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                                                                   EXHIBIT 10(a)


                                  POPULAR, INC.

                   MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
                          (Dated as of March 21, 2003)


         Medium-Term Notes, Series 4 (collectively, the "Notes") in the
aggregate principal amount of up to an additional $2,000,000,000 so as to be
limited to $3,500,000,000, less the aggregate initial offering price of
"Securities" (as defined in the Prospectus, dated November 19, 2001, relating to
debt securities and preferred stock of the Company, Popular International Bank,
Inc. and Popular North America, Inc.) authenticated and delivered upon original
issuance other than the Notes prior to or after the date hereof, are to be
offered on a continuous basis by Popular, Inc. (the "Company") through Credit
Suisse First Boston LLC ("Credit Suisse First Boston"), J.P. Morgan Securities
Inc. ("JPMorgan"), Keefe, Bruyette & Woods, Inc. ("KBW"), Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Popular
Securities, Inc. ("Popular Securities") and UBS Warburg LLC ("UBS"), who, as
agents (each an "Agent"), have agreed to use their reasonable efforts to solicit
offers to purchase the Notes from the Company. The Agents also may purchase
Notes as principal for resale.

         The Notes are being sold pursuant to a Distribution Agreement among the
Company and the Agents, dated March 21, 2003 (the "Distribution Agreement"). The
Notes will be issued pursuant to the Indenture, dated as of February 15, 1995,
as supplemented by the First Supplemental Indenture, dated as of May 8, 1997 and
the Second Supplemental Indenture, dated as of August 5, 1999 (together, the
"Indenture"), each between the Company and Bank One, NA (formerly known as The
First National Bank of Chicago), as Trustee. A Registration Statement (the
"Registration Statement," which term shall include any additional registration
statements filed in connection with the Notes as provided in the Distribution
Agreement) with respect to the Notes has been filed with the Securities and
Exchange Commission (the "Commission"). The Prospectus dated November 19, 2001,
as supplemented with respect to the Notes, is herein referred to as the
"Prospectus." The most recent supplement to the Prospectus with respect to the
specific terms of the Notes is herein referred to as the "Pricing Supplement."

         The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC, or (b) in certificated form (each, a
"Certificated Note") delivered to the purchaser thereof or a person designated
by such purchaser. Owners of beneficial interests in Book-Entry Notes will be
entitled to physical delivery of Certificated Notes equal in principal amount to
their respective beneficial interests only upon certain limited circumstances
described in the Prospectus.

         General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in


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Part III hereof. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Indenture or the Notes, as the case
may be.


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                   PART I: PROCEDURES OF GENERAL APPLICABILITY


Date of Issuance/
  Authentication:          Each Note will be dated as of the date of its
                           authentication by the Trustee or its duly appointed
                           authenticating agent. Each Note shall also bear an
                           original issue date (the "Original Issue Date"). The
                           Original Issue Date shall remain the same for all
                           Notes subsequently issued upon transfer, exchange or
                           substitution of an original Note regardless of their
                           dates of authentication.

Maturities:                Each Note will mature on a date selected by the
                           purchaser and agreed to by the Company which is not
                           less than nine months from its Original Issue Date;
                           provided, however, that Notes bearing interest at
                           rates determined by reference to selected indices
                           ("Floating Rate Notes") will mature on an Interest
                           Payment Date.

Currencies:                Each Note shall be denominated in one of the
                           currencies or currency units, as specified in the
                           relevant Pricing Supplement, or in such other
                           currency or currency unit as may be agreed from time
                           to time between the Company and the applicable
                           Agent(s) and as specified in the relevant Pricing
                           Supplement, or, if no currency or currency unit is
                           specified therein, in U.S. dollars. Notes denominated
                           in one or more currencies or currency units other
                           than in U.S. dollars are herein referred to as
                           "Multi-Currency Notes." Notes that have the amount of
                           principal payments determined by reference to an
                           index are herein referred to as "Indexed Notes."

Denominations:             The Notes will be issued in denominations of a
                           minimum of $1,000 and integral multiples of $1,000.
                           Any Notes denominated other than in U.S. dollars will
                           be issuable in denominations as set forth in the
                           relevant Multi-Currency Note Prospectus Supplement.
                           For special provisions relating to Multi-Currency
                           Notes or Indexed Notes, see the related
                           Multi-Currency or Indexed Note Prospectus Supplement.

Registration:              Notes will be issued only in fully registered form.

Redemption/Repayment:      The Notes will be subject to repayment at the option
                           of the Holders thereof in accordance with the terms
                           of

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                           the Notes on their respective Repayment Dates, if
                           any. Repayment Dates, if any, will be fixed at the
                           time of sale and set forth in the applicable Pricing
                           Supplement and in the applicable Note. If no
                           Repayment Dates are indicated with respect to a Note,
                           such Note will not be repayable at the option of the
                           Holder prior to Maturity.

                           The Notes will be subject to redemption by the
                           Company on and after their respective Redemption
                           Commencement Dates, if any. Redemption Commencement
                           Dates, if any, will be fixed at the time of sale and
                           set forth in the applicable Pricing Supplement and in
                           the applicable Note. If no Redemption Commencement
                           Dates are indicated with respect to a Note, such Note
                           will not be redeemable prior to Maturity, except as
                           set forth in the Prospectus in the event that the
                           Company is obligated to pay Additional Amounts in
                           respect of the Notes.

Calculation of
  Interest:                In the case of Fixed Rate Notes, interest (including
                           payments for partial periods) will be calculated and
                           paid on the basis of a 360-day year of twelve 30-day
                           months. In the case of Floating Rate Notes, interest
                           will be calculated and paid on the basis of the
                           actual number of days in the interest period divided
                           by 360, with the exception of Treasury Rate Notes and
                           CMT Rate Notes, for which interest will be calculated
                           on the basis of the actual number of days in the
                           interest period divided by the actual number of days
                           in the year. If an Interest Payment Date with respect
                           to any Fixed Rate Note falls on a day that is not a
                           Business Day (as hereinafter defined), the payment of
                           interest required to be made on such Interest Payment
                           Date need not be made on such day, but may be made on
                           the next succeeding Business Day with the same force
                           and effect as if made on such Interest Payment Date
                           and no interest shall accrue on such payment for the
                           period from and after such Interest Payment Date. If
                           an Interest Payment Date with respect to any Floating
                           Rate Note would otherwise fall on a day that is not a
                           Business Day, such Interest Payment Date will be the
                           following day that is a Business Day, except that in
                           the case of a LIBOR Note, if such day falls in the
                           next calendar month, such Interest Payment Date will
                           be


                                      -4-
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                           the preceding day that is a Business Day. If the
                           Stated Maturity, or date of earlier redemption or
                           repayment, as the case may be, of a Note is not a
                           Business Day, the payment of principal and interest
                           due on such day shall be made on the next succeeding
                           Business Day and no interest shall accrue on such
                           payment for the period from and after such Stated
                           Maturity, or date of earlier redemption or repayment.
                           For special provisions relating to Multi-Currency
                           Notes or Indexed Notes, see the related
                           Multi-Currency or Indexed Note Prospectus Supplement.


Acceptance and
  Rejection of Offers:     The Company shall have the sole right to accept
                           offers to purchase Notes from the Company and may
                           reject any such offer in whole or in part. Each Agent
                           shall communicate to the Company, orally or in
                           writing, each reasonable offer to purchase Notes from
                           the Company received by it. Each Agent shall have the
                           right, in its discretion reasonably exercised,
                           without notice to the Company, to reject any offer to
                           purchase Notes through it in whole or in part.


Preparation of
  Pricing Supplement:      If any offer to purchase a Note is accepted by the
                           Company, the Company, with the approval of the Agent
                           which presented the order, will prepare a Pricing
                           Supplement reflecting the terms of such Note and file
                           the Pricing Supplement relating to the Notes with the
                           Commission in accordance with Rule 424 under the
                           Securities Act of 1933, as amended. Information to be
                           included in the Pricing Supplement shall include:

                                    1.       the name of the Company;

                                    2.       the title of the securities,
                           including series designation, if any;

                                    3.       the date of the Pricing Supplement
                           and the date of the Prospectus Supplement to which
                           the Pricing Supplement relates;

                                    4.       the price to public (but only if
                           (a) the trade is being made on an agency basis and
                           (b) such price to public is other than 100%);


                                      -5-
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                                    5.       net proceeds to the Company (but
                           only if (a) the trade is being made on a principal
                           basis and (b) the net proceeds to the Company is
                           other than 100%), less what would have been the
                           applicable agency commission;

                                    6.       the information with respect to the
                           terms of the Notes set forth below (whether or not
                           the applicable Note is a Book-Entry Note) under
                           "Procedures for Notes Issued in Book-Entry Form --
                           Settlement Procedures," items A.2, A.3, A.4, A.5,
                           A.6, A.7, A.8 and A.9; and

                                    7.       any other terms of the Notes not
                           otherwise specified in the Prospectus or Prospectus
                           Supplement, including, without limitation, any other
                           terms required by the Prospectus or Prospectus
                           Supplement.

                           One copy of such filed document will be sent by
                           telecopy or overnight express (for delivery not later
                           than 11:00 A.M. on the Business Day next following
                           the trade date) to the applicable Agent at the
                           following addresses:

                           To Credit Suisse First Boston:
                           Credit Suisse First Boston LLC,
                           1 Madison Avenue
                           New York, New York 10010
                           Attention: Joan Bryan, Transaction Advisory Group
                           Telephone: (212) 538-7764
                           Telecopy: (212) 538-6259

                           To JPMorgan:
                           J.P. Morgan Securities Inc.
                           270 Park Avenue
                           8th Floor
                           New York, New York  10017
                           Attention:  Medium-Term Note Desk
                           Telephone:  (212) 834-4421
                           Telecopy:   (212) 834-6081

                                      -6-
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                           To KBW:
                           Keefe, Bruyette & Woods, Inc.
                           787 Seventh Avenue
                           New York, New York  10019
                           Attention:  Fixed Income Syndicate
                           Telephone: (212) 887-8936
                           Telecopy:  (212) 582-5419

                           To Merrill Lynch:
                           If by overnight, express or special delivery:
                           Merrill Lynch & Co., Tritech Services, 40 Colonial
                            Drive,
                           Piscataway, New Jersey  08854,
                           Attention:  Prospectus Operations/ Susan Putnam

                           If by all other types of deliveries:
                           Tritech Services, #4 Corporate Place, Corporate Park
                           287, Piscataway, New Jersey  08854
                           Attention:  Prospectus Operations/ Nachman Kimerling
                           Telephone:  (908) 885-2769
                           Telecopy:   (908) 885-2774/2775/2776

                           To Popular Securities:
                           Popular Securities Inc.
                           209 Munoz Rivera Avenue
                           Suite 1020
                           Hato Rey, Puerto Rico  00918
                           Attention:  Ken McGrath
                           Telephone:  (787) 766-4200
                           Telecopy:   (787) 766-3485

                           To UBS:
                           UBS Warburg LLC
                           677 Washington Blvd
                           Stamford, Connecticut 06901
                           Attention: Fixed Income Syndicate
                           Telephone: (203) 719-1088
                           Telecopy: (203) 719-0495

                           The applicable Agent will
                           cause a stickered
                           supplemented Prospectus
                           with the trade confirmation
                           to be delivered to the
                           purchaser of the Note.


                                      -7-
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                           For record keeping purposes, one copy of each Pricing
                           Supplement shall also be mailed or telecopied to each
                           Agent and the Trustee at the following respective
                           addresses:

                           To Credit Suisse First Boston:
                           Credit Suisse First Boston LLC
                           11 Madison Avenue
                           New York, New York  10010
                           Attention: Short and Medium-Term Finance
                                      Department
                           Telephone:  (212) 909-3842
                           Telecopy:   (212) 318-1498

                           To JPMorgan:
                           J.P. Morgan Securities Inc.
                           270 Park Avenue
                           8th Floor
                           New York, New York  10017
                           Attention:  Medium-Term Note Desk
                           Telephone:  (212) 834-4421
                           Telecopy:   (212) 834-6081

                           To KBW:
                           Keefe, Bruyette & Woods, Inc.
                           787 Seventh Avenue
                           New York, New York  10019
                           Attention: Fixed Income Syndicate
                           Telephone: (212) 887-8936
                           Telecopy: (212) 582-5419

                           To Merrill Lynch:
                           Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
                                               Smith Incorporated
                           World Financial Center, North Tower, 10th Floor
                           New York, New York  10281-1310
                           Attention:  MTN Product Management
                           Telephone:  (212) 449-7476
                           Telecopy:   (212) 449-2234


                                      -8-
<PAGE>

                           To Popular Securities:
                           Popular Securities, Inc.
                           209 Munoz Rivera Avenue
                           Suite 1020
                           Hato Rey, Puerto Rico  00918
                           Attention:  Ken McGrath
                           Telephone:  (787) 766-4200
                           Telecopy:   (787) 766-3485

                           To UBS:
                           UBS Warburg LLC
                           677 Washington Blvd
                           Stamford, Connecticut 06901
                           Attention: Fixed Income Syndicate
                           Telephone: (203) 719-1088
                           Telecopy: (203) 719-0495

                           To the Trustee:
                           Bank One, NA
                           153 West 51st Street
                           5th Floor
                           New York, New York  10019
                           Attention:  Corporate Trust Services
                           Telephone:  (212) 373-1339
                           Telecopy:   (212) 373-1383

                           In each instance that a Pricing Supplement is
                           prepared, the applicable Agent will affix the Pricing
                           Supplement to supplemented Prospectuses prior to its
                           use. Outdated Pricing Supplements and the
                           Prospectuses to which they are attached (other than
                           those retained for files) will be destroyed.

Settlement:                The receipt of immediately available funds by the
                           Company in payment for a Note and the authentication
                           and delivery of such Note shall, with respect to such
                           Note, constitute "settlement." Offers accepted by the
                           Company will be settled at a time as the purchaser
                           and the Company shall agree and pursuant to the
                           timetable for settlement set forth in Parts II and
                           III hereof under "Settlement Procedures" with respect
                           to Book-Entry Notes and Certificated Notes,
                           respectively (each such date fixed for settlement, a
                           "Settlement Date"). If procedures A and B of the
                           applicable Settlement Procedures with respect to a
                           particular offer are not completed on or before the

                                      -9-
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                           time set forth under the applicable "Settlement
                           Procedures Timetable," such offer shall not be
                           settled until the Business Day following the
                           completion of Settlement Procedures A and B or such
                           later date as the purchaser and the Company shall
                           agree.

                           In the event of a purchase of Notes by an Agent as
                           principal, appropriate settlement details will be set
                           forth in the applicable Terms Agreement to be entered
                           into between the applicable Agent and the Company
                           pursuant to the Distribution Agreement.

Procedure for Changing
  Rates or Other
  Variable Terms:          When a decision has been reached to change the
                           interest rate or any other variable term on any Notes
                           being offered by the Company, the Company will
                           promptly advise the Agents and the Agents will
                           forthwith suspend solicitation of offers to purchase
                           such Notes. Each Agent will telephone the Company
                           with recommendations as to the changed interest rates
                           or other variable terms. At such time as the Company
                           advises the Agents of the new interest rates or other
                           variable terms, the Agents may resume solicitation of
                           offers to purchase such Notes. Until such time, only
                           "indications of interest" may be recorded.
                           Immediately after acceptance by the Company of an
                           offer to purchase at a new interest rate or new
                           variable term, the Company, the Agents and the
                           Trustee shall follow the procedures set forth under
                           the applicable "Settlement Procedures."


                                      -10-
<PAGE>

Suspension of
  Solicitation;
  Amendment or
  Supplement:              The Company may instruct the Agents to suspend
                           solicitation of purchases at any time. Upon receipt
                           of such instructions, the Agents will forthwith
                           suspend solicitation of offers to purchase from the
                           Company until such time as the Company has advised
                           them that solicitation of offers to purchase may be
                           resumed. If the Company decides to amend the
                           Registration Statement (including incorporating any
                           documents by reference therein) or supplement any of
                           such documents (other than to change rates or other
                           variable terms), it will promptly advise the Agents
                           and, except in the case of an amendment by the filing
                           of a document incorporated by reference in the
                           Registration Statement, will furnish each Agent and
                           its counsel with copies of the proposed amendment or
                           supplement. One copy of such filed document, along
                           with a copy of the cover letter sent to the
                           Commission, will be delivered or mailed to the Agents
                           at the following addresses:

                           To Credit Suisse First Boston: Credit Suisse First
                           Boston LLC 11 Madison Avenue New York, New York 10010
                           Attention: Short and Medium-Term Finance Department
                           Telephone: (212) 909-3842 Telecopy: (212) 318-1498

                           To JPMorgan:
                           J.P. Morgan Securities Inc.
                           270 Park Avenue, 8th Floor
                           New York, New York  10017
                           Attention:  Medium-Term Note Desk
                           Telephone:  (212) 834-4421
                           Telecopy:   (212) 834-6081


                                      -11-
<PAGE>

                           To KBW:
                           Keefe, Bruyette & Woods, Inc.
                           787 Seventh Avenue
                           New York, New York  10019
                           Attention: Fixed Income Syndicate
                           Telephone: (212) 887-8936
                           Telecopy: (212) 582-5419

                           To Merrill Lynch:
                           Product Management MTNs
                           Merrill Lynch Money Markets
                           North Tower, World Financial Center, 10th Floor,
                           New York, New York  10281-1310
                           Telephone:  (212) 449-7476
                           Telecopy:   (212) 449-2234

                           To Popular Securities:
                           Popular Securities, Inc.
                           209 Munoz Rivera Avenue, Suite 1020
                           Hato Rey, Puerto Rico  00918
                           Attention:  Ken McGrath
                           Telephone:  (787) 766-4200
                           Telecopy:   (787) 766-3485

                           To UBS:
                           UBS Warburg LLC
                           677 Washington Blvd
                           Stamford, Connecticut 06901
                           Attention: Fixed Income Syndicate
                           Telephone: (203) 719-1088
                           Telecopy: (203) 719-0495

                           In the event that at the time the solicitation of
                           offers to purchase from the Company is suspended
                           (other than to change interest rates or other
                           variable terms) there shall be any offers to purchase
                           Notes that have been accepted by the Company which
                           have not been settled, the Company will promptly
                           advise the Agents and the Trustee whether such offers
                           may be settled and whether copies of the Prospectus
                           as theretofore amended and/or supplemented as in
                           effect at the time of the suspension may be delivered
                           in connection with the settlement of such orders. The
                           Company will have the sole responsibility for such
                           decision and for any arrangements which may be made
                           in the event that the Company determines that such
                           orders may not be


                                      -12-
<PAGE>

                           settled or that copies of such Prospectus may not be
                           so delivered.

Delivery of Prospectus:    A copy of the most recent Prospectus and Pricing
                           Supplement must accompany or precede the earlier of
                           (a) the written confirmation of a sale sent to a
                           customer or his agent and (b) the delivery of Notes
                           to a customer or his agent.

Authenticity of
 Signatures:               The Agents will have no obligation or liability to
                           the Company or the Trustee in respect of the
                           authenticity of the signature of any officer,
                           employee or agent of the Company or the Trustee on
                           any Note.

Documents Incorporated
  by Reference:            The Company shall supply each Agent with an adequate
                           supply of all documents incorporated by reference in
                           the Registration Statement.

Business Day:              "Business Day" has the meaning set forth in the
                           Prospectus Supplement.


                                      -13-
<PAGE>


                      PART II: PROCEDURES FOR NOTES ISSUED
                               IN BOOK-ENTRY FORM


         In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations from the
Company and The First National Bank of Chicago to DTC, dated August 6, 1999, as
supplemented by a Bring-Down Letter of Representations from the Company and the
Trustee to DTC, dated March 21, 2003, and a Medium-Term Note Certificate
Agreement between The First National Bank of Chicago and DTC, dated May 26, 1989
(the "Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").


Issuance:                  All Fixed Rate Book-Entry Notes having the same
                           Original Issue Date, interest rate, terms of
                           redemption or repayment, if any, and Stated Maturity
                           (collectively, the "Fixed Rate Terms") will be
                           represented initially by a single global security in
                           fully registered form without coupons; and all
                           Floating Rate Book-Entry Notes having the same
                           Original Issue Date, interest rate basis or bases
                           upon which interest may be determined (each, an
                           "Interest Rate Basis"), which may be one or more of
                           the Commercial Paper Rate, the Treasury Rate, LIBOR,
                           the CD Rate, the CMT Rate, the Federal Funds Rate,
                           the Prime Rate, the 11th District Rate, and any other
                           rate set forth by the Company, Initial Interest Rate,
                           Index Maturity, Spread and/or Spread Multiplier, if
                           any, Minimum Interest Rate, if any, Maximum Interest
                           Rate, if any, terms of redemption or repayment, if
                           any, and Stated Maturity (collectively, "Floating
                           Rate Terms") will be represented initially by a
                           single Book-Entry Note.

                           Each Book-Entry Note will be dated and issued as of
                           the date of its authentication by the Trustee or its
                           duly appointed authenticating agent. Each Book-Entry
                           Note will bear interest from a date (the "Interest
                           Accrual Date") which will be (a) with respect to an
                           original Book-Entry Note (or any portion thereof),
                           its Original Issue Date and (b) with respect to any
                           Book-Entry Note (or portion thereof) issued
                           subsequently upon exchange or transfer of a
                           Book-Entry Note or in lieu of a destroyed, lost or

                                      -14-
<PAGE>

                           stolen Book-Entry Note, the most recent Interest
                           Payment Date to which interest has been paid or duly
                           provided for on the predecessor Book-Entry Note or
                           Notes or if no such payment or provision has been
                           made, the Original Issue Date of the predecessor
                           Book-Entry Note or Notes, regardless of the date of
                           authentication of such subsequently issued Book-Entry
                           Note. No Book-Entry Note shall represent any
                           Certificated Note.

Identification:            The Agents have arranged with the CUSIP Service
                           Bureau (the "CUSIP Service Bureau") of Standard &
                           Poor's Ratings Service, a division of the McGraw-Hill
                           Companies ("S&P"), for the reservation of
                           approximately 900 CUSIP numbers for each rank of
                           Notes which have been reserved for future assignment
                           to Book-Entry Notes representing Notes issued in
                           book-entry form and have delivered to the Company,
                           the Trustee and DTC an initial written list of such
                           CUSIP numbers. The Trustee will assign CUSIP numbers
                           to Book-Entry Notes as described below under
                           Settlement Procedure B. DTC will notify the CUSIP
                           Service Bureau periodically of the CUSIP numbers that
                           the Trustee has assigned to Book-Entry Notes. The
                           Trustee will notify the Company at any time when
                           fewer than 100 of the respective reserved CUSIP
                           numbers remain unassigned to Book-Entry Notes, and,
                           if it deems necessary, the Company will reserve
                           additional CUSIP numbers for assignment to Book-Entry
                           Notes representing Notes issued in book-entry form.
                           Upon obtaining such additional CUSIP numbers, the
                           Company will deliver a list of such additional
                           numbers to the Trustee and DTC. Book-Entry Notes
                           having an aggregate principal amount in excess of
                           $500,000,000 and otherwise required to be represented
                           by the same Global Certificate will instead be
                           represented by two or more Global Certificates which
                           shall be assigned the same CUSIP number.

Registration:              Each Book-Entry Note will be registered in the name
                           of CEDE & CO., as nominee for DTC, on the register
                           maintained by the Trustee under the Indenture. The
                           beneficial owner of a Book-Entry Note (i.e., an owner
                           of a beneficial interest in a


                                      -15-
<PAGE>

                           Book-Entry Note), or one or more indirect
                           participants in DTC designated by such owner, will
                           designate one or more participants in DTC (with
                           respect to such Book-Entry Note, the "Participants")
                           to act as agent for such beneficial owner in
                           connection with the book-entry system maintained by
                           DTC, and DTC will record in book-entry form, in
                           accordance with instructions provided by such
                           Participants, a credit balance with respect to such
                           Book-Entry Note in the account of such Participants.
                           The ownership interest of such beneficial owner in
                           such Book-Entry Note will be recorded through the
                           records of such Participants or through the separate
                           records of such Participants and one or more indirect
                           participants in DTC.

Transfers:                 Transfers of beneficial interests in a Book-Entry
                           Note will be accomplished by book entries made by DTC
                           and, in turn, by Participants (and in certain cases,
                           one or more indirect participants in DTC) acting on
                           behalf of beneficial transferors and transferees of
                           such Book-Entry Note.

Exchanges:                 The Trustee may deliver to DTC and the CUSIP Service
                           Bureau at any time a written notice specifying (a)
                           the CUSIP numbers of two or more Book-Entry Notes
                           Outstanding on such date that represent Book-Entry
                           Notes having the same Fixed Rate Terms or Floating
                           Rate Terms, as the case may be, other than Original
                           Issue Dates, and for which interest has been paid to
                           the same date; (b) a date, occurring at least 30 days
                           after such written notice is delivered and at least
                           30 days before the next Interest Payment Date for the
                           related Book-Entry Notes, on which such Book-Entry
                           Notes shall be exchanged for a single replacement
                           Book-Entry Note; and (c) a new CUSIP number to be
                           assigned to such replacement Book-Entry Note. Upon
                           receipt of such a notice, DTC will send to its
                           Participants (including the Trustee) a written
                           reorganization notice to the effect that such
                           exchange will occur on such date. Prior to the
                           specified exchange date, the Trustee will deliver to
                           the CUSIP Service Bureau written notice setting forth
                           such exchange date and the new CUSIP number and
                           stating that, as of such exchange date, the CUSIP
                           numbers of the Book-Entry Notes to be



                                      -16-
<PAGE>

                           exchanged will no longer be valid. On the specified
                           exchange date, the Trustee will exchange such
                           Book-Entry Notes for a single Book-Entry Note bearing
                           the new CUSIP number and the CUSIP numbers of the
                           exchanged Book-Entry Notes will, in accordance with
                           CUSIP Service Bureau procedures, be cancelled and not
                           immediately reassigned. Notwithstanding the
                           foregoing, if the Book-Entry Notes to be exchanged
                           exceed $500,000,000 in aggregate principal amount,
                           one replacement Book-Entry Note will be authenticated
                           and issued to represent each $500,000,000 of
                           principal amount of the exchanged Book-Entry Notes
                           and an additional Book-Entry Note will be
                           authenticated and issued to represent any remaining
                           principal amount of such Book-Entry Notes (see
                           "Denominations" below).

Denominations:             All Book-Entry Notes will be denominated in U.S.
                           dollars and will be issued in denominations of a
                           minimum of $1,000 and integral multiples of $1,000.
                           Book-Entry Notes will be denominated in principal
                           amounts not in excess of $500,000,000. If one or more
                           Book-Entry Notes having an aggregate principal amount
                           in excess of $500,000,000 would, but for the
                           preceding sentence, be represented by a single
                           Book-Entry Note, then one Book-Entry Note will be
                           issued to represent each $500,000,000 principal
                           amount of such Note or Notes issued in book-entry
                           form and an additional Book-Entry Note will be issued
                           to represent any remaining principal amount of such
                           Note or Notes issued in book-entry form. In such a
                           case, each of the Book-Entry Notes shall be assigned
                           the same CUSIP number.

Interest:                  General. Interest on each Note issued in book-entry
                           form will accrue from the Interest Accrual Date of
                           the Book-Entry Note representing such Note. Each
                           payment of interest on a Book-Entry Note will include
                           interest accrued through the day preceding, as the
                           case may be, the Interest Payment Date, Stated
                           Maturity Date, Redemption Date or Repayment Date.
                           Interest payable at Maturity of a Book-Entry Note
                           will be payable to the Person to whom the principal
                           of such Note is payable. DTC will arrange for each
                           pending deposit message described under Settlement
                           Procedure C below to be transmitted to



                                      -17-
<PAGE>

                           S&P, which will use the information in the message to
                           include certain terms of the related Book-Entry Note
                           in the appropriate daily bond report published by
                           S&P.

                           Interest Payment Dates. Interest payments will be
                           made on each Interest Payment Date commencing with
                           the first Interest Payment Date following the
                           Original Issue Date; provided, however, the first
                           payment of interest on any Book-Entry Note originally
                           issued between a Regular Record Date and an Interest
                           Payment Date will occur on the Interest Payment Date
                           following the next Regular Record Date.

                           Fixed Rate Notes. Unless otherwise specified in the
                           applicable Pricing Supplement, interest payments on
                           Fixed Rate Book-Entry Notes will be made semiannually
                           on June 15 and December 15 of each year and at
                           Maturity.

                           Floating Rate Notes. Except as provided in Part I
                           under "Calculation of Interest" and unless otherwise
                           specified in the applicable Pricing Supplement, the
                           Interest Payment Date for a Floating Rate Note will
                           be, in the case of Floating Rate Notes which reset
                           daily, weekly or monthly, on the third Wednesday of
                           each month or on the third Wednesday of March, June,
                           September and December of each year as specified in
                           the applicable Pricing Supplement; in the case of
                           Floating Rate Notes which reset quarterly, on the
                           third Wednesday of March, June, September and
                           December of each year; in the case of Floating Rate
                           Notes which reset semiannually, on the third
                           Wednesday of the two months of each year specified in
                           the applicable Pricing Supplement; and in the case of
                           Floating Rate Notes which reset annually, on the
                           third Wednesday of the month specified in the
                           applicable Pricing Supplement; and, in each case, at
                           Maturity. For additional special provisions relating
                           to Floating Rate Notes, see the Prospectus
                           Supplement.

                           Regular Record Dates. Unless otherwise specified in
                           the applicable Pricing Supplement, the Regular Record
                           Date with respect to any Interest Payment


                                      -18-
<PAGE>

                           Date for a Fixed Rate Note shall be the June 1 or
                           December 1 (whether or not a Business Day) preceding
                           such Interest Payment Date. Unless otherwise
                           specified in the applicable Pricing Supplement, the
                           Regular Record Date with respect to any Interest
                           Payment Date for any Floating Rate Note shall be the
                           date 15 calendar days (whether or not a Business Day)
                           preceding such Interest Payment Date.

                           Notice of Interest Payments and Regular Record Dates.
                           On the first Business Day of January, April, July and
                           October of each year, the Trustee will deliver to the
                           Company and DTC a written list of Regular Record
                           Dates and Interest Payment Dates that will occur
                           during the six-month period beginning on such first
                           Business Day with respect to Floating Rate Book-Entry
                           Notes. Promptly after each Interest Determination
                           Date for Floating Rate Book-Entry Notes, the Company
                           will notify S&P of the interest rates determined on
                           such Interest Determination Date.

Payments of Principal      Payments of Interest Only. Promptly after each
  and Interest:            Regular Record Date, the Trustee will deliver to the
                           Company and DTC a written notice specifying by CUSIP
                           number the amount of interest to be paid on each
                           Book-Entry Note issued under the Indenture on the
                           following Interest Payment Date (other than an
                           Interest Payment Date coinciding with Maturity) and
                           the total of such amounts. DTC will confirm the
                           amount payable on each Book-Entry Note on such
                           Interest Payment Date by reference to the daily bond
                           reports published by Standard & Poor's. On such
                           Interest Payment Date, the Company will pay to the
                           Trustee, and the Trustee in turn will pay to DTC,
                           such total amount of interest due (other than at
                           Maturity), at the times and in the manner set forth
                           below under "Manner of Payment."

                           Payments at Maturity. On or about the first Business
                           Day of each month, the Trustee will deliver to the
                           Company and DTC a written list of principal, interest
                           and premium, if any, to be paid on each Book-Entry
                           Note issued under the Indenture having a Maturity in
                           the following month. The Trustee and DTC will


                                      -19-
<PAGE>

                           confirm the amounts of such principal, premium and
                           interest payments with respect to a Book-Entry Note
                           on or about the fifth Business Day preceding the
                           Maturity of such Book-Entry Note. At such maturity,
                           the Company will pay to the Trustee, and the Trustee
                           in turn will pay to DTC, the principal amount of such
                           Note, together with interest and premium, if any, due
                           at such Maturity, at the times and in the manner set
                           forth below under "Manner of Payment." Promptly after
                           payment to DTC of the principal, interest and
                           premium, if any, due at the Maturity of such
                           Book-Entry Note, the Trustee will cancel and destroy
                           such Book-Entry Note and deliver to the Company a
                           certificate of destruction therefor.

                           Manner of Payment. The total amount of any principal,
                           premium, if any, and interest due on Book-Entry Notes
                           on any Interest Payment Date or at Maturity shall be
                           paid by the Company to the Trustee in funds available
                           for use as of 9:30 a.m., New York City time, on such
                           date. The Company will make such payment on such
                           Book-Entry Notes by instructing the Trustee to
                           withdraw funds from an account maintained by the
                           Company with the Trustee. The Company will confirm
                           such instructions in writing to the Trustee. Prior to
                           10:00 a.m., New York City time, on such date or as
                           soon as possible thereafter, the Trustee will pay by
                           separate wire transfer (using Fedwire message entry
                           instructions in a form previously specified by DTC)
                           to an account at the Federal Reserve Bank of New York
                           previously specified by DTC, in funds available for
                           immediate use by DTC, each payment of principal,
                           premium, if any, and interest due on a Book-Entry
                           Note on such date. Thereafter on such payment date,
                           DTC will pay, in accordance with its SDFS operating
                           procedures then in effect, such amounts in funds
                           available for immediate use to the respective
                           Participants in whose names such Notes are recorded
                           in the book-entry system maintained by DTC. Neither
                           the Company nor the Trustee shall have any
                           responsibility or liability for the payment by DTC of
                           the principal, premium, if any, or interest due on
                           the Book-Entry Notes to such Participants.


                                      -20-
<PAGE>

                           Withholding Taxes. The amount of any taxes required
                           under applicable law to be withheld from any interest
                           payment on a Note will be determined and withheld by
                           the Participant, indirect participant in DTC or other
                           Person responsible for forwarding payments and
                           materials directly to the beneficial owner of such
                           Note.

Settlement Procedures:     Settlement Procedures with regard to each Book-Entry
                           Note sold by the Agents, as agents of the Company,
                           will be as follows:

                           A.       The applicable Agent will advise the Company
                                    by telephone of the following Settlement
                                    information:

                                    1.       Taxpayer identification number of
                                             the purchaser.

                                    2.       Principal amount of the Note.

                                    3.       Fixed Rate Notes:

                                             (a)      interest rate;

                                             (b)      Regular Record Dates; and

                                             (c)      Interest Payment Dates.

                                                      Floating Rate Notes:

                                             (a)      interest rate basis;

                                             (b)      index maturity;

                                             (c)      spread and/or spread
                                                      multiplier, if any;

                                             (d)      initial interest rate;

                                             (e)      maximum interest rate, if
                                                      any;

                                             (f)      minimum interest rate, if
                                                      any;

                                             (g)      interest reset dates;

                                             (h)      interest determination
                                                      dates;

                                             (i)      interest payment dates;
                                                      and

                                             (j)      calculation agent.

                                    4.       Price to public of the Note.


                                      -21-
<PAGE>

                                    5.       Trade date.

                                    6.       Settlement Date (Original Issue
                                             Date).

                                    7.       Stated Maturity.

                                    8.       Redemption provisions, if any:

                                             (a)      Redemption Commencement
                                                      Date

                                             (b)      initial redemption
                                                      percentage

                                             (c)      annual redemption
                                                      percentage reduction

                                    9.       Repayment Date(s), if any.

                                    10.      Net proceeds to the Company.

                                    11.      Agent's commission.

                           B.       The Company will advise the Trustee by
                                    telecopy or other method acceptable to the
                                    Trustee of the above settlement information
                                    received with respect to each Note from the
                                    applicable Agent and shall confirm to the
                                    Trustee that the principal amount of Notes,
                                    including such Note, issued as of the
                                    relevant Settlement Date shall not exceed
                                    the limit with respect to the principal
                                    amount of Notes specified in the most recent
                                    Company Order delivered to the Trustee
                                    pursuant to Section 303 of the Indenture.

                           C.       The Trustee will assign a CUSIP Number to
                                    the Book-Entry Note and will telephone and
                                    advise the Company and the applicable Agent
                                    of such CUSIP Number. The Trustee will
                                    communicate to DTC and the applicable Agent
                                    through DTC's Participant Terminal System a
                                    pending deposit message specifying the
                                    following settlement information:

                                    1.       The information set forth in
                                             Settlement Procedure A.

                                    2.       Identification numbers of the
                                             participant accounts maintained by
                                             DTC on behalf of the Trustee and
                                             the applicable Agent.


                                      -22-
<PAGE>

                                    3.       Identification as a Fixed Rate
                                             Book-Entry Note or Floating Rate
                                             Book-Entry Note.

                                    4.       Initial Interest Payment Date for
                                             such Note, number of days by which
                                             such date succeeds the related
                                             record date for DTC purposes (which
                                             in the case of Floating Rate Notes
                                             that reset daily or weekly will be
                                             the date five calendar days
                                             immediately preceding the
                                             applicable Interest Payment Date
                                             and in the case of all other
                                             Book-Entry Notes will be the
                                             Regular Record Date, as defined in
                                             the Notes) and, if then calculable,
                                             the amount of interest payment on
                                             such Interest Payment Date (which
                                             amount shall have been confirmed by
                                             the Trustee).

                                    5.       CUSIP number of the Book-Entry Note
                                             representing such Note.

                                    6.       Whether such Book-Entry Note
                                             represents any other Notes issued
                                             or to be issued in book-entry form.

                           D.       The Company will deliver to the Trustee a
                                    Book-Entry Note representing such Note in a
                                    form that has been approved by the Company,
                                    the applicable Agent and the Trustee.

                           E.       The Trustee will complete and authenticate
                                    the Book-Entry Note.

                           F.       DTC will credit such Note to the participant
                                    account of the Trustee maintained by DTC.

                           G.       The Trustee will enter an SDFS deliver order
                                    through DTC's Participant Terminal System
                                    instructing DTC (i) to debit such Note to
                                    the Trustee's participant account and credit
                                    such Note to the participant account of the
                                    applicable Agent maintained by DTC and (ii)
                                    to debit the settlement account of the
                                    applicable Agent and credit the settlement
                                    account of the Trustee maintained by DTC, in
                                    an amount equal to the price of such Note
                                    less the applicable Agent's commission. Any
                                    entry of such a deliver order shall be
                                    deemed to constitute a representation


                                      -23-
<PAGE>

                                    and warranty by the Trustee to DTC that (i)
                                    the Book-Entry Note has been issued and
                                    authenticated and (ii) the Trustee is
                                    holding such Book-Entry Note pursuant to the
                                    Certificate Agreement between the Trustee
                                    and DTC.

                           H.       The applicable Agent will enter an SDFS
                                    deliver order through DTC's Participant
                                    Terminal System instructing DTC (i) to debit
                                    such Note to the applicable Agent's
                                    participant account and credit such Note to
                                    the participant account of the appropriate
                                    Participants maintained by DTC and (ii) to
                                    debit the settlement accounts of such
                                    Participants and credit the settlement
                                    account of the applicable Agent maintained
                                    by DTC, in an amount equal to the initial
                                    public offering price of such Note.

                           I.       Transfers of funds in accordance with SDFS
                                    deliver orders described in Settlement
                                    Procedures G and H will be settled in
                                    accordance with SDFS operating procedures in
                                    effect on the Settlement Date.

                           J.       The Trustee will credit to an account of the
                                    Company maintained by the Trustee funds
                                    available for immediate use in the amount
                                    transferred to the Trustee in accordance
                                    with Settlement Procedure G.

                           K.       The Trustee will send a copy of the
                                    Book-Entry Note stamped "SPECIMEN" on each
                                    page to the Company together with a
                                    statement setting forth the principal amount
                                    of Notes Outstanding as of the related
                                    Settlement Date after giving effect to such
                                    transaction and all other offers to purchase
                                    Notes of which the Company has advised the
                                    Trustee but which have not been settled.


                                      -24-
<PAGE>

                           L.       The applicable Agent will confirm the
                                    purchase of such Note to the purchaser
                                    either by transmitting to the Participant
                                    with respect to such Note a confirmation
                                    order through DTC's Participant Terminal
                                    System or by mailing a written confirmation
                                    to such purchaser.

Settlement Procedures
 Timetable:                         For offers to purchase Notes accepted by the
                                    Company, Settlement Procedures "A" through
                                    "L" set forth above shall be completed as
                                    soon as possible but not later than the
                                    respective times (New York City time) set
                                    forth below:

<TABLE>
<CAPTION>
                                    Settlement
                                    Procedure         Time
                                    ---------         ----

                                    <S>        <C>
                                      A        11:00 a.m. on the trade date

                                      B        12:00 noon on the trade date

                                      C        2:00 p.m. on the trade date

                                      D        3:00 p.m. on the Business Day
                                               before Settlement Date

                                      E        9:00 a.m. on Settlement Date

                                      F        10:00 a.m. on Settlement Date

                                      G-H      No later than 2:00 p.m. on
                                               Settlement Date

                                      I        4:45 p.m. on Settlement Date

                                      J-L      5:00 p.m. on Settlement Date
</TABLE>

                                    If a sale is to be settled more than one
                                    Business Day after the trade date,
                                    Settlement Procedures A, B, and C may, if
                                    necessary, be completed at any time prior to
                                    the specified times on the first Business
                                    Day after such trade date. In connection
                                    with a sale which is to be settled more than
                                    one Business Day after the trade date, if
                                    the initial interest rate for a Floating
                                    Rate Note is not known at the time that
                                    Settlement Procedure A is completed,
                                    Settlement Procedures B and C shall be
                                    completed as soon as such rate has been
                                    determined, but no later than 11:00 a.m. and
                                    2:00 p.m., New York City time, respectively,
                                    on the second Business Day before the
                                    Settlement Date. Settlement Procedure I is
                                    subject to extension in accordance with any
                                    extension of Fedwire closing deadlines and
                                    in the other events specified in the


                                      -25-
<PAGE>

                                    SDFS operating procedures in effect on the
                                    Settlement Date.

                                    If settlement of a Book-Entry Note is
                                    rescheduled or cancelled, the Company shall
                                    notify the Trustee and the Trustee will
                                    deliver to DTC, through DTC's Participant
                                    Terminal System, a cancellation message to
                                    such effect by no later than 2:00 p.m., New
                                    York City time, on the Business Day
                                    immediately preceding the scheduled
                                    Settlement Date.

Failure to Settle:                  If the Trustee has not entered an SDFS
                                    deliver order with respect to a Book-Entry
                                    Note pursuant to Settlement Procedure G,
                                    then upon written request (which may be
                                    evidenced by facsimile transmission) of the
                                    Company, the Trustee shall deliver to DTC,
                                    through DTC's Participant Terminal System,
                                    as soon as practicable a withdrawal message
                                    instructing DTC to debit such Note to the
                                    participant account of the Trustee
                                    maintained at DTC. DTC will process the
                                    withdrawal message, provided that such
                                    participant account contains a principal
                                    amount of the Book-Entry Note representing
                                    such Note that is at least equal to the
                                    principal amount to be debited. If
                                    withdrawal messages are processed with
                                    respect to all the Notes represented by a
                                    Book-Entry Note, the Trustee will mark such
                                    Book-Entry Note "cancelled," make
                                    appropriate entries in its records and send
                                    such cancelled Book-Entry Note to the
                                    Company. The CUSIP number assigned to such
                                    Book-Entry Note shall, in accordance with
                                    CUSIP Service Bureau procedures, be
                                    cancelled and not immediately reassigned. If
                                    withdrawal messages are processed with
                                    respect to a portion of the Notes
                                    represented by a Book-Entry Note, the
                                    Trustee will exchange such Book-Entry Note
                                    for two Book-Entry Notes, one of which shall
                                    represent the Book-Entry Notes for which
                                    withdrawal messages are processed and shall
                                    be cancelled immediately after issuance, and
                                    the other of which shall represent the other
                                    Notes previously represented by the
                                    surrendered Book-Entry Note and shall bear
                                    the CUSIP number of the surrendered
                                    Book-Entry Note.

                                    If the purchase price for any Book-Entry
                                    Note is not timely paid to the Participants
                                    with respect to such


                                      -26-
<PAGE>

                                    Note by the beneficial purchaser thereof (or
                                    a person, including an indirect participant
                                    in DTC, acting on behalf of such purchaser),
                                    such Participants and, in turn, the
                                    applicable Agent may enter SDFS deliver
                                    orders through DTC's Participant Terminal
                                    System reversing Settlement Procedures G and
                                    H, respectively. Thereafter, the Trustee
                                    will deliver the withdrawal message and take
                                    the related actions described in the
                                    preceding paragraph. If such failure shall
                                    have occurred for any reason other than
                                    default by the applicable Agent to perform
                                    its obligations hereunder or under the
                                    Distribution Agreement, the Company will
                                    reimburse the applicable Agent on an
                                    equitable basis for its loss of the use of
                                    funds during the period when the funds were
                                    credited to the account of the Company.

                                    Notwithstanding the foregoing, upon any
                                    failure to settle with respect to a
                                    Book-Entry Note, DTC may take any actions in
                                    accordance with its SDFS operating
                                    procedures then in effect. In the event of a
                                    failure to settle with respect to a Note
                                    that was to have been represented by a
                                    Book-Entry Note also representing other
                                    Notes, the Trustee will provide, in
                                    accordance with Settlement Procedures D and
                                    E, for the authentication and issuance of a
                                    Book-Entry Note representing such remaining
                                    Notes and will make appropriate entries in
                                    its records.



                                      -27-
<PAGE>


                      PART III: PROCEDURES FOR NOTES ISSUED
                              IN CERTIFICATED FORM


Denominations:                      The Certificated Notes, other than Indexed
                                    Notes and Multi-Currency Notes, will be
                                    issued in denominations of a minimum of
                                    $1,000 and integral multiples of $1,000.
                                    Indexed Notes or Multi-Currency Notes will
                                    be issued in the denominations specified in
                                    the related Multi-Currency or Indexed Note
                                    Prospectus Supplement and Pricing
                                    Supplement.

Interest:                           Each Certificated Note will bear interest in
                                    accordance with its terms. Interest will
                                    begin to accrue on the Original Issue Date
                                    of a Certificated Note for the first
                                    Interest Payment Period and on the most
                                    recent Interest Payment Date to which
                                    interest has been paid for all subsequent
                                    Interest Payment Periods. Each payment of
                                    interest shall include interest accrued to,
                                    but excluding, the date of such payment.
                                    Unless otherwise specified in the applicable
                                    Pricing Supplement, interest payments in
                                    respect of Fixed Rate Certificated Notes
                                    will be made semiannually on June 15 and
                                    December 15 of each year and at Maturity.
                                    However, the first payment of interest on
                                    any Certificated Note issued between a
                                    Regular Record Date and an Interest Payment
                                    Date will be made on the Interest Payment
                                    Date following the next succeeding Regular
                                    Record Date. Unless otherwise specified in
                                    the applicable Pricing Supplement, the
                                    Regular Record Date with respect to any
                                    Interest Payment Date for a Fixed Rate
                                    Certificated Note shall be the June 1 or
                                    December 1 (whether or not a Business Day)
                                    preceding such Interest Payment Date.
                                    Interest at Maturity will be payable to the
                                    person to whom the principal is payable.

                                    Except as provided in Part I under
                                    "Calculation of Interest" and unless
                                    otherwise specified in the applicable
                                    Pricing Supplement, the Interest Payment
                                    Date for a Floating Rate Certificated Note
                                    will be, in the case of Floating Rate Notes
                                    which reset daily, weekly or monthly, on the
                                    third Wednesday of each month or on the
                                    third


                                      -28-
<PAGE>

                                    Wednesday of March, June, September and
                                    December of each year as specified in the
                                    applicable Pricing Supplement; in the case
                                    of Floating Rate Notes which reset
                                    quarterly, on the third Wednesday of March,
                                    June, September and December of each year;
                                    in the case of Floating Rate Notes which
                                    reset semiannually, on the third Wednesday
                                    of the two months of each year specified in
                                    the applicable Pricing Supplement; and in
                                    the case of Floating Rate Notes which reset
                                    annually, on the third Wednesday of the
                                    month specified in the applicable Pricing
                                    Supplement; and, in each case, at Maturity.
                                    Unless otherwise specified in the applicable
                                    Pricing Supplement, the Regular Record Date
                                    with respect to a Floating Rate Note shall
                                    be the date 15 calendar days (whether or not
                                    a Business Day) preceding an Interest
                                    Payment Date.

Payments of Principal
  and Interest:                     Upon presentment and delivery of the
                                    Certificated Note, the Trustee or the
                                    Company's duly authorized agent will pay the
                                    principal amount of each Certificated Note
                                    at Maturity and the final installment of
                                    interest in next day funds. All interest
                                    payments in U.S. dollars on a Certificated
                                    Note, other than interest due at Maturity,
                                    will be made by check drawn on the Trustee
                                    or the Company's duly authorized agent and
                                    mailed by such Trustee or agent to the
                                    person entitled thereto as provided in the
                                    Certificated Note. However, the Registered
                                    Owners (as hereinafter defined) of ten
                                    million dollars or more in aggregate
                                    principal amount of the same series of
                                    Certificated Notes (whether having identical
                                    or different terms and provisions) shall be
                                    entitled to receive payments of interest,
                                    other than at Maturity, by wire transfer of
                                    immediately available funds if appropriate
                                    wire transfer instructions have been
                                    received in writing by the Trustee or such
                                    agent not less than 16 days prior to the
                                    applicable Interest Payment Date.

                                    For special provisions relating to
                                    Multi-Currency Notes or Indexed Notes, see
                                    the related Multi-Currency or Indexed Note
                                    Prospectus Supplement.



                                      -29-
<PAGE>

                                    The Trustee will provide monthly to the
                                    Company a list of the principal and interest
                                    in each currency to be paid on Certificated
                                    Notes maturing in the next succeeding month.
                                    Such Trustee or agent will be responsible
                                    for withholding taxes on interest paid as
                                    required by applicable law, but shall be
                                    relieved from any such responsibility if it
                                    acts in good faith and in reliance upon an
                                    opinion of counsel.

                                    Certificated Notes presented to the Trustee
                                    or the Company's duly authorized agent at
                                    Maturity for payment will be cancelled by
                                    such Trustee or agent. All cancelled
                                    Certificated Notes held by such Trustee or
                                    agent shall be destroyed, and the Trustee or
                                    agent shall furnish to the Company a
                                    certificate with respect to such
                                    destruction.

Settlement Procedures:              Settlement Procedures with regard to each
                                    Certificated Note purchased through the
                                    Agents, as agents, shall be as follows:

                                    A.       Each Agent will advise the Company
                                             by telephone of the following
                                             Settlement information with regard
                                             to each Certificated Note:

                                             1.       Exact name in which the
                                                      Certificated Note is to be
                                                      registered (the
                                                      "Registered Owner").

                                             2.       Exact address or
                                                      addresses of the
                                                      Registered Owner for
                                                      delivery, notices and
                                                      payments of principal,
                                                      premium, if any, and
                                                      interest.

                                             3.       Taxpayer identification
                                                      number of the Registered
                                                      Owner.

                                             4.       Principal amount of the
                                                      Certificated Note.

                                             5.       Denomination of the
                                                      Certificated Note.

                                             6.       Fixed Rate Notes:

                                                      (a)      interest rate;

                                                      (b)      Regular Record
                                                               Dates; and

                                                      (c)      Interest Payment
                                                               Dates.




                                      -30-
<PAGE>

                                             Floating Rate Notes:

                                                      (a)      interest rate
                                                               basis or bases;

                                                      (b)      index maturity;

                                                      (c)      spread or spread
                                                               multiplier, if
                                                               any;

                                                      (d)      initial interest
                                                               rate;

                                                      (e)      maximum interest
                                                               rate, if any;

                                                      (f)      minimum interest
                                                               rate, if any;

                                                      (g)      interest reset
                                                               dates;

                                                      (h)      interest
                                                               determination
                                                               dates;

                                                      (i)      interest payment
                                                               dates; and

                                                      (j)      calculation
                                                               agent.


                                             Multi-Currency or Indexed Notes:

                                                      (a)      specified
                                                               currency;

                                                      (b)      index, if any;

                                                      (c)      base rate of
                                                               exchange, if
                                                               any; and

                                                      (d)      any other
                                                               applicable terms.

                                             7.       Currency or currency unit
                                                      in which the Certificated
                                                      Note is to be denominated.

                                             8.       Price to public of the
                                                      Certificated Note.

                                             9.       Settlement Date (Original
                                                      Issue Date).

                                             10.      Stated Maturity.

                                             11.      Redemption provisions, if
                                                      any:

                                                      (a)  Redemption
                                                           Commencement Date

                                                      (b)  initial redemption
                                                           percentage

                                                      (c)  annual redemption
                                                           percentage reduction

                                             12.      Repayment Date(s), if any.

                                             13.      Net proceeds to the
                                                      Company.

                                             14.      Agent's commission.

                                    B.       The Company shall provide to the
                                             Trustee by telecopy or other method
                                             acceptable to the


                                      -31-
<PAGE>

                                    Trustee the above Settlement information
                                    with respect to each Certificated Note
                                    received from the Agents and the name of the
                                    applicable Agent and shall confirm to the
                                    Trustee that the principal amount of Notes,
                                    including such Certificated Note, issued as
                                    of the relevant Settlement Date shall not
                                    exceed the limit with respect to the
                                    principal amount of Notes specified in the
                                    most recent Company Order delivered to the
                                    Trustee pursuant to Section 303 of the
                                    Indenture. The Company also shall cause the
                                    Trustee or its duly appointed agent to
                                    issue, authenticate and deliver Certificated
                                    Notes in accordance with the Settlement
                                    Procedures Timetable set forth below. The
                                    Company also shall provide to the Trustee
                                    and the applicable Agent a copy of the
                                    applicable Pricing Supplement. The Company
                                    also shall provide to the Trustee and the
                                    applicable Agent a copy of a Multi-Currency
                                    or Indexed Note Prospectus Supplement, if
                                    applicable.

                                    C.       The Trustee or its duly appointed
                                             agent will complete and
                                             authenticate the Certificated Notes
                                             in form approved by the Company.

                                    D.       With respect to each trade, the
                                             Trustee will deliver the
                                             Certificated Note and one photocopy
                                             thereof stamped "SPECIMEN" on each
                                             page to the applicable Agent at the
                                             following addresses:

                                     Credit Suisse First Boston LLC
                                     1 Madison Avenue
                                     New York, New York  10010
                                     Attention:  Paul Riley

                                     J.P. Morgan Securities Inc.,
                                     55 Water Street, Room 226, Windows 17 and
                                     18
                                     New York, New York  10041
                                     Telephone:  (212) 638-6787
                                     Telecopy:   (212) 638-5618


                                      -32-
<PAGE>

                                     Keefe, Bruyette & Woods, Inc.
                                     787 Seventh Avenue
                                     New York, New York  10019
                                     Attention: Fixed Income Syndicate
                                     Telephone: (212) 887-8936
                                     Telecopy:  (212) 582-5419

                                     Merrill Lynch & Co., Money Markets
                                     Clearance, 55 Water
                                     Street, 3rd Floor, N.S.C.C. Window
                                     New York, New York  10041,
                                     Attention:  Al Mitchell
                                     Telephone:  (212) 558-2405
                                     Telecopy:   (212) 558-2457

                                     Popular Securities Inc.
                                     209 Munoz Rivera Avenue
                                     Suite 1020
                                     Hato Rey, Puerto Rico  00918
                                     Attention: Ken McGrath
                                     Telephone:  (787) 766-4200
                                     Telecopy:   (787) 766-3485

                                     UBS Warburg LLC
                                     677 Washington Blvd
                                     Stamford, Connecticut 06901
                                     Attention: Fixed Income Syndicate
                                     Telephone: (203) 719-1088
                                     Telecopy:  (203) 719-0495

                                    The Trustee will keep Stub 1. The applicable
                                    Agent will acknowledge receipt of the
                                    Certificated Note through a broker's receipt
                                    and will keep the photocopy. Delivery of the
                                    Certificated Note will be made only against
                                    such acknowledgment of receipt.

                                    Upon determination that the Certificated
                                    Note has been authorized, delivered and
                                    completed as aforementioned, the applicable
                                    Agent will wire the net proceeds of the
                                    Certificated Note after deduction of its
                                    applicable commission to the Company
                                    pursuant to standard wire instructions given
                                    by the Company.


                                      -33-
<PAGE>

                                    E.       The applicable Agent will deliver
                                             the Certificated Note, as well as a
                                             copy of the Prospectus and any
                                             applicable Pricing Supplement or
                                             Supplements received from the
                                             Trustee, to the purchaser against
                                             payment in immediately available
                                             funds.

                                    F.       The Trustee will send a photocopy
                                             of the Certificated Note stamped
                                             "SPECIMEN" on each page to the
                                             Company.

Settlement Procedures
  Timetable:                        For offers to purchase Certificated Notes
                                    accepted by the Company, Settlement
                                    Procedures "A" through "F" set forth above
                                    shall be completed on or before the
                                    respective times set forth below:

<TABLE>
<CAPTION>
                                   Settlement
                                   Procedure    Time
                                   ---------    ----
                                   <S>          <C>

                                    A-B         3:00 PM on Business Day prior to
                                                     Settlement
                                    C-D         2:15 PM on Settlement Date
                                    E           3:00 PM on Settlement Date
                                    F           5:00 PM on Settlement Date
</TABLE>

Failure to Settle:                  In the event that a purchaser of a
                                    Certificated Note from the Company shall
                                    either fail to accept delivery of or make
                                    payment for a Certificated Note on the date
                                    fixed for settlement, the applicable Agent
                                    will forthwith notify the Trustee and the
                                    Company by telephone, confirmed in writing,
                                    and return the Certificated Note to the
                                    Trustee.

                                    The Trustee or the Company's duly authorized
                                    agent, upon receipt of the Certificated Note
                                    from the applicable Agent, will immediately
                                    advise the Company, and the Company will
                                    promptly arrange to credit the account of
                                    the applicable Agent in an amount of
                                    immediately available funds equal to the
                                    amount previously paid by the applicable
                                    Agent in settlement for the Certificated
                                    Note. Such credits will be made on the
                                    Settlement Date if possible, and in any
                                    event not later than the Business Day
                                    following the Settlement Date; provided that
                                    the Company has received notice on the same
                                    day. If such failure



                                      -34-
<PAGE>

                                    shall have occurred for any reason other
                                    than failure by the applicable Agent to
                                    perform its obligations hereunder or under
                                    the Distribution Agreement, the Company will
                                    reimburse the applicable Agent on an
                                    equitable basis for its loss of the use of
                                    funds during the period when the funds were
                                    credited to the account of the Company.
                                    Immediately upon receipt of the Certificated
                                    Note in respect of which the failure
                                    occurred, the Trustee or the Company's duly
                                    authorized agent will cancel and destroy the
                                    Certificated Note, make appropriate entries
                                    in its records to reflect the fact that the
                                    Certificated Note was never issued, and
                                    accordingly notify the Company in writing.



                                      -35-