGE>


     "Reuters  Screen  USPRIME 1 Page"  means  the  display  designated  as page
"USPRIME  1" on the  Reuters  Monitor  Money  Rates  Service,  or any  successor
service, or any other page as may replace the USPRIME 1 Page on that service for
the purpose of displaying prime rates or base lending rates of major U.S. banks.

     TREASURY RATE NOTES

     Treasury rate notes will bear interest at the interest  rates  specified in
the Treasury rate notes and in the applicable pricing supplement.  That interest
rate will be based on the Treasury rate and any spread and/or spread  multiplier
and will be subject to the minimum  interest rate and the maximum interest rate,
if any.

     The "Treasury rate" means:

     o    the  rate  from  the   auction   held  on  the   applicable   interest
          determination  date,  which we refer to as the  "auction,"  of  direct
          obligations  of the United States,  which are commonly  referred to as
          "Treasury   Bills,"  having  the  index  maturity   specified  in  the
          applicable  pricing  supplement as that rate appears under the caption
          "INVESTMENT  RATE"  on  the  display  on  Moneyline  Telerate,  or any
          successor service, on page 56 or any other page as may replace page 56
          on that service,  which we refer to as "Telerate  Page 56," or page 57
          or any other page as may  replace  page 57 on that  service,  which we
          refer to as "Telerate Page 57"; or

     o    if the rate  described in the first  bullet point is not  published by
          3:00  p.m.,  New York City time,  on the  calculation  date,  the bond
          equivalent  yield  of the rate for the  applicable  Treasury  Bills as
          published in the H.15 Daily  Update,  or other  recognized  electronic
          source used for the purpose of displaying the applicable  rate,  under
          the caption "U.S. Government Securities/Treasury  Bills/Auction High";
          or

     o    if the rate  described in the second  bullet point is not published by
          3:00 p.m.,  New York City time, on the related  calculation  date, the
          bond equivalent  yield of the auction rate of the applicable  Treasury
          Bills, announced by the United States Department of the Treasury; or

     o    if the rate  referred to in the third bullet point is not announced by
          the United States Department of the Treasury, or if the auction is not
          held, the bond equivalent yield of the rate on the applicable interest
          determination  date  of  Treasury  Bills  having  the  index  maturity
          specified in the applicable pricing supplement  published in H.15(519)
          under  the  caption  "U.S.   Government   Securities/Treasury   Bills/
          Secondary Market"; or

     o    if the rate referred to in the fourth bullet point is not so published
          by 3:00 p.m., New York City time, on the related calculation date, the
          rate on the applicable  interest  determination date of the applicable
          Treasury Bills as published in H.15 Daily Update,  or other recognized
          electronic  source used for the purpose of displaying  the  applicable
          rate,   under  the  caption   "U.S.   Government   Securities/Treasury
          Bills/Secondary Market"; or

     o    if the rate  referred to in the fifth bullet point is not so published
          by 3:00 p.m., New York City time, on the related calculation date, the
          rate on the applicable  interest  determination date calculated by the
          calculation  agent as the bond equivalent yield of the arithmetic mean
          of the secondary market bid rates, as of approximately  3:30 p.m., New
          York City time,  on the  applicable  interest  determination  date, of
          three primary U.S. government  securities  dealers,  which may include
          the agent and its affiliates,  selected by the calculation  agent, for
          the issue of Treasury Bills with a remaining  maturity  closest to the
          index maturity specified in the applicable pricing supplement; or

     o    if the dealers  selected by the  calculation  agent are not quoting as
          set forth above,  the Treasury  rate for that  interest  determination
          date will  remain  the  Treasury  rate for the  immediately  preceding
          interest reset period,  or, if there was no interest reset period, the
          rate of interest payable will be the initial interest rate.

     The "bond equivalent yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:

                                   D x N
      bond equivalent yield = -----------------  x 100
                               360 - (D x M)


                                      S-21
<PAGE>


In this formula,  "D" refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount  basis,  "N" refers to 365 or 366, as the case may be,
and "M" refers to the  actual  number of days in the  interest  period for which
interest is being calculated.

     CMT RATE NOTES

     CMT rate notes will bear  interest at the interest  rates  specified in the
CMT rate notes and in the applicable pricing supplement. That interest rate will
be based on the CMT rate and any spread  and/or  spread  multiplier  and will be
subject to the minimum interest rate and the maximum interest rate, if any.

     The  "CMT  rate"  means,  for any  interest  determination  date,  the rate
displayed on the  Designated  CMT Telerate  Page,  as defined  below,  under the
caption " . Treasury  Constant  Maturities . Federal Reserve Board Release H.15.
Mondays  Approximately  3:45  p.m.,"  under the  column for the  Designated  CMT
Maturity Index, as defined below, for:

     o    the rate on that interest  determination  date, if the  Designated CMT
          Telerate Page is 7051; and

     o    the week or the month, as applicable,  ended immediately preceding the
          week in which the related interest  determination  date occurs, if the
          Designated CMT Telerate Page is 7052.

     The  following  procedures  will be  followed  if the CMT  rate  cannot  be
determined as described above:

     o    If the above 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  will be the  Treasury  Constant
          Maturity rate for the  Designated  CMT Maturity  Index as published in
          the relevant H.15(519).

     o    If the above rate  described  in the first  bullet  point 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 will be the Treasury
          Constant  Maturity rate for the Designated CMT Maturity Index or other
          U.S.  Treasury  rate  for the  Designated  CMT  Maturity  Index on the
          interest  determination  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).

     o    If  the  information  described  in the  second  bullet  point  is not
          provided by 3:00 p.m., New York City time, on the related  calculation
          date, then the  calculation  agent will determine the CMT rate to 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 U.S.
          government  securities  dealers,  which we  refer  to as a  "reference
          dealer,"  in The City of New  York,  which  may  include  the agent or
          another  affiliate  of  ours,  selected  by the  calculation  agent as
          described in the following sentence. The calculation agent will select
          five reference dealers, after consultation with us, and will eliminate
          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,  which are commonly  referred to as
          "Treasury  notes,"  with an  original  maturity of  approximately  the
          Designated CMT Maturity Index, a remaining term to maturity of no more
          than 1 year shorter than that  Designated  CMT Maturity Index and in a
          principal amount that is  representative  for a single  transaction in
          the securities in that market at that time. If two Treasury notes with
          an  original  maturity  as  described  above 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.

     o    If the calculation agent cannot obtain three Treasury notes quotations
          as  described  in  the  immediately   preceding   bullet  point,   the
          calculation  agent  will  determine  the CMT  rate  to 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,  selected using the same method described in the immediately
          preceding bullet point,  for Treasury notes with an original  maturity
          equal  to the  number  of  years  closest  to but not  less  than  the
          Designated CMT Maturity Index and a remaining term to maturity closest
          to the Designated CMT Maturity Index and in a principal amount that is
          representative  for a single  transaction  in the  securities  in that
          market at that time.


                                      S-22
<PAGE>


     o    If three or four (and not five) of the  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 those quotes will be eliminated.

     o    If fewer than three  reference  dealers  selected  by the  calculation
          agent are quoting as described  above,  the CMT rate for that interest
          determination  date  will  remain  the CMT  rate  for the  immediately
          preceding  interest  reset period,  or, if there was no interest reset
          period,  the rate of interest  payable  will be the  initial  interest
          rate.

     "Designated CMT Telerate Page" means the display on Moneyline Telerate,  or
any  successor  service,  on  the  page  designated  in the  applicable  pricing
supplement  or any other page as may replace  that page on that  service for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519).  If
no page is specified in the applicable  pricing  supplement,  the Designated CMT
Telerate Page will be 7052, for the most recent week.

     "Designated  CMT Maturity  Index" means the original  period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in the  applicable  pricing  supplement for which the CMT rate will be
calculated.  If no maturity is specified in the applicable  pricing  supplement,
the Designated CMT Maturity Index will be two years.

EXCHANGEABLE NOTES

     We may issue  notes,  which we refer to as  "exchangeable  notes," that are
optionally or mandatorily exchangeable into:

     o    the securities of an entity affiliated or not affiliated with us;

     o    a basket of those securities;

     o    an index or indices of those securities; or

     o    any combination of, or the cash value of, the above.

     The  exchangeable  notes may or may not bear  interest  or be  issued  with
original issue discount or at a premium.  The general terms of the  exchangeable
notes are described below.

     OPTIONALLY  EXCHANGEABLE  NOTES.  The holder of an optionally  exchangeable
note may, during a period, or at a specific time or times, exchange the note for
the  underlying  property at a specified  rate of exchange.  If specified in the
applicable pricing supplement,  we will have the option to redeem the optionally
exchangeable note prior to maturity. If the holder of an optionally exchangeable
note does not elect to exchange  the note prior to  maturity  or any  applicable
redemption  date, the holder will receive the principal  amount of the note plus
any accrued interest at maturity or upon redemption.

     MANDATORILY  EXCHANGEABLE  NOTES. At maturity,  the holder of a mandatorily
exchangeable  note  must  exchange  the note for the  underlying  property  at a
specified  rate of exchange,  and,  therefore,  depending  upon the value of the
underlying property at maturity,  the holder of a mandatorily  exchangeable note
may  receive  less  than the  principal  amount of the 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 property 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 property.  Mandatorily exchangeable notes may include
notes where we have the right,  but not the  obligation,  to require  holders of
notes to exchange their notes for the underlying property.

     PAYMENTS UPON EXCHANGE.  The  applicable  pricing  supplement  will specify
whether upon exchange,  at maturity or otherwise,  the holder of an exchangeable
note may receive, at the specified exchange rate, either the underlying property
or the cash value of the underlying property. The underlying property may be the
securities of either U.S. or foreign  entities or both. The  exchangeable  notes
may or may not provide for protection against  fluctuations in the exchange rate
between  the  currency  in which that note is  denominated  and the  currency or


                                      S-23
<PAGE>


currencies in which the market prices of the  underlying  security or securities
are quoted.  Exchangeable notes may have other terms, which will be specified in
the applicable pricing supplement.

     SPECIAL  REQUIREMENTS FOR EXCHANGE OF GLOBAL  SECURITIES.  If an optionally
exchangeable note is represented by a global note, the Depositary's nominee will
be the  holder  of that  note and  therefore  will be the only  entity  that can
exercise a right to exchange.  In order to ensure that the Depositary's  nominee
will timely  exercise a right to exchange a particular  note or any portion of a
particular  note, the  beneficial  owner of the note must instruct the broker or
other direct or indirect  participant through which it holds an interest in that
note to notify the  Depositary  of its desire to  exercise a right to  exchange.
Different firms have different  deadlines for accepting  instructions from their
customers.  Each beneficial owner should consult the broker or other participant
through  which it holds an interest in a note in order to ascertain the deadline
for ensuring that timely notice will be delivered to the Depositary.

     PAYMENTS UPON ACCELERATION OF MATURITY.  If the principal amount payable at
maturity of any exchangeable note is declared due and payable prior to maturity,
the amount payable on:

     o    an optionally exchangeable note will equal the face amount of the note
          plus accrued  interest,  if any, to but excluding the date of payment,
          except that if a holder has exchanged an optionally  exchangeable note
          prior to the date of  acceleration  without having received the amount
          due upon exchange,  the amount payable will be an amount in cash equal
          to the amount due upon  exchange  and will not include any accrued but
          unpaid interest; and

     o    a mandatorily  exchangeable note will equal an amount determined as if
          the date of acceleration were the maturity date plus accrued interest,
          if any, to but excluding the date of payment.

NOTES LINKED TO COMMODITIES,  RATES,  SINGLE SECURITIES,  BASKETS OF SECURITIES,
INDICES AND OTHER QUANTITATIVE MEASURES

     We may issue  notes with the  principal  amount  payable  on any  principal
payment date and/or the amount of interest  payable on any interest payment date
is determined  by reference to one or more  commodities,  rates,  debt or equity
securities,  or other debt or equity  instruments of entities  affiliated or not
affiliated with us, baskets of those  securities or an index or indices of those
securities,  quantitative  measures associated with an occurrence,  extent of an
occurrence, or contingency associated with a financial,  commercial, or economic
consequence,  or  economic  or  financial  indices or  measures  of  economic or
financial  risk or value.  These notes may include  other  terms,  which will be
specified in the relevant pricing supplement.

CURRENCY-LINKED NOTES

     We may issue  notes with the  principal  amount  payable  on any  principal
payment date and/or the amount of interest  payable on any interest payment date
to be determined by reference to the value of one or more currencies as compared
to  the  value  of  one  or  more  other  currencies,   which  we  refer  to  as
"currency-linked notes." The pricing supplement will specify the following:

     o    information  as to the one or more  currencies  to which the principal
          amount payable on any principal payment date or the amount of interest
          payable on any interest payment date is linked or indexed;

     o    the currency in which the face amount of the  currency-linked  note is
          denominated, which we refer to as the "denominated currency;"

     o    the currency in which  principal on the  currency-linked  note will be
          paid, which we refer to as the "payment currency;"

     o    the  interest  rate per  annum  and the  dates  on which we will  make
          interest payments;

     o    specific  historic  exchange rate  information  and any currency risks
          relating to the specific currencies selected; and

     o    additional tax considerations, if any.

     The denominated  currency and the payment currency may be the same currency
or different  currencies.  Interest on currency-linked notes will be paid in the
denominated currency.


                                      S-24
<PAGE>


REDEMPTIONS AND REPURCHASES OF NOTES

     OPTIONAL REDEMPTION.  The pricing supplement will indicate the terms of our
option to redeem the notes,  if any. We will mail a notice of redemption to each
holder  or, in the case of global  notes,  to the  Depositary,  as holder of the
global notes, by first-class  mail,  postage  prepaid,  at least 30 days and not
more  than 60 days  prior  to the date  fixed  for  redemption,  or  within  the
redemption notice period designated in the applicable pricing supplement, to the
address of each holder as that address appears upon the books  maintained by the
paying agent. The notes will not be subject to any sinking fund.

     REPAYMENT  AT OPTION OF  HOLDER.  If  applicable,  the  pricing  supplement
relating  to each note will  indicate  that the holder has the option to have us
repay the note on a date or dates  specified  prior to its  maturity  date.  The
repayment  price  will be equal to 100% of the  principal  amount  of the  note,
together with accrued  interest to the date of repayment.  For notes issued with
original issue discount,  the pricing supplement will specify the amount payable
upon repayment.

     For us to repay a note,  the paying  agent must  receive the  following  at
least 15 days but not more than 30 days prior to the repayment date:

     o    the note with the form  entitled  "Option to Elect  Repayment"  on the
          reverse of the note duly completed; or

     o    a telegram, telex, facsimile transmission or a letter from a member of
          a  national  securities  exchange,  or  the  National  Association  of
          Securities Dealers,  Inc. or a commercial bank or trust company in the
          United States  setting  forth the name of the holder of the 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  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,  will be received  by the paying  agent not later
          than the fifth  business day after the date of that  telegram,  telex,
          facsimile  transmission  or  letter.  However,  the  telegram,  telex,
          facsimile  transmission  or letter will only be effective if that note
          and form duly  completed are received by the paying agent by the fifth
          business  day  after  the  date of  that  telegram,  telex,  facsimile
          transmission or letter.

     Exercise  of  the  repayment  option  by  the  holder  of a  note  will  be
irrevocable.  The holder may  exercise  the  repayment  option 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.

     SPECIAL  REQUIREMENTS FOR OPTIONAL  REPAYMENT OF GLOBAL NOTES. If a note is
represented by a global note, the Depositary or the Depositary's nominee will be
the holder of the note and therefore will be the only entity that can exercise a
right to repayment. In order to ensure that the Depositary's nominee will timely
exercise a right to repayment of a particular  note, the beneficial owner of the
note must  instruct the broker or other direct or indirect  participant  through
which it holds an interest in the note to notify the Depositary of its desire to
exercise a right to repayment.  Different firms have different cut-off times 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 cut-off time by
which an instruction must be given in order for timely notice to be delivered to
the Depositary.

     OPEN  MARKET  PURCHASES.  We may  purchase  notes at any  price in the open
market or otherwise. Notes so purchased by us may, at our discretion, be held or
resold or surrendered to the relevant trustee for cancellation.

REPLACEMENT OF NOTES

     At the expense of the holder,  we may, in our discretion  replace any notes
that become mutilated,  destroyed,  lost or stolen or are apparently  destroyed,
lost or stolen. The mutilated notes must be delivered to the applicable trustee,
the  paying  agent  and the  registrar,  in the  case of  registered  notes,  or
satisfactory  evidence  of the  destruction,  loss or theft of the notes must be
delivered to us, the paying  agent,  the  registrar,  in the case of  registered
notes, and the applicable  trustee.  At the expense of the holder,  an indemnity
that is satisfactory to us, the principal  paying agent,  the registrar,  in the
case of registered  notes,  and the applicable  trustee may be required before a
replacement note will be issued.


                                      S-25
<PAGE>


                             DESCRIPTION OF WARRANTS

     INVESTORS  SHOULD  CAREFULLY  READ THE GENERAL TERMS AND  PROVISIONS OF OUR
WARRANTS  IN  "DESCRIPTION   OF  WARRANTS"  IN  THE  PROSPECTUS.   THIS  SECTION
SUPPLEMENTS THAT DESCRIPTION. THE PRICING SUPPLEMENT WILL ADD SPECIFIC TERMS FOR
EACH  ISSUANCE OF WARRANTS AND MAY MODIFY OR REPLACE ANY OF THE  INFORMATION  IN
THIS SECTION AND IN "DESCRIPTION OF WARRANTS" IN THE PROSPECTUS. IF A WARRANT IS
OFFERED AS PART OF A UNIT,  INVESTORS  SHOULD  ALSO  REVIEW THE  INFORMATION  IN
"DESCRIPTION OF UNITS" IN THE PROSPECTUS AND IN THIS PROSPECTUS SUPPLEMENT.

     Warrants will entitle or require you to purchase from us or sell to us:

     o    securities  issued by us or by an entity  affiliated or not affiliated
          with us, a basket of those  securities,  an index or  indices of those
          securities or any combination of the above;

     o    currencies; or

     o    commodities.


                                      S-26
<PAGE>


                              DESCRIPTION OF UNITS

     INVESTORS  SHOULD  CAREFULLY  READ THE GENERAL TERMS AND  PROVISIONS OF OUR
UNITS IN "DESCRIPTION OF UNITS" IN THE PROSPECTUS. THIS SECTION SUPPLEMENTS THAT
DESCRIPTION. THE PRICING SUPPLEMENT WILL ADD SPECIFIC TERMS FOR EACH ISSUANCE OF
UNITS AND MAY MODIFY OR REPLACE ANY OF THE  INFORMATION  IN THIS  SECTION AND IN
"DESCRIPTION  OF UNITS" IN THE  PROSPECTUS.  IF A NOTE IS  OFFERED  AS PART OF A
UNIT,  INVESTORS  SHOULD ALSO REVIEW THE  INFORMATION  IN  "DESCRIPTION  OF DEBT
SECURITIES" IN THE PROSPECTUS AND IN  "DESCRIPTION  OF NOTES" IN THIS PROSPECTUS
SUPPLEMENT.  IF A WARRANT IS OFFERED AS PART OF A UNIT,  INVESTORS  SHOULD  ALSO
REVIEW THE  INFORMATION IN  "DESCRIPTION OF WARRANTS" IN BOTH THE PROSPECTUS AND
THIS PROSPECTUS SUPPLEMENT.

     The  following  terms used in this  section  are  defined in the  indicated
sections of the accompanying prospectus:

     o    Unit Agreement ("Description of Units")

     o    warrant ("Description of Warrants -- Offered Warrants")

     o    warrant agent  ("Description of Warrants -- Significant  Provisions of
          the Warrant Agreements")

     o    warrant property ("Description of Warrants -- Offered Warrants")

FURTHER INFORMATION ON UNITS

     TERMS SPECIFIED IN PRICING SUPPLEMENT. We may issue from time to time units
that may include one or more notes or warrants.

     The applicable pricing supplement will describe:

     o    the  designation  and the  terms  of the  units  and of the  notes  or
          warrants or any  combination  of notes or warrants,  included in those
          units,  including whether and under what circumstances  those notes or
          warrants may be separately traded;

     o    any additional terms of the Unit Agreement; and

     o    any  additional  provisions  for the  issuance,  payment,  settlement,
          transfer  or  exchange  of the  units,  or of the  notes  or  warrants
          constituting those units.

     Units will be issued only in fully  registered  form, in  denominations  of
whole units only,  with face  amounts as  indicated  in the  applicable  pricing
supplement.

     PAYMENTS ON 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 us
for that purpose, the holder may:

     o    present  the  units,  accompanied  by  each  of  the  securities  then
          comprised by that unit, for payment or delivery of warrant property or
          any other amounts due;

     o    register the transfer of the units; and

     o    exchange the units,  except that book-entry units will be exchangeable
          only in the  manner  and to the  extent  set  forth  under  "Forms  of
          Securities -- Global Securities" in the prospectus.

     The holder will not pay a service charge for any  registration  of transfer
or  exchange of the units or of any  security  included in a unit or interest in
the  unit  or  security  included  in a  unit,  except  for  any  tax  or  other
governmental charge that may be imposed.

     Although we anticipate making payments of principal,  premium,  if any, and
interest,  if any, on most units in U.S.  dollars,  some units may be payable in
foreign currencies as specified in the applicable pricing supplement. Currently,
few facilities  exist in the United States to convert U.S.  dollars into foreign
currencies  and vice versa.  In addition,  most U.S. banks do not offer non-U.S.
dollar denominated checking or savings account facilities.  Accordingly,  unless
alternative  arrangements are made, we will pay principal,  premium, if any, and
interest,  if any, on units that are payable in a foreign currency to an account
at a bank  outside the United  States,  which,  in the case of a note payable in
euro will be made by credit or transfer to a euro account specified by the payee
in a country for which the euro is the lawful currency.


                                      S-27
<PAGE>


BOOK-ENTRY UNITS

     BOOK-ENTRY  SYSTEM.  For each issuance of units in book-entry form, we will
issue a single  registered  global unit  representing the entire issue of units.
Each  registered  global unit  representing  book-entry  units,  and each global
security  included in that unit,  will be deposited  with,  or on behalf of, the
Depositary,  and registered in the name of a nominee of the Depositary.  You may
not exchange  certificated units for book-entry units or interests in book-entry
units.  In  addition,  except as  described  in the  prospectus  under "Forms of
Securities  -- Global  Securities,"  you may not  exchange  book-entry  units or
interests in book-entry units for certificated units.

     SPECIAL  REQUIREMENTS  FOR  EXERCISE  OF  RIGHTS  FOR  GLOBAL  UNITS.  If a
book-entry unit represented by a registered global unit:

     o    includes a warrant  entitling  the holder to  exercise  the warrant to
          purchase or sell warrant property,

     o    includes any note that  entitles the holder to redeem,  accelerate  or
          take any other action concerning that note, or

     o    otherwise entitles the holder of the unit to take any action under the
          unit or any security included in that unit,

then, in each of the cases listed above,  the  Depositary's  nominee will be the
only entity that can exercise those rights.

     In order to ensure that the  Depositary's  nominee  will timely  exercise a
right  conferred  by a unit or by the  securities  included  in that  unit,  the
beneficial  owner of that  unit must  instruct  the  broker  or other  direct or
indirect  participant  through which it holds an interest in that unit to notify
the  Depositary  of its desire to  exercise  that  right.  Different  firms have
different  deadlines  for  accepting  instructions  from their  customers.  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  ensuring  that  timely  notice  will  be  delivered  to  the
Depositary.

     A further description of the Depositary's  procedures for registered global
securities representing book-entry securities, including registered global units
and the other registered  global  securities  included in the registered  global
units, is set forth in this prospectus  supplement  under "The  Depositary." The
Depositary has confirmed to us, the unit agent, the collateral agent, the paying
agent,  the  warrant  agent and each  trustee  that it intends  to follow  those
procedures.


                                      S-28
<PAGE>


                                 THE DEPOSITARY

     The Depository Trust Company,  New York, New York will be designated as the
depositary for any registered  global security.  Each registered global security
will be registered in the name of Cede & Co., the Depositary's nominee.

     The   Depositary   has  advised  us  as  follows:   the   Depositary  is  a
limited-purpose  trust  company  organized  under the New York  Banking  Law,  a
"banking  organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System,  a "clearing  corporation"  within the meaning of
the New  York  Uniform  Commercial  Code,  and a  "clearing  agency"  registered
pursuant to the  provisions  of Section 17A of the  Securities  Exchange  Act of
1934, as amended.  The  Depositary  holds  securities  deposited  with it by its
participants,  and it  facilitates  the  settlement  of  transactions  among its
participants in those  securities  through  electronic  computerized  book-entry
changes in participants' accounts, eliminating the need for physical movement of
securities certificates.  The Depositary's direct participants include both U.S.
and non-U.S. securities brokers and dealers (including the agents), banks, trust
companies,  clearing  corporations and other organizations,  some of whom and/or
their representatives own the Depositary.  Access to the Depositary's book-entry
system is also  available  to  others,  such as banks,  both U.S.  and  non-U.S.
brokers,  dealers,  trust companies and clearing corporations that clear through
or maintain a custodial  relationship  with a  participant,  either  directly or
indirectly.  The rules  applicable to the Depositary and its participants are on
file with the SEC.

     Purchases of the securities under the  Depositary's  system must be made by
or  through  its  direct  participants,  which  will  receive  a credit  for the
securities on the Depositary's  records.  The ownership  interest of each actual
purchaser of each security (the "beneficial owner") is in turn to be recorded on
the  records of direct and  indirect  participants.  Beneficial  owners will not
receive  written  confirmation  from  the  Depositary  of  their  purchase,  but
beneficial  owners are  expected  to  receive  written  confirmations  providing
details of the  transaction,  as well as periodic  statements of their holdings,
from the direct or indirect  participants  through  which the  beneficial  owner
entered into the transaction. Transfers of ownership interests in the securities
are to be made by  entries  on the books of  direct  and  indirect  participants
acting  on behalf of  beneficial  owners.  Beneficial  owners  will not  receive
certificates representing their ownership interests in securities, except in the
event that use of the book-entry system for the securities is discontinued.

     To facilitate  subsequent  transfers,  all  securities  deposited  with the
Depositary are registered in the name of the Depositary's  partnership  nominee,
Cede & Co, or such other name as may be requested by the Depositary. The deposit
of securities  with the Depositary and their  registration in the name of Cede &
Co.  or such  other  nominee  of the  Depositary  do not  effect  any  change in
beneficial  ownership.  The Depositary has no knowledge of the actual beneficial
owners of the securities;  the Depositary's records reflect only the identity of
the direct participants to whose accounts the securities are credited, which may
or may not be the beneficial  owners.  The participants will remain  responsible
for keeping account of their holdings on behalf of their customers.

     Conveyance of notices and other  communications by the Depositary to direct
participants,  by direct  participants to indirect  participants,  and by direct
participants and indirect  participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory  requirements as
may be in effect from time to time.

     Neither  the  Depositary  nor Cede & Co.  (nor such  other  nominee  of the
Depositary)  will  consent  or  vote  with  respect  to  the  securities  unless
authorized  by  a  direct   participant  in  accordance  with  the  Depositary's
procedures. Under its usual procedures, the Depositary mails an omnibus proxy to
us as soon as possible  after the  applicable  record  date.  The omnibus  proxy
assigns Cede & Co.'s  consenting or voting  rights to those direct  participants
identified  in a listing  attached to the omnibus  proxy to whose  accounts  the
securities are credited on the record date.

     Redemption proceeds, distributions, and dividend payments on the securities
will  be made to Cede & Co or such  other  nominee  as may be  requested  by the
Depositary. The Depositary's practice is to credit direct participants' accounts
upon the Depositary's receipt of funds and corresponding detail information from
us or any agent of ours, on the date payable in accordance with their respective
holdings  shown  on  the  Depositary's  records.  Payments  by  participants  to
beneficial  owners  will be  governed by  standing  instructions  and  customary
practices,  as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and


                                      S-29
<PAGE>


will be the  responsibility of such participant and not of the Depositary or its
nominee,  the trustee,  any agent of ours,  or us,  subject to any  statutory or
regulatory  requirements  as may be in  effect  from time to time.  Payments  of
redemption proceeds,  distributions, and dividend payments to Cede & Co. or such
other nominee as may be requested by the Depositary is the  responsibility of us
or of any  paying  agent  of  ours,  disbursement  of such  payments  to  direct
participants will be the  responsibility of the Depositary,  and disbursement of
such payments to the beneficial owners will be the  responsibility of direct and
indirect participants.

     If the Depositary for any of these  securities  represented by a registered
global  security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency  registered under the Securities  Exchange Act of
1934,  and a successor  depositary  registered  as a clearing  agency  under the
Securities  Exchange Act of 1934 is not  appointed by us within 90 days, we will
issue  securities  in  definitive  form in exchange  for the  registered  global
security  that had been  held by the  Depositary.  In  addition,  the  indenture
permits us at any time and in our sole  discretion  to decide not to have any of
the securities represented by one or more registered global securities.  DTC has
advised us that, under its current  practices,  it would notify its participants
of our request, but will only withdraw beneficial interests from the global note
at the request of each DTC participant.  We would issue definitive  certificates
in  exchange  for  any  such  interests  withdrawn.  Any  securities  issued  in
definitive  form in exchange for global  security will be registered in the name
or names that the Depositary gives to the relevant trustee,  warrant agent, unit
agent or  other  relevant  agent  of ours or  theirs.  It is  expected  that the
Depositary's  instructions  will  be  based  upon  directions  received  by  the
Depositary from participants  with respect to ownership of beneficial  interests
in the registered global security that had been held by the Depositary.

     According to the  Depositary,  the  foregoing  information  relating to the
Depositary  has been  provided  to the  financial  community  for  informational
purposes  only and is not  intended  to serve as a  representation,  warranty or
contract modification of any kind.

     The information in this section  concerning the Depositary and Depositary's
book-entry system has been obtained from sources we believe to be reliable,  but
we take no responsibility for the accuracy thereof. The Depositary may change or
discontinue the foregoing procedures at any time.


                                      S-30
<PAGE>


                  SERIES E SECURITIES OFFERED ON A GLOBAL BASIS

     If we offer any of the  securities  under our  Series E Program on a global
basis, we will so specify in the applicable pricing  supplement.  The additional
information  contained in this section under "-- Book Entry,  Delivery and Form"
and "-- Global Clearance and Settlement Procedures" will apply to every offering
on a global basis.

BOOK-ENTRY, DELIVERY AND FORM

     The securities  will be issued in the form of one or more fully  registered
global  securities which will be deposited with, or on behalf of, the Depositary
and registered in the name of Cede & Co., the Depositary's  nominee.  Beneficial
interests  in the  registered  global  securities  will be  represented  through
book-entry  accounts of financial  institutions  acting on behalf of  beneficial
owners as direct and indirect  participants  in the  Depositary.  Investors  may
elect  to  hold  interests  in the  registered  global  securities  held  by the
Depositary through Clearstream, Luxembourg or the Euroclear operator if they are
participants in those systems,  or indirectly  through  organizations  which are
participants  in  those  systems.  Clearstream,  Luxembourg  and  the  Euroclear
operator will hold interests on behalf of their participants  through customers'
securities  accounts in Clearstream,  Luxembourg's and the Euroclear  operator's
names on the  books of their  respective  depositaries,  which in turn will hold
such  interests in the  registered  global  securities in customers'  securities
accounts in the  depositaries'  names on the books of the Depositary.  Citibank,
N.A. will act as depositary for Clearstream,  Luxembourg and JPMorgan Chase Bank
will act as depositary for the Euroclear operator. We refer to each of Citibank,
N.A. and JPMorgan Chase Bank, acting in this depositary  capacity,  as the "U.S.
depositary" for the relevant  clearing  system.  Except as set forth below,  the
registered global securities may be transferred,  in whole but not in part, only
to the  Depositary,  another  nominee of the Depositary or to a successor of the
Depositary or its nominee.

     Clearstream,  Luxembourg  advises that it is incorporated under the laws of
Luxembourg  as  a  bank.  Clearstream,   Luxembourg  holds  securities  for  its
customers,  "Clearstream,  Luxembourg  customers," and facilitates the clearance
and  settlement  of  securities  transactions  between  Clearstream,  Luxembourg
customers  through  electronic  book-entry  transfers  between  their  accounts,
thereby  eliminating the need for physical movement of securities.  Clearstream,
Luxembourg provides to Clearstream,  Luxembourg  customers,  among other things,
services  for   safekeeping,   administration,   clearance  and   settlement  of
internationally   traded  securities  and  securities   lending  and  borrowing.
Clearstream,  Luxembourg  interfaces with domestic securities markets in over 30
countries through established depository and custodial relationships. As a bank,
Clearstream,  Luxembourg is subject to regulation by the  Luxembourg  Commission
for the  Supervision  of the Financial  Sector  (Commission de  Surveillance  du
Secteur Financier).  Clearstream,  Luxembourg customers are world-wide financial
institutions,  including  underwriters,  securities brokers and dealers,  banks,
trust  companies  and  clearing  corporations.  Clearstream,  Luxembourg's  U.S.
customers  are limited to  securities  brokers  and dealers and banks.  Indirect
access to Clearstream,  Luxembourg is also available to other  institutions such
as banks, brokers,  dealers and trust companies that clear through or maintain a
custodial  relationship with a Clearstream,  Luxembourg  customer.  Clearstream,
Luxembourg has established an electronic  bridge with the Euroclear  operator to
facilitate  settlement  of  trades  between  Clearstream,   Luxembourg  and  the
Euroclear operator.

     The Euroclear  operator  advises that the  Euroclear  System was created in
1968 to hold securities for its participants,  "Euroclear  participants," and to
clear  and  settle   transactions   between   Euroclear   participants   through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for  physical  movement  of  certificates  and any  risk  from  lack of
simultaneous  transfers of securities and cash. The Euroclear System is owned by
Euroclear Clearance System Public Limited Company and operated through a license
agreement by the Euroclear  operator,  a bank incorporated under the laws of the
Kingdom of Belgium.  The  Euroclear  operator is  regulated  and examined by the
Belgian Banking and Finance Commission and the National Bank of Belgium.

     The  Euroclear  operator  holds  securities  and  book-entry  interests  in
securities for  participating  organizations  and  facilitates the clearance and
settlement of securities transactions between Euroclear participants and between
Euroclear   participants   and   participants   of  certain   other   securities
intermediaries  through  electronic  book-entry  changes  in  accounts  of  such
participants or other securities intermediaries.


                                      S-31
<PAGE>


     The Euroclear  operator provides  Euroclear  participants with, among other
things,  safekeeping,   administration,  clearance  and  settlement,  securities
lending and borrowing and related services.

     Non-participants  of Euroclear  may acquire,  hold and transfer  book-entry
interests in securities  through accounts with a direct participant of Euroclear
or any other  securities  intermediary  that holds a book-entry  interest in the
securities through one or more securities  intermediaries  standing between such
other securities intermediary and the Euroclear operator.

     Securities clearance accounts and cash accounts with the Euroclear operator
are governed by the Terms and  Conditions  Governing  Use of  Euroclear  and the
related  Operating  Procedures of the Euroclear System,  and applicable  Belgian
law,  collectively,  the "terms and conditions." The terms and conditions govern
transfers of securities  and cash within the Euroclear  System,  withdrawals  of
securities  and cash from the  Euroclear  System,  and receipts of payments with
respect to securities in the Euroclear  System.  All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear operator acts under the
terms and conditions only on behalf of Euroclear  participants and has no record
of or relationship with persons holding through Euroclear participants.

     Distributions with respect to the securities held beneficially  through the
Euroclear System will be credited to the cash accounts of Euroclear participants
in accordance with the terms and conditions,  to the extent received by the U.S.
depositary for the Euroclear operator.

     Although the Euroclear operator has agreed to the procedures provided below
in order to facilitate transfers of securities among Euroclear  participants and
between Euroclear  participants and participants of other intermediaries,  it is
under no obligation  to perform or continue to perform in  accordance  with such
procedures, and such procedures may be modified or discontinued at any time.

     Investors  electing  to acquire  securities  through  an  account  with the
Euroclear  operator  or some  other  securities  intermediary  must  follow  the
settlement  procedures of such an intermediary with respect to the settlement of
new issues of  securities.  Investors  electing  to  acquire,  hold or  transfer
securities  through  an  account  with  the  Euroclear  operator  or some  other
securities  intermediary  must  follow  the  settlement  procedures  of  such an
intermediary with respect to the settlement of secondary market  transactions of
such securities.

     Investors  who are  Euroclear  participants  may acquire,  hold or transfer
interests in securities  by book-entry to accounts with the Euroclear  operator.
Investors  who are not  Euroclear  participants  may  acquire,  hold or transfer
interests in securities by book-entry to accounts with a securities intermediary
who holds a  book-entry  interest  in these  securities  through  accounts  with
Euroclear.

     The Euroclear  operator  further advises that investors that acquire,  hold
and transfer interests in the securities by book-entry through accounts with the
Euroclear operator or any other securities  intermediary are subject to the laws
and contractual provisions governing their relationship with their intermediary,
as well as the  laws  and  contractual  provisions  governing  the  relationship
between their intermediary and each other intermediary, if any, standing between
themselves and the securities.

     The Euroclear  operator advises that, under Belgian law, investors that are
credited  with  securities  on the  records  of the  Euroclear  operator  have a
co-property  right in the fungible  pool of interests in  securities  on deposit
with the  Euroclear  operator in an amount  equal to the amount of  interests in
securities  credited to their  accounts.  In the event of the  insolvency of the
Euroclear operator,  Euroclear participants would have a right under Belgian law
to the return of the amount and type of  interests  in  securities  credited  to
their accounts with the Euroclear  operator.  If the Euroclear operator does not
have a sufficient  amount of interests in  securities on deposit of a particular
type to  cover  the  claims  of all  participants  credited  with  interests  in
securities of that type on the Euroclear  operator's  records,  all participants
having an amount of  interests  in  securities  of that type  credited  to their
accounts  with the  Euroclear  operator will have the right under Belgian law to
the return of their  pro-rata  share of the amount of  interests  in  securities
actually on deposit.

     Under  Belgian  law,  the  Euroclear  operator  is  required to pass on the
benefits of ownership in any interests in securities on deposit with it (such as
dividends,  voting rights and other  entitlements)  to any person  credited with
those interests in securities on its records.


                                      S-32
<PAGE>


     Individual  certificates in respect of the securities will not be issued in
exchange  for  the  registered  global   securities,   except  in  very  limited
circumstances.  If the Depositary  notifies us that it is unwilling or unable to
continue  as  a  clearing  system  in  connection  with  the  registered  global
securities or ceases to be a clearing agency  registered under the Exchange Act,
and a  successor  clearing  system is not  appointed  by us within 90 days after
receiving  that  notice  from the  Depositary  or upon  becoming  aware that the
Depositary  is no  longer  so  registered,  we will  issue or cause to be issued
individual certificates in registered form on registration of transfer of, or in
exchange  for,  book-entry  interests  in the  securities  represented  by  such
registered global securities upon delivery of those registered global securities
for cancellation.

     Title to  book-entry  interests in the  securities  will pass by book-entry
registration of the transfer within the records of Clearstream,  Luxembourg, the
Euroclear  operator or the  Depositary,  as the case may be, in accordance  with
their  respective  procedures.  Book-entry  interests in the  securities  may be
transferred within  Clearstream,  Luxembourg and within the Euroclear System and
between  Clearstream,  Luxembourg  and the Euroclear  System in accordance  with
procedures  established  for these purposes by  Clearstream,  Luxembourg and the
Euroclear  operator.  Book-entry  interests in the securities may be transferred
within the Depositary in accordance with procedures established for this purpose
by the  Depositary.  Transfers of book-entry  interests in the securities  among
Clearstream,  Luxembourg  and the Euroclear  operator and the  Depositary may be
effected  in  accordance  with  procedures   established  for  this  purpose  by
Clearstream, Luxembourg, the Euroclear operator and the Depositary.

     A further  description of the  Depositary's  procedures with respect to the
registered  global  securities  is set forth in the  prospectus  under "Forms of
Securities -- Global  Securities."  The  Depositary  has confirmed to us and the
trustee that it intends to follow these procedures.

GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES

     Initial  settlement  for the  securities  offered on a global basis will be
made in  immediately  available  funds.  Secondary  market  trading  between the
Depositary's  participants will occur in the ordinary way in accordance with the
Depositary's rules and will be settled in immediately  available funds using the
Depositary's Same-Day Funds Settlement System.  Secondary market trading between
Clearstream,  Luxembourg  customers and/or Euroclear  participants will occur in
the  ordinary  way  in  accordance  with  the  applicable  rules  and  operating
procedures  of  Clearstream,  Luxembourg  and the  Euroclear  System and will be
settled using the procedures applicable to conventional Eurobonds in immediately
available funds.

     Cross-market  transfers  between  persons  holding  directly or  indirectly
through the  Depositary  on the one hand,  and  directly or  indirectly  through
Clearstream,  Luxembourg customers or Euroclear participants, on the other, will
be effected through the Depositary in accordance with the Depositary's  rules on
behalf  of the  relevant  European  international  clearing  system  by its U.S.
depositary;  however,  these cross-market  transactions will require delivery of
instructions  to the  relevant  European  international  clearing  system by the
counterparty  in the clearing system in accordance with its rules and procedures
and within its established  deadlines  (European  time).  The relevant  European
international  clearing  system will, if the  transaction  meets its  settlement
requirements,  deliver  instructions  to its U.S.  depositary  to take action to
effect final settlement on its behalf by delivering  interests in the securities
to or receiving  interests in the securities from the Depositary,  and making or
receiving  payment in  accordance  with normal  procedures  for  same-day  funds
settlement applicable to the Depositary.  Clearstream,  Luxembourg customers and
Euroclear participants may not deliver instructions directly to their respective
U.S. depositaries.

     Because of time-zone  differences,  credits of interests in the  securities
received in  Clearstream,  Luxembourg or the  Euroclear  System as a result of a
transaction  with a  Depositary  participant  will  be  made  during  subsequent
securities  settlement  processing  and dated the  business  day  following  the
Depositary  settlement date. Credits of interests or any transactions  involving
interests in the securities received in Clearstream, Luxembourg or the Euroclear
System as a result of a transaction  with a Depositary  participant  and settled
during  subsequent  securities  settlement  processing  will be  reported to the
relevant  Clearstream,  Luxembourg  customers or Euroclear  participants  on the
business  day  following  the  Depositary  settlement  date.  Cash  received  in
Clearstream,  Luxembourg  or the  Euroclear  System  as a  result  of  sales  of
interests in the securities by or through a Clearstream,  Luxembourg customer or
a Euroclear participant to a Depositary  participant will be received with value
on the


                                      S-33
<PAGE>


Depositary  settlement  date but will be available in the relevant  Clearstream,
Luxembourg  or Euroclear  cash  account  only as of the  business day  following
settlement in the Depositary.

     Although the Depositary, Clearstream, Luxembourg and the Euroclear operator
have agreed to the  foregoing  procedures  in order to  facilitate  transfers of
interests in the securities among  participants of the Depositary,  Clearstream,
Luxembourg and Euroclear, they are under no obligation to perform or continue to
perform  the  foregoing  procedures  and  these  procedures  may be  changed  or
discontinued at any time.

NOTICES

     Notices to holders of the securities  will 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 our books.  Notices  given to the
Depositary, as holder of the registered global securities,  will be passed on to
the beneficial  owners of the  securities in accordance  with the standard rules
and  procedures  of the  Depositary  and its direct and  indirect  participants,
including Clearstream, Luxembourg and the Euroclear operator.

     See also  "Plan of  Distribution  --  Series  E Notes  Offered  on a Global
Basis."


                                      S-34
<PAGE>


                         UNITED STATES FEDERAL TAXATION

     In the opinion of Davis Polk &  Wardwell,  our  special  tax  counsel,  the
following  summary  accurately  describes the principal U.S.  federal income tax
consequences  of ownership  and  disposition  of the notes and units.  Except as
specifically noted below, this discussion applies only to:

     o    notes and units that are purchased on original issuance; and

     o    notes that are held as capital assets.

     This discussion does not describe all of the tax  consequences  that may be
relevant in light of a holder's  particular  circumstances or to holders subject
to special rules, such as:

     o    certain financial institutions;

     o    insurance companies;

     o    dealers in securities or foreign currencies;

     o    persons  holding notes as part of a hedging  transaction,  "straddle,"
          conversion transaction or other integrated transaction;

     o    United States Holders,  as defined below, whose functional currency is
          not the U.S. dollar; or

     o    partnerships  or other entities  classified as  partnerships  for U.S.
          federal income tax purposes.

     This summary is based on the Internal  Revenue Code of 1986,  as amended to
the date hereof (the "Code"), administrative pronouncements,  judicial decisions
and final, temporary and proposed Treasury Regulations,  changes to any of which
subsequent  to the  date  of  this  prospectus  supplement  may  affect  the tax
consequences  described  below.  Persons  considering  the purchase of the notes
should consult the applicable pricing  supplement for any additional  discussion
regarding U.S. federal income taxation and their tax advisers with regard to the
application of the U.S. federal income tax laws to their  particular  situations
as well as any tax  consequences  arising under the laws of any state,  local or
foreign taxing jurisdiction.

     This discussion does not apply to mandatorily exchangeable notes, warrants,
units,  currency-linked  notes or notes  linked to  commodities,  rates,  single
securities,  baskets of securities,  indices or other quantitative measures. The
tax treatment of these  instruments will be specified in the applicable  pricing
supplement and prospective purchasers are urged to review the applicable pricing
supplement and consult with their tax advisers.

TAX CONSEQUENCES TO UNITED STATES HOLDERS

     As used herein, the term "United States Holder" means a beneficial owner of
a note that is for U.S. federal income tax purposes:

     o    a citizen or individual resident of the United States;

     o    a  corporation,  or other  entity  taxable as a  corporation  for U.S.
          federal income tax purposes, created or organized in or under the laws
          of the United States or of any political subdivision thereof; or

     o    an estate or trust the  income  of which is  subject  to U.S.  federal
          income taxation regardless of its source.

     The term "United States Holder" also includes  certain former  citizens and
residents of the United States.

     If an entity that is classified as a partnership  for U.S.  federal  income
tax purposes  holds notes,  the U.S.  federal  income tax treatment of a partner
will  generally  depend on the status of the partner and upon the  activities of
the  partnership.  Partners of  partnerships  holding notes should  consult with
their tax advisers.

     PAYMENTS OF INTEREST

     Interest  paid on a note  will be  taxable  to a United  States  Holder  as
ordinary  interest  income at the time it accrues or is received  in  accordance
with the Holder's method of accounting for federal income tax purposes, provided
that the interest is "qualified  stated  interest" (as defined  below).  Special
rules govern the  treatment of interest paid with respect to certain  notes,  as
described under  "Original Issue  Discount,"  "Optionally  Exchangeable  Notes,"
"Mandatorily Exchangeable Notes" and "Foreign Currency Notes" below.


                                      S-35
<PAGE>


     ORIGINAL ISSUE DISCOUNT

     A note that has an "issue  price" that is less than its "stated  redemption
price at  maturity"  will be  considered  to have  been  issued  at an  original
discount  for  federal  income  tax  purposes  (and  will be  referred  to as an
"original issue discount note") unless the note satisfies a de minimis threshold
(as  described  below) or is a short-term  note (as defined  below).  The "issue
price" of a note will be the first  price at which a  substantial  amount of the
notes are sold to the public (not  including  sales to bond  houses,  brokers or
similar  persons  or  organizations  acting  in the  capacity  of  underwriters,
placement agents or wholesalers). The "stated redemption price at maturity" of a
note generally will equal the sum of all payments  required under the note other
than payments of "qualified  stated  interest."  "Qualified  stated interest" is
stated interest  unconditionally  payable (other than in debt instruments of the
issuer) at least  annually  during the entire  term of the note and equal to the
outstanding  principal  balance of the note multiplied by a single fixed rate of
interest. In addition,  qualified stated interest includes,  among other things,
stated  interest on a "variable rate debt  instrument"  that is  unconditionally
payable  (other than in debt  instruments  of the issuer) at least annually at a
single qualified  floating rate of interest or at a rate that is determined at a
single  fixed  formula  that  is  based  on  objective   financial  or  economic
information.  A rate generally is a qualified floating rate if variations in the
rate can reasonably be expected to measure  contemporaneous  fluctuations in the
cost of newly borrowed funds in the currency in which the note is denominated.

     If the difference  between a note's stated redemption price at maturity and
its issue price is less than a de minimis amount,  i.e., 1/4 of 1 percent of the
stated  redemption price at maturity  multiplied by the number of complete years
to maturity,  the note will not be considered to have original  issue  discount.
United  States  Holders  of notes  with a de minimis  amount of  original  issue
discount will include this original issue  discount in income,  as capital gain,
on a pro rata basis as principal payments are made on the note.

     A United  States  Holder of  original  discount  notes will be  required to
include any qualified stated interest  payments in income in accordance with the
Holder's  method of accounting  for federal  income tax purposes.  United States
Holders of  original  issue  discount  notes that mature more than one year from
their date of issuance will be required to include  original  issue  discount in
income for federal  tax  purposes  as it accrues in  accordance  with a constant
yield method based on a  compounding  of  interest,  regardless  of whether cash
attributable  to this  income is  received.  Under this  method,  United  States
Holders of original issue  discount notes  generally will be required to include
in income increasingly  greater amounts of original issue discount in successive
accrual periods.

     A United  States Holder may make an election to include in gross income all
interest  that  accrues  on any note  (including  stated  interest,  acquisition
discount,  original issue discount,  de minimis original issue discount,  market
discount,  de minimis market discount and unstated interest,  as adjusted by any
amortizable  bond premium or acquisition  premium) in accordance with a constant
yield method based on the compounding of interest (a "constant yield election").

     A note  that  matures  one  year or less  from  its  date  of  issuance  (a
"short-term note") will be treated as being issued at a discount and none of the
interest  paid on the note will be  treated as  qualified  stated  interest.  In
general, a cash method United States Holder of a short-term note is not required
to accrue the discount for U.S.  federal income tax purposes unless it elects to
do so.  Holders  who so elect and certain  other  Holders,  including  those who
report  income on the  accrual  method of  accounting  for  federal  income  tax
purposes,  are  required  to include  the  discount in income as it accrues on a
straight-line  basis,  unless  another  election is made to accrue the  discount
according to a constant yield method based on daily compounding.  In the case of
a United States Holder who is not required and who does not elect to include the
discount  in income  currently,  any gain  realized  on the sale,  exchange,  or
retirement of the short-term  note will be ordinary  income to the extent of the
discount  that would have  accrued on a  straight-line  basis (or,  if  elected,
according to a constant  yield method  based on daily  compounding)  through the
date of sale, exchange or retirement.  In addition,  those United States Holders
will be required  to defer  deductions  for any  interest  paid on  indebtedness
incurred to purchase or carry  short-term  notes in an amount not  exceeding the
accrued discount until the accrued discount is included in income.

     We may have an unconditional option to redeem, or United States Holders may
have an unconditional option to require us to redeem, a note prior to its stated
maturity date. Under applicable regulations,  if we have an unconditional option
to redeem a note prior to its stated maturity date, this option will be presumed
to be exercised  if, by utilizing  any date on which the note may be redeemed as
the maturity date and the amount payable on that

                                      S-36
<PAGE>


date in accordance with the terms of the note as the stated  redemption price at
maturity,  the yield on the note would be lower than its yield to  maturity.  If
the United States Holders have an unconditional option to require us to redeem a
note prior to its stated  maturity  date,  this  option  will be  presumed to be
exercised  if making  the same  assumptions  as those set forth in the  previous
sentence,  the yield on the note would be higher than its yield to maturity.  If
this  option is not in fact  exercised,  the note  would be  treated  solely for
purposes of calculating  original  issue discount as if it were redeemed,  and a
new note were issued,  on the presumed  exercise date for an amount equal to the
note's  adjusted  issue  price on that  date.  The  adjusted  issue  price of an
original  issue  discount  note is defined as the sum of the issue  price of the
note and the aggregate  amount of previously  accrued  original issue  discount,
less any prior payments other than payments of qualified stated interest.

     MARKET DISCOUNT

     If a United States Holder  purchases a note (other than a short-term  note)
for an amount that is less than its stated  redemption  price at maturity or, in
the case of an original  issue  discount  note,  its adjusted  issue price,  the
amount of the difference  will be treated as market  discount for federal income
tax purposes, unless this difference is less than a specified de minimis amount.

     A United States Holder will be required to treat any principal payment (or,
in the case of an  original  issue  discount  note,  any  payment  that does not
constitute  qualified  stated  interest) on, or any gain on the sale,  exchange,
retirement or other  disposition  of a note,  including  disposition  in certain
nonrecognition  transactions,  as  ordinary  income to the  extent of the market
discount  accrued on the note at the time of the payment or  disposition  unless
this market discount has been previously included in income by the United States
Holder  pursuant  to an  election  by the Holder to include  market  discount in
income as it accrues,  or pursuant to a constant yield election by the Holder as
described under  "Original Issue Discount"  above. If the note is disposed of in
certain nontaxable  transactions,  accrued market discount will be includible as
ordinary  income to the Holder as if such  Holder had sold the note in a taxable
transaction at its then fair market value. In addition, the United States Holder
may be  required  to  defer,  until  the  maturity  of the  note or its  earlier
disposition (including certain nontaxable transactions), the deduction of all or
a portion of the interest expense on any indebtedness  incurred or maintained to
purchase or carry such note.

     If a United States Holder makes a constant  yield  election for a note with
market  discount,  such election will result in a deemed election for all market
discount  bonds  acquired  by the  Holder on or after the first day of the first
taxable year to which such election applies.

     ACQUISITION PREMIUM AND AMORTIZABLE BOND PREMIUM

     A United  States  Holder who purchases a note for an amount that is greater
than the note's  adjusted  issue  price but less than or equal to the sum of all
amounts  payable on the note after the  purchase  date  other than  payments  of
qualified  stated  interest will be considered to have  purchased the note at an
acquisition premium. Under the acquisition premium rules, the amount of original
issue  discount  that the United  States Holder must include in its gross income
with  respect to the note for any taxable year will be reduced by the portion of
acquisition premium properly allocable to that year.

     If a United  States  Holder  purchases a note for an amount that is greater
than the amount payable at maturity, or on the earlier call date, in the case of
a note that is redeemable  at our option,  the Holder will be considered to have
purchased the note with  amortizable  bond premium equal in amount to the excess
of the purchase price over the amount payable at maturity.  The Holder may elect
to amortize this premium, using a constant yield method, over the remaining term
of the note (where the note is not optionally  redeemable  prior to its maturity
date). If the note may be optionally redeemed prior to maturity after the Holder
has  acquired  it, the amount of  amortizable  bond  premium  is  determined  by
substituting  the call  date for the  maturity  date and the call  price for the
amount payable at maturity only if the substitution  results in a smaller amount
of premium  attributable to the period before the redemption  date. A Holder who
elects to  amortize  bond  premium  must reduce his tax basis in the note by the
amount of the premium  amortized  in any year.  An  election  to  amortize  bond
premium  applies to all  taxable  debt  obligations  then  owned and  thereafter
acquired by the Holder and may be revoked  only with the consent of the Internal
Revenue Service.


                                      S-37
<PAGE>


     If a United  States  Holder makes a constant  yield  election (as described
under "Original Issue Discount" above) for a note with amortizable bond premium,
such election will result in a deemed  election to amortize bond premium for all
of the  Holder's  debt  instruments  with  amortizable  bond  premium and may be
revoked only with the permission of the Internal Revenue Service with respect to
debt instruments acquired after revocation.

     SALE, EXCHANGE OR RETIREMENT OF THE NOTES

     Upon the sale,  exchange or  retirement  of a note, a United  States Holder
will recognize  taxable gain or loss equal to the difference  between the amount
realized on the sale, exchange or retirement and the Holder's adjusted tax basis
in the note. For these purposes, the amount realized does not include any amount
attributable to accrued  interest on the note.  Amounts  attributable to accrued
interest  are treated as interest as  described  under  "Payments  of  Interest"
above.

     Except as described below,  gain or loss realized on the sale,  exchange or
retirement  of a note  will  generally  be  capital  gain  or loss  and  will be
long-term  capital gain or loss if at the time of sale,  exchange or  retirement
the note has been held for more than one year.  Exceptions  to this general rule
apply  to the  extent  of any  accrued  market  discount  or,  in the  case of a
short-term note, to the extent of any accrued  discount not previously  included
in the  Holder's  taxable  income.  See  "Original  Issue  Discount"  above.  In
addition,  other  exceptions  to this  general rule apply in the case of foreign
currency notes and optionally  exchangeable  notes. See "Foreign Currency Notes"
and "Optionally Exchangeable Notes" below.

     OPTIONALLY EXCHANGEABLE NOTES

     Unless  otherwise noted in the applicable  pricing  supplement,  optionally
exchangeable notes will be treated as "contingent  payment debt instruments" for
U.S.  federal income tax purposes.  Under the rules that govern the treatment of
contingent  payment debt instruments,  no payment on an optionally  exchangeable
note qualifies as qualified stated interest. Rather, a United States Holder must
account for interest for U.S. federal income tax purposes based on a "comparable
yield" and the  differences  between actual  payments on the note and the note's
"projected  payment  schedule"  as  described  below.  The  comparable  yield is
determined by us at the time of issuance of the notes and takes into account the
yield at which we could issue a fixed rate debt  instrument  with no  contingent
payments,  but with  terms  and  conditions  otherwise  similar  to those of the
optionally  exchangeable notes. The comparable yield may be greater than or less
than the stated interest, if any, with respect to the notes.

     Solely for the purpose of determining  the amount of interest income that a
United States will be required to accrue on an optionally  exchangeable note, we
will be required to construct a "projected  payment  schedule" that represents a
series of  payments  the  amount and  timing of which  would  produce a yield to
maturity on the optionally  exchangeable note equal to the comparable yield that
is used.

     Neither the comparable yield nor the projected payment schedule constitutes
a representation  by us regarding the actual amount, if any, that the optionally
exchangeable note will pay.

     For U.S.  federal  income tax  purposes,  a United  States  Holder  will be
required  to use  the  comparable  yield  and  the  projected  payment  schedule
established by us in determining interest accruals and adjustments in respect of
an  optionally  exchangeable  note,  unless  the  Holder  timely  discloses  and
justifies the use of a different comparable yield and projected payment schedule
to the Internal Revenue Service.

     A United States Holder, regardless of the Holder's method of accounting for
U.S. federal income tax purposes,  will be required to accrue interest income on
an optionally  exchangeable  note at the comparable  yield,  adjusted  upward or
downward to reflect the difference, if any, between the actual and the projected
amount of any contingent  payments on the optionally  exchangeable  note (as set
forth below).

     A United States Holder will be required to recognize  interest income equal
to the  amount  of any net  positive  adjustment,  i.e.,  the  excess  of actual
payments over projected payments, in respect of an optionally  exchangeable note
for a taxable  year. A net negative  adjustment,  i.e.,  the excess of projected
payments over actual payments, in respect of an optionally exchangeable note for
a taxable year:

     o    will first reduce the amount of interest in respect of the  optionally
          exchangeable note that a Holder would otherwise be required to include
          in income in the taxable year; and


                                      S-38
<PAGE>


     o    to the extent of any excess,  will give rise to an ordinary loss equal
          to so much of this excess as does not exceed the excess of:

          o    the  amount  of  all  previous  interest   inclusions  under  the
               optionally exchangeable note over

          o    the total  amount of the  United  States  Holder's  net  negative
               adjustments   treated  as   ordinary   loss  on  the   optionally
               exchangeable note in prior taxable years.

     A net  negative  adjustment  is  not  subject  to  the  two  percent  floor
limitation imposed on miscellaneous  deductions.  Any net negative adjustment in
excess of the amounts  described  above will be carried forward to offset future
interest income in respect of the optionally  exchangeable note or to reduce the
amount realized on a sale, exchange or retirement of the optionally exchangeable
note. Where a United States Holder purchases an optionally exchangeable note for
a price other than its adjusted issue price, the difference between the purchase
price and the  adjusted  issue price must be  reasonably  allocated to the daily
portions  of interest  or  projected  payments  with  respect to the  optionally
exchangeable  note over its remaining term and treated as a positive or negative
adjustment,  as the case may be,  with  respect  to each  period  to which it is
allocated.

     Upon a sale,  exchange or  retirement of an  optionally  exchangeable  note
(including  a delivery  of shares  pursuant to the terms of the  obligation),  a
United States Holder will generally  recognize taxable gain or loss equal to the
difference  between the amount realized on the sale,  exchange or retirement and
the Holder's  adjusted  basis in the  optionally  exchangeable  note. A Holder's
adjusted  basis in the note will  equal the cost of the note,  increased  by the
amount of  interest  income  previously  accrued by the Holder in respect of the
note  (disregarding  any positive or negative  adjustments  described above) and
decreased by the amount of all prior projected  payments in respect of the note.
If we deliver property, other than cash, to a United States Holder in retirement
of an  optionally  exchangeable  note,  the amount  realized will equal the fair
market value of the  property,  determined at the time of  retirement,  plus the
amount of cash,  if any,  received in lieu of property.  A United  States Holder
generally will treat any gain as interest income,  and any loss as ordinary loss
to the extent of the excess of  previous  interest  inclusions  in excess of the
total net negative adjustments previously taken into account as ordinary losses,
and the balance as capital loss. The  deductibility of capital losses is subject
to limitations. Additionally, a United States Holder who recognizes a loss above
certain  thresholds  could be required to file a disclosure  statement  with the
Internal Revenue Service.

     A United States  Holder will have a tax basis in any  property,  other than
cash, received upon the retirement of an optionally  exchangeable note including
in satisfaction  of a conversion  right or a call right equal to the fair market
value of the  property,  determined  at the  time of  retirement.  The  Holder's
holding period for the property will commence on the day  immediately  following
its receipt.

     FOREIGN CURRENCY NOTES

     The following  discussion  summarizes  the principal  United States federal
income  tax  consequences  to a  United  States  Holder  of  the  ownership  and
disposition of notes that are denominated in a specified currency other than the
U.S. dollar, which we refer to as "foreign currency notes." The tax treatment of
currency-linked  notes and notes the payment of interest or  principal  on which
are  payable in more than one  currency  or  currency  units other than the U.S.
dollar will be specified in the relevant pricing supplement.

     The rules  applicable to foreign  currency  notes could require some or all
gain or loss on the sale,  exchange or other  disposition of a foreign  currency
note to be  recharacterized  as ordinary income or loss. The rules applicable to
foreign  currency  notes are complex and may depend on the  holder's  particular
U.S. federal income tax situation.  For example, various elections are available
under these rules,  and whether a United  States Holder should make any of these
elections may depend on the holder's  particular  federal  income tax situation.
United States Holders are urged to consult their own tax advisers  regarding the
U.S. federal income tax consequences of the ownership and disposition of foreign
currency notes.

     A United  States  Holder  who uses the cash  method of  accounting  and who
receives a payment of  qualified  stated  interest  in a foreign  currency  with
respect to a foreign  currency  note will be  required  to include in income the
U.S. dollar value of the foreign  currency  payment  (determined on the date the
payment is received)  regardless of whether the payment is in fact  converted to
U.S.  dollars at the time, and this U.S.  dollar value will be the United States
Holder's tax basis in the foreign currency.  A cash method Holder who receives a
payment of qualified stated

                                      S-39
<PAGE>


interest in U.S. dollars pursuant to an option available under such note will be
required to include the amount of this payment in income upon receipt.

     An accrual  method  United  States  Holder  will be  required to include in
income  the U.S.  dollar  value of the  amount  of  interest  income  (including
original issue discount or market discount,  but reduced by acquisition  premium
and amortizable bond premium,  to the extent applicable) that has accrued and is
otherwise  required to be taken into account with respect to a foreign  currency
note during an accrual period.  The U.S. dollar value of the accrued income will
be determined by translating  the income at the average rate of exchange for the
accrual  period or,  with  respect to an accrual  period  that spans two taxable
years,  at the average rate for the partial  period within the taxable year. The
United  States  Holder will  recognize  ordinary  income or loss with respect to
accrued interest income on the date the income is actually received.  The amount
of ordinary income or loss recognized will equal the difference between the U.S.
dollar value of the foreign currency  payment  received  (determined on the date
the payment is  received) in respect of the accrual  period (or,  where a Holder
receives  U.S.  dollars,  the amount of the  payment  in respect of the  accrual
period) and the U.S. dollar value of interest income that has accrued during the
accrual period (as determined above).  Rules similar to these rules apply in the
case of a cash method  taxpayer  required to  currently  accrue  original  issue
discount or market discount.

     An accrual  method  United  States  Holder may elect to translate  interest
income (including original issue discount) into U.S. dollars at the spot rate on
the  last day of the  interest  accrual  period  (or,  in the case of a  partial
accrual  period,  the spot rate on the last day of the taxable  year) or, if the
date of receipt is within  five  business  days of the last day of the  interest
accrual  period,  the spot rate on the date of receipt.  A United  States Holder
that makes this election must apply it consistently to all debt instruments from
year to year and cannot change the election  without the consent of the Internal
Revenue Service.

     Original  issue  discount,   market  discount,   acquisition   premium  and
amortizable  bond premium on a foreign currency note are to be determined in the
relevant foreign currency.  Where the taxpayer elects to include market discount
in income  currently,  the amount of market  discount will be determined for any
accrual period in the relevant  foreign  currency and then  translated into U.S.
dollars on the basis of the average  rate in effect  during the accrual  period.
Exchange  gain or loss  realized  with respect to such accrued  market  discount
shall be determined in accordance  with the rules  relating to accrued  interest
described above.

     If an election to amortize bond premium is made,  amortizable  bond premium
taken into account on a current basis shall reduce  interest  income in units of
the relevant  foreign  currency.  Exchange gain or loss is realized on amortized
bond premium  with respect to any period by treating the bond premium  amortized
in the period in the same manner as on the sale,  exchange or  retirement of the
foreign currency note. Any exchange gain or loss will be ordinary income or loss
as described  below. If the election is not made, any loss realized on the sale,
exchange or retirement  of a foreign  currency note (other than to the extent of
exchange loss) with  amortizable  bond premium by a United States Holder who has
not elected to amortize  the premium will be a capital loss to the extent of the
bond premium.

     A United  States  Holder's tax basis in a foreign  currency  note,  and the
amount of any subsequent  adjustment to the holder's tax basis, will be the U.S.
dollar  value  amount  of the  foreign  currency  amount  paid for such  foreign
currency note, or of the foreign  currency amount of the adjustment,  determined
on the date of the purchase or adjustment.  A United States Holder who purchases
a foreign  currency note with previously  owned foreign  currency will recognize
ordinary  income or loss in an amount equal to the difference,  if any,  between
such  United  States  Holder's  tax basis in the foreign  currency  and the U.S.
dollar fair market value of the foreign currency note on the date of purchase.

     Gain or loss  realized  upon the sale,  exchange or retirement of a foreign
currency note that is  attributable  to fluctuation  in currency  exchange rates
will be ordinary  income or loss which will not be treated as interest income or
expense.  Gain or loss attributable to fluctuations in exchange rates will equal
the  difference  between  (i) the  U.S.  dollar  value of the  foreign  currency
principal amount of the note,  determined on the date the payment is received or
the note is disposed of, and (ii) the U.S. dollar value of the foreign  currency
principal  amount of the note,  determined  on the date the United States Holder
acquired the note.  Payments  received that are attributable to accrued interest
will be treated in accordance with the rules  applicable to payments of interest
on foreign  currency notes described  above.  The foreign  currency gain or loss
will be recognized only to the extent of the total gain or


                                      S-40
<PAGE>


loss realized by the United States Holder on the sale, exchange or retirement of
the foreign  currency note. The source of the foreign currency gain or loss will
be  determined  by reference to the residence of the United States Holder or the
"qualified  business  unit" of the  holder on whose  books the note is  properly
reflected. Any gain or loss realized by these United States Holders in excess of
the  foreign  currency  gain or loss will be capital  gain or loss except to the
extent of any accrued market discount or, in the case of short-term note, to the
extent of any discount not previously included in the holder's income.

     A United  States  Holder  will  have a tax  basis in any  foreign  currency
received on the sale, exchange or retirement of a foreign currency note equal to
the U.S. dollar value of the foreign  currency,  determined at the time of sale,
exchange  or  retirement.  A cash  method  taxpayer  who buys or sells a foreign
currency  note is  required  to  translate  units of  foreign  currency  paid or
received  into  U.S.  dollars  at the spot  rate on the  settlement  date of the
purchase  or sale.  Accordingly,  no  exchange  gain or loss  will  result  from
currency  fluctuations  between  the trade date and the  settlement  date of the
purchase or sale. An accrual  method  taxpayer may elect the same  treatment for
all purchases and sales of foreign currency  obligations provided that the notes
are traded on an established  securities market. This election cannot be changed
without the consent of the Internal Revenue  Service.  Any gain or loss realized
by a United States  Holder on a sale or other  disposition  of foreign  currency
(including its exchange for U.S. dollars or its use to purchase foreign currency
notes) will be ordinary income or loss.

     BACKUP WITHHOLDING AND INFORMATION REPORTING

     Information  returns  will be filed with the  Internal  Revenue  Service in
connection  with  payments  on the notes and the  proceeds  from a sale or other
disposition of the notes.  A United States Holder may be subject to U.S.  backup
withholding  on these  payments  if it fails to provide  its tax  identification
number to the paying agent and comply with certain  certification  procedures or
otherwise  establish an  exemption  from backup  withholding.  The amount of any
backup withholding from a payment to a United States Holder will be allowed as a
credit  against the Holder's U.S.  federal  income tax liability and may entitle
them to a refund,  provided  that the required  information  is furnished to the
Internal Revenue Service.

TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

     As used herein,  the term  "Non-United  States  Holder"  means a beneficial
owner of a note that is, for United States federal income tax purposes:

     o    an individual  who is classified  as a  nonresident  for U.S.  federal
          income tax purposes;

     o    a foreign corporation; or

     o    a foreign estate or trust.

     "Non-United  States  Holder" does not include a holder who is an individual
present  in the  United  States  for 183  days or  more in the  taxable  year of
disposition  and who is not  otherwise a resident of the United  States for U.S.
federal  income tax  purposes.  Such a holder is urged to consult his or her own
tax advisor  regarding the U.S.  federal  income tax  consequences  of the sale,
exchange or other disposition of a note.

     Subject to the discussion below concerning backup withholding,  payments of
principal,  interest (including original issue discount,  if any) and premium on
the notes by us or any paying agent to any Non-United  States Holder will not be
subject to United States federal  withholding tax, provided that, in the case of
interest,   (i)  the  Non-United   States  Holder  does  not  own,  actually  or
constructively,  10 percent or more of the total  combined  voting  power of all
classes  of  our  stock  entitled  to  vote  and  is  not a  controlled  foreign
corporation related,  directly or indirectly,  to us through stock ownership and
(ii) if the note is a registered note, the certification  requirement  described
below has been  fulfilled  with respect to the  beneficial  owner,  as discussed
below.   Additionally,   subject  to  the  discussion  below  concerning  backup
withholding,  a Non-United States Holder of a note will not be subject to United
States  federal  income  tax on gain  realized  on the sale,  exchange  or other
disposition  of such note,  unless the gain is  effectively  connected  with the
conduct by the holder of a trade or business in the United States.


     CERTIFICATION REQUIREMENT

     Interest and original  issue  discount will not be exempt from  withholding
tax unless the  beneficial  owner of that note  certifies  on  Internal  Revenue
Service Form W-8BEN, under penalties of perjury,  that it is not a United


                                      S-41
<PAGE>


States person. The exemption will not apply to contingent interest if the amount
of the interest is determined with reference to our financial performance or the
financial  performance  of a related  person or with reference to changes in the
value of our or a related  person's  assets.  Unless  otherwise  provided in the
applicable pricing supplement, we do not expect to pay this type of interest.

     If a Non-United  States  Holder of a note is engaged in a trade or business
in the United States, and if interest (including original issue discount) on the
note is effectively  connected  with the conduct of this trade or business,  the
Non-United States Holder,  although exempt from the withholding tax discussed in
the preceding paragraph,  will generally be taxed in the same manner as a United
States Holder (see "Tax  Consequences to United States Holders"  above),  except
that the Holder will be  required to provide to the Company a properly  executed
Internal  Revenue  Service  Form  W-8ECI  in order to  claim an  exemption  from
withholding  tax. These  Non-United  States Holders should consult their own tax
advisors  with  respect to other U.S.  tax  consequences  of the  ownership  and
disposition of notes,  including the possible imposition of a 30% branch profits
tax.

     Subject to benefits  provided by an applicable estate tax treaty, a note or
coupon held by an individual who is a Non-United States Holder may be subject to
United States federal estate tax upon the  individual's  death if, at such time,
interest payments on the note would have been:

     o    subject to United States federal  withholding  tax (even if the W-8BEN
          certification requirement described above were satisfied); or

     o    effectively  connected  to the  conduct  by the  holder  of a trade or
          business in the United States.

     BACKUP WITHHOLDING AND INFORMATION REPORTING

     Information  returns will be filed with the United States Internal  Revenue
Service in connection with payments on the notes.  Unless the Non-United  States
Holder  complies with  certification  procedures  to establish  that it is not a
United States  person,  information  returns may be filed with the United States
Internal  Revenue  Service in connection  with the proceeds from a sale or other
disposition  and the  Non-United  States  Holder may be subject to United States
backup  withholding  tax on payments on the notes or on the proceeds from a sale
or other  disposition of the notes.  The  certification  procedures  required to
claim the exemption from withholding tax on interest and original issue discount
described above will satisfy the certification  requirements  necessary to avoid
the backup  withholding tax as well. The amount of any backup withholding from a
payment to a Non-United  States  Holder will be allowed as a credit  against the
Non-United  States  Holder's  United States federal income tax liability and may
entitle the  Non-United  States  Holder to a refund,  provided that the required
information is furnished to the Internal Revenue Service.

     The federal  income tax  discussion set forth above is included for general
information only and may not be applicable  depending upon a holder's particular
situation. Holders should consult their own tax advisors with respect to the tax
consequences  to them of the ownership and  disposition of the notes,  including
the tax  consequences  under  state,  local,  foreign and other tax laws and the
possible effects of changes in federal or other tax laws.


                                      S-42
<PAGE>


                              PLAN OF DISTRIBUTION

     We are offering the Series E securities on a continuing  basis through J.P.
Morgan Securities Inc. ("JPMSI"), which we refer to as the "agent" to the extent
it is named in the applicable pricing supplement.  In addition, we may offer the
Series E notes  through  certain  other  agents  to be  named in the  applicable
pricing supplement. The agent has agreed and any additional agents will agree to
use reasonable  efforts to solicit offers to purchase these securities.  We will
have the sole right to accept offers to purchase these securities and may reject
any offer in whole or in part.  Each agent may reject,  in whole or in part, any
offer it solicited to purchase  securities.  We will pay an agent, in connection
with sales of these securities  resulting from a solicitation that agent made or
an offer to  purchase  the  agent  received,  a  commission  as set forth in the
applicable pricing supplement.

     We may also sell  these  securities  to an agent as  principal  for its own
account at  discounts  to be agreed upon at the time of sale as disclosed in the
applicable  pricing  supplement.  That  agent may  resell  these  securities  to
investors and other purchasers at a fixed offering price or at prevailing market
prices,  or prices related  thereto at the time of resale or otherwise,  as that
agent determines and as we will specify in the applicable pricing supplement. An
agent may offer the  securities it has purchased as principal to other  dealers.
That  agent may sell the  securities  to any dealer at a  discount  and,  unless
otherwise specified in the applicable pricing  supplement,  the discount allowed
to any dealer will not be in excess of the discount that agent will receive from
us. After the initial public  offering of securities that the agent is to resell
on a fixed public offering price basis, the agent may change the public offering
price, concession and discount.

     The agent may be deemed to be an  "underwriter"  within the  meaning of the
Securities  Act of 1933,  as amended.  We and the agent have agreed to indemnify
each  other  against  certain  liabilities,   including  liabilities  under  the
Securities  Act,  or  to  contribute  to  payments  made  in  respect  of  those
liabilities. We have also agreed to reimburse the agent for specified expenses.

     We estimate that we will spend approximately $300,000 for printing,  rating
agency, trustee and legal fees and other expenses allocable to the offering.

     Unless otherwise provided in the applicable pricing  supplement,  we do not
intend to apply for the  listing of these  securities  on a national  securities
exchange, but we have been advised by the agent that it intends to make a market
in these securities or, if separable, any other securities included in units, as
applicable  laws and  regulations  permit.  The agent is not obligated to do so,
however,  and the agent  may  discontinue  making a market  at any time  without
notice.  No assurance can be given as to the liquidity of any trading market for
these securities or, if separable, any other securities included in units.

     JPMSI is our wholly owned indirect subsidiary. To the extent it is named in
the applicable  pricing  supplement,  each offering of these  securities will be
conducted in compliance with the requirements of Rule 2720 of the NASD regarding
an NASD member firm's distributing the securities of an affiliate. Following the
initial  distribution of these  securities,  each agent may offer and sell those
securities in the course of its business as a broker-dealer. An agent may act as
principal  or agent in those  transactions  and will make any  sales at  varying
prices related to prevailing market prices at the time of sale or otherwise. The
agent  may use  this  prospectus  supplement  in  connection  with  any of those
transactions.  The  agents  are not  obligated  to make a market in any of these
securities or any other  securities  included in units and may  discontinue  any
market-making activities at any time without notice.

     Neither the agents nor any dealer utilized in the initial offering of these
securities will confirm sales to accounts over which it exercises  discretionary
authority without the prior specific written approval of its customer.

     In order to  facilitate  the offering of these  securities,  the agents may
engage in transactions that stabilize, maintain or otherwise affect the price of
these  securities or of any other  securities the prices of which may be used to
determine payments on these securities.  Specifically,  the agents may sell more
securities  than they are obligated to purchase in connection with the offering,
creating a short  position in these  securities  for their own account.  A short
sale is covered if the short position is no greater than the number or amount of
securities available for purchase by the agents under any overallotment  option.
The agents can close out a covered short sale by exercising  the  over-allotment
option or purchasing  these  securities in the open market.  In determining  the
source  of  securities  to close out a  covered  short  sale,  the  agents  will
consider, among other things, the open market price of these securities


                                      S-43
<PAGE>


compared to the price available under the overallotment  option.  The agents may
also  sell  these   securities  or  any  other   securities  in  excess  of  the
overallotment option, creating a naked short position. The agents must close out
any naked short  position by purchasing  securities in the open market.  A naked
short  position  is more likely to be created if the agents are  concerned  that
there may be  downward  pressure  on the price of these  securities  in the open
market after pricing that could adversely  affect  investors who purchase in the
offering.  As an additional means of facilitating  the offering,  the agents may
bid for, and  purchase,  these  securities  or any other  securities in the open
market to stabilize the price of these  securities  or of any other  securities.
Finally,  in any offering of the securities through a syndicate of underwriters,
the underwriting  syndicate may also reclaim selling  concessions  allowed to an
underwriter or a dealer for distributing these securities in the offering if the
syndicate repurchases previously distributed securities to cover syndicate short
positions or to stabilize the price of these securities. Any of these activities
may raise or maintain the market  price of these  securities  above  independent
market  levels  or  prevent  or retard a decline  in the  market  price of these
securities.  The agents are not required to engage in these activities,  and may
end any of these activities at any time.

SERIES E NOTES, SERIES E WARRANTS AND SERIES E UNITS OFFERED ON A GLOBAL BASIS

     If the  applicable  pricing  supplement  indicates that any of our Series E
medium-term  notes,  Series E  warrants  or Series E units  will be offered on a
global basis,  those  registered  global  securities will be offered for sale in
those  jurisdictions  outside  of the  United  States  where it is legal to make
offers for sale of those securities.

     The agent has represented and agreed,  and any other agent through which we
may offer any Series E medium-term notes, Series E warrants or Series E units on
a global basis will represent and agree, that it will comply with all applicable
laws and regulations in force in any jurisdiction in which it purchases, offers,
sells or delivers the  securities  or possesses or  distributes  the  applicable
pricing supplement,  this prospectus  supplement or the accompanying  prospectus
and will  obtain any  consent,  approval  or  permission  required by it for the
purchase,  offer or sale by it of the securities  under the laws and regulations
in  force  in any  jurisdiction  to  which  it is  subject  or in which it makes
purchases,   offers  or  sales  of  the  securities,   and  we  shall  not  have
responsibility   for  the  agent's  compliance  with  the  applicable  laws  and
regulations or obtaining any required consent, approval or permission.

     With respect to sales in any jurisdictions  outside of the United States of
such securities offered on a global basis, purchasers of any such securities may
be required to pay stamp taxes and other charges in accordance with the laws and
practices of the country of purchase in addition to the issue price set forth on
the cover page hereof.

                                  LEGAL MATTERS

     The  validity  of the notes,  warrants  and units  will be passed  upon for
JPMorgan  Chase & Co. by Simpson  Thacher & Bartlett LLP.  Davis Polk & Wardwell
will pass upon certain legal matters  relating to the notes,  warrants and units
for the agents. Davis Polk & Wardwell has in the past represented JPMorgan Chase
& Co. and its  affiliates,  and continues to represent  JPMorgan Chase & Co. and
its affiliates on a regular basis and in a variety of matters.


                                      S-44
<PAGE>


PROSPECTUS

                                [GRAPHIC OMITTED]

                              JPMORGAN CHASE & CO.

                                 $4,738,098,000

                                 DEBT SECURITIES
                                    WARRANTS
                                      UNITS

                                  -----------


     We will provide  specific terms of these  securities in supplements to this
prospectus.  You should read this prospectus and any supplement carefully before
you invest.

     These  securities  are not deposits or other  obligations of a bank and are
not insured by the Federal  Deposit  Insurance  Corporation or any other federal
agency.

     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or  disapproved  of these  securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

                                    JPMORGAN

                   THIS PROSPECTUS IS DATED SEPTEMBER 23, 2004


<PAGE>


                              ABOUT THIS PROSPECTUS

     This prospectus is part of a Registration  Statement that we filed with the
Securities and Exchange  Commission  utilizing a "shelf"  registration  process.
Under this shelf process, we may, from time to time, sell any combination of the
securities  described in the  prospectus in one or more  offerings up to a total
dollar  amount of  $4,738,098,000  or the  equivalent  of this amount in foreign
currencies or foreign currency units.

     This prospectus  provides you with a general  description of the securities
we may  offer.  Each  time we sell  securities,  we will  provide  a  prospectus
supplement  that  will  contain  specific  information  about  the  terms of the
offering.  The prospectus  supplement may also add, update or change information
contained  in this  prospectus.  You should  read both this  prospectus  and any
prospectus  supplement together with additional  information described under the
heading  "Where  You Can  Find  More  Information"  beginning  on page 1 of this
prospectus.

     Following  the initial  distribution  of an offering  of  securities,  J.P.
Morgan  Securities  Inc. and other  affiliates  of ours may offer and sell those
securities in the course of their  businesses  as broker  dealers.  J.P.  Morgan
Securities Inc. and other  affiliates of ours may act as a principal or agent in
these  transactions.  This prospectus and the applicable  prospectus  supplement
will also be used in connection with those  transactions.  Sales in any of those
transactions  will be made at varying prices related to prevailing market prices
and other circumstances at the time of sale.

     No  person  is  authorized  to  give  any   information   or  to  make  any
representations  other than those contained or incorporated by reference in this
prospectus or the  accompanying  prospectus  supplement,  and, if given or made,
such  information  or  representations  must not be relied  upon as having  been
authorized.  This prospectus and the accompanying  prospectus  supplement do not
constitute  an  offer  to  sell  or the  solicitation  of an  offer  to buy  any
securities other than the securities  described in the  accompanying  prospectus
supplement  or an  offer  to sell or the  solicitation  of an  offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither  the  delivery  of  this  prospectus  or  the  accompanying   prospectus
supplement,  nor any  sale  made  hereunder  and  thereunder  shall,  under  any
circumstances,  create  any  implication  that  there  has been no change in the
affairs of JPMorgan  Chase & Co.  since the date hereof or that the  information
contained or  incorporated  by reference  herein or therein is correct as of any
time subsequent to the date of such information.


                                       i
<PAGE>


                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----
Where You Can Find More Information .....................................     1
JPMorgan Chase & Co. ....................................................     2
Consolidated Ratios Of Earnings To Fixed Charges ........................     4
Use Of Proceeds .........................................................     4
Description Of Debt Securities ..........................................     5
Description Of Warrants .................................................    11
Description Of Units ....................................................    15
Forms Of Securities .....................................................    17
Plan Of Distribution ....................................................    20
Experts .................................................................    22
Legal Opinions ..........................................................    22
ERISA Matters For Pension Plans And Insurance Companies .................    22


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

     In this  prospectus,  the "Company," "we," "us" and "our" refer to JPMorgan
Chase & Co. and its subsidiaries, except where the context otherwise requires or
as otherwise indicated.


                                       ii
<PAGE>


                       WHERE YOU CAN FIND MORE INFORMATION

     We file annual,  quarterly and current reports,  proxy statements and other
information  with the  Commission.  You may read and copy these documents at the
Commission's  public  reference room at Room 1024,  Judiciary  Plaza,  450 Fifth
Street, N.W.,  Washington,  D.C. 20549, and at the Commission's regional offices
at Northeast Regional Office, 233 Broadway, New York, New York 10279 and Midwest
Regional Office,  Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois  60661.  Copies of this  material can also be obtained  from the Public
Reference Room of the  Commission at Judiciary  Plaza,  450 Fifth Street,  N.W.,
Washington,  D.C.  20549 at  prescribed  rates.  Please call the  Commission  at
1-800-732-0330  for further  information  about the Public  Reference  Room. The
Commission also maintains an Internet website that contains  reports,  proxy and
information   statements  and  other   materials  that  are  filed  through  the
Commission's  Electronic Data Gathering,  Analysis and Retrieval (EDGAR) System.
This website can be accessed at http://www.sec.gov.  You can find information we
have filed  with the  Commission  by  reference  to file  number  001-05805.  In
addition, you may inspect our reports, proxy statements and other information at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.

     This  prospectus  is part of a  registration  statement  we filed  with the
Commission. This prospectus omits some information contained in the registration
statement in accordance with Commission rules and regulations. You should review
the  information  and  exhibits  in  the  registration   statement  for  further
information on us and our  consolidated  subsidiaries  and the securities we are
offering.  Statements in this prospectus  concerning any document we filed as an
exhibit  to the  registration  statement  or that we  otherwise  filed  with the
Commission are not intended to be  comprehensive  and are qualified by reference
to these  filings.  You should  review the complete  document to evaluate  these
statements.

     The  Commission   allows  us  to  incorporate  by  reference  much  of  the
information  we file with  them,  which  means  that we can  disclose  important
information to you by referring you to those publicly available  documents.  The
information that we incorporate by reference in this prospectus is considered to
be part of this  prospectus.  Because we are  incorporating  by reference future
filings with the Commission,  this  prospectus is continually  updated and those
future  filings  may modify or  supersede  some of the  information  included or
incorporated  in this  prospectus.  This  means that you must look at all of the
Commission  filings that we  incorporate by reference to determine if any of the
statements in this  prospectus  or in any document  previously  incorporated  by
reference  have been modified or superseded.  This  prospectus  incorporates  by
reference  the  documents  listed below and any future  filings we make with the
Commission under Sections 13(a),  13(c), 14 or 15(d) of the Securities  Exchange
Act of 1934 until we complete our offering of the  securities to be issued under
the registration statement or, if later, the date on which any of our affiliates
cease offering and selling these securities:

         (a)  our  Annual  Report on Form 10-K for the year ended  December  31,
              2003 (filed on February 18, 2004 and amended on June 28, 2004);

         (b)  our  Quarterly  Reports on Form 10-Q for the quarters  ended March
              31,  2004  (filed  on May 10,  2004) and June 30,  2004  (filed on
              August 9, 2004); and

         (c)  our Current Reports on Form 8-K filed on January 21, 2004, January
              28, 2004,  February 3, 2004,  March 1, 2004,  March 4, 2004, April
              21, 2004,  May 3, 2004,  May 11, 2004, May 14, 2004, May 27, 2004,
              June 3,  2004,  June 8,  2004,  June 15,  2004,  July 1,  2004 (as
              amended on July 30, 2004 and August 13, 2004),  July 8, 2004, July
              21, 2004 (two reports filed) and September 8, 2004 (other than, in
              each  case,  the  portions  of those  documents  not  deemed to be
              filed).

     You may request,  at no cost to you, a copy of these documents  (other than
exhibits  to such  documents)  by writing or  telephoning  us at:  Office of the
Secretary,  JPMorgan Chase & Co., 270 Park Avenue, New York, New York 10017 2070
(Telephone: (212) 270-4040).


                                       1
<PAGE>


                              JPMORGAN CHASE & CO.

     On July 1,  2004,  JPMorgan  Chase & Co.  ("JPMorgan  Chase")  and Bank One
Corporation  consummated  the  merger  of Bank  One  Corporation  with  and into
JPMorgan Chase.

     JPMorgan Chase is a financial holding company  incorporated  under Delaware
law in 1968.  JPMorgan Chase is one of the largest  banking  institutions in the
United States,  with more than $1 trillion in assets and operations in more than
50 countries.  Its principal  bank  subsidiaries  are JPMorgan Chase Bank, a New
York banking corporation,  Chase Manhattan Bank USA, National Association,  Bank
One Ohio,  N.A., Bank One Illinois,  N.A. and Bank One Delaware,  N.A.  JPMorgan
Chase's  principal  nonbank  subsidiary is its  investment  banking  subsidiary,
JPMorgan Securities. The bank and nonbank subsidiaries of JPMorgan Chase operate
nationally as well as through overseas branches and subsidiaries, representative
offices and affiliated banks.

     JPMorgan  Chase's  activities  are  internally  organized,  for  management
reporting purposes, into six major business segments:  Investment Bank; Treasury
& Securities  Services;  Asset & Wealth  Management;  Card Services;  Commercial
Banking; and Retail Financial Services.  The following is a brief description of
those businesses.

INVESTMENT BANK

     The Investment  Bank is one of the world's  leading  investment  banks with
broad client relationships and product capabilities.  JPMorgan Chase's customers
are  corporations,   financial   institutions,   governments  and  institutional
investors  worldwide.  The Investment Bank provides a complete  platform for its
clients, including advising on corporate strategy and structure, equity and debt
capital raising,  sophisticated  risk management,  research and market-making in
cash securities and derivative instruments around the world. The Investment Bank
also participates in proprietary investing and trading.

TREASURY & SECURITIES SERVICES

     Treasury & Securities Services is a global leader in providing transaction,
investment  and  information  services  to  support  the  needs of  issuers  and
investors  worldwide.  JPMorgan  Chase  is  one  of  the  world's  largest  cash
management providers and one of the world's largest custodians.

ASSET & WEALTH MANAGEMENT

     Asset  &  Wealth  Management  provides  investment  and  wealth  management
services  to  institutional,  high net  worth  and  retail  investors  and their
advisors.   For  wealthy   individuals  and  families,   JPMorgan  Chase  offers
personalized financial solutions that integrate investment  management,  capital
markets,  trust and banking  products.  JPMorgan Chase provides  retirement plan
services and brokerage for retail clients.

CARD SERVICES

     JPMorgan  Chase is the second  largest issuer of credit cards in the United
States and the largest merchant  acquirer.  JPMorgan Chase offers a wide variety
of cards to satisfy  the needs of its  cardmembers,  including  cards  issued on
behalf of major airlines, hotels,  universities,  top retailers, other financial
institutions and other well-known brands.

COMMERCIAL BANKING

     Commercial  Banking includes three client segments:  Middle Market Banking,
which  serves  companies  with  revenues  between $10 million and $500  million;
Mid-Corporate Banking, which focuses on clients with more significant Investment
Banking  needs;  and  Commercial  Real Estate.  Commercial  Banking also has two
product segments: Asset Based Lending and Commercial Leasing.


                                       2
<PAGE>


RETAIL FINANCIAL SERVICES

     Retail  Financial  Services  provides  consumer  banking,   small  business
banking,  auto and  education  finance,  insurance  and home  finance.  JPMorgan
Chase's  extensive  branch network of 2,400 retail banking  centers in 17 states
makes it the fourth-largest retail bank in the United States.  JPMorgan Chase is
one of the industry's  leading  providers of mortgages and home equity loans and
is the largest U.S. bank originator of auto loans and leases.

     Our principal executive office is located at 270 Park Avenue, New York, New
York 10017 and our telephone number is (212) 270-6000.


                                       3
<PAGE>


                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>

                                          SIX MONTHS                   YEAR ENDED DECEMBER 31,
                                        ENDED JUNE 30,   -----------------------------------------------
                                             2004         2003       2002      2001      2000      1999
                                        --------------   ------     ------    ------    ------    ------
<S>                                          <C>          <C>        <C>       <C>       <C>       <C>
Excluding Interest on Deposits               1.46         2.27       1.28      1.18      1.52      1.93
Including Interest on Deposits               1.32         1.87       1.17      1.11      1.31      1.54

</TABLE>


     For purposes of computing the above ratios,  earnings  represent net income
from  continuing  operations plus total taxes based on income and fixed charges.
Fixed charges,  excluding interest on deposits,  include interest expense (other
than on  deposits),  one-third  (the  proportion  deemed  representative  of the
interest  factor)  of  rents,  net of income  from  subleases,  and  capitalized
interest.  Fixed charges,  including interest on deposits,  include all interest
expense, one-third (the proportion deemed representative of the interest factor)
of rents, net of income from subleases, and capitalized interest.

                                 USE OF PROCEEDS

     We will use the net  proceeds  we receive  from the sale of the  securities
offered  by this  prospectus  and the  accompanying  prospectus  supplement  for
general corporate purposes, in connection with hedging our obligations under the
securities,  or for any other  purpose  described in the  applicable  prospectus
supplement. General corporate purposes may include additions to working capital,
repayment of debt,  investments in or extensions of credit to our  subsidiaries,
or redemptions or repurchases of our stock.  We may  temporarily  invest the net
proceeds  or use them to repay  short  term debt  until  they are used for their
stated purpose.


                                       4
<PAGE>


                         DESCRIPTION OF DEBT SECURITIES

GENERAL

     The  following  description  of the terms of the debt  securities  contains
certain general terms that may apply to the debt securities.  The specific terms
of any debt securities will be described in the prospectus  supplement  relating
to those debt securities.

     The debt  securities  will be issued under an Indenture dated May 25, 2001,
between us and Deutsche  Bank Trust  Company  Americas  (formerly  Bankers Trust
Company),  as trustee.  We refer to the Indenture,  as may be supplemented  from
time to time, as the "Indenture."

     We have summarized  below the material  provisions of the Indenture and the
debt securities, or indicated which material provisions will be described in the
related prospectus supplement.  These descriptions are only summaries,  and each
investor should refer to the Indenture, which describes completely the terms and
definitions  summarized below and contains additional  information regarding the
debt  securities.  Where  appropriate,  we use  parentheses  to refer you to the
particular  sections of the Indenture.  Any reference to particular  sections or
defined terms of the Indenture in any statement under this heading qualifies the
entire  statement  and  incorporates  by  reference  the  applicable  section or
definition into that statement.

     The debt securities will be our direct, unsecured general obligations.  The
debt  securities  will  have the same  rank in  liquidation  as all of our other
unsecured and unsubordinated debt.

     The  Indenture  does not limit the  amount of debt  securities  that we may
issue.  The  Indenture  provides  that debt  securities  may be issued up to the
principal  amount  authorized  by us  from  time to  time  (Section  2.03 of the
Indenture).  The Indenture  allows us to reopen a previous  issue of a series of
debt securities and issue additional debt securities of that issue.

     We are a holding  company and conduct  substantially  all of our operations
through subsidiaries. As a result, claims of holders of the debt securities will
generally  have a junior  position to claims of creditors  of our  subsidiaries,
except  to  the  extent  that  we may  be  recognized  as a  creditor  of  those
subsidiaries.  In addition,  our right to  participate  as a shareholder  in any
distribution of assets of any subsidiary (and thus the ability of holders of the
debt  securities to benefit as creditors of the Company from such  distribution)
is  junior  to  creditors  of  that  subsidiary.  Claims  of  creditors  of  our
subsidiaries include:

     o    substantial amounts of long term debt;

     o    deposit liabilities;

     o    federal funds purchased;

     o    securities sold under repurchase agreements; and

     o    short term borrowings.

     In  addition,  various  statutes  and  regulations  restrict  some  of  our
subsidiaries  from paying  dividends  or making  loans or advances to us.  These
restrictions could prevent those subsidiaries from paying the cash to us that we
need in order to pay you. These restrictions include:

     o    the net capital  requirements  under the  Securities  Exchange  Act of
          1934, as amended, and the rules of some exchanges and other regulatory
          bodies,   which  apply  to  J.P.  Morgan  Securities  Inc.  and  other
          broker-dealer affiliates, and

     o    banking  regulations,  which  apply  to  JPMorgan  Chase  Bank,  Chase
          Manhattan Bank USA,  National  Association,  Bank One Ohio, N.A., Bank
          One Illinois,  N.A.,  Bank One Delaware,  N.A and other of our banking
          subsidiaries.

     We may  issue  debt  securities  from  time to time in one or more  series.
(SECTION 2.03 OF THE  INDENTURE)  The debt  securities  may be  denominated  and
payable in U.S. dollars or foreign  currencies.  (SECTION 2.03 OF THE INDENTURE)
We may also issue debt securities, from time to time, with the principal amount,
interest or other amounts payable on any relevant  payment date to be determined
by reference to one or more currency exchange rates, securities


                                       5
<PAGE>


or baskets of  securities,  commodity  prices,  indices or any other  financial,
economic  or  other  measure  or   instrument,   including  the   occurrence  or
non-occurrence of any event or circumstance.  All references in this prospectus,
or any  prospectus  supplement  to other amounts will include  premium,  if any,
other cash amounts  payable under the Indenture,  and the delivery of securities
or baskets of securities under the terms of the debt securities.

     Debt securities may bear interest at a fixed rate,  which may be zero, or a
floating rate.

     The  prospectus  supplement  relating  to the  particular  series  of  debt
securities  being  offered  will  specify  the  particular  terms of,  and other
information relating to, those debt securities. These terms may include:

     o    the specific designation;

     o    any  limit  on  the   aggregate   principal   amount  and   authorized
          denominations of the debt securities;

     o    the purchase price of the debt  securities  (expressed as a percentage
          of the principal amount thereof);

     o    the date or dates on which the principal of the debt  securities  will
          be payable;

     o    the interest rate or rates (including any interest rates applicable to
          overdue  payments)  on the debt  securities,  if any, or the method by
          which the calculation agent will determine those rates;

     o    if other than U.S.  dollars,  the  currency or  currencies  (including
          composite  currencies or currency  units) in which the debt securities
          may be purchased and in which payments on the debt  securities will be
          made (which  currencies  may be different  for payments of  principal,
          premium, if any, and/or interest, if any);

     o    the dates on which any interest or other  amounts will be payable,  if
          any;

     o    any  repayment,  redemption,  prepayment  or sinking fund  provisions,
          including any redemption notice provisions;

     o    information as to the methods for determining the amount of principal,
          interest or other amounts  payable on any date and/or any  currencies,
          currency units,  composite currencies,  commodity prices,  securities,
          baskets of securities,  indices,  baskets of indices,  interest rates,
          swap  rates,  baskets  of swap  rates or any  other  factors  or other
          financial,  economic or other  measure or  instrument,  including  the
          occurrence or  non-occurrence  of any event or circumstance,  to which
          the amount  payable with respect to the  principal,  interest or other
          amounts, if any, of the debt securities on that date will be linked;

     o    any  conversion or exchange  provision  relating to the  conversion or
          exchange  of the debt  securities  into or for  securities  of another
          entity;

     o    the terms on which  holders  of the debt  securities  may  convert  or
          exchange these securities into or for stock or other securities issued
          by another  entity,  any specific  terms relating to the adjustment of
          the  conversion  or exchange  feature and the period  during which the
          holders may make the conversion or exchange;

     o    whether we will issue the debt securities in registered form or bearer
          form or both and, if we are offering  debt  securities in bearer form,
          any  restrictions  applicable  to the exchange of one form for another
          and to the offer, sale and delivery of those debt securities in bearer
          form;

     o    the place or places for payment of the principal  amount,  interest or
          other amounts on the debt securities;

     o    whether we will issue the debt securities in definitive form and under
          what terms and conditions;

     o    any agents for the debt securities,  including trustees, depositaries,
          authenticating or paying agents, transfer agents or registrars;

     o    any  applicable   United  States  federal  income  tax   consequences,
          including, but not limited to:

          o    whether  and  under  what  circumstances  we will pay  additional
               amounts  on debt  securities  held by a person  who is not a U.S.
               person for any tax, assessment or governmental charge withheld or
               deducted  and,  if so,  whether we will have the option to redeem
               those debt  securities  in order to avoid the  obligation  to pay
               future additional amounts; and

          o    tax considerations  applicable to any debt securities denominated
               and payable in foreign currencies; and

     o    any  other  specific  terms  of the  debt  securities,  including  any
          additional  events of default or covenants,  and any terms required by
          or advisable under applicable laws or regulations.


                                       6
<PAGE>


     Some of the debt  securities  may be issued as original issue discount debt
securities (the "Original Issue Discount  Securities").  Original Issue Discount
Securities  bear no interest or bear  interest at below market rates and will be
sold  at  a  discount  below  their  stated  principal  amount.  The  prospectus
supplement  relating  to an issue of Original  Issue  Discount  Securities  will
contain  information  relating to United States federal income tax,  accounting,
and  other  special   considerations   applicable  to  Original  Issue  Discount
Securities.

     Holders may present  debt  securities  for  exchange  or  transfer,  in the
manner,  at the  places  and  subject  to the  restrictions  stated  in the debt
securities  and  described  in the  applicable  prospectus  supplement.  We will
provide these services  without charge except for any tax or other  governmental
charge payable in connection  with these services and subject to any limitations
provided in the Indenture. (SECTION 2.08 OF THE INDENTURE)

     Holders  may  transfer  debt  securities  in  bearer  form and the  related
coupons,  if any, by delivery to the  transferee.  If any of the  securities are
held in  global  form,  the  procedures  for  transfer  of  interests  in  those
securities  will depend upon the  procedures of the  depositary for those global
securities. See "Forms of Securities."

     We will generally have no obligation to repurchase,  redeem,  or change the
terms of debt  securities  upon any event  (including a change in control)  that
might have an adverse effect on our credit quality.

EVENTS OF DEFAULT, WAIVER, DEBT SECURITIES IN FOREIGN CURRENCIES

     An "Event of  Default"  with  respect  to a series  of debt  securities  is
defined in the Indenture as:

     o    default for 30 days in the payment of interest on any debt  securities
          of that series;

     o    default in payment of principal or other  amounts  payable on any debt
          securities of that series when due, at maturity,  upon redemption,  by
          declaration, or otherwise;

     o    failure by us for 90 days after notice to perform any other  covenants
          or warranties contained in the Indenture applicable to that series;

     o    certain events of bankruptcy or reorganization of the Company; and

     o    any other  event of default  provided in the  applicable  supplemental
          indentures or form of security. (SECTION 5.01 OF THE INDENTURE)

     If a default in the payment of principal, interest or other amounts payable
on the debt securities,  or in the performance of any covenant or agreement,  or
in a  manner  provided  in the  applicable  supplemental  indenture  or  form of
security,  with respect to one or more series of debt  securities  occurs and is
continuing,  either  the  trustee or the  holders  of at least 25% in  principal
amount of the debt  securities of such series then  outstanding,  treated as one
class,  may declare the  principal of all  outstanding  debt  securities of such
series and any interest accrued thereon, to be due and payable  immediately.  In
the case of Original Issue Discount Securities,  only a specified portion of the
principal  amount may be  accelerated.  If a default in the  performance  of any
covenant or agreement with respect to all series of debt  securities,  or due to
specified  events of  bankruptcy  or  insolvency  of the Company,  occurs and is
continuing,  either  the  trustee or the  holders  of at least 25% in  principal
amount of all debt securities then  outstanding,  voting as a single class,  may
declare the  principal  of all  outstanding  debt  securities  and any  interest
accrued  thereon,  to be due and  payable  immediately.  In the case of Original
Issue Discount Securities,  only a specified portion of the principal amount may
be accelerated.  Subject to certain conditions such declarations may be annulled
and past defaults,  except for uncured payment  defaults on the debt securities,
may  be  waived  by  the  holders  of a  majority  in  principal  amount  of the
outstanding debt securities of the series  affected.  (SECTIONS 5.01 AND 5.10 OF
THE INDENTURE)

     An Event of Default with respect to one series of debt  securities does not
necessarily  constitute  an Event of Default with respect to any other series of
debt securities.  The Indenture provides that the trustee may withhold notice to
the holders of the debt securities of any default if the trustee considers it in
the interest of the holders of the debt securities to do so. The trustee may not
withhold  notice of a default in the payment of principal of, interest on or any
other amounts due under, such debt securities. (SECTION 5.11 OF THE INDENTURE)


                                       7
<PAGE>


     The Indenture  provides that the holders of a majority in principal  amount
of outstanding  debt securities of any series may direct the time,  method,  and
place of conducting any proceeding for any remedy  available to the trustee,  or
exercising  any trust or other power  conferred on the trustee.  The trustee may
decline  to act if the  direction  is  contrary  to  law  and in  certain  other
circumstances  set forth in the  Indenture.  (SECTION 5.09 OF THE INDENTURE) The
trustee is not  obligated  to  exercise  any of its  rights or powers  under the
Indenture at the request or direction of the holders of debt  securities  unless
the  holders  offer  the  trustee  reasonable  indemnity  against  expenses  and
liabilities. (SECTION 6.02(D) OF THE INDENTURE)

     No holder of any debt security of any series has the right to institute any
action for remedy unless such holder has previously given to the trustee written
notice of default  and the  trustee  has failed to take action for 60 days after
the holders of not less than 25% in principal  amount of the debt  securities of
such series make  written  request  upon the trustee to  institute  such action.
(SECTION 5.06 OF THE INDENTURE)

     The  Indenture  requires  us to file  annually  with the  trustee a written
statement of no default, or specifying any default that exists. (SECTION 3.05 OF
THE INDENTURE)

     Whenever the Indenture  provides for an action by, or the  determination of
any of the rights of, or any distribution to, holders of debt securities, in the
absence of any  provision  to the  contrary  in the form of debt  security,  any
amount in respect of any debt  security  denominated  in a currency  or currency
unit other than U.S.  dollars may be treated for any such action or distribution
as the amount of U.S.  dollars that could  reasonably  be exchanged for such non
U.S. dollar amount.  This amount will be calculated as of a date that we specify
to the trustee or, if we fail to specify a date,  on a date that the trustee may
determine. (SECTION 11.11 OF THE INDENTURE)

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

     Discharge of Indenture.  The Indenture  will cease to be of further  effect
with  respect  to  debt  securities  of  any  series,  except  as to  rights  of
registration of transfer and exchange, substitution of mutilated or defaced debt
securities,  rights of holders to receive  principal,  interest or other amounts
payable  under the debt  securities,  rights and  immunities  of the trustee and
rights of holders with respect to property  deposited  pursuant to the following
provisions, if at any time:

     o    the Company has paid the principal,  interest or other amounts payable
          under the debt securities of such series;

     o    the Company has  delivered  to the trustee for  cancellation  all debt
          securities of such series; or

     o    the debt  securities  of such series not  delivered to the trustee for
          cancellation  have  become  due and  payable,  or will  become due and
          payable within one year, or are to be called for redemption within one
          year under arrangements  satisfactory to the trustee,  and the Company
          has  irrevocably  deposited with the trustee as trust funds the entire
          amount in cash or U.S.  government  obligations  sufficient to pay all
          amounts due with respect to such debt  securities on or after the date
          of such deposit,  including at maturity or upon redemption of all such
          debt  securities,  including  principal,  interest and other  amounts.
          (SECTION 10.01 OF THE INDENTURE)

     The  trustee,  on  demand  of  the  Company  accompanied  by  an  Officers'
Certificate  and an  Opinion  of  Counsel  and at the  cost and  expense  of the
Company, will execute proper instruments  acknowledging such satisfaction of and
discharging the Indenture with respect to such series.

     Defeasance of a Series of Securities at Any Time. We may also discharge all
of our obligations,  other than as to transfers and exchanges,  under any series
of debt securities at any time, which we refer to as "defeasance".

     We may  be  released  with  respect  to  any  outstanding  series  of  debt
securities  from the  obligations  imposed  by Article  9,  which  contains  the
covenant described below limiting  consolidations,  mergers and asset sales, and
elect not to comply with that  provision  without  creating an event of default.
Discharge under these procedures is called "covenant defeasance".


                                       8
<PAGE>


     Defeasance  or covenant  defeasance  may be effected  only if,  among other
things:

     o    we  irrevocably  deposit with the trustee cash or, in the case of debt
          securities payable only in U.S. dollars, U.S. government  obligations,
          as trust funds in an amount  certified to be sufficient to pay on each
          date that they become due and payable, the principal of , interest on,
          other amounts due under, and any mandatory  sinking fund payments for,
          all outstanding debt securities of the series being defeased;

     o    we deliver to the trustee an opinion of counsel to the effect that:

          o    the holders of the series of debt securities  being defeased will
               not  recognize  income,  gain or loss for United  States  federal
               income tax  purposes  as a result of the  defeasance  or covenant
               defeasance; and

          o    the defeasance or covenant  defeasance  will not otherwise  alter
               those  holders'  United  States  federal  income tax treatment of
               principal  or interest  payments  or other  amounts due under the
               series  of  debt  securities  being  defeased;

               in the  case of a  defeasance,  this  opinion  must be based on a
               ruling  of the  Internal  Revenue  Service  or a change in United
               States  federal  income tax law occurring  after the date of this
               prospectus,  since that result would not occur under  current tax
               law; and

     o    such defeasance or covenant  defeasance will not result in a breach or
          violation  of, or  constitute a default  under,  the  Indenture or any
          other  agreement or  instrument to which we are a party or by which we
          are bound. (SECTION 10.01 OF THE INDENTURE)

MODIFICATION OF THE INDENTURE; WAIVER OF COMPLIANCE

     The Indenture contains  provisions  permitting us and the trustee to modify
the Indenture or the rights of the holders of debt  securities  with the consent
of the  holders  of not  less  than a  majority  in  principal  amount  of  each
outstanding series of debt securities affected by the modification.  Each holder
of an affected debt security must consent to a modification that would:

     o    change  the  stated  maturity  date  of the  principal  of,  or of any
          installment of principal of or interest on, any debt security;

     o    reduce the principal  amount of, interest on, or any other amounts due
          under any debt security;

     o    change the currency or currency unit of payment of any debt security;

     o    change the method in which amounts of payments of principal,  interest
          or other amounts are determined on any debt security;

     o    reduce  the  portion  of the  principal  amount of an  Original  Issue
          Discount Security payable upon acceleration of the maturity thereof;

     o    reduce any amount payable upon redemption of any debt security;

     o    impair the right of a holder to institute  suit for the payment of or,
          if the debt securities  provide,  any right of repayment at the option
          of the holder of a debt security; or

     o    reduce the percentage of debt securities of any series, the consent of
          the holders of which is required for any  modification.  (SECTION 8.02
          OF THE INDENTURE)

     The  Indenture  also  permits us and the trustee to amend the  Indenture in
certain  circumstances  without the consent of the holders of debt securities to
evidence our merger, the replacement of the trustee,  to effect changes which do
not  affect any  outstanding  series of debt  security,  and for  certain  other
purposes. (SECTION 8.01 OF THE INDENTURE)


                                       9
<PAGE>


CONSOLIDATIONS, MERGERS AND SALES OF ASSETS

     We may not  merge or  consolidate  with any  other  corporation  or sell or
convey all or substantially all of our assets to any other  corporation,  unless
either:

     o    we are the continuing  corporation  or the successor  corporation is a
          United States  corporation  which expressly assumes the payment of the
          principal of, any interest on, or any other amounts due under the debt
          securities and the performance and observance of all the covenants and
          conditions of the Indenture binding upon us, and

     o    we or the  successor  corporation  shall  not,  immediately  after the
          merger or  consolidation,  sale or  conveyance,  be in  default in the
          performance of any covenant or condition. (ARTICLE 9 OF THE INDENTURE)

     There are no  covenants or other  provisions  in the  Indenture  that would
afford  holders  of debt  securities  additional  protection  in the  event of a
recapitalization  transaction,  a change of control of JPMorgan Chase & Co. or a
highly  leveraged  transaction.  The merger covenant  described above would only
apply if the recapitalization transaction, change of control or highly leveraged
transaction  were  structured to include a merger or  consolidation  of JPMorgan
Chase & Co. or a sale or conveyance of all or  substantially  all of our assets.
However, we may provide specific  protections,  such as a put right or increased
interest,  for  particular  debt  securities,  which  we would  describe  in the
applicable prospectus supplement.

CONCERNING THE TRUSTEE, PAYING AGENT, REGISTRAR AND TRANSFER AGENT

     Our subsidiaries and we have normal banking relationships with the trustee,
Deutsche Bank Trust Company Americas.  Deutsche Bank Trust Company Americas will
also be the paying agent, registrar and transfer agent for the debt securities.

GOVERNING LAW AND JUDGMENTS

     The debt securities  will be governed by and interpreted  under the laws of
the State of New York.  (SECTION 11.8 OF THE  INDENTURE) In an action  involving
debt securities  denominated in a currency other than U.S. dollars, it is likely
that any judgment  granted by a U.S.  court would be made only in U.S.  dollars.
However,  a New York court should enter a judgment in the denominated  currency.
Such judgment should then be converted into U.S. dollars at the rate of exchange
prevailing on the date of entry of the judgment.


                                       10
<PAGE>


                             DESCRIPTION OF WARRANTS

OFFERED WARRANTS

     We may issue  warrants that are debt  warrants,  index  warrants,  currency
warrants,  interest rate warrants or universal  warrants.  We may offer warrants
separately or together with one or more additional warrants,  or debt securities
or any combination of those securities in the form of units, as described in the
applicable  prospectus  supplement.  If we issue warrants as part of a unit, the
accompanying  prospectus  supplement  will specify whether those warrants may be
separated  from  the  other  securities  in the  unit  prior  to  the  warrants'
expiration  date.  Universal  warrants issued in the United States may not be so
separated prior to the 91st day after the issuance of the unit, unless otherwise
specified in the applicable prospectus supplement.

     DEBT WARRANTS.  We may issue,  together with debt securities or separately,
warrants for the purchase of debt  securities  on terms to be  determined at the
time of sale. We refer to this type of warrant as a "debt warrant".

     INDEX  WARRANTS.  We may issue  warrants  entitling the holders  thereof to
receive from us, upon  exercise,  an amount in cash  determined  by reference to
decreases  or  increases  in the level of a specific  index or in the levels (or
relative levels) of two or more indices or combinations of indices,  which index
or indices may be based on one or more stocks, bonds or other securities, one or
more  interest  rates,  one  or  more  currencies  or  currency  units,  or  any
combination  of the  foregoing.  We refer to this type of  warrant  as an "index
warrant".

     CURRENCY WARRANTS. We may also issue warrants entitling the holders thereof
to receive from us, upon exercise,  an amount in cash determined by reference to
the right to  purchase  or the  right to sell a  specified  amount or  specified
amounts of one or more  currencies or currency  units or any  combination of the
foregoing for a specified  amount or specified  amounts of one or more different
currencies or currency units or any  combination  of the foregoing.  We refer to
this type of warrant as a "currency warrant".

     INTEREST RATE WARRANTS. We may issue warrants entitling the holders thereof
to receive from us, upon exercise,  an amount in cash determined by reference to
decreases or increases  in the yield or closing  price of one or more  specified
debt  instruments or in the interest  rates,  interest rate swap rates, or other
rates  established  from  time  to  time  by one  or  more  specified  financial
institutions,  or any  combination  of the  foregoing.  We refer to this type of
warrant as an "interest rate warrant".

     UNIVERSAL WARRANTS. We may also issue warrants:

     o    to purchase or sell securities  issued by another  entity,  securities
          based  on the  performance  of such  entity,  securities  based on the
          performance  of  such  entity  but  excluding  the  performance  of  a
          particular  subsidiary  or  subsidiaries  of such entity,  a basket of
          securities,  any  other  financial,   economic  or  other  measure  or
          instrument, including the occurrence or non-occurrence of any event or
          circumstance, or any combination of the above;

     o    to purchase or sell commodities; or

     o    in such other form as shall be specified in the applicable  prospectus
          supplement.

     We refer to the  property in the above  clauses as "warrant  property."  We
refer to this type of warrant  as a  "universal  warrant."  We may  satisfy  our
obligations,  if any, with respect to any universal  warrants by delivering  the
warrant  property or, in the case of warrants to purchase or sell  securities or
commodities,  the cash value of the securities or  commodities,  as described in
the applicable prospectus supplement.

FURTHER INFORMATION IN PROSPECTUS SUPPLEMENT

     GENERAL  TERMS OF  WARRANTS.  The  applicable  prospectus  supplement  will
contain, where applicable, the following terms of and other information relating
to the warrants:

     o    the specific  designation  and  aggregate  number of, and the price at
          which we will issue, the warrants;

     o    the currency with which the warrants may be purchased;


                                       11
<PAGE>


     o    the date on which the right to exercise  the  warrants  will begin and
          the  date  on  which  that  right  will  expire  or,  if you  may  not
          continuously   exercise  the  warrants  throughout  that  period,  the
          specific date or dates on which you may exercise the warrants;

     o    whether the warrants will be issued in fully registered form or bearer
          form,  in  definitive  or global form or in any  combination  of these
          forms, although, in any case, the form of a warrant included in a unit
          will  correspond  to the form of the  unit  and of any  debt  security
          included in that unit;

     o    any applicable United States federal income tax consequences;

     o    the  identity of the warrant  agent for the  warrants and of any other
          depositaries, execution or paying agents, transfer agents, registrars,
          determination, or other agents;

     o    the  proposed  listing,  if any,  of the  warrants  or any  securities
          purchasable upon exercise of the warrants on any securities exchange;

     o    whether  the  warrants  are  to  be  sold  separately  or  with  other
          securities as part of units; and

     o    any other terms of the warrants.

     ADDITIONAL TERMS OF DEBT WARRANTS.  The prospectus supplement will contain,
where  applicable,  the  following  terms of and  other  terms  and  information
relating to any debt warrants:

     o    the designation, aggregate principal amount, currency and terms of the
          debt  securities  that  may be  purchased  upon  exercise  of the debt
          warrants;

     o    if applicable,  the  designation and terms of the debt securities with
          which the debt warrants are issued and the number of the debt warrants
          issued with each of the debt securities;

     o    if  applicable,  the date on and after which the debt warrants and the
          related debt securities will be separately transferable; and

     o    the principal  amount of debt securities  purchasable upon exercise of
          each debt  warrant,  the price at which and the  currency in which the
          debt securities may be purchased and the method of exercise.

     ADDITIONAL  TERMS OF  INDEX,  CURRENCY  AND  INTEREST  RATE  WARRANTS.  The
applicable prospectus supplement will contain,  where applicable,  the following
terms of and other terms and  information  relating to any index,  currency  and
interest rate warrants:

     o    the exercise price, if any;

     o    the currency or currency unit in which the exercise price, if any, and
          the cash settlement value of such warrants is payable;

     o    the index or indices  for any index  warrants,  which index or indices
          may be based on one or more U.S. or foreign  stocks,  bonds,  or other
          securities,  one or more U.S. or foreign  interest rates,  one or more
          currencies or currency units, or any combination of the foregoing, and
          may be a preexisting U.S. or foreign index or an index based on one or
          more securities, interest rates or currencies selected by us solely in
          connection  with the  issuance  of such index  warrants,  and  certain
          information  regarding  such  index  or  indices  and  the  underlying
          securities,  interest  rates or currencies  (including,  to the extent
          possible,  the policies of the  publisher of the index with respect to
          additions,  deletions and  substitutions of such securities,  interest
          rates or currencies);

     o    for index warrants,  the method of providing for a substitute index or
          indices or otherwise determining the amount payable in connection with
          the exercise of such index  warrants if the index changes or ceases to
          be made available by the publisher of the index;

     o    for index  warrants,  any provisions  permitting a holder to condition
          any exercise notice on the absence of certain specified changes in the
          Spot  Value  or the Base  Value  or Spot  Amount  (as  defined  in the
          applicable prospectus supplement) after the exercise date;

     o    the  base  currency  and  the  reference  currency  for  any  currency
          warrants;


                                       12
<PAGE>


     o    the debt instrument (which may be one or more debt instruments  issued
          either by the United States  government  or by a foreign  government),
          the rate (which may be one or more  interest  rates or  interest  rate
          swap  rates  established  from  time to time by one or more  specified
          financial  institutions)  or the other yield or price utilized for any
          interest rate warrants,  and certain  information  regarding such debt
          instrument, rate, yield or price;

     o    the strike amount,  the method of determining  the spot amount and the
          method of  expressing  movements in the yield or closing  price of the
          debt  instrument  or in the level of the rate as a cash  amount in the
          currency  in which  the  interest  rate cash  settlement  value of any
          interest rate warrants is payable;

     o    whether  such  warrants  shall  be  put  warrants,  call  warrants  or
          otherwise;

     o    the formula for determining the cash settlement value of each warrant;

     o    the  circumstances,  if any,  under  which a  minimum  and/or  maximum
          expiration value is applicable upon the expiration of such warrants;

     o    the  effect or  effects,  if any,  of the  occurrence  of an  Exercise
          Limitation Event or Extraordinary  Event (as defined in the applicable
          prospectus  supplement)  and the  circumstances  that  constitute such
          events;

     o    any minimum  number of  warrants  which must be  exercised  at any one
          time, other than upon automatic exercise;

     o    the maximum number,  if any, of such warrants that may, subject to our
          election, be exercised by all holders on any day;

     o    any provisions for the automatic  exercise of such warrants other than
          at expiration;

     o    whether and under what  circumstances such warrants may be canceled by
          us prior to the expiration date; and

     o    any other  procedures and conditions  relating to the exercise of such
          warrants.

     ADDITIONAL  TERMS  OF  UNIVERSAL   WARRANTS.   The  applicable   prospectus
supplement  will contain,  where  applicable,  the following  terms of and other
terms and information relating to any universal warrants:

     o    whether the  universal  warrants are put warrants or call warrants and
          whether you or we will be entitled to exercise the warrants;

     o    the  specific  warrant  property,  and the  amount or the  method  for
          determining the amount of the warrant property,  that may be purchased
          or sold upon exercise of each universal warrant;

     o    the  price  at  which  and the  currency  with  which  the  underlying
          securities or  commodities  may be purchased or sold upon the exercise
          of each universal warrant, or the method of determining that price;

     o    whether the exercise price may be paid in cash, by the exchange of any
          other  security  offered with the  universal  warrants or both and the
          method of exercising the universal warrants; and

     o    whether  the  exercise of the  universal  warrants is to be settled in
          cash or by delivery of the  underlying  securities or  commodities  or
          both.

SIGNIFICANT PROVISIONS OF THE WARRANT AGREEMENTS

     We will  issue the  warrants  under one or more  warrant  agreements  to be
entered into between us and a bank or trust company, as warrant agent, in one or
more  series,  which will be  described  in the  prospectus  supplement  for the
warrants.  The  forms  of  warrant  agreements  are  filed  as  exhibits  to the
registration statement. The following summaries of significant provisions of the
warrant  agreements  and the warrants are not intended to be  comprehensive  and
holders of  warrants  should  review the  detailed  provisions  of the  relevant
warrant agreement for a full description and for other information regarding the
warrants.


                                       13
<PAGE>


     MODIFICATIONS  WITHOUT CONSENT OF WARRANTHOLDERS.  We and the warrant agent
may amend the terms of the  warrants  and the warrant  certificates  without the
consent of the holders to:

     o    cure any ambiguity,

     o    cure,  correct or supplement any defective or inconsistent  provision,
          or

     o    amend the terms in any other  manner  which we may deem  necessary  or
          desirable  and which will not  adversely  affect the  interests of the
          affected holders in any material respect.

     MODIFICATIONS  WITH CONSENT OF  WARRANTHOLDERS.  We and the warrant  agent,
with the  consent of the  holders  of not less than a majority  in number of the
then outstanding  unexercised warrants affected, may modify or amend the warrant
agreement.  However,  we and the warrant  agent may not,  without the consent of
each affected warrantholder:

     o    change the exercise price of the warrants;

     o    reduce the amount receivable upon exercise, cancellation or expiration
          of the  warrants  other  than  in  accordance  with  the  antidilution
          provisions  or other  similar  adjustment  provisions  included in the
          terms of the  warrants;  o shorten the period of time during which the
          warrants may be exercised;

     o    materially  and  adversely  affect  the  rights  of the  owners of the
          warrants; or

     o    reduce the  percentage  of  outstanding  warrants the consent of whose
          owners is required  for the  modification  of the  applicable  warrant
          agreement.

     MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION. If at any time there will
be a merger or  consolidation  by us or a transfer of  substantially  all of our
assets,  the  successor  corporation  will  succeed  to  and  assume  all of our
obligations under each warrant agreement and the warrant  certificates.  We will
then  be  relieved  of any  further  obligation  under  each  of  those  warrant
agreements  and  the  warrants  issued  under  those  warrant  agreements.   See
"Description of Debt Securities--Consolidations, Mergers and Sales of Assets."

     ENFORCEABILITY  OF RIGHTS OF  WARRANTHOLDERS.  The warrant  agents will act
solely as our agents in connection  with the warrant  certificates  and will not
assume any obligation or relationship of agency or trust for or with any holders
of warrant certificates or beneficial owners of warrants.  Any holder of warrant
certificates  and any beneficial  owner of warrants may,  without the consent of
any other person,  enforce by appropriate legal action,  on its own behalf,  its
right to exercise the  warrants  evidenced  by the warrant  certificates  in the
manner  provided  for in that series of  warrants or pursuant to the  applicable
warrant agreement.  No holder of any warrant  certificate or beneficial owner of
any  warrants  will be  entitled  to any of the  rights  of a holder of the debt
securities or any other warrant  property that may be purchased upon exercise of
the warrants,  including,  without limitation, the right to receive the payments
on those debt  securities  or other  warrant  property  or to enforce any of the
covenants or rights in the relevant indenture or any other similar agreement.

     REGISTRATION  AND  TRANSFER  OF  WARRANTS.  Subject  to  the  terms  of the
applicable warrant  agreement,  warrants in definitive form may be presented for
exchange and for registration of transfer,  at the corporate trust office of the
warrant agent for that series of warrants,  or at any other office  indicated in
the prospectus  supplement relating to that series of warrants,  without service
charge.  However,  the  holder  will be  required  to pay any  taxes  and  other
governmental  charges as  described  in the warrant  agreement.  The transfer or
exchange  will be effected  only if the warrant agent for the series of warrants
is satisfied  with the  documents of title and identity of the person making the
request.

     NEW YORK LAW TO GOVERN.  The warrants and each  warrant  agreement  will be
governed by, and  construed  in  accordance  with,  the laws of the State of New
York.


                                       14
<PAGE>


                              DESCRIPTION OF UNITS

GENERAL

     Units  will  consist of one or more debt  securities  and  warrants  or any
combination of them. The applicable prospectus supplement will also describe:

     o    the  designation  and the terms of the units and of any combination of
          debt securities and warrants constituting the units, including whether
          and under what  circumstances  the debt  securities or warrants may be
          traded separately;

     o    any additional terms of the applicable unit agreement;

     o    any  additional  provisions  for the  issuance,  payment,  settlement,
          transfer  or  exchange  of the  units  or of the  debt  securities  or
          warrants constituting the units; and

     o    any applicable United States federal income tax consequences.

     The terms and conditions  described under "Description of Debt Securities,"
and  "Description  of Warrants" will apply to each unit and to any debt security
or warrant included in each unit,  respectively,  unless otherwise  specified in
the applicable prospectus supplement.

     We will issue the units under one or more unit agreements, each referred to
as a unit agreement,  to be entered into between us and a bank or trust company,
as unit agent. We may issue units in one or more series, which will be described
in the applicable prospectus supplement.  We have filed a form of unit agreement
as an exhibit to the registration statement.

SIGNIFICANT PROVISIONS OF THE UNIT AGREEMENT

     REMEDIES.  The unit agent will act solely as our agent in  connection  with
the units  governed by the unit  agreement and will not assume any obligation or
relationship of agency or trust for or with any holders of units or interests in
those units.  Any holder of units or  interests in those units may,  without the
consent  of the unit  agent or any other  holder or  beneficial  owner of units,
enforce by  appropriate  legal action,  on its own behalf,  its rights under the
unit  agreement.  However,  the holders of units or interests in those units may
only enforce their rights under the debt  securities or warrants issued as parts
of those units in accordance  with the terms of the Indenture and the applicable
warrant agreement.

     MODIFICATION.  We and the unit agent may amend the unit  agreement  without
the consent of the holders to:

     o    cure any ambiguity;

     o    cure, correct or supplement any defective or inconsistent provision in
          the agreement; or

     o    amend the terms in any other  manner  which we may deem  necessary  or
          desirable  and which will not  adversely  affect the  interest  of the
          affected holders of units in any material respect.

     We and the unit  agent,  with the consent of the holders of not less than a
majority of units at the time outstanding, may modify or amend the rights of the
affected  holders  of the  affected  units and the terms of the unit  agreement.
However,  we and the unit agent may not,  without the  consent of each  affected
holder of units, make any modifications or amendments that would:

     o    materially  and adversely  affect the exercise  rights of the affected
          holders, or

     o    reduce the percentage of outstanding units the consent of whose owners
          is  required to consent to a  modification  or  amendment  of the unit
          agreement.

     Any debt securities  issued as part of units governed by the unit agreement
may be modified only in accordance with the Indenture,  as described above under
"Description  of Debt Securities -- Modification of the Indenture." Any warrants
issued as part of units may be modified only in accordance with the terms of the
applicable  warrant  agreement  as  described  in  "Description  of  Warrants --
Significant Provisions of the Warrant Agreements."


                                       15
<PAGE>


     MERGER, CONSOLIDATION, SALE OR CONVEYANCE. The unit agreement provides that
we will not  merge or  consolidate  with any other  person  and will not sell or
convey all or substantially all of our assets to any person unless:

     o    we will be the continuing corporation; or

     o    the successor corporation or person that acquires all or substantially
          all of our assets:

     o    will be a corporation organized under the laws of the United States, a
          state of the United States or the District of Columbia; and

     o    will expressly assume all of our obligations under the unit agreement;
          and

     o    immediately after the merger,  consolidation,  sale or conveyance, we,
          that person or that  successor  corporation  will not be in default in
          the  performance of the covenants and conditions of the unit agreement
          applicable to us.

     REPLACEMENT OF UNIT CERTIFICATES. We will replace any mutilated certificate
evidencing a definitive unit at the expense of the holder upon surrender of that
certificate  to the unit  agent.  We will  replace  certificates  that have been
destroyed,  lost or stolen at the expense of the holder upon  delivery to us and
the  unit  agent  of  evidence  satisfactory  to us and the  unit  agent  of the
destruction, loss or theft of the certificates. In the case of a destroyed, lost
or stolen certificate, an indemnity satisfactory to the unit agent and to us may
be  required  at the  expense  of the  holder of the units or  prepaid  purchase
contracts evidenced by that certificate before a replacement will be issued.

     TITLE. We, the unit agent, the trustee,  the warrant agent and any of their
agents will treat the registered owner of any unit as its owner, notwithstanding
any notice to the contrary, for all purposes.

     NEW YORK LAW TO GOVERN.  The unit  agreement and the units will be governed
by, and construed in accordance with, the laws of the State of New York.


                                       16
<PAGE>


                               FORMS OF SECURITIES

     Each  debt  security,  warrant  and unit  will be  represented  either by a
certificate issued in definitive form to a particular investor or by one or more
global  securities   representing  the  entire  issuance  of  securities.   Both
certificated  securities in definitive form and global  securities may be issued
either (1) in registered  form,  where our obligation  runs to the holder of the
security  named on the face of the  security or (2)  subject to the  limitations
explained  below under "--  Limitations  on Issuance  of Bearer  Securities  and
Bearer Debt  Warrants," in bearer form,  where our obligation runs to the bearer
of the security.  Definitive securities name you or your nominee as the owner of
the security (other than definitive bearer securities,  which name the bearer as
owner),  and in order to  transfer or exchange  these  securities  or to receive
payments other than interest or other interim payments, you or your nominee must
physically  deliver the  securities to the trustee,  registrar,  paying agent or
other agent, as applicable.  Global  securities name a depositary or its nominee
as the owner of the debt  securities,  warrants  or units  represented  by these
global securities (other than global bearer securities, which name the bearer as
owner).  The depositary  maintains a computerized  system that will reflect each
investor's  beneficial ownership of the securities through an account maintained
by  the  investor  with  its   broker/dealer,   bank,  trust  company  or  other
representative, as we explain more fully below.

GLOBAL SECURITIES

     REGISTERED GLOBAL SECURITIES.  We may issue the registered debt securities,
warrants and units in the form of one or more fully registered global securities
that will be  deposited  with a  depositary  or its  nominee  identified  in the
applicable  prospectus  supplement and registered in the name of that depositary
or nominee.  In those cases,  one or more registered  global  securities will be
issued in a denomination or aggregate  denominations equal to the portion of the
aggregate  principal  or face  amount of the  securities  to be  represented  by
registered  global  securities.  Unless and until it is  exchanged  in whole for
securities in definitive  registered form, a registered  global security may not
be transferred  except as a whole by and among the depositary for the registered
global  security,  the  nominees  of the  depositary  or any  successors  of the
depositary or those nominees.

     If not described  below,  any specific terms of the depositary  arrangement
with respect to any securities to be represented by a registered global security
will be described in the prospectus supplement relating to those securities.  We
anticipate   that  the  following   provisions  will  apply  to  all  depositary
arrangements.

     Ownership of beneficial  interests in a registered  global security will be
limited to persons, called participants,  that have accounts with the depositary
or persons that may hold interests through participants.  Upon the issuance of a
registered  global  security,  the  depositary  will  credit,  on its book entry
registration and transfer system, the participants' accounts with the respective
principal  or  face  amounts  of  the  securities   beneficially  owned  by  the
participants.   Any  dealers,   underwriters  or  agents  participating  in  the
distribution  of the  securities  will  designate  the  accounts to be credited.
Ownership of beneficial  interests in a registered global security will be shown
on, and the  transfer of  ownership  interests  will be effected  only  through,
records maintained by the depositary, with respect to interests of participants,
and on the records of participants, with respect to interests of persons holding
through  participants.  The laws of some states may require that some purchasers
of securities  take physical  delivery of these  securities in definitive  form.
These  laws may  impair  your  ability  to own,  transfer  or pledge  beneficial
interests in registered global securities.

     So long as the  depositary,  or its nominee,  is the registered  owner of a
registered global security,  that depositary or its nominee, as the case may be,
will be considered the sole owner or holder of the securities represented by the
registered  global  security for all purposes  under the  applicable  indenture,
warrant  agreement  or unit  agreement.  Except as  described  below,  owners of
beneficial  interests in a registered  global  security  will not be entitled to
have the securities  represented by the registered global security registered in
their names, will not receive or be entitled to receive physical delivery of the
securities in definitive  form and will not be considered  the owners or holders
of the securities  under the  applicable  indenture,  warrant  agreement or unit
agreement. Accordingly, each person owning a beneficial interest in a registered
global  security  must  rely  on the  procedures  of  the  depositary  for  that
registered  global  security  and, if that person is not a  participant,  on the
procedures of the  participant  through  which the person owns its interest,  to
exercise  any  rights  of a  holder  under  the  applicable  indenture,  warrant
agreement  or  unit  agreement.  We  understand  that  under  existing  industry
practices,  if we request  any action of holders or if an owner of a  beneficial
interest in a registered global security desires to give or take any action that
a holder is entitled


                                       17
<PAGE>


to give or take  under  the  applicable  indenture,  warrant  agreement  or unit
agreement, the depositary for the registered global security would authorize the
participants  holding the  relevant  beneficial  interests  to give or take that
action,  and the participants  would authorize  beneficial owners owning through
them to give or take that action or would otherwise act upon the instructions of
beneficial owners holding through them.

     Principal,  interest  payments on debt securities,  other amounts due under
debt  securities  and any payments to holders with respect to warrants or units,
represented  by a  registered  global  security  registered  in  the  name  of a
depositary or its nominee will be made to the depositary or its nominee,  as the
case may be, as the registered owner of the registered global security.  None of
us,  the  trustees,  the  warrant  agents,  the unit  agents or any of our other
agents, agent of the trustees or agent of the warrant agents or unit agents will
have any  responsibility  or liability for any aspect of the records relating to
payments made on account of  beneficial  ownership  interests in the  registered
global  security  or for  maintaining,  supervising  or  reviewing  any  records
relating to those beneficial ownership interests.

     We expect that the depositary  for any of the  securities  represented by a
registered global security, upon receipt of any payment of principal,  interest,
other amounts or other  distribution of underlying  securities or other property
to  holders  on  that  registered  global  security,   will  immediately  credit
participants'  accounts in amounts  proportionate to their respective beneficial
interests  in that  registered  global  security  as shown on the records of the
depositary. We also expect that payments by participants to owners of beneficial
interests in a registered  global  security  held through  participants  will be
governed by standing customer  instructions and customary  practices,  as is now
the case with the  securities  held for the accounts of customers in bearer form
or  registered  in  "street  name,"  and  will be the  responsibility  of  those
participants.

     If the depositary for any of these  securities  represented by a registered
global  security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency  registered under the Securities  Exchange Act of
1934,  and a successor  depositary  registered  as a clearing  agency  under the
Securities  Exchange Act of 1934 is not  appointed by us within 90 days, we will
issue  securities  in  definitive  form in exchange  for the  registered  global
security  that had been  held by the  depositary.  In  addition,  the  indenture
permits us at any time and in our sole  discretion  to decide not to have any of
the securities represented by one or more registered global securities. However,
The Depository Trust Company,  New York, New York has advised us that, under its
current  practices,  it would notify its  participants of our request,  but will
only withdraw beneficial  interests from the global securities at the request of
each DTC  participant.  We will issue  securities in definitive form in exchange
for all of the  registered  global  security or  securities  representing  those
securities.  Any  securities  issued  in  definitive  form  in  exchange  for  a
registered  global  security  will be  registered  in the name or names that the
depositary  gives to the relevant  trustee,  warrant agent,  unit agent or other
relevant  agent  of  ours  or  theirs.  It is  expected  that  the  depositary's
instructions  will be based upon  directions  received  by the  depositary  from
participants with respect to ownership of beneficial interests in the registered
global security that had been held by the depositary.

     BEARER GLOBAL SECURITIES.  The securities may also be issued in the form of
one or more  bearer  global  securities  that  will be  deposited  with a common
depositary for the Euroclear System and Clearstream Banking,  societe anonyme or
with a  nominee  for the  depositary  identified  in the  prospectus  supplement
relating to those securities.  The specific terms and procedures,  including the
specific terms of the depositary arrangement,  with respect to any securities to
be represented  by a bearer global  security will be described in the prospectus
supplement relating to those securities.

LIMITATIONS ON ISSUANCE OF BEARER SECURITIES AND BEARER DEBT WARRANTS

     In compliance  with United States federal income tax laws and  regulations,
bearer  securities,  including bearer securities in global form, and bearer debt
warrants will not be offered, sold, resold or delivered, directly or indirectly,
in the United States or its possessions or to United States persons,  as defined
below,  except as otherwise  permitted  by United  States  Treasury  Regulations
Section 1.163-5(c)(2)(i)(D).  Any underwriters,  agents or dealers participating
in the  offerings  of bearer  securities  or bearer debt  warrants,  directly or
indirectly, must agree that:

     o    they will not, in connection with the original  issuance of any bearer
          securities  or during  the  restricted  period,  as  defined in United
          States Treasury  Regulations Section  1.163-5(c)(2)(i)(D)(7)  which we
          refer to as the "restricted  period," offer,  sell, resell or deliver,
          directly or indirectly,  any bearer securities in the United States or
          its possessions or to United States  persons,  other than as permitted
          by the applicable Treasury Regulations described above, and



                                       18
<PAGE>



     o    they will not, at any time, offer,  sell, resell or deliver,  directly
          or  indirectly,  any bearer debt  warrants in the United States or its
          possessions  or to United States  persons,  other than as permitted by
          the applicable Treasury Regulations described above.

     In  addition,  any  underwriters,  agents or dealers  must have  procedures
reasonably  designed to ensure that their  employees  or agents who are directly
engaged in selling  bearer  securities  or bearer debt warrants are aware of the
above  restrictions  on  the  offering,  sale,  resale  or  delivery  of  bearer
securities or bearer debt warrants.

     Bearer  securities,  other than temporary global debt securities and bearer
securities that satisfy the  requirements of United States Treasury  Regulations
Section  1.163-5(c)(2)(i)(D)(3)(iii)  and any coupons  appertaining thereto will
not be delivered  in  definitive  form,  and no interest  will be paid  thereon,
unless we have  received  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 the date of that  certificate  the
bearer security:

     o    is owned by a person that is not a United States person;

     o    is owned by a United States  person that (a) is a foreign  branch of a
          United States financial  institution,  as defined in applicable United
          States  Treasury  Regulations,  which  we  refer  to  as a  "financial
          institution,"  purchasing for its own account or for resale, or (b) is
          acquiring  the bearer  security  through a foreign  branch of a United
          States financial institution and who holds the bearer security through
          that financial  institution  through that date, and in either case (a)
          or (b)  above,  each of those  United  States  financial  institutions
          agrees, on its own behalf or through its agent, that we 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  and  the  Treasury
          Regulations thereunder; or

     o    is owned by a United States or foreign  financial  institution for the
          purposes of resale during the  restricted  period and,  whether or not
          also  described in the first or second  clause  above,  the  financial
          institution certifies that it has not acquired the bearer security for
          purposes of resale directly or indirectly to a United States person or
          to a person within the United States or its possessions.

     We will not issue bearer debt warrants in definitive form.

     We will make  payments on bearer  securities  and bearer debt warrants only
outside the United States and its  possessions  except as permitted by the above
Treasury Regulations.

     Bearer securities,  other than temporary global securities, and any coupons
issued with bearer securities 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  Internal  Revenue  Code." The  sections  referred to in this
legend  provide  that,  with  exceptions,  a United  States  person  will not be
permitted  to  deduct  any  loss,  and will not be  eligible  for  capital  gain
treatment with respect to any gain realized on the sale,  exchange or redemption
of that bearer security or coupon.

     As used in the  preceding  three  paragraphs,  the term  bearer  securities
includes  bearer  securities  that are part of units  and the term  bearer  debt
warrants  includes  bearer debt warrants that are part of units. As used herein,
the term "United States person" means a citizen or resident of the United States
for United States  federal income tax purposes,  a corporation  or  partnership,
including an entity treated as a corporation  or  partnership  for United States
federal  income tax  purposes,  created or organized in or under the laws of the
United States, or any state of the United States or the District of Columbia, or
an estate  or trust the  income of which is  subject  to United  States  federal
income taxation regardless of its source.

FORM OF SECURITIES INCLUDED IN UNITS

     The form of any warrant  included in a unit will  correspond to the form of
the unit and of any other security included in that unit.


                                       19
<PAGE>


                              PLAN OF DISTRIBUTION

     We may sell the debt securities or warrants:

     o    through agents;

     o    through underwriters;

     o    through dealers; and

     o    directly to  purchasers,  any of whom may be customers  of,  engage in
          transactions  with,  or  perform  services  for,  the  Company  in the
          ordinary course of business.

     If we offer and sell securities through an agent, that agent will be named,
and any  commissions  payable  to that  agent  by us,  will be set  forth in the
prospectus supplement.  Any agent will be acting on a best efforts basis for the
period of its  appointment  which will usually be five business days or less. An
agent may be deemed to be an underwriter under the federal securities laws.

     If  underwriters  are used in the sale of the  securities,  we will sign an
underwriting  agreement with them. The underwriting  agreement will provide that
the obligations of the underwriters  are subject to certain  conditions and that
the underwriters  will be obligated to purchase all of the securities if any are
purchased.  Underwriters  will buy the  securities for their own account and may
resell them from time to time in one or more transactions,  including negotiated
transactions, at fixed public offering prices or at varying prices determined at
the time of  sale.  Securities  may be  offered  to the  public  either  through
underwriting syndicates represented by managing underwriters, or directly by the
managing underwriters.  The name of the managing underwriter or underwriters, as
well as any  other  underwriters,  and the terms of the  transaction,  including
compensation of the underwriters  and dealers,  if any, will be set forth in the
prospectus supplement.  The underwriters named in the prospectus supplement will
be  the  only  underwriters  for  the  securities  offered  by  that  prospectus
supplement.

     If a dealer is  utilized  in the sale of  securities,  we will  sell  those
securities to the dealer,  as principal.  The dealer may resell those securities
to the public at varying  prices to be  determined  by the dealer at the time of
resale.  A dealer may be deemed to be an underwriter of those  securities  under
the  securities  laws.  The name of the dealer and the terms of the  transaction
will be set forth in the prospectus supplement.

     Our net  proceeds  will be the  purchase  price  in the  case of sales to a
dealer,  the  public  offering  price less  discount  in the case of sales to an
underwriter or the purchase  price less  commission in the case of sales through
an agent -- in each case,  less other  expenses  attributable  to  issuance  and
distribution.

     In order to facilitate the offering of these  securities,  the underwriters
may engage in  transactions  that  stabilize,  maintain or otherwise  affect the
price of these  securities  or any other  securities  the prices of which may be
used to determine payments on these securities.  Specifically,  the underwriters
may sell more  securities than they are obligated to purchase in connection with
the offering,  creating a short position for their own accounts. A short sale is
covered  if the  short  position  is no  greater  than the  number  or amount of
securities  available for purchase by the underwriters  under any  overallotment
option.  The  underwriters  can close out a covered short sale by exercising the
overallotment  option or  purchasing  these  securities  in the open market.  In
determining  the source of  securities  to close out a covered  short sale,  the
underwriters will consider,  among other things,  the open market price of these
securities  compared to the price available under the overallotment  option. The
underwriters may also sell these securities or any other securities in excess of
the overallotment option, creating a naked short position. The underwriters must
close out any naked short position by purchasing  securities in the open market.
A naked  short  position is more  likely to be created if the  underwriters  are
concerned that there may be downward  pressure on the price of these  securities
in the open market  after  pricing that could  adversely  affect  investors  who
purchase in the offering.  As an additional  means of facilitating the offering,
the  underwriters  may bid for,  and  purchase,  these  securities  or any other
securities in the open market to stabilize  the price of these  securities or of
any other  securities.  Finally,  in any  offering of the  securities  through a
syndicate of underwriters,  the underwriting  syndicate may also reclaim selling
concessions  allowed  to an  underwriter  or a  dealer  for  distributing  these
securities in the offering, if the syndicate repurchases  previously distributed
securities to cover syndicate short positions or to stabilize the price of these
securities.  Any of these  activities  may raise or maintain the market price of
these securities above independent  market levels or prevent or retard a decline
in the market price of these  securities.  The  underwriters are not required to
engage in these activities, and may end any of these activities at any time.


                                       20
<PAGE>


     We may agree to indemnify agents, underwriters,  or dealers against certain
liabilities,  including  liabilities under the securities laws, or to contribute
to  payments  that  agents,  underwriters,  or dealers  may be required to make.
Agents,  underwriters  and dealers may be customers of,  engage in  transactions
with or perform services for us in the ordinary course of business.

     We may  directly  solicit  offers to purchase  securities,  and we may sell
securities  directly to institutional  investors or others, who may be deemed to
be underwriters within the meaning of the securities laws. The terms of any such
sales will be described in the prospectus supplement.

     We may authorize  agents,  underwriters,  and dealers to solicit  offers by
certain  institutions  to purchase the securities from us at the public offering
price stated in the prospectus supplement pursuant to delayed delivery contracts
providing  for  payment and  delivery  on a specified  date in the future and on
terms described in the prospectus supplement. These contracts will be subject to
only those conditions described in the prospectus supplement, and the prospectus
supplement will state the commission  payable for  solicitation of these offers.
Institutions with whom delayed delivery contracts may be made include commercial
and savings banks,  insurance companies,  pension funds,  investment  companies,
educational and charitable institutions, and other institutions but shall in all
cases be institutions which we have approved.

     These contracts will be subject only to the conditions that:

     o    the underwriters  purchase the securities at the time of the Contract;
          and

     o    the purchase is not prohibited  under the laws of any  jurisdiction in
          the United States to which the purchase is subject.

     We will pay a commission,  as indicated in the  prospectus  supplement,  to
agents and  dealers  soliciting  purchases  of  securities  pursuant  to delayed
delivery contracts that we have accepted.

     This prospectus and related prospectus  supplement may be used by direct or
indirect  wholly owned  subsidiaries of ours in connection with offers and sales
related to secondary market  transactions in the securities.  Those subsidiaries
may act as principal or agent in those transactions. Secondary market sales will
be made at prices related to prevailing market prices at the time of sale.

     The offer and sale of the  securities  by an  affiliate of ours will comply
with the  requirements  of Rule 2720 of the  Rules of  Conduct  of the  National
Association of Securities  Dealers,  Inc., which is commonly  referred to as the
NASD,  regarding the  distribution of securities of an affiliate.  Following the
initial distribution of any of the securities, our affiliates may offer and sell
these  securities  in the  course  of their  business  as  broker  dealers.  Our
affiliates  may act as principals or agents in these  transactions  and may make
any sales at varying prices  related to prevailing  market prices at the time of
sale or otherwise.  Our  affiliates may use this  prospectus in connection  with
these transactions.  None of our affiliates is obligated to make a market in any
of these securities and may discontinue any market making activities at any time
without notice.

     As  required  by the NASD,  (a)  post-effective  amendments  or  prospectus
supplements  disclosing  the actual price and selling terms will be submitted to
the NASD's  Corporate  Financing  Department  (the Department ) at the same time
they are filed with the SEC, (b) the Department  will be advised if,  subsequent
to the  filing of the  offering,  any 5% or  greater  shareholder  of ours is or
becomes an affiliate or associated person of an NASD member participating in the
distribution,  and (c) all  NASD  members  participating  in the  offering  will
confirm  their  understanding  of  the  requirements  that  have  to be  met  in
connection  with  SEC  Rule  415  and  Notice-to-Members  88-101.   Underwriting
discounts and  commissions on securities sold in the initial  distribution  will
not exceed 8% of the offering proceeds.

     Any  underwriter,  agent or dealer  utilized  in the  initial  offering  of
securities   will  not  confirm  sales  to  accounts  over  which  it  exercises
discretionary  authority  without  the prior  specific  written  approval of its
customer.


                                       21
<PAGE>


                                     EXPERTS

     The audited  financial  statements of JPMorgan Chase & Co. contained in our
Annual  Report  on  Form  10-K  for  the  year  ended  December  31,  2003,  are
incorporated  by  reference  in this  prospectus  in  reliance on the reports of
PricewaterhouseCoopers  LLP, an independent  registered  public accounting firm,
given on the authority of that firm as experts in auditing and  accounting.  The
audited  financial  statements of Bank One Corporation  contained in our Current
Report on Form 8-K dated March 1, 2004 are  incorporated  by  reference  in this
prospectus  in reliance on the  reports of KPMG LLP, an  independent  registered
public  accounting  firm,  given on the  authority  of that firm as  experts  in
auditing and accounting.

                                 LEGAL OPINIONS

     The  validity  of the  securities  will be passed  upon by Neila B.  Radin,
Senior Vice  President and  Associate  General  Counsel of JPMorgan  Chase & Co.
Davis  Polk &  Wardwell  will pass upon some  legal  matters  relating  to these
securities  for  the  underwriters.  Davis  Polk &  Wardwell  has  in  the  past
represented JPMorgan Chase & Co. and its affiliates,  and continues to represent
JPMorgan  Chase & Co. and its  affiliates on a regular basis and in a variety of
matters.

             ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES

     Section 406 of the Employee  Retirement  Income  Security  Act of 1974,  as
amended  ("ERISA")  and Section  4975 of the Internal  Revenue Code of 1986,  as
amended, (the "Code") prohibit pension, profit-sharing or other employee benefit
plans,  as well as  individual  retirement  accounts and Keogh plans  subject to
Section  4975 of the Code  ("Plans"),  from  engaging  in  certain  transactions
involving  the "plan  assets" with  persons who are "parties in interest"  under
ERISA or  "disqualified  persons"  under the Code  ("Parties in Interest")  with
respect to such Plans.  As a result of its  business,  the Company is a Party in
Interest  with  respect to many Plans.  Where the Company is a Party in Interest
with  respect to a Plan  (either  directly or by reason of its  ownership of its
subsidiaries), the purchase and holding of the securities by or on behalf of the
Plan would be a prohibited lending  transaction under Section 406(a)(1) of ERISA
and Section 4975(c)(1) of the Code, unless exemptive relief were available under
an applicable  administrative  exemption (as described  below) or there was some
other basis on which the transaction was not prohibited.

     Accordingly,  the  securities may not be purchased or held by any Plan, any
entity whose  underlying  assets  include  "plan assets" by reason of any Plan's
investment in the entity (a "Plan Asset Entity") or any person  investing  "plan
assets"  of any Plan,  unless  such  purchaser  or holder  is  eligible  for the
exemptive relief available under Prohibited Transaction Class Exemption ("PTCE")
96-23,  95-60,  91-38,  90-1 or 84-14 issued by the U.S.  Department of Labor or
there was some other basis on which the purchase  and holding of the  securities
by the Plan Asset Entity is not  prohibited.  Unless the  applicable  prospectus
supplement  explicitly  provides  otherwise,  any  purchaser  or  holder  of the
securities  or any interest  therein will be deemed to have  represented  by its
purchase of the  securities  that (a) its purchase and holding of the securities
is not made on behalf of or with "plan  assets" of any Plan or (b) its  purchase
and holding of the  securities  is eligible for the exemptive  relief  available
under PTCE 96-23,  95-60,  91-38,  90-1 or 84-14 or there is some other basis on
which such purchase and holding is not prohibited.

     Employee benefit plans that are  governmental  plans (as defined in Section
3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and
foreign  plans (as  described  in Section  4(b)(4) of ERISA) are not  subject to
these "prohibited  transaction"  rules of ERISA or Section 4975 of the Code, but
may be subject to similar rules under other applicable laws or documents.

     Due to the complexity of the applicable rules, it is particularly important
that  fiduciaries  or other persons  considering  purchasing  the  securities on
behalf of or with "plan assets" of any Plan consult with their counsel regarding
the relevant  provisions of ERISA and the Code and the availability of exemptive
relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-1.


                                       22
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<PAGE>


                                TABLE OF CONTENTS


PRICING SUPPLEMENT                                                          PAGE

Summary.................................................................... PS-1
Risk Factors............................................................... PS-6
Use of Proceeds............................................................PS-10
Description of Notes.......................................................PS-11
Certain U.S. Federal Income Tax Consequences...............................PS-20
Underwriting...............................................................PS-23
ERISA Matters for Pension Plans and Insurance Companies....................PS-24


PROSPECTUS                                                                  PAGE

Where You Can Find More Information About Us................................   1
JPMorgan Chase & Co.........................................................   2
Consolidated Ratios of Earnings to Fixed Charges............................   4
Use of Proceeds.............................................................   4
Description of Debt Securities..............................................   5
Description of Warrants.....................................................  11
Description of Units........................................................  15
Forms of Securities.........................................................  17
Plan of Distribution........................................................  20
Experts.....................................................................  22
Legal Opinions..............................................................  22
ERISA Matters for Pension Plans and Insurance
   Companies................................................................  22

PROSPECTUS SUPPLEMENT                                                       PAGE

About this Prospectus Supplement............................................ S-1
Where You Can Find Out More About Us........................................ S-2
JPMorgan Chase & Co......................................................... S-3
Consolidated Ratios of Earnings to Fixed Charges............................ S-5
Foreign Currency Risks...................................................... S-6
Description of Notes........................................................ S-8
Descriptions of Warrants....................................................S-26
Description of Units........................................................S-27
The Depositary..............................................................S-29
Series E Securities Offered on a Global Basis...............................S-31
United States Federal Taxation..............................................S-35
Plan of Distribution........................................................S-43
Legal Matters...............................................................S-44


     In making your investment decision, you should rely only on the information
contained  or  incorporated  by reference  in this  pricing  supplement  and the
accompanying  prospectus  supplement  and  prospectus  with respect to the notes
offered  hereby and with respect to JPMorgan  Chase & Co. We have not authorized
anyone to give you any additional or different  information.  The information in
this  pricing  supplement  and  the  accompanying   prospectus   supplement  and
prospectus may only be accurate on the date of this pricing supplement.

     The notes described in this pricing  supplement are not appropriate for all
investors,  and involve  important  legal and tax  consequences  and  investment
risks, which should be discussed with your professional  advisers. You should be
aware  that the laws of  certain  jurisdictions  (including  laws  that  require
brokers to ensure that  investments are suitable for their  customers) may limit
the  availability  of  notes  in  those  jurisdictions.   Neither  this  pricing
supplement nor the accompanying prospectus supplement and prospectus constitutes
an  offer  to  sell or a  solicitation  of an  offer  to buy  the  notes  in any
circumstances in which such offer or solicitation is unlawful.

     In this pricing supplement and the accompanying  prospectus  supplement and
prospectus,  "we,"  "us" and "our"  refer to  JPMorgan  Chase & Co.,  unless the
context requires otherwise.
</TEXT>
</DOCUMENT>
