<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>e22779_424b3.txt
<DESCRIPTION>PRICING SUPPLEMENT
<TEXT>

PRICING SUPPLEMENT                                   Pricing Supplement No. 9 to
(TO PROSPECTUS DATED OCTOBER 20, 2005      Registration Statement No. 333-128506
AND PROSPECTUS SUPPLEMENT DATED OCTOBER 20, 2005)         Dated November 4, 2005
                                                                  Rule 424(b)(3)

JPMorgan Chase [LOGO]

$5,250,000
JPMorgan Chase & Co.
Buffered  Return  Enhanced Notes Linked to the Nikkei 225 Index due February 23,
2007

General
-------

o     Senior unsecured obligations of JPMorgan Chase & Co. maturing February 23,
      2007 (subject to certain market disruption events).

o     Payment linked to the Nikkei 225 Index as described below.

o     At maturity the notes will pay an amount in cash that will vary  depending
      upon the  performance  of the Nikkei 225 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     For key  information  about tax  consequences,  please see  "Certain  U.S.
      Federal Income Tax Consequences" on page PS-20.

o     Secondary  market  trading  may be  limited.  Even if there is a secondary
      market,  it may not provide enough liquidity to allow you to trade or sell
      your notes easily.  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.

o     Minimum  denominations  of $50,000  and  integral  multiples  of $1,000 in
      excess thereof.

o     The notes  priced on  November  4, 2005 and are  expected  to settle on or
      about November 10, 2005.

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

Key Terms
---------

Index:                  The Nikkei 225 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 $1,000
                        principal   amount  note  equal  to  the  Index   Return
                        multiplied  by two,  subject to the Maximum Total Return
                        on the note. The "Maximum  Total Return" is 25.00%.  The
                        maximum final payment per $1,000  principal  amount note
                        is $1,250.  If the Index Return is positive,  your final
                        payment  per  $1,000   principal  amount  note  will  be
                        calculated  as  follows,  subject to the  Maximum  Total
                        Return:

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

                        Your  investment  will  be  protected  for  up  to a 10%
                        decline in the Ending  Index  Level as  compared  to the
                        Initial Index Level.  Therefore,  if the Index Return is
                        between 0% and  negative  10%,  your final  payment  per
                        $1,000 principal amount note at maturity will be $1,000.

                        Your  investment will be fully exposed to any decline of
                        more than 10% in the Ending  Index  Level as compared to
                        the Initial Index Level. Therefore,  for each 1% decline
                        in the Ending Index Level  relative to the Initial Index
                        Level  beyond a decline of 10%, you will lose 1.1111% of
                        your  investment in the notes and your final payment per
                        $1,000  principal  amount  note  will be  calculated  as
                        follows:

                        $1,000 + ($1,000 x (Index Return + 10%) x 1.1111)

                        You will lose some or all of your investment at maturity
                        if the Index Return reflects a decline of more than 10%.

Index Return:           Ending Index Level - Initial Index Level
                        ----------------------------------------
                                 Initial Index Level

Initial Index Level:    The Index closing  level on the pricing date,  which was
                        14075.96.

Ending Index Level:     The  arithmetic  average of the Index closing  levels on
                        each of the five Averaging Dates.

Buffer:                 10%

Averaging Dates:        February 9, 2007*,  February  13,  2007*,  February  14,
                        2007*,  February  15,  2007* and February 16, 2007* (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 Buffered Return Enhanced Notes involves a number of risks.  See
"Risk Factors" beginning on page PS-6.

An  affiliate  and  employee  of  JPMorgan  Chase & Co. has  purchased  $100,000
aggregate principal amount of the notes.

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                $1,000                 $16.70                 $983.30
--------------------------------------------------------------------------------
Total                   $5,250,000             $87,675                $5,162,325
--------------------------------------------------------------------------------

(1) J.P. Morgan  Securities Inc., acting as agent for JPMorgan Chase & Co., will
receive a  commission  of $16.70 per $1,000  principal  amount  note and may pay
selling  concessions to other dealers of $8.00 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  offers and
sales will be made at prices  related  to market  prices at the time of offer or
sale.

                                    JPMorgan

November 4, 2005

<PAGE>

      We are offering to sell,  and are seeking offers to buy, the notes only in
jurisdictions  where  offers  and  sales are  permitted.  Neither  this  pricing
supplement nor the accompanying  prospectus  supplement or prospectus constitute
an offer to sell, or a solicitation  of an offer to buy, any notes by any person
in any  jurisdiction  in which it is  unlawful  for such  person to make such an
offer or solicitation.  Neither the delivery of this pricing  supplement nor the
accompanying  prospectus  supplement or prospectus  nor any sale made  hereunder
implies that there has been no change in our affairs or that the  information in
this  pricing  supplement  and  the  accompanying   prospectus   supplement  and
prospectus is correct as of any date after the date hereof.

      You must (i) comply with all applicable  laws and  regulations in force in
any  jurisdiction  in connection  with the  possession or  distribution  of this
pricing supplement and the accompanying prospectus supplement and prospectus and
the purchase,  offer or sale of the notes and (ii) obtain any consent,  approval
or permission required to be obtained by you for the purchase,  offer or sale by
you of the notes under the laws and  regulations  applicable  to you in force in
any  jurisdiction  to which you are subject or in which you make such purchases,
offers  or  sales;  neither  we nor the  agent  shall  have  any  responsibility
therefor.

      The notes are not and will not be authorized  by the Comision  Nacional de
Valores for public offer in Argentina and may thus not be offered or sold to the
public at large or to sectors or specific groups thereof by any means, including
but not limited to personal offerings, written materials,  advertisements or the
media, in  circumstances  which constitute a public offering of securities under
Argentine Law No. 17,811, as amended.

      The notes have not been and will not be  registered  with the "Comissao de
Valores  Mobiliarios" - the Brazilian Securities and Exchange Commission ("CVM")
and  accordingly,  the  notes  may not be sold,  promised  to be sold,  offered,
solicited,  advertised and/or marketed within the Federative  Republic of Brazil
in an offering that can be construed as a public  offering under CVM Instruction
no 400, dated December 29, 2003, as amended from time to time.

      The notes have not been registered with the  Superintendencia de Valores y
Seguros  in Chile and may not be offered or sold  publicly  in Chile.  No offer,
sales or deliveries of the notes, or distribution of this pricing  supplement or
the  accompanying  prospectus  supplement or prospectus,  may be made in or from
Chile  except  in  circumstances  which  will  result  in  compliance  with  any
applicable Chilean laws and regulations.

      The notes have not been,  and will not be,  registered  with the  National
Registry of Securities maintained by the Mexican National Banking and Securities
Commission  nor with the Mexican  Stock  Exchange and may not be offered or sold
publicly  in  the  United  Mexican  States.  This  pricing  supplement  and  the
accompanying   prospectus   supplement   and  prospectus  may  not  be  publicly
distributed in the United Mexican States.


<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 Buffered Return Enhanced Notes?

      The Buffered  Return  Enhanced Notes are senior  unsecured  obligations of
JPMorgan Chase & Co. ("JPMorgan  Chase") that are linked to the Nikkei 225 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 $1,000  principal
                  amount note that provides you with a return on your investment
                  equal to the Index Return  multiplied  by two,  subject to the
                  Maximum Total Return.  The Maximum Total Return is 25.00%. The
                  maximum  final  payment  per $1,000  principal  amount note is
                  $1,250.  If the Index Return is positive,  your final  payment
                  per  $1,000  principal  amount  note  will  be  calculated  as
                  follows, subject to the Maximum Total Return:

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

            o     Your  investment  will be protected for up to a 10% decline in
                  the Ending Index Level as compared to the Initial Index Level.
                  Therefore, if the Index Return is between 0% and negative 10%,
                  your  final  payment  per  $1,000  principal  amount  note  at
                  maturity will be $1,000.

            o     Your  investment  will be fully exposed to any decline of more
                  than 10% in the Ending  Index Level as compared to the Initial
                  Index  Level.  Therefore,  for each 1%  decline  in the Ending
                  Index  Level  relative to the  Initial  Index  Level  beyond a
                  decline of 10%,  you will lose 1.1111% of your  investment  in
                  the notes and your final payment per $1,000  principal  amount
                  note will be calculated as follows:

                          $1,000 + ($1,000 x (Index Return + 10%) x 1.1111)

      The Initial  Index Level is the Index  closing  level on the pricing date,
which was  14075.96.  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,  subject to  adjustment as described  "Description  of
Notes - Payment at  Maturity."  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 "The
Nikkei 225 Index --  Discontinuation  of the Nikkei  225  Index;  Alteration  of
Method of  Calculation" at the regular  official  weekday close of the principal
trading session of the Tokyo Stock Exchange (the "TSE") or the relevant exchange
or market for the successor index.

      The  Index  Return,  as  calculated  by  the  calculation  agent,  is  the
percentage change of the Index calculated by comparing the arithmetic average of
the Index closing level on each of the five  Averaging  Dates (the "Ending Index
Level") to the Index  closing  level on the  pricing  date (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  at  maturity  if the Index
Return reflects a decline of more than 10%.

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


                                      PS-1
<PAGE>

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

What is the Nikkei 225 Index?

      The Nikkei  Stock  Average  (the "Index" or "Nikkei 225 Index") is a stock
index  published  by Nihon  Keizai  Shimbun,  Inc.  ("NKS")  that  measures  the
composite price  performance of 225 common stocks traded on the TSE representing
a broad cross section of Japanese industry. All 225 underlying stocks are listed
in the First  Section  of the TSE and,  therefore,  are among the most  actively
traded  stocks on the TSE.  The Nikkei 225 Index is a  modified,  price-weighted
Index,  which means that a stock's weight in the Index is based on its price per
share rather than the total market  capitalization  of the issuer of that stock.
NKS may from time to time, in its sole discretion, change the companies included
in the Index. However, to maintain continuity in the Index, the policy of NKS is
generally  not to alter  the  composition  of the Index  except  when a stock is
deleted in accordance with certain criteria.

      An  investment  in the  notes  does not  reflect  a direct  investment  in
Japanese  yen.  Thus,  although the level of the Nikkei 225 Index may  generally
fluctuate  because of various economic factors,  including  without  limitation,
currency movement or foreign exchange rates, the notes are not otherwise subject
to currency  conversion,  direct fluctuation due to currency movement or foreign
exchange  rates.  For  additional  discussion  of the Nikkei 225 Index,  see the
section of this pricing supplement called "The Nikkei 225 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 of 25.00%.

      o     LIMITED  PROTECTION  AGAINST  LOSS  -  Payment  at  maturity  of the
            principal amount of the notes is protected  against a decline in the
            Ending  Index Level as compared to the Initial  Index Level of up to
            10%. Investors lose 1.1111% of principal for every 1% that the Index
            has declined below 10%.

      o     DIVERSIFICATION OF THE NIKKEI 225 INDEX - The return on the notes is
            linked to the  performance of the Nikkei 225 Index which consists of
            225 stocks listed on the first section of the Tokyo Stock  Exchange.
            It  is  a   price-weighted   average  of  225   Japanese   companies
            representing a broad cross-section of Japanese  industries.  The mix
            of  components  which  comprise the Nikkei 225 Index are  rebalanced
            from  time to time to assure  that all  issues in the Index are both
            highly liquid and  representative of Japan's  industrial  structure.
            See "The Nikkei 225 Index."

      o     CAPITAL  GAINS TAX TREATMENT - If you hold the notes for more than a
            year,  your gain or loss on the notes should be treated as long term
            capital gain or loss.  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  $50,000  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 exposed,  on a leveraged basis, to any decline in
            the Index below 10%.

      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   25.00%  of  the   principal   amount,   regardless  of  the
            appreciation  in the  Index.  We  refer  to this  percentage  as the
            Maximum Total Return.

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


                                      PS-2
<PAGE>

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

      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 Nikkei 225 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.

What  is the  Total  Return  on the  Notes  at  Maturity  Assuming  a  Range  of
Performance for the Nikkei 225 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 reflect the Maximum Total Return of 25.00% and assume an
Initial Index Level of 14000. 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. The hypothetical Total Returns set
forth below do not represent an  annualized  compounded  return,  but rather the
Total Return on the notes at maturity.

  (The following table is represented by a line chart in the printed material.)

                  ---------------------------------------------------
                                      Return on an         Return on
                    Index            Investment in       an Investment
                    Return             the Index          in the Notes
                  ---------------------------------------------------
                    80.00%               80.00%             25.00%
                    70.00%               70.00%             25.00%
                    60.00%               60.00%             25.00%
                    50.00%               50.00%             25.00%
                    40.00%               40.00%             25.00%
                    30.00%               30.00%             25.00%
                    20.00%               20.00%             25.00%
                    12.50%               12.50%             25.00%
                    10.00%               10.00%             20.00%
                     5.00%                5.00%             10.00%
                     2.50%                2.50%              5.00%
                     0.00%                0.00%              0.00%
                   -10.00%              -10.00%              0.00%
                   -20.00%              -20.00%            -11.11%
                   -30.00%              -30.00%            -22.22%
                   -40.00%              -40.00%            -33.33%
                   -50.00%              -50.00%            -44.44%
                   -60.00%              -60.00%            -55.56%
                   -70.00%              -70.00%            -66.67%
                   -80.00%              -80.00%            -77.78%
                   -90.00%              -90.00%            -88.89%
                  -100.00%             -100.00%           -100.00%
                  ---------------------------------------------------

                  ---------------------------------------------------
                    Ending
                  Index Level        Index Return        Total Return
                  ---------------------------------------------------
                    25200                80.00%             25.00%
                    23800                70.00%             25.00%
                    22400                60.00%             25.00%
                    21000                50.00%             25.00%
                    19600                40.00%             25.00%
                    18200                30.00%             25.00%
                    16800                20.00%             25.00%
                    15750                12.50%             25.00%
                    15400                10.00%             20.00%
                    14700                 5.00%             10.00%
                    14350                 2.50%              5.00%
                    14000                 0.00%              0.00%
                    12600               -10.00%              0.00%
                    11200               -20.00%            -11.11%
                     9800               -30.00%            -22.22%
                     8400               -40.00%            -33.33%
                     7000               -50.00%            -44.44%
                     5600               -60.00%            -55.56%
                     4200               -70.00%            -66.67%
                     2800               -80.00%            -77.78%
                     1400               -90.00%            -88.89%
                        0              -100.00%           -100.00%
                  ---------------------------------------------------

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


                                      PS-3
<PAGE>

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

      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.

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
reflects the Maximum Total Return of 25.00% and assumes a  hypothetical  Initial
Index Level of 14000 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    Example #4
                                                             ----------     ----------    ----------    ----------
<S>                                                            <C>             <C>           <C>          <C>
Initial Index Level.....................................       14000           14000         14000        14000
Index Closing Level on First Averaging Date.............       14750           13600         17700        10000
Index Closing Level on Second Averaging Date............       14800           13100         17900         9600
Index Closing Level on Third Averaging Date.............       14800           13150         18100        10400
Index Closing Level on Fourth Averaging Date............       14750           13100         18700         9500
Index Closing Level on Final Averaging Date.............       14400           13550         18600         9500
Ending Index Level......................................       14700           13300         18200         9800
Index Return............................................       5.00%          -5.00%        30.00%       -30.00%
Payment at Maturity Per $1,000 Principal Amount Note ...     $1,100.00       $1,000.00     $1,250.00     $777.78
</TABLE>

Example 1: The level of the Index  increases  from the  Initial  Index  Level of
14000 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
14700.

Payment at Maturity per $1,000 note = $1,000 + ($1,000 x (5.00% x 2)) = $1,100

Because the Ending Index Level of 14700 is greater than the Initial  Index Level
of 14000 and the Index  Return of 5.00%  multiplied  by two does not  exceed the
Maximum Total Return of 25.00%,  the investor  receives a payment at maturity of
$1,100.00 per $1,000 principal amount note.

               [14700 - 14000]
Index Return = --------------- = 5.00%
               [    14000    ]

Example 2: The level of the Index  decreases  from the  Initial  Index  Level of
14000 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
13300.

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

Because the Ending Index Level of 13300 is less than the Initial  Index Level of
14000, and because that decline is less than 10%, the payment at maturity is the
principal amount of $1,000 per $1,000 principal amount note.

               [13300 - 14000]
Index Return = -------------- = -5.00%
               [    14000    ]

Example 3: The level of the Index  increases  from the  Initial  Index  Level of
14000 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
18200.

Payment at Maturity per $1,000 note = $1,250.00

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


                                      PS-4
<PAGE>

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

Because the Index Return of 30.00%  exceeds the Maximum  Total Return of 25.00%,
the investor  receives a payment at maturity of $1,250.00  per $1,000  principal
amount note, the maximum return on the notes.

               [18200 - 14000]
Index Return = --------------- = 30.00%
               [    14000    ]

Example 4: The level of the Index  decreases  from the  Initial  Index  Level of
14000 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 9800.

Payment at Maturity  per $1,000 note = $1,000 + ($1,000 x (-30% + 10%) x 1.1111)
= $777.78

Because the Ending  Index Level is more than 10% below the Initial  Index Level,
the  investor  will receive  less than the  principal  amount of his, her or its
investment. The payment at maturity is $777.78 per $1,000 principal amount note.

               [9800 - 14000]
Index Return = -------------- = -30%
               [    14000   ]

Tax Treatment

      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.  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 gain or loss 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 are urged to consult your
tax adviser  concerning these  alternative  characterizations,  and to carefully
review the section of this  pricing  supplement  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
"The Nikkei 225 Index -- Historical Information" in this pricing supplement.

Listing

      The notes will not be listed on any securities exchange.

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


                                      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 has  declined by more than 10% from the
Initial Index Level, 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 25.00%.  The appreciation  potential of the
notes will be limited to a maximum of 25.00% of the principal value of the notes
(or $250 per $1,000  principal  amount note) even if the Index Return is greater
than 12.50%.

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 or
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.

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


                                      PS-6
<PAGE>

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 Nikkei 225 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 Nikkei 225 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, if the Index Return
reflects  a decline of more than 10%,  you may lose some or all of your  initial
investment.

The return for the notes will not be adjusted for changes in exchange rates that
might affect the Index Return.

      Although  most of stocks  comprising  the  Nikkei  225 Index are traded in
currencies  other  than the U.S.  dollars,  and the  notes,  which are linked to
Nikkei 225 Index,  are  denominated in U.S.  dollars,  the amount payable on the
notes at maturity  will not be adjusted for changes in the exchange rate between
U.S.  dollars  and each of the  currencies  in which the stocks  comprising  the
Nikkei  225 Index are  denominated.  Changes in  exchange  rates,  however,  may
reflect changes in various non-U.S.  economies that in turn may affect the Index
Return.  The amount we pay in respect of the notes on the maturity  date will be
determined solely in accordance with the procedures described in "Description of
Notes - Payment at Maturity."

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.

NKS may adjust the Nikkei 225 Index in a way that affects its level, and NKS has
no obligation to consider your interests.

      NKS is responsible  for  calculating and maintaining the Nikkei 225 Index.
NKS can add, delete or substitute the stocks  underlying the Nikkei 225 Index or
make other methodological  changes that could change the level of the Nikkei 225
Index. You should realize that the changing of companies  included in the Nikkei
225 Index may affect the Nikkei 225 Index as a newly  added  company may perform
significantly  better  or worse  than the  company  or  companies  it  replaces.
Additionally, NKS may discontinue or suspend calculation or dissemination of the
Nikkei 225 Index.  Any of these actions could adversely  affect the value of the
notes.  NKS has no  obligation  to consider  your  interests in  calculating  or
revising the Nikkei 225 Index.


                                      PS-7
<PAGE>

We are not  affiliated  with any company  included in the Nikkei 225 Index.  You
will have no  shareholder  rights in the  companies  whose  stocks  comprise the
Nikkei 225 Index.

      We are not affiliated with any of the companies whose stock is represented
in the  Nikkei 225 Index.  As a result,  we will have no ability to control  the
actions of such companies,  including actions that could affect the value of the
stocks  underlying the Nikkei 225 Index or your notes. None of the money you pay
us will go to NKS or any of the other companies included in the Nikkei 225 Index
and none of those companies will 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 Nikkei 225 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 Nikkei  225 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  nonpublic  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 disrupted 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


                                      PS-8
<PAGE>

and the  maturity  date will be  postponed  and your  return  will be  adversely
affected. See "Description of Notes--Market Disruption Events."

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  ("IRS")  regarding 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  in "Certain  U.S.
Federal  Income Tax  Consequences."  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.  Non-U.S.
holders  should note that they 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.

An  investment  in the  notes is  subject  to  risks  associated  with  non-U.S.
securities markets.

      The  underlying  stocks  that  constitute  the  Nikkei 225 Index have been
issued by non-U.S. companies.  Investments in securities indexed to the value of
such non-U.S.  equity  securities  involve risks  associated with the securities
markets in those  countries,  including  risks of volatility  in those  markets,
governmental  intervention in those markets and cross shareholdings in companies
in  certain   countries.   Also  there  is  generally  less  publicly  available
information  about  companies  in some of these  jurisdictions  than  about U.S.
companies  that are  subject  to the  reporting  requirements  of the  SEC,  and
generally non-U.S.  companies are subject to accounting,  auditing and financial
reporting standards and requirements and securities trading rules different from
those  applicable  to U.S.  reporting  companies.  The prices of  securities  in
non-U.S.  jurisdictions  may be affected by political,  economic,  financial and
social  factors in such markets,  including  changes in a country's  government,
economic and fiscal policies, currency exchange laws or restrictions.  Moreover,
the economies in such  countries may differ  favorably or  unfavorably  from the
economy  of the  United  States in such  respects  as  growth of gross  national
product,   rate  of  inflation,   capital   reinvestment,   resources  and  self
sufficiency.  Such  countries may be subjected to different  and, in some cases,
more adverse economic environments.


                                      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.

      We have no obligation to engage in any manner of hedging activity and will
do so solely at our  discretion  and for our own  account.  No note holder shall
have any rights or interest in our hedging activity or any positions we may take
in connection with our hedging activity.


                                     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 Buffered Return Enhanced Notes Linked to
the Nikkei 225 Index due February 23, 2007.

General

      The Buffered  Return  Enhanced Notes are senior  unsecured  obligations of
JPMorgan Chase & Co. that are linked to the Nikkei 225 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 $5,250,000
aggregate  principal  amount.  An affiliate and employee of JPMorgan Chase & Co.
has purchased $100,000 aggregate principal amount of the notes.

      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  $50,000  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 February 23, 2007 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 $1,000  principal
                  amount note that provides you with a return on your investment
                  equal to the Index Return  multiplied  by two,  subject to the
                  Maximum Total Return on the note.  The "Maximum  Total Return"
                  is 25.00%.  The maximum  final  payment  per $1,000  principal
                  amount note is $1,250.  If the Index Return is positive,  your
                  final  payment  per  $1,000  principal  amount  note  will  be
                  calculated as follows, subject to the Maximum Total Return:

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

            o     Your  investment  will be protected for up to a 10% decline in
                  the Ending Index Level as compared to the Initial Index Level.
                  Therefore, if the Index Return is between 0% and negative 10%,
                  your final  payment per $1,000  principal  amount note will be
                  $1,000.

            o     Your  investment  will be fully exposed to any decline of more
                  than 10% in the Ending  Index Level as compared to the Initial
                  Index  Level.  Therefore,  for each 1%  decline  in the Ending
                  Index  Level  relative to the  Initial  Index  Level  beyond a
                  decline of 10%,  you will lose 1.1111% of your  investment  in
                  the notes and your final payment per $1,000  principal  amount
                  note at maturity will be calculated as follows:


                                     PS-11
<PAGE>

                $1,000 + ($1,000 x (Index Return + 10%) x 1.1111)

      The  "Index  Return,"  as  calculated  by the  calculation  agent,  is the
percentage change of the Index calculated by comparing the arithmetic average of
the Index closing level on each of the five  Averaging  Dates (the "Ending Index
Level") to the Index  closing  level on the  pricing  date (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  at  maturity  if the Index
Return reflects a decline of more than 10%.

      The "Initial  Index Level" is the Index closing level on the pricing date,
which was 14075.96.  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  February  9, 2007,  February  13,  2007,
February  14,  2007,  February  15,  2007 and  February  16,  2007,  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 February 16, 2007, 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 four  business  days prior to the
scheduled  maturity  date,  the  maturity  date will be the fourth  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   "The   Nikkei  225  Index  --
Discontinuation of the Nikkei 225 Index; Alteration of Method of Calculation" at
the regular official weekday close of the principal trading session of the Tokyo
Stock Exchange (the "TSE") 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 TSE, and the principal options and futures
exchanges relating to the securities comprising the Nikkei 225 Index.

      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 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


                                     PS-12
<PAGE>

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.

      The  calculation  agent will provide  written notice to the trustee at its
New York  office,  on which  notice the Trustee may  conclusively  rely,  of the
amount to be paid at  maturity  on or prior to 11:00 a.m.  on the  business  day
preceding the maturity date.

      All calculations  with respect to the Ending Index Level,  Index Return or
the 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.

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


                                     PS-13
<PAGE>

                  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.

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

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-14
<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, N.A.  ("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-15
<PAGE>

                              THE NIKKEI 225 INDEX

      We have derived all  information  regarding the Nikkei 225 Index contained
in this pricing supplement,  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, Nihon Keizai  Shimbun,  Inc.  ("NKS").  NKS has no obligation to continue to
publish, and may discontinue publication of, the Nikkei 225 Index.

      The  Nikkei  225  Index  is  a  stock  index  calculated,   published  and
disseminated  by NKS that measures the composite  price  performance of selected
Japanese  stocks.  The Nikkei  225 Index  currently  is based on 225  underlying
stocks  (the  "Underlying  Stocks")  trading  on the  TSE  representing  a broad
cross-section  of  Japanese  industries.  All 225  Underlying  Stocks are stocks
listed in the First  Section of the TSE.  Stocks  listed in the First Section of
the TSE are among the most actively  traded stocks on the TSE. NKS rules require
that the 75 most liquid issues  (one-third of the component  count of the Nikkei
225 Index) be included in the Nikkei 225 Index.

      The 225  companies  included in the Nikkei 225 Index are divided  into six
sector categories:  Technology,  Financials,  Consumer Goods, Materials, Capital
Goods/Others and Transportation  and Utilities.  These six sector categories are
further divided into 36 industrial classifications as follows:

o     Technology - Pharmaceuticals, Electrical Machinery, Automobiles, Precision
      Machinery, Telecommunications

o     Financials - Banks, Miscellaneous Finance, Securities, Insurance

o     Consumer Goods - Marine Products, Food, Retail, Services

o     Materials - Mining,  Textiles,  Paper and Pulp,  Chemicals,  Oil,  Rubber,
      Ceramics, Steel, Nonferrous Metals, Trading House

o     Capital    Goods/Others   -   Construction,    Machinery,    Shipbuilding,
      Transportation Equipment, Miscellaneous Manufacturing, Real Estate

o     Transportation  and Utilities - Railroads and Buses,  Trucking,  Shipping,
      Airlines, Warehousing, Electric Power, Gas

      The  Nikkei  225  Index is a  modified,  price-weighted  Index  (i.e.,  an
Underlying  Stock's  weight in the Index is based on its price per share  rather
than the total market  capitalization  of the issuer) which is calculated by (i)
multiplying  the per share price of each Underlying  Stock by the  corresponding
weighting factor for such Underlying Stock (a "Weight Factor"), (ii) calculating
the sum of all these  products  and (iii)  dividing  such sum by a divisor  (the
"Divisor").  The Divisor was  initially  set at 225 for the date of May 16, 1949
using  historical  numbers  from May 16,  1949,  the  date on which  the TSE was
reopened.  The  Divisor  was  23.154 as of  October  1, 2003 and is  subject  to
periodic  adjustments  as set forth  below.  Each  Weight  Factor is computed by
dividing (Y)50 by the par value of the relevant  Underlying  Stock,  so that the
share  price of each  Underlying  Stock when  multiplied  by its  Weight  Factor
corresponds  to a share price  based on a uniform par value of (Y)50.  The stock
prices used in the  calculation  of the Nikkei 225 Index are those reported by a
primary market for the Underlying  Stocks  (currently the TSE). The level of the
Nikkei 225 Index is calculated once per minute during TSE trading hours.

      In order to  maintain  continuity  in the Nikkei 225 Index in the event of
certain changes due to non-market factors affecting the Underlying Stocks,  such
as the addition or deletion of stocks,  substitution of stocks,  stock splits or
distributions  of assets to  stockholders,  the Divisor used in calculating  the
Nikkei 225 Index is adjusted in a manner  designed to prevent any  instantaneous
change or  discontinuity in the level of the Nikkei 225 Index.  Thereafter,  the
Divisor remains at the new value until a further  adjustment is necessary as the
result of another  change.  As a result of such change  affecting any Underlying
Stock,  the Divisor is  adjusted in such a way that the sum of all share  prices
immediately  after such change  multiplied by the  applicable  Weight Factor and
divided by the new Divisor (i.e., the level of the Nikkei 225 Index  immediately
after such  change)  will  equal the level of the  Nikkei 225 Index  immediately
prior to the change.


                                     PS-16
<PAGE>

      An  Underlying  Stock may be deleted or added by NKS.  Any stock  becoming
ineligible  for  listing  in the  First  Section  of the  TSE  due to any of the
following reasons will be deleted from the Underlying  Stocks: (i) bankruptcy of
the issuer,  (ii) merger of the issuer with,  or  acquisition  of the issuer by,
another company,  (iii) delisting of such stock,  (iv) transfer of such stock to
the  "Seiri-Post"  because of excess  debt of the issuer or because of any other
reason or (v)  transfer  of such stock to the Second  Section.  In  addition,  a
component  stock  transferred  to  the  "Kanri-Post"  (Posts  for  stocks  under
supervision)  is in principle a candidate for deletion.  Underlying  Stocks with
relatively low liquidity,  based on trading value and rate of price  fluctuation
over the past five years,  may be deleted by NKS.  Upon deletion of a stock from
the Underlying Stocks, NKS will select a replacement for such deleted Underlying
Stock in  accordance  with certain  criteria.  In an  exceptional  case, a newly
listed  stock in the First  Section of the TSE that is  recognized  by NKS to be
representative  of a market  may be added to the  Underlying  Stocks.  In such a
case, an existing  Underlying Stock with low trading volume and deemed not to be
representative of a market will be deleted by NKS.

      A list of the issuers of the Underlying Stocks constituting the Nikkei 225
Index is available from the Nikkei Economic  Electronic Databank System and from
the Stock  Market  Indices Data Book  published  by NKS. NKS may delete,  add or
substitute any stock  underlying the Nikkei 225 Index.  NKS first calculated and
published the Nikkei 225 Index in 1970.

License Agreement

      We have  entered into an  agreement  with NKS  providing us and any of our
affiliated  or  subsidiary   companies  identified  in  that  agreement  with  a
non-exclusive  license  and,  for a fee,  with the right to use the  Nikkei  225
Index,  which is owned and  published  by the NKS, in  connection  with  certain
securities, including the notes.

      Our license agreement with NKS provides that NKS will assume no obligation
or responsibility for use of the Nikkei 225 Index by us or our affiliates.

Discontinuation of the Nikkei 225 Index; Alteration of Method of Calculation

      If NKS discontinues publication of the Nikkei 225 Index and NKS or another
entity  publishes a successor or  substitute  index that the  calculation  agent
determines,  in its sole discretion, to be comparable to the discontinued Nikkei
225 Index (such index being referred to herein as a "Nikkei  successor  index"),
then any Nikkei 225 Index  closing  level will be determined by reference to the
level of such  Nikkei  successor  index at the close of  trading on the TSE (2nd
session) or the relevant  exchange or market for the Nikkei  successor  index on
the relevant review date.

      Upon any selection by the calculation  agent of a Nikkei  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 NKS discontinues publication of the Nikkei 225 Index prior to, and such
discontinuance  is continuing  on, an Averaging Date and the  calculation  agent
determines, in its sole discretion,  that no Nikkei successor index is available
at such time,  then the  calculation  agent will  determine the Nikkei 225 Index
closing  level for the  Nikkei  225 Index for such  date.  The  Nikkei 225 Index
closing level for the Nikkei 225 Index will be computed by the calculation agent
in  accordance  with the  formula for and method of  calculating  the Nikkei 225
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
Nikkei 225 Index. Notwithstanding these alternative arrangements, discontinuance
of the  publication  of the  Nikkei  225  Index  on the  relevant  exchange  may
adversely affect the value of the notes.

      If at any time the method of calculating  the Nikkei 225 Index or a Nikkei
successor index, or the level thereof,  is changed in a material respect,  or if
the Nikkei 225 Index or a Nikkei successor index is in any other way modified so
that the  Nikkei  225 Index or such  Nikkei  successor  index  does not,  in the
opinion of the calculation  agent,  fairly represent the level of the Nikkei 225
Index or such Nikkei 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 Nikkei 225 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 Nikkei 225 Index or such
Nikkei  successor index, as the case may be, as if such changes or modifications
had not been


                                     PS-17
<PAGE>

made,  and the  calculation  agent will  calculate  the Nikkei 225 Index closing
level with reference to the Nikkei 225 Index or such Nikkei  successor index, as
adjusted.  Accordingly,  if the method of calculating  the Nikkei 225 Index or a
Nikkei  successor index is modified so that the level of the Nikkei 225 Index or
such  Nikkei  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
Nikkei  225 Index or such  Nikkei  successor  index as if there had been no such
modification (e.g., as if such split had not occurred).

The Tokyo Stock Exchange

      The TSE is one of the world's  largest  securities  exchanges  in terms of
market capitalization.  Trading hours are currently from 9:00 a.m. to 11:00 a.m.
and from 12:30 p.m. to 3:00 p.m., Tokyo time, Monday through Friday.

      Due to the time zone  difference,  on any normal  trading day the TSE will
close prior to the  opening of  business  in New York City on the same  calendar
day. Therefore,  the closing level of the Nikkei 225 Index on a trading day will
generally be  available  in the United  States by the opening of business on the
same calendar day.

      The TSE has adopted  certain  measures,  including  daily price floors and
ceilings on individual stocks,  intended to prevent any extreme short-term price
fluctuations  resulting from order imbalances.  In general,  any stock listed on
the TSE cannot be traded at a price  lower than the  applicable  price  floor or
higher than the applicable  price  ceiling.  These price floors and ceilings are
expressed in absolute  Japanese yen, rather than percentage  limits based on the
closing price of the stock on the previous trading day. In addition,  when there
is a major  order  imbalance  in a listed  stock,  the TSE posts a "special  bid
quote" or a "special asked quote" for that stock at a specified  higher or lower
price level than the stock's last sale price in order to solicit  counter-orders
and balance supply and demand for the stock.  Prospective  investors should also
be aware that the TSE may suspend the  trading of  individual  stocks in certain
limited and extraordinary circumstances, including, for example, unusual trading
activity  in that  stock.  As a result,  changes  in the Nikkei 225 Index may be
limited by price limitations or special quotes, or by suspension of trading,  on
individual stocks that make up the Nikkei 225 Index, and these  limitations,  in
turn, may adversely affect the value of the notes.


                                     PS-18
<PAGE>

Historical Information

      The following  graph sets forth the  historical  performance of the Nikkei
225 Index based on the weekly  Nikkei 225 Index closing  level,  from January 1,
2000 through November 4, 2005. The Nikkei 225 Index closing level on November 4,
2005 was  14075.96.  We obtained the Nikkei 225 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  obtained from
Bloomberg Financial Markets.

  [The following data is represented by a line chart in the printed material.]

                 Historical Performance of the Nikkei 225 Index

  Date     Index Level
  ----     -----------
07-Jan-00   18193.41
14-Jan-00   18956.55
21-Jan-00   18878.09
28-Jan-00   19434.78

04-Feb-00   19763.13
11-Feb-00   19710.02
18-Feb-00   19789.03
25-Feb-00   19817.88

03-Mar-00   19927.54
10-Mar-00   19750.40
17-Mar-00   19566.32
24-Mar-00   19958.08
31-Mar-00   20337.32

07-Apr-00   20252.81
14-Apr-00   20434.68
21-Apr-00   18252.68
28-Apr-00   17973.70

05-May-00   18439.36
12-May-00   17357.86
19-May-00   16858.17
26-May-00   16008.14

02-Jun-00   16800.06
09-Jun-00   16861.91
16-Jun-00   16318.31
23-Jun-00   16963.21
30-Jun-00   17411.05

07-Jul-00   17398.24
14-Jul-00   17142.90
21-Jul-00   16811.49
28-Jul-00   15838.57

04-Aug-00   15667.36
11-Aug-00   16117.50
18-Aug-00   16280.49
25-Aug-00   16911.33

01-Sep-00   16739.78
08-Sep-00   16501.55
15-Sep-00   16213.28
22-Sep-00   15818.25
29-Sep-00   15747.26

06-Oct-00   15994.24
13-Oct-00   15330.31
20-Oct-00   15198.73
27-Oct-00   14582.20

03-Nov-00   14837.78
10-Nov-00   14988.54
17-Nov-00   14544.30
24-Nov-00   14315.35

01-Dec-00   14835.33
08-Dec-00   14696.51
15-Dec-00   14552.29
22-Dec-00   13427.08
29-Dec-00   13785.69

05-Jan-01   13867.61
12-Jan-01   13347.74
19-Jan-01   13989.12
26-Jan-01   13696.06

02-Feb-01   13703.63
09-Feb-01   13422.83
16-Feb-01   13175.49
23-Feb-01   13246.00

02-Mar-01   12261.80
09-Mar-01   12627.90
16-Mar-01   12232.98
23-Mar-01   13214.54
30-Mar-01   12999.70

06-Apr-01   13383.76
13-Apr-01   13385.72
20-Apr-01   13765.67
27-Apr-01   13934.32

04-May-01   14421.64
11-May-01   14043.92
18-May-01   13877.77
25-May-01   13765.92

01-Jun-01   13261.84
08-Jun-01   13430.22
15-Jun-01   12790.38
22-Jun-01   13044.61
29-Jun-01   12969.05

06-Jul-01   12306.08
13-Jul-01   12355.15
20-Jul-01   11908.39
27-Jul-01   11798.08

03-Aug-01   12241.97
10-Aug-01   11735.06
17-Aug-01   11445.54
24-Aug-01   11166.31
31-Aug-01   10713.51

07-Sep-01   10516.79
14-Sep-01   10008.89
21-Sep-01    9554.99
28-Sep-01    9774.68

05-Oct-01   10205.87
12-Oct-01   10632.35
19-Oct-01   10538.79
26-Oct-01   10795.16

02-Nov-01   10383.78
09-Nov-01   10215.71
16-Nov-01   10649.09
23-Nov-01   10696.82
30-Nov-01   10697.44

07-Dec-01   10796.89
14-Dec-01   10511.65
21-Dec-01   10335.45
28-Dec-01   10542.62

04-Jan-02   10871.49
11-Jan-02   10441.59
18-Jan-02   10293.32
25-Jan-02   10144.14

01-Feb-02    9791.43
08-Feb-02    9686.06
15-Feb-02   10048.10
22-Feb-02   10356.78

01-Mar-02   10812.00
08-Mar-02   11885.79
15-Mar-02   11648.01
22-Mar-02   11345.08
29-Mar-02   11024.94

05-Apr-02   11335.49
12-Apr-02   10962.98
19-Apr-02   11512.01
26-Apr-02   11541.39

03-May-02   11551.01
10-May-02   11531.11
17-May-02   11847.32
24-May-02   11976.28
31-May-02   11763.70

07-Jun-02   11438.53
14-Jun-02   10920.63
21-Jun-02   10354.35
28-Jun-02   10621.84

05-Jul-02   10826.09
12-Jul-02   10601.45
19-Jul-02   10202.36
26-Jul-02    9591.03

02-Aug-02    9709.66
09-Aug-02    9999.79
16-Aug-02    9788.13
23-Aug-02    9867.45
30-Aug-02    9619.30

06-Sep-02    9129.07
13-Sep-02    9241.93
20-Sep-02    9481.08
27-Sep-02    9530.44

04-Oct-02    9027.55
11-Oct-02    8529.61
18-Oct-02    9086.13
25-Oct-02    8726.29

01-Nov-02    8685.72
08-Nov-02    8690.77
15-Nov-02    8503.59
22-Nov-02    8772.56
29-Nov-02    9215.56

06-Dec-02    8863.26
13-Dec-02    8516.07
20-Dec-02    8406.88
27-Dec-02    8714.05

03-Jan-03    8578.95
10-Jan-03    8470.45
17-Jan-03    8690.25
24-Jan-03    8731.65
31-Jan-03    8339.94

07-Feb-03    8448.16
14-Feb-03    8701.92
21-Feb-03    8513.54
28-Feb-03    8363.04

07-Mar-03    8144.12
14-Mar-03    8002.69
21-Mar-03    8195.05
28-Mar-03    8280.16

04-Apr-03    8074.12
11-Apr-03    7816.49
18-Apr-03    7874.51
25-Apr-03    7699.50

02-May-03    7907.19
09-May-03    8152.16
16-May-03    8117.29
23-May-03    8184.76
30-May-03    8424.51

06-Jun-03    8785.87
13-Jun-03    8980.64
20-Jun-03    9120.39
27-Jun-03    9104.06

04-Jul-03    9547.73
11-Jul-03    9635.35
18-Jul-03    9527.73
25-Jul-03    9648.01

01-Aug-03    9611.67
08-Aug-03    9327.53
15-Aug-03    9863.47
22-Aug-03   10281.17
29-Aug-03   10343.55

05-Sep-03   10650.77
12-Sep-03   10712.81
19-Sep-03   10938.42
26-Sep-03   10318.44

03-Oct-03   10709.29
10-Oct-03   10786.04
17-Oct-03   11037.89
24-Oct-03   10335.70
31-Oct-03   10559.59

07-Nov-03   10628.98
14-Nov-03   10167.06
21-Nov-03    9852.83
28-Nov-03   10100.57

05-Dec-03   10373.46
12-Dec-03   10169.66
19-Dec-03   10284.54
26-Dec-03   10417.41

02-Jan-04   10676.64
09-Jan-04   10965.05
16-Jan-04   10857.20
23-Jan-04   11069.01
30-Jan-04   10783.61

06-Feb-04   10460.92
13-Feb-04   10557.69
20-Feb-04   10720.69
27-Feb-04   11041.92

05-Mar-04   11537.29
12-Mar-04   11162.75
19-Mar-04   11418.51
26-Mar-04   11770.65

02-Apr-04   11815.95
09-Apr-04   11897.51
16-Apr-04   11824.56
23-Apr-04   12120.66
30-Apr-04   11761.79

07-May-04   11438.82
14-May-04   10849.63
21-May-04   11070.25
28-May-04   11309.57

04-Jun-04   11128.05
11-Jun-04   11526.82
18-Jun-04   11382.08
25-Jun-04   11780.40

02-Jul-04   11721.49
09-Jul-04   11423.53
16-Jul-04   11436.00
23-Jul-04   11187.33
30-Jul-04   11325.78

06-Aug-04   10972.57
13-Aug-04   10757.20
20-Aug-04   10889.14
27-Aug-04   11209.59

03-Sep-04   11022.49
10-Sep-04   11083.23
17-Sep-04   11082.49
24-Sep-04   10895.16

01-Oct-04   10985.17
08-Oct-04   11349.35
15-Oct-04   10982.95
22-Oct-04   10857.13
29-Oct-04   10771.42

05-Nov-04   11061.77
12-Nov-04   11019.98
19-Nov-04   11082.84
26-Nov-04   10833.75

03-Dec-04   11074.89
10-Dec-04   10756.80
17-Dec-04   11078.32
24-Dec-04   11365.48
31-Dec-04   11488.76

07-Jan-05   11433.24
14-Jan-05   11438.39
21-Jan-05   11238.37
28-Jan-05   11320.58

04-Feb-05   11360.40
11-Feb-05   11553.56
18-Feb-05   11660.12
25-Feb-05   11658.25

04-Mar-05   11873.05
11-Mar-05   11923.89
18-Mar-05   11879.81
25-Mar-05   11761.10

01-Apr-05   11723.63
08-Apr-05   11874.75
15-Apr-05   11370.69
22-Apr-05   11045.95
29-Apr-05   11008.90

06-May-05   11192.17
13-May-05   11049.11
20-May-05   11037.29
27-May-05   11192.33

03-Jun-05   11300.05
10-Jun-05   11304.23
17-Jun-05   11514.03
24-Jun-05   11537.03

01-Jul-05   11630.13
08-Jul-05   11565.99
15-Jul-05   11758.68
22-Jul-05   11695.05
29-Jul-05   11899.60

05-Aug-05   11766.48
12-Aug-05   12261.68
19-Aug-05   12291.73
26-Aug-05   12439.48

02-Sep-05   12600.00
09-Sep-05   12692.04
16-Sep-05   12958.68
23-Sep-05   13159.36
30-Sep-05   13574.30

07-Oct-05   13227.74
14-Oct-05   13420.54
21-Oct-05   13199.95
28-Oct-05   13346.54

04-Nov-05   14075.96

Source: Bloomberg

      Since its  inception,  the  Nikkei 225 Index has  experienced  significant
fluctuations.  The historical levels of the Nikkei 225 Index should not be taken
as an indication of future performance,  and no assurance can be given as to the
Nikkei 225 Index closing level of the Nikkei 225 Index on any Averaging Date. We
cannot  give you  assurance  that the  performance  of the Nikkei 225 Index will
result in the return of any of your initial investment.


                                     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.


                                     PS-20
<PAGE>

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.

    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  as  indebtedness,  any  payments  or
accruals on the notes nonetheless would 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


                                     PS-21
<PAGE>

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.

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 $8.00 per  $1,000  principal  amount  note to other
dealers.  We expect to deliver the notes against  payment  therefor in New York,
New York on or about November 10, 2005. After the initial offering of the notes,
the Agent 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  offers  and sales  will be made at prices  related  to market
prices at the time of such  offer or sale;  accordingly  the  Agent  may  change
public  offering  price,  concession  and  discount  after the offering has been
completed.

      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.

      No action has been or will be taken by us,  the Agent or any  dealer  that
would permit a public  offering of the notes or  possession or  distribution  of
this pricing supplement or the accompanying prospectus supplement or prospectus,
other than in the United States,  where action for that purpose is required.  No
offers,  sales or  deliveries  of the notes,  or  distribution  of this  pricing
supplement or the accompanying  prospectus supplement or prospectus or any other
offering material relating to the notes, may be made in or from any jurisdiction
except in circumstances which will result in compliance with any applicable laws
and  regulations  and will not  impose any  obligations  on us, the Agent or any
dealer.

      The Agent has represented and agreed, and each dealer through which we may
offer the notes has  represented  and  agreed,  that it (i) will comply with all
applicable laws and regulations in force in each non-U.S.  jurisdiction in which
it purchases,  offers,  sells or delivers the notes or possesses or  distributes
this  pricing  supplement  and  the  accompanying   prospectus   supplement  and
prospectus and (ii) will obtain any consent,  approval or permission required by
it for the  purchase,  offer  or sale by it of the  notes  under  the  laws  and
regulations in force in each non-U.S.  jurisdiction to which it is subject or in
which it makes  purchases,  offers  or sales  of the  notes.  We shall  not have
responsibility  for the Agent's or any dealer's  compliance  with the applicable
laws and regulations or obtaining any required consent, approval or permission.

      The notes are not and will not be authorized  by the Comision  Nacional de
Valores for public offer in Argentina and may thus not be offered or sold to the
public at large or to sectors or specific groups thereof by any means, including
but not limited to personal offerings, written materials,  advertisements or the
media, in  circumstances  which constitute a public offering of securities under
Argentine Law No. 17,811, as amended.


                                     PS-23
<PAGE>

      The Notes have not been and will not be  registered  with the "Comissao de
Valores  Mobiliarios" - the Brazilian Securities and Exchange Commission ("CVM")
and  accordingly,  the  Notes  may not be sold,  promised  to be sold,  offered,
solicited,  advertised and/or marketed within the Federative  Republic of Brazil
in an offering that can be construed as a public  offering under CVM Instruction
no 400, dated December 29, 2003, as amended from time to time.

      The notes have not been registered with the  Superintendencia de Valores y
Seguros  in Chile and may not be offered or sold  publicly  in Chile.  No offer,
sales or deliveries of the notes, or distribution of this pricing  supplement or
the  accompanying  prospectus  supplement or prospectus,  may be made in or from
Chile  except  in  circumstances  which  will  result  in  compliance  with  any
applicable Chilean laws and regulations.

      The notes have not been,  and will not be,  registered  with the  National
Registry of Securities maintained by the Mexican National Banking and Securities
Commission  nor with the Mexican  Stock  Exchange and may not be offered or sold
publicly  in  the  United  Mexican  States.  This  pricing  supplement  and  the
accompanying   prospectus   supplement   and  prospectus  may  not  be  publicly
distributed in the United Mexican States.

      We  expect  that  delivery  of the  notes  will  be made  against  payment
therefore on or about the  settlement  date  specified on the cover page of this
pricing supplement,  which will be the fourth business day following the pricing
date of the notes (this  settlement  cycle being referred to as T+4). Under Rule
15c6-1 under the Exchange  Act,  trades in the  secondary  market  generally are
required  to settle in three  business  days,  unless the  parties to that trade
expressly agree  otherwise.  Accordingly,  purchasers who wish to trade notes on
the date of  pricing  will be  required,  by  virtue  of the fact that the notes
initially  will settle in T+4, to specify an alternate  settlement  cycle at the
time of any such trade to prevent a failed  settlement  and should consult their
own advisors.


                                     PS-24
<PAGE>

                      BENEFIT PLAN INVESTOR CONSIDERATIONS

      A fiduciary of a pension,  profit-sharing  or other employee  benefit plan
subject to the  Employment  Retirement  Income  Security Act of 1974, as amended
("ERISA"),  including entities such as collective investment funds, partnerships
and separate  accounts whose underlying  assets include the assets of such plans
(collectively,  "ERISA Plans") should consider the fiduciary  standards of ERISA
in the context of the ERISA Plans' particular  circumstances  before authorizing
an investment in the notes.  Among other factors,  the fiduciary should consider
whether  the   investment   would  satisfy  the  prudence  and   diversification
requirements of ERISA and would be consistent with the documents and instruments
governing the ERISA Plan.

      Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans, as
well as individual  retirement  accounts and Keogh plans subject to Section 4975
of the Code  (together  with ERISA  Plans,  "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 our  business,  we are a
Party in Interest  with respect to many Plans.  Where we are a Party in Interest
with  respect  to a Plan  (either  directly  or by  reason of  ownership  of our
subsidiaries), the purchase and holding of the notes by or on behalf of the Plan
would be a prohibited  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 notes  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 notes is not
prohibited.  Each 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  will  not  result  in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code 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
non-U.S.  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,  the  Code  or any  Similar  Laws  and the
availability of exemptive relief under PTCE 96-23,  95-60,  91-38, 90-1 or 84-14
or some other basis on which the acquisition and holding is not prohibited.

      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 any 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 Plans  generally or
any  particular  Plan,  or that  such an  investment  is  appropriate  for Plans
generally or any particular Plan.

                                     PS-25
<PAGE>

PROSPECTUS SUPPLEMENT
(To Prospectus Dated October 20, 2005)

JPMorgan Chase [Logo]
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-3.

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

October 20, 2005

<PAGE>

                               TABLE OF CONTENTS

Prospectus Supplement                                                       Page
---------------------                                                       ----
About this Prospectus Supplement ........................................    S-1
Consolidated Ratios of Earnings to Fixed Charges ........................    S-2
Foreign Currency Risks ..................................................    S-3
Description of Notes ....................................................    S-5
Description of Warrants .................................................   S-23
Description of Units ....................................................   S-24
The Depositary ..........................................................   S-26
Series E Securities Offered on a Global Basis............................   S-28
United States Federal Taxation ..........................................   S-32
Plan of Distribution ....................................................   S-40
Legal Matters ...........................................................   S-41

Prospectus                                                                  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
Description of Purchase Contracts .......................................     18
Purchase Contracts Issued as Part of Units ..............................     19
Forms of Securities .....................................................     21
Plan of Distribution ....................................................     24
Experts .................................................................     27
Legal Opinions ..........................................................     27
Benefit Plan Investor Considerations ....................................     27

      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  $4,000,000,000,  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>

                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
                                                           Six Months                       Year Ended December 31,
                                                         Ended June 30,    --------------------------------------------------------
                                                              2005         2004         2003         2002         2001         2000
                                                         --------------    ----         ----         ----         ----         ----
<S>                                                           <C>          <C>          <C>          <C>          <C>          <C>
Earnings to Fixed Charges:
   Excluding Interest on Deposits ....................        1.46         1.65         2.27         1.28         1.18         1.52
   Including Interest on Deposits ....................        1.32         1.44         1.87         1.17         1.11         1.31
</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-2
<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-3
<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-4
<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 September 30, 2005, we
had  approximately  $402,207,000  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-5
<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-6
<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,  National  Association,
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,  National  Association,  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.


                                      S-7
<PAGE>

      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.

      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.


                                      S-8
<PAGE>

      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.

      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


                                      S-9
<PAGE>

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  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


                                      S-10
<PAGE>

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."

      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.


                                      S-11
<PAGE>

      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

      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,


                                      S-12
<PAGE>

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
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.


                                      S-13
<PAGE>

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 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


                                      S-14
<PAGE>

            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  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.


                                      S-15
<PAGE>

      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."

      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


                                      S-16
<PAGE>

            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
            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.


                                      S-17
<PAGE>

      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.

      "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


                                      S-18
<PAGE>

      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)

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


                                      S-19
<PAGE>

            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.

      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


                                      S-20
<PAGE>

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
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;"


                                      S-21
<PAGE>

      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.

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.


                                      S-22
<PAGE>

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.

                             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-23
<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-24
<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-25
<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-26
<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.  Payment  of
redemption proceeds,  distributions, and dividend payments to Cede & Co. or such
other nominee as may be requested by the Depositary is our responsibility or the
responsibility  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-27
<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-28
<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-29
<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-30
<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-31
<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     tax-exempt organizations;

      o     dealers in securities or foreign currencies;

      o     persons  holding notes as part of a hedging  transaction,  straddle,
            synthetic  security,  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" and
"Foreign Currency Notes" below.


                                      S-32
<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-33
<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-34
<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-35
<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-36
<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-37
<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-38
<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-39
<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 $601,000 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


                                      S-40
<PAGE>

securities  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. Each of Simpson Thacher & Bartlett LLP and 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-41
<PAGE>

Prospectus

                                 JPMorgan [Logo]

                              JPMorgan Chase & Co.

                                 $4,597,793,000

                                 Debt Securities
                                    Warrants
                                     Units
                               Purchase Contracts

                                   ----------

      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 October 20, 2005

<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 $4,597,793,000 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

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                                                                            ----
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
Description of Purchase Contracts .........................................   18
Purchase Contracts Issued as Part of Units ................................   19
Forms of Securities .......................................................   21
Plan of Distribution ......................................................   24
Experts ...................................................................   27
Legal Opinions ............................................................   27
Benefit Plan Investor Considerations ......................................   27

                                   ----------

      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 100 F Street,  N.E.,  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 100 F Street, N.E.,  Washington,  D.C. 205499 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,
                  2004 (filed on March 2, 2005 and amended on June 28, 2005);

            (b)   our  Quarterly  Reports  on Form 10-Q for the  quarters  ended
                  March 31, 2005 (filed on May 5, 2005) and June 30, 2005 (filed
                  on August 8, 2005); and

            (c)   our  Current  Reports on Form 8-K filed on March 1, 2004,  May
                  14,  2004,  July 30, 2004,  August 13, 2004,  January 7, 2005,
                  January 11,  2005,  January 19,  2005  (three  reports  filed,
                  including  an  amendment  to the Form 8-K filed on  October 1,
                  2004),  February 1, 2005,  February  28,  2005,  March 1, 2005
                  (three  reports  filed),  March 16, 2005 (two reports  filed),
                  March 17,  2005,  March 21, 2005,  March 23,  2005,  April 11,
                  2005,  April  20,  2005  (four  reports  filed,  including  an
                  amendment to the Form 8-K filed on October 1, 2004), April 27,
                  2005 (two reports filed), May 4, 2005 (two reports filed), May
                  6, 2005, May 9, 2005, May 20, 2005 (three reports filed),  May
                  26, 2005,  June 1, 2005,  June 2, 2005,  June 7, 2005, June 9,
                  2005,  June 13, 2005,  June 15, 2005,  July 6, 2005,  July 14,
                  2005,  July  20,  2005  (three  reports  filed,  including  an
                  amendment to the Form 8-K filed on October 1, 2004), August 3,
                  2005 (two  reports  filed),  August 5,  2005,  August 8, 2005,
                  August 12,  2005,  September  2, 2005,  September 8, 2005 (two
                  reports filed),  September 20, 2005,  October 4, 2005, October
                  5, 2005 (two reports  filed),  October 11,  2005,  October 14,
                  2005,  October 18,  2005 and  October 19, 2005 (three  reports
                  filed)  (other  than,  in each case,  those  documents  or 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.

      We are a financial  holding  company  incorporated  under  Delaware law in
1968.  We are a leading  global  financial  services firm and one of the largest
banking  institutions in the United States,  with approximately $1.2 trillion in
assets,  $105 billion in  stockholders'  equity and  operations  in more than 50
countries.  We are a  leader  in  investment  banking,  financial  services  for
consumers and businesses,  financial  transaction  processing,  asset and wealth
management and private equity. Under the JPMorgan, Chase and Bank One brands, we
serve  millions of customers  in the United  States and many of the world's most
prominent  corporate,  institutional and government clients.  Our principal bank
subsidiaries are JPMorgan Chase Bank, National  Association,  a national banking
association  with  branches  in  17  states,   and  Chase  Bank  USA,   National
Association,  a national bank  headquartered in Delaware that is our credit card
issuing bank.  JPMorgan  Chase's  principal  nonbank  subsidiary is J.P.  Morgan
Securities Inc., our U.S. investment banking firm.

      The  headquarters  for  JPMorgan  Chase is in New York  City.  The  retail
banking business,  which includes the consumer  banking,  small business banking
and  consumer  lending  activities  (with  the  exception  of  our  credit  card
business), is headquartered in Chicago.  Chicago also serves as the headquarters
for the commercial banking business.

      Our activities are organized,  for management reporting purposes, into six
business segments as well as Corporate.  Our wholesale  businesses are comprised
of the Investment Bank, Commercial Banking,  Treasury & Securities Services, and
Asset & Wealth  Management.  Our  consumer  businesses  are  comprised of Retail
Financial  Services and Card Services.  A description of our business  segments,
and the products and services  they provide to their  respective  client  bases,
follows:

Investment Bank

      The Investment  Bank is one of the world's  leading  investment  banks, as
evidenced by the breadth of its client  relationships and product  capabilities.
The Investment Bank has extensive  relationships  with  corporations,  financial
institutions,  governments and institutional investors worldwide. The Investment
Bank  provides a full range of investment  banking  products and services in all
major capital markets,  including  advising on corporate strategy and structure,
capital raising in equity and debt markets,  sophisticated risk management,  and
market-making in cash securities and derivative instruments. The Investment Bank
also commits JPMorgan  Chase's own capital to proprietary  investing and trading
activities.

Retail Financial Services

      Retail Financial Services includes Home Finance, Consumer & Small Business
Banking,  Auto  &  Education  Finance  and  Insurance.  Through  this  group  of
businesses,  Retail Financial  Services provides  consumers and small businesses
with a broad  range of  financial  products  and  services  including  deposits,
investments, loans and insurance. Home Finance is a leading provider of consumer
real estate loan products and is one of the largest originators and servicers of
home  mortgages.  Consumer & Small  Business  Banking  offers one of the largest
branch  networks in the United  States.  As of June 30,  2005,  Auto & Education
Finance was the largest bank  originator  of  automobile  loans as well as a top
provider of loans for college students. Through its Insurance operations, Retail
Financial  Services  sells  and  underwrites  an  extensive  range of  financial
protection  products and  investment  alternatives,  including  life  insurance,
annuities and debt protection products.

Card Services

      As of June 30,  2005,  Card  Services  was one of the  largest  issuers of
general  purpose  credit  cards  in the  United  States  and one of the  largest
merchant  acquirers.  Card Services offers a wide variety of products to satisfy
the  needs  of its  cardmembers,  including  cards  issued  on  behalf  of  many
well-known partners, such as major airlines, hotels, universities, retailers and
other financial institutions.

Commercial Banking

      Commercial Banking serves more than 25,000  corporations,  municipalities,
financial  institutions  and  not-for-profit   entities,  with  annual  revenues
generally ranging from $10 million to $2 billion.  A local market presence and a
strong customer service model, coupled with a focus on risk management,  provide
a solid


                                       2
<PAGE>

infrastructure  for  Commercial  Banking to provide  JPMorgan  Chase's  complete
product  set--lending,  treasury  services,  investment  banking and  investment
management.  Commercial  Banking clients  benefit greatly from JPMorgan  Chase's
expansive branch network as well as commercial banking offices located in 10 out
of the top 15 major metropolitan areas in the U.S.

Treasury & Securities Services

      Treasury  &   Securities   Services  is  a  global   leader  in  providing
transaction,  investment  and  information  services  to  support  the  needs of
corporations,   issuers  and  institutional  investors  worldwide.   Treasury  &
Securities  Services is the largest cash management  provider in the world and a
leading global custodian. The Treasury Services business provides clients with a
broad range of capabilities,  including U.S. dollar and multi-currency clearing,
Automated  Clearing House (ACH) transfers,  trade, and short-term  liquidity and
working capital tools. The Investor  Services  business provides a wide range of
capabilities,   including  custody,  funds  services,  securities  lending,  and
performance measurement and execution products. The Institutional Trust Services
business provides trustee,  depository and administrative  services for debt and
equity issuers. Treasury Services partners with the Commercial Banking, Consumer
& Small Business Banking and Asset & Wealth Management segments to serve clients
firmwide. As a result,  certain Treasury Services revenues are included in other
segments' results. Treasury & Securities Services has combined the management of
the Investor Services and Institutional Trust Services businesses under the name
Worldwide  Securities  Services  to create an  integrated  franchise  which will
provide custody and investor services as well as securities  clearance and trust
services to clients globally.

Asset & Wealth Management

      Asset & Wealth  Management  provides  investment  management to retail and
institutional  investors,  financial  intermediaries and high-net-worth families
and  individuals  globally.  For  retail  investors,  Asset & Wealth  Management
provides investment management products and services,  including a global mutual
fund franchise, retirement plan administration,  and brokerage services. Asset &
Wealth  Management  delivers  investment  management to institutional  investors
across  all  asset  classes.  The  Private  Bank  and  Private  Client  Services
businesses provide integrated wealth management services to ultra-high-net-worth
and high-net-worth clients, respectively.

Corporate

      The  Corporate  Sector  is  comprised  of  Private  Equity,  Treasury  and
corporate staff and other centrally managed  expenses.  Private Equity currently
includes JPMorgan Partners and ONE Equity Partners businesses. On March 1, 2005,
we announced that the management team of JPMorgan Partners LLC, a private equity
unit of JPMorgan Chase, will become independent when it completes the investment
of the current  $6.5  billion  Global Fund,  which it advises.  The  independent
management  team  intends to raise a new fund as a successor to the Global Fund.
JPMorgan  Chase  has  committed  to  invest  24.9%  of the  limited  partnership
interests,  up to $1 billion,  in the new fund.  Treasury manages the structural
interest rate risk and investment  portfolio for JPMorgan  Chase.  The corporate
staff areas include Central Technology and Operations, Internal Audit, Executive
Office, Finance, General Services, Human Resources,  Marketing & Communications,
Office  of  the  General  Counsel,  Real  Estate  and  Business  Services,  Risk
Management,  and Strategy and Development.  JPMorgan Chase's  centrally  managed
expenses  include  items  such as its  occupancy  and  pension  expense,  net of
allocations to the business.

      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,   ---------------------------------------------------
                                              2005        2004        2003       2002        2001        2000
                                         --------------   ----        ----       ----        ----        ----
<S>                                           <C>         <C>         <C>        <C>         <C>         <C>
Excluding Interest on Deposits..........      1.64        1.65        2.27       1.28        1.18        1.52
Including Interest on Deposits..........      1.40        1.44        1.87       1.17        1.11        1.31
</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,  National
            Association,  Chase  Manhattan Bank USA,  National  Association  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 or baskets of
securities,  commodity prices, indices or any other financial, economic or other
measure or instrument,


                                       5
<PAGE>

including the  occurrence or  non-occurrence  of any event or  circumstance.  In
addition,  we may  issue  debt  securities  as part of units  issued  by us,  as
described in  "--Description of Units" below. 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, amortization,  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  definitive  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)

      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


                                       7
<PAGE>

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 of the Indenture,  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".

      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;


                                       8
<PAGE>

      o     we deliver to the trustee an opinion of counsel to the effect that:

            o     the beneficial  owners 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  beneficial  owners'  United States  federal  income tax
                  treatment of principal or interest  payments or other  amounts
                  due under the series of debt securities being defeased;

            o     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)

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


                                       9
<PAGE>

      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, purchase contracts,
debt securities  issued by us, debt obligations or other securities of an entity
affiliated or not affiliated with us, other property 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 us or  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 or property 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 any  combination  of warrants,  purchase  contracts,
debt securities  issued by us, debt obligations or other securities of an entity
affiliated  or not  affiliated  with us or any other  property.  The  applicable
prospectus supplement will also describe:

      o     the designation and the terms of the units and of any combination of
            warrants,  purchase  contracts,  debt securities  issued by us, debt
            obligations  or other  securities  of an  entity  affiliated  or not
            affiliated  with  us  or  other  property  constituting  the  units,
            including  whether  and  under  what   circumstances  the  warrants,
            purchase  contracts,  debt securities issued by us, debt obligations
            or other  securities of an entity  affiliated or not affiliated with
            us or other  property may be traded  separately or as other kinds of
            units and, if purchase contracts are included in the units,  whether
            holders of the units will be  required to pledge any items to secure
            performance   under  the   purchase   contracts,   as  described  in
            "--Description of Purchase  Contracts--Purchase  Contracts Issued as
            Part  of  Units--Pledge  by  Purchase  Contract  Holders  to  Secure
            Performance" below;

      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  warrants,  purchase
            contracts,  debt securities  issued by us, debt obligations or other
            securities  of an entity  affiliated  or not  affiliated  with us or
            other property constituting the units; and

      o     any applicable United States federal income tax consequences.

      The  terms  and  conditions   described  under   "--Description   of  Debt
Securities," "--Description of Warrants," "--Description of Purchase Contracts,"
and those described below under "--Significant Provisions of the Unit Agreement"
will apply to each unit and to any warrants, purchase contracts, debt securities
issued by us, debt  obligations or other  securities of an entity  affiliated or
not affiliated  with us or other property  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.

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.

      Obligations of Unit Holder.  Under the terms of the unit  agreement,  each
owner of a unit:

      o     consents  to and  agrees  to be  bound  by  the  terms  of the  unit
            agreement;

      o     appoints the unit agent as its authorized agent to execute,  deliver
            and perform any purchase contract included in the unit in which that
            owner has an  interest  and to  otherwise  deal  with  that  owner's
            property included in the unit; and

      o     irrevocably agrees to be a party to and be bound by the terms of any
            purchase  contract  included  in the unit in which that owner has an
            interest.

      Assumption of Obligations by Transferee. Upon the registration of transfer
of a unit, the transferee will assume the obligations, if any, of the transferor
under any purchase  contract  included in the unit and under any other  security
constituting  that  unit,  and  the  transferor  will  be  released  from  those
obligations. Under the unit


                                       15
<PAGE>

agreement, we consent to the transfer of these obligations to the transferee, to
the assumption of these  obligations by the transferee and to the release of the
transferor,  if the transfer is made in  accordance  with the  provisions of the
unit agreement.

      Limitation on Actions by You as an Individual Holder. No owner of any unit
will  have any  right  under  the unit  agreement  to  institute  any  action or
proceeding at law or in equity or in bankruptcy or otherwise  regarding the unit
agreement, or for the appointment of a trustee, receiver, liquidator,  custodian
or other similar  official,  unless the owner will have given written  notice to
the  unit  agent  and to us of  the  occurrence  and  continuance  of a  default
thereunder and:

o     in the case of an event of default under any debt  securities  included in
      the units or the  relevant  indenture,  unless the  procedures,  including
      notice  to us and the  trustee,  described  in such  indenture  have  been
      complied with; and

o     in  the  case  of a  failure  by us to  observe  or  perform  any  of  our
      obligations under the unit agreement  relating to any purchase  contracts,
      unless:

            o     owners of not less than 25% of the affected purchase contracts
                  have (a) requested the unit agent to institute  that action or
                  proceeding  in its own  name  as unit  agent  under  the  unit
                  agreement and (b) offered the unit agent reasonable indemnity;

            o     the  unit  agent  has  failed  to  institute  that  action  or
                  proceeding  within  60  days  of that  request  by the  owners
                  referred to above; and

            o     the owners of a majority  of the  outstanding  affected  units
                  have not given directions to the unit agent  inconsistent with
                  those of the owners referred to above.

      If these conditions have been satisfied, any owner of an affected unit may
then,  but only then,  institute an action or  proceeding.  Notwithstanding  the
above,  the owner of any unit or purchase  contract will have the  unconditional
right to purchase or sell, as the case may be, purchase  contract property under
the purchase  contract and to institute  suit for the  enforcement of that right
and to exercise  such rights with respect to that owner's  property  included in
the  unit as are  specified  in the  prospectus  supplement.  Purchase  contract
property is defined under "--Description of Purchase Contracts" below.

      Modification  Without Consent of Holders.  We and the unit agent may amend
or supplement the unit agreement and the terms of the purchase contracts and the
purchase contract certificates without the consent of the holders to:

      o     evidence the assumption by a successor of our covenants;

      o     evidence  the  acceptance  of  appointment  by a successor  agent or
            collateral agent;

      o     add covenants for the protection of the holders of the units;

      o     comply with the Securities  Act of 1933, as amended,  the Securities
            Exchange  Act of 1934 or the  Investment  Company  Act of  1940,  as
            amended, or any other relevant laws;

      o     cure any  ambiguity;  to  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 of units in any material respect.

      Modification  with  Consent of Holders.  We and the unit  agent,  with the
consent of the holders of not less than a majority of all series of  outstanding
units  affected  may modify or amend the  rights of the  holders of the units of
each series so affected or the terms of any purchase  contracts  included in any
of those  series of units and the terms of the unit  agreement  relating  to the
purchase  contracts of each series so affected.  However,  we and the unit agent
may not make the following first three modifications  without the consent of the
holder of each outstanding  purchase contract included in units and may not make
the following last two  modifications  without the consent of the holder of each
outstanding unit affected by the modification that:

      o     impair  the  right  to  institute  suit for the  enforcement  of any
            purchase contract;

      o     materially and adversely  affect the holders' rights and obligations
            under any purchase contract;


                                       16
<PAGE>

      o     reduce the  percentage of purchase  contracts  constituting  part of
            outstanding  units the consent of whose  owners is required  for the
            modification  of the  provisions of the unit  agreement  relating to
            those purchase contracts or for the waiver of any defaults under the
            unit agreement relating to those purchase contracts;

      o     materially  and adversely  affect the holders' units or the terms of
            the unit  agreement  (other  than terms  related to the first  three
            clauses above); 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  (other  than the terms  related to the first  three
            clauses above).

      Modifications  of any debt  securities  issued  pursuant  to an  indenture
included in units may only be made in accordance with the applicable  indenture,
as  described  under  "--Description  of  Debt  Securities--Modification  of the
Indenture;  Waiver of  Compliance."  Modifications  of any warrants  included in
units may only be made in accordance  with the terms of the  applicable  warrant
agreement as described under "--Description of Warrants--Significant  Provisions
of the Warrant Agreement."

      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
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.


                                       17
<PAGE>

                        DESCRIPTION OF PURCHASE CONTRACTS

      We may issue purchase  contracts,  including  purchase contracts issued as
part of a unit with one or more  warrants,  debt  securities  issued by us, debt
obligations or other  securities of an entity  affiliated or not affiliated with
us or other  property,  for the purchase or sale of, or settlement in cash based
on the value of:

      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;

      o     commodities; or

      o     other property.

      We refer to this  property  in the above  clauses  as  "purchase  contract
property."

      Each purchase  contract will obligate the holder to purchase or sell,  and
obligate us to sell or purchase,  on  specified  dates,  the  purchase  contract
property  at a  specified  price  or  prices,  or cash in lieu of such  purchase
contract property, all as described in the applicable prospectus supplement. The
applicable  prospectus  supplement  will also  specify  the methods by which the
holders  may   purchase  or  sell  the  purchase   contract   property  and  any
acceleration,   cancellation  or  termination  provisions  or  other  provisions
relating to the settlement of a purchase contract.


                                       18
<PAGE>

                   PURCHASE CONTRACTS ISSUED AS PART OF UNITS

      Purchase  contracts issued as part of a unit will be governed by the terms
and provisions of a unit agreement.  See  "--Description  of  Units--Significant
Provisions of the Unit  Agreement."  The applicable  prospectus  supplement will
specify the following:

      o     whether the purchase  contract  obligates  the holder to purchase or
            sell the purchase contract property;

      o     whether and when a purchase contract issued as part of a unit may be
            separated from the other securities  constituting  part of that unit
            prior to the purchase contract's settlement date;

      o     the methods by which the holders may  purchase or sell the  purchase
            contract property;

      o     any  acceleration,  cancellation or termination  provisions or other
            provisions relating to the settlement of a purchase contract;

      o     whether the purchase contracts will be issued in fully registered or
            bearer form, in definitive or global form or in any  combination  of
            these forms,  although, in any case, the form of a purchase contract
            included  in a unit will  correspond  to the form of the unit and of
            any debt security,  warrant or other security included in that unit;
            and

      o     any applicable United States federal income tax consequences.

      Settlement of Purchase Contracts. Where purchase contracts issued together
with debt  securities or debt  obligations as part of a unit require the holders
to buy purchase contract  property,  the unit agent may apply principal payments
from the debt  securities or debt  obligations  in  satisfaction  of the holders
obligations  under the related purchase  contract as specified in the prospectus
supplement.  The unit  agent  will not so apply the  principal  payments  if the
holder has delivered cash to meet its obligations  under the purchase  contract.
To settle the purchase contract and receive the purchase contract property,  the
holder must present and  surrender  the unit  certificates  at the office of the
unit agent. If a holder settles its obligations  under a purchase  contract that
is part of a unit in cash rather than by  delivering  the debt  security or debt
obligation  that is part of the unit, that debt security or debt obligation will
remain outstanding,  if the maturity extends beyond the relevant settlement date
and, as more fully described in the applicable prospectus supplement, the holder
will  receive  that debt  security  or debt  obligation  or an  interest  in the
relevant global debt security.

      Pledge by Purchase Contract Holders to Secure  Performance.  To secure the
obligations of the purchase contract holders contained in the unit agreement and
in the purchase contracts,  the holders, acting through the unit agent, as their
attorney-in-fact,  will assign and pledge the items in the  following  sentence,
which we refer to as the "pledge," to JPMorgan Chase Bank, National Association,
in its  capacity as  collateral  agent,  for our  benefit.  Except as  otherwise
described  in the  applicable  prospectus  supplement,  the pledge is a security
interest in, and a lien upon and right of set-off  against,  all of the holders'
right, title and interest in and to:

      o     all or any portion of the debt securities, debt obligations or other
            securities  that are,  or  become,  part of units that  include  the
            purchase  contracts,  or other  property as may be  specified in the
            applicable prospectus supplement,  which we refer to as the "pledged
            items";

      o     all additions to and  substitutions  for the pledged items as may be
            permissible,   if  so   specified  in  the   applicable   prospectus
            supplement;

      o     all income,  proceeds and collections received or to be received, or
            derived or to be derived, at any time from or in connection with the
            pledged items described in the two clauses above; and

      o     all powers and rights  owned or  thereafter  acquired  under or with
            respect to the pledged items.

      The pledge constitutes collateral security for the performance when due by
each  holder of its  obligations  under the unit  agreement  and the  applicable
purchase contract.  Except as otherwise  described in the applicable  prospectus
supplement,  the  collateral  agent will forward all  payments  from the pledged
items  to us,  unless  the  payments  have  been  released  from the  pledge  in
accordance with the unit agreement. If the terms of the unit so provide, we will
use the payments  received from the pledged items to satisfy the  obligations of
the holder of the unit under the related purchase contract.


                                       19
<PAGE>

      Property  Held in Trust by Unit  Agent.  If a holder  fails to settle  its
obligations  under a  purchase  contract  that is part of a unit  and  fails  to
present and surrender its unit certificate to the unit agent when required, that
holder will not receive the purchase contract property.  Instead, the unit agent
will  hold  that  holder's  purchase  contract   property,   together  with  any
distributions,  as the  registered  owner in trust for the benefit of the holder
until  the  holder   presents  and  surrenders   the   certificate  or  provides
satisfactory  evidence that the certificate has been destroyed,  lost or stolen.
The unit agent or JPMorgan  Chase may require an  indemnity  from the holder for
liabilities related to any destroyed, lost or stolen certificate.  If the holder
does not present the unit  certificate,  or provide  the  necessary  evidence of
destruction  or loss and indemnity,  on or before the second  anniversary of the
settlement date of the related purchase contract,  the unit agent will pay to us
the  amounts it received in trust for that  holder.  Thereafter,  the holder may
recover those  amounts only from us and not the unit agent.  The unit agent will
have no obligation to invest or to pay interest on any amounts it holds in trust
pending distribution.


                                       20
<PAGE>

                               FORMS OF SECURITIES

      Each  debt  security,   warrant,   purchase  contract  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, if a
registry  is kept,  the  registered  owner of the note in the  registry,  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  the  holder  thereof  will be the  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. Registered global securities name a depositary or its nominee as the
owner of the debt securities,  warrants, purchase contracts or units represented
by these  global  securities  (other than global  bearer  securities,  which the
holder  thereof  will be the 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  registered debt securities,
warrants,  purchase  contracts  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 and holder of the  securities  represented by
the registered global security for all purposes under the applicable  indenture,
warrant  agreement,  purchase  contract 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, purchase contract 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, purchase contract or unit agreement. We
understand


                                       21
<PAGE>

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  to give or take  under the
applicable  indenture,  warrant agreement,  purchase contract 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,  purchase
contract 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  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 the  registered  global  security or all the 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


                                       22
<PAGE>

            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

      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 permanent  global form or  definitive  bearer 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 relevant interest in 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  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
or talons 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 this  section,  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.  As used  herein,  "United  States"  means the United
States of America  (including  the states  thereof and the District of Columbia)
and "its  possessions"  include  Puerto Rico,  the U.S.  Virgin  Islands,  Guam,
American Samoa, Wake Island and the Northern Mariana Islands.

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.


                                       23
<PAGE>

                              PLAN OF DISTRIBUTION

      We may sell the debt securities, warrants, units or purchase contracts:

      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.


                                       24
<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 enter into derivative or other hedging  transactions with financial
institutions.  These  financial  institutions  may in turn  engage  in  sales of
securities to hedge their  position,  deliver this prospectus in connection with
some or all of those sales and use the securities  covered by this prospectus to
close out any loan of securities or short  position  created in connection  with
those sales. We may also sell securities short using this prospectus and deliver
securities  covered by this  prospectus  to close out any loan of  securities or
such short  positions,  or loan or pledge  securities to financial  institutions
that in turn may sell the  securities  using this  prospectus.  We may pledge or
grant a  security  interest  in some or all of the  securities  covered  by this
prospectus to support a derivative or hedging  position or other obligation and,
if we default in the  performance  of our  obligations,  the pledgees or secured
parties  may offer and sell the  securities  from time to time  pursuant to this
prospectus.

      We may loan or pledge securities to a financial institution or other third
party that in turn may sell the securities using this prospectus. Such financial
institution  or third party may transfer its short  position to investors in our
securities or in connection  with a  simultaneous  offering of other  securities
offered by this prospectus.

      If so  indicated  in the  applicable  prospectus  supplement,  one or more
firms,  including J.P. Morgan Securities Inc., which we refer to as "remarketing
firms," may also offer or sell the  securities in connection  with a remarketing
arrangement  upon their  purchase.  Remarketing  firms may act as principals for
their own  accounts or as agents for us. These  remarketing  firms will offer or
sell the securities in accordance with a redemption or repayment pursuant to the
terms of the securities. The prospectus supplement will identify any remarketing
firm and the  terms of its  agreement,  if any,  with us and will  describe  the
remarketing  firm's  compensation.   Remarketing  firms  may  be  deemed  to  be
underwriters in connection with the securities they remarket.  Remarketing firms
may  be  entitled  under  agreements  that  may  be  entered  into  with  us  to
indemnification by us against certain civil liabilities,  including  liabilities
under the Securities Act of 1933, as amended, and may be customers of, engage in
transactions with or perform services for us in the ordinary course of business.

      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.


                                       25
<PAGE>

      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.


                                       26
<PAGE>

                                     EXPERTS

      JPMorgan  Chase.  The  financial  statements  of JPMorgan  Chase & Co. and
management's  assessment of the effectiveness of internal control over financial
reporting  (which is included in  Management's  Report on Internal  Control over
Financial Reporting)  incorporated in this prospectus by reference to our Annual
Report  on Form  10-K  for  the  year  ended  December  31,  2004  have  been so
incorporated  in  reliance  on the  report  of  PricewaterhouseCoopers  LLP,  an
independent  registered  public  accounting firm, given on the authority of that
firm as experts in auditing and accounting.

      Bank  One.  The  financial  statements  of Bank One  incorporated  in this
document by reference  to our Current  Report on Form 8-K filed on March 1, 2004
have been  incorporated  in reliance  on the report of KPMG LLP, an  independent
registered  public  accounting  firm,  given on the  authority  of that  firm as
experts in auditing and  accounting,  whose report dated January 20, 2004 refers
to Bank One's adoption of FASB Interpretation No. 46,  Consolidation of Variable
Interest Entities,  effective December 31, 2003, and the discontinuance and sale
of Bank One's corporate trust services business in 2003.

                                 LEGAL OPINIONS

      The validity of the  securities  will be passed upon for JPMorgan  Chase &
Co. by Simpson  Thacher &  Bartlett  LLP.  Davis Polk & Wardwell  will pass upon
certain legal matters relating to these securities for the underwriters. Each of
Simpson  Thacher  &  Bartlett  LLP and  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.

                      BENEFIT PLAN INVESTOR CONSIDERATIONS

      A fiduciary of a pension,  profit-sharing  or other employee  benefit plan
subject to the  Employment  Retirement  Income  Security Act of 1974, as amended
("ERISA"),  including entities such as collective investment funds, partnerships
and separate  accounts whose underlying  assets include the assets of such plans
(collectively,  "ERISA Plans") should consider the fiduciary  standards of ERISA
in the context of the ERISA Plans particular circumstances before authorizing an
investment in the securities. Among other factors, the fiduciary should consider
whether  the   investment   would  satisfy  the  prudence  and   diversification
requirements of ERISA and would be consistent with the documents and instruments
governing the ERISA Plan.

      Section  406 of ERISA and Section  4975 of the  Internal  Revenue  Code of
1986,  as amended,  (the "Code")  prohibit  ERISA Plans,  as well as  individual
retirement  accounts  and  Keogh  plans  subject  to  Section  4975 of the  Code
(together  with ERISA Plans,  "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  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
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
will not  result  in a  prohibited  transaction  under  Section  406 of ERISA or
Section 4975 of the Code or there is some other basis on which such purchase and
holding is not prohibited.


                                       27
<PAGE>

      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
non-U.S.  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").

      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, the Code or any Similar Laws
and the availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or
84-14  or  some  other  basis  on  which  the  acquisition  and  holding  is not
prohibited.

      Purchasers and holders of the securities have exclusive responsibility for
ensuring  that their  purchase and holding of the  securities do not violate the
fiduciary  or  prohibited  transaction  rules of ERISA,  the Code or any Similar
Laws. The sale of any  securities to any Plan is in no respect a  representation
by the  Company  or any  of its  affiliates  or  representatives  that  such  an
investment meets all relevant legal  requirements with respect to investments by
Plans  generally  or  any  particular  Plan,  or  that  such  an  investment  is
appropriate for Plans generally or any particular Plan.

      Please   consult  the   applicable   prospectus   supplement  for  further
information with respect to a particular offering and, in certain cases, further
restrictions on the purchase or transfer of securities.


                                       28
<PAGE>

                                TABLE OF CONTENTS

Pricing Supplement                                                          Page
------------------                                                          ----
Summary ............................................................        PS-1
Risk Factors .......................................................        PS-6
Use of Proceeds ....................................................       PS-10
Description of Notes ...............................................       PS-11
The Nikkei 225 Index ...............................................       PS-16
Certain U.S. Federal Income Tax Consequences........................       PS-20
Underwriting .......................................................       PS-23
Benefit Plan Investor Considerations ...............................       PS-25

Prospectus Supplement                                                       Page
---------------------                                                       ----
About this Prospectus Supplement ...................................         S-1
Consolidated Ratios of Earnings to Fixed Charges ...................         S-2
Foreign Currency Risks .............................................         S-3
Description of Notes ...............................................         S-5
Descriptions of Warrants ...........................................        S-23
Description of Units ...............................................        S-24
The Depositary .....................................................        S-26
Series E Securities Offered on a Global Basis ......................        S-28
United States Federal Taxation .....................................        S-32
Plan of Distribution ...............................................        S-40
Legal Matters ......................................................        S-41

Prospectus                                                                  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
Description of Purchase Contracts ..................................          18
Purchase Contracts Issued as Part of Units .........................          19
Forms of Securities ................................................          21
Plan of Distribution ...............................................          24
Experts ............................................................          27
Legal Opinions .....................................................          27
Benefit Plan Investor Considerations ...............................          27

      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>
