AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1995
                                                     REGISTRATION NO. 33-
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                             UNIVERSAL CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                     <C>
     COMMONWEALTH OF VIRGINIA                                           54-0414210
   (State or other jurisdiction                                      (I.R.S. employer
  of incorporation or organization)                               identification number)
</TABLE>


                           1501 NORTH HAMILTON STREET
                            RICHMOND, VIRGINIA 23230
                                 (804) 359-9311
         (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)
                              JAMES M. WHITE, III
                         SECRETARY AND GENERAL COUNSEL
                             UNIVERSAL CORPORATION
                           1501 NORTH HAMILTON STREET
                            RICHMOND, VIRGINIA 23230
                                 (804) 359-9311
           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                                   COPIES TO:

<TABLE>
<S>                                         <C>
             CRAIG H. WEBER                      ROBERT H. CRAFT, JR.
 MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P           SULLIVAN & CROMWELL
 ONE JAMES CENTER, 901 EAST CARY STREET     1701 PENNSYLVANIA AVENUE, N.W.
        RICHMOND, VIRGINIA 23219                WASHINGTON, D.C. 20006
</TABLE>

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
   From time to time after the effective date of this registration statement.
     If the only securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to dividend or interest reinvestment plans,
please check the following box. ( )
     If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. (X)
     If this Form is filed to registered additional securities for an offering
pursuant to Rule 462(b) under the Security Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ( )
     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ( )
     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ( )

                       CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
     TITLE OF EACH CLASS                                      PROPOSED MAXIMUM          PROPOSED MAXIMUM      AMOUNT OF
       OF SECURITIES TO               AMOUNT TO BE             OFFERING PRICE              AGGREGATE         REGISTRATION
        BE REGISTERED                  REGISTERED               PER UNIT(1)            OFFERING PRICE(1)         FEE
<S>                             <C>                       <C>                       <C>                      <C>
Debt Securities.............        $200,000,000(2)               100%(3)               $200,000,000(3)        $68,966
</TABLE>

(1) Estimated solely for purposes of calculating the registration fee.
(2) Such amount represents the issue price rather than the principal amount of
    any Debt Securities issued at an original issue discount. Any offering of
    Debt Securities denominated other than in U.S. dollars will be treated as
    the equivalent in U.S. dollars based on the official exchange rate
    applicable to the purchase of Debt Securities from the registrant.
(3) Plus accrued interest, if any.
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.



<PAGE>
                 SUBJECT TO COMPLETION, DATED DECEMBER 15, 1995
                                  $200,000,000
                          [UNIVERSAL CORPORATION LOGO]
                                DEBT SECURITIES
     Universal Corporation (the "Company") may offer, from time to time, its
debt securities consisting of debentures, notes and/or other evidences of
indebtedness (the "Debt Securities"), at an aggregate issue price not to exceed
$200,000,000 (or the equivalent in foreign denominated currencies or units of
two or more currencies, based on the applicable exchange rate at the time of
offering, as shall be designated by the Company at the time of offering). The
Debt Securities may be offered as separate series, and may be offered in
amounts, at prices and on terms to be determined at the time of the offering.
Each issue of Debt Securities may vary, where applicable, as to aggregate
principal amount, maturity date, public offering or purchase price, interest
rate or rates and timing of payments thereof, provision for redemption or
sinking fund requirements, if any, currencies of denomination or currencies
otherwise applicable thereto and any other variable terms and methods of
distribution. The specific terms with regard to the Debt Securities in respect
of which this Prospectus is being delivered are set forth in one or more
accompanying Prospectus Supplements (each a "Prospectus Supplement").
     The Debt Securities will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company.
     The Debt Securities may be issued in registered form ("Registered
Securities") or bearer form with coupons attached ("Bearer Securities"), or
both. In addition, all or a portion of the Debt Securities of a series may be
issuable in temporary or permanent global form. Bearer Debt Securities, Debt
Securities represented by a permanent global Debt Security exchangeable for
Bearer Debt Securities and Debt Securities initially represented by a temporary
global Debt Security described under "Description of Debt
Securities -- Temporary Global Securities" (collectively, "Euro-Securities") are
offered only to Non-United States persons and to offices of certain United
States financial institutions located outside the United States and its
possessions. See "Limitations on Issuance of Euro-Securities." For a discussion
of certain United States federal income tax consequences to Holders of Debt
Securities, see "United States Taxation."

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

     The Debt Securities may be sold directly by the Company, or indirectly
through agents designated from time to time or through underwriters or dealers,
or through a combination of such methods. See "Plan of Distribution." If any
agents of the Company or any underwriters or dealers are involved in the sale of
the Debt Securities, the names of such agents, underwriters or dealers and any
applicable commissions or discounts will also be set forth in the Prospectus
Supplement. The net proceeds to the Company from such sale will be set forth in
the Prospectus Supplement.
               THE DATE OF THIS PROSPECTUS IS DECEMBER   , 1995.


INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.


<PAGE>
                             AVAILABLE INFORMATION
     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference room of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following regional offices of the Commission: Seven World Trade
Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Company's
Common Stock is listed on the New York Stock Exchange, and such reports, proxy
statements and other information concerning the Company may be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
     This Prospectus does not contain all the information set forth in the
registration statement to which this Prospectus relates (the "Registration
Statement") and the exhibits thereto which the Company has filed with the
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
and to which reference is hereby made.
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
     The following documents filed by the Company with the Commission (File No.
1-652) are incorporated herein by reference:
     1. The Company's Annual Report on Form 10-K for the fiscal year ended June
        30, 1995;
     2. The Company's Quarterly Report on Form 10-Q for the quarter ended
        September 30, 1995; and
     3. The Company's Current Report on Form 8-K bearing a cover date of July
        11, 1995.
     All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Debt Securities shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the respective dates of filing of such
documents.
     Any statement contained herein or in a document all or any portion of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
     The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than certain exhibits to such documents). Requests for such copies should be
directed to Karen M. L. Whelan, Vice President and Treasurer, Universal
Corporation, 1501 North Hamilton Street, Richmond, Virginia 23230, telephone
number (804) 359-9311.
                                  THE COMPANY
     The Company, through its subsidiaries, is the world's largest independent
leaf tobacco merchant and has additional operations in agri-products and lumber
and building products. The Company's tobacco operations have been the principal
focus of the Company since its founding in 1918, and for the fiscal year ended
June 30, 1995, such operations accounted for 70% of revenues and 75% of
operating profits. The Company's agri-products and lumber and building products
operations accounted for 14% and 16% of revenues and 9% and 16% of operating
profits, respectively, during the same period.
     The Company was incorporated under the laws of the Commonwealth of Virginia
in 1918. The Company's principal executive offices are located at 1501 North
Hamilton Street, Richmond, Virginia 23230, telephone (804) 359-9311.
                                       2
 


<PAGE>
                       RATIO OF EARNINGS TO FIXED CHARGES
     The table below sets forth the ratio of earnings to fixed charges for the
periods indicated. For purposes of calculating the ratio, earnings consist of
the sum of (i) pretax income from continuing consolidated operations and
unconsolidated affiliates, excluding the effects of discontinued operations,
extraordinary items and the cumulative effect of accounting changes and (ii)
fixed charges. Fixed charges consist of interest costs for the Company and its
unconsolidated affiliates and the amortization of debt discounts.

<TABLE>
<CAPTION>
                                                       THREE MONTHS
                                                           ENDED
                                                       SEPTEMBER 30,               YEAR ENDED JUNE 30,
                                                       1995     1994     1995     1994     1993     1992     1991
<S>                                                    <C>      <C>      <C>      <C>      <C>      <C>      <C>
Ratio of Earnings to Fixed Charges.................    2.0x     1.4x     1.8x     1.9x     3.1x     2.8x     2.4x
</TABLE>


                                USE OF PROCEEDS
     Except as may be set forth in a Prospectus Supplement, the Company intends
to use the net proceeds from the sale of the Debt Securities for general
corporate purposes, which may include repayment of indebtedness, capital
expenditures, possible acquisitions and working capital. Pending such use, the
net proceeds may be temporarily invested or applied to the reduction of
indebtedness.
                         DESCRIPTION OF DEBT SECURITIES
     The Debt Securities will be issued under an Indenture dated as of February
1, 1991 (the "Indenture") between the Company and Chemical Bank, as Trustee (the
"Trustee"). A copy of the Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The statements under
this caption, as modified or superseded by the applicable Prospectus Supplement,
are brief summaries of certain provisions of the Indenture, do not purport to be
complete, and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Indenture. Wherever particular Sections or
defined terms of the Indenture are referred to, such Sections or defined terms
are incorporated herein by reference.
     The term "Securities," as used in this Prospectus, refers to all Securities
issued under the Indenture and includes the Debt Securities. Unless otherwise
indicated, currency amounts in this Prospectus and any Prospectus Supplement are
stated in United States dollars ("$" or "dollars").
     The Securities may be issued from time to time in one or more series. The
particular terms of each series of Securities offered by a Prospectus Supplement
or Prospectus Supplements will be described in such Prospectus Supplement or
Prospectus Supplements relating to such series.
     The Indenture limits the ability of the Company to incur certain secured
indebtedness and to engage in certain sale and leaseback transactions. See
"Restrictions on Liens" and "Restrictions on Sale and Leaseback Transactions"
below. There is no restriction in the Securities or the Indenture against the
incurring of indebtedness by the Company or any subsidiary of the Company. The
Debt Securities will be obligations exclusively of the Company. The Company is a
holding company, substantially all of whose consolidated assets are held by its
subsidiaries. Accordingly, the cash flow of the Company and the consequent
ability to service its debt, including the Debt Securities, are largely
dependent upon the cash flow and earnings of such subsidiaries.
GENERAL
     The Indenture will provide that, in addition to Securities previously
issued thereunder, additional Securities may be issued in separate series
thereunder without limitation as to aggregate principal amount. The terms of
each series of Securities will be established by or pursuant to a resolution of
the Board of Directors of the Company and set forth or determined in the manner
provided in an Officers' Certificate or by a supplemental indenture. (Section
301)
     The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Securities of each series: (1) the title of
the Securities; (2) any limit on the aggregate principal amount of the
Securities; (3) whether the Securities are to be issuable as Registered
Securities or Bearer Securities or both, whether any of the Securities are to be
issuable initially in temporary global form and whether any of the Securities
are to be issuable in permanent global form; (4) the price or prices (expressed
as a percentage of the aggregate principal amount thereof) at which the
Securities will be
                                       3
 


<PAGE>
issued; (5) the date or dates on which the Securities will mature; (6) the rate
or rates per annum at which the Securities will bear interest, if any, or the
formula pursuant to which such rate or rates will be determined, and the date or
dates from which any such interest will accrue; (7) the Interest Payment Dates
on which any such interest on the Securities will be payable and the Regular
Record Date for any interest payable on any Registered Securities on any
Interest Payment Date; (8) the Person to whom any Registered Securities of such
series will be payable, if other than the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, the manner in which, or the Person to
whom, any interest on any Bearer Security of such series will be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto, and the extent to which, or the manner in which, any interest payable
on a temporary global Security on an Interest Payment Date will be paid if other
than in the manner described under "Global Securities -- Temporary Global
Securities" below and the extent to which, or the manner in which, any interest
payable on a permanent global Security on an Interest Payment Date will be paid;
(9) each office or agency where, subject to the terms of the Indenture as
described below under "Payment and Paying Agents," the principal of and any
premium and interest on the Securities will be payable and each office or agency
where, subject to the terms of the Indenture as described below under "Form,
Exchange, Registration and Transfer," the Securities may be presented for
registration of transfer or exchange; (10) the period or periods within which
and the price or prices at which the Securities may, pursuant to any optional
redemption provisions, be redeemed, in whole or in part, and the other detailed
terms and provisions of any such optional redemption provisions; (11) the
obligation, if any, of the Company to redeem or purchase the Securities pursuant
to any sinking fund or analogous provisions or at the option of the Holder
thereof and the period or periods within which and the price or prices at which
the Securities will be redeemed or purchased, in whole or in part, pursuant to
such obligation, and the other detailed terms and provisions of such obligation;
(12) the denominations in which any Registered Securities will be issuable, if
other than denominations of $1,000 and any integral multiple thereof, and the
denomination or denominations in which Bearer Securities will be issuable, if
other than denominations of $5,000; (13) the currency or currency units of
payment of principal of and any premium and interest on the Securities; (14) any
index used to determine the amount of payments of principal of and any premium
and interest on the Securities; (15) any limitation on the application of the
terms of the Indenture described below under "Defeasance and Covenant
Defeasance;" and (16) any other terms of the Securities not inconsistent with
the provisions of the Indenture. (Section 301) Any such Prospectus Supplement or
Prospectus Supplements will also describe any special provisions for the payment
of additional amounts relating to specified taxes, assessments or other
governmental charges in respect of the Securities of such series and whether the
Company has the option to redeem the affected Securities rather than pay such
additional amounts.
     Securities may be issued as Original Issue Discount Securities. An Original
Issue Discount Security is a Security, including any zero-coupon Security, which
is issued at a price lower than the amount payable upon the Stated Maturity
thereof, and which provides that, upon redemption or acceleration of the
Maturity thereof, an amount less than the amount payable upon the Stated
Maturity thereof and determined in accordance with the terms of such Security
shall become due and payable. Special United States federal income tax
considerations applicable to Securities issued at an original issue discount,
including Original Issue Discount Securities, and special United States tax
considerations applicable to any Securities which are denominated in a currency
or currency unit other than United States dollars are described below under
"United States Taxation -- United States Holders -- Original Issue Discount."
     The Securities of each series will be unsecured and will rank pari passu
with all other unsecured and unsubordinated indebtedness of the Company.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
     Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Unless otherwise indicated in an applicable
Prospectus Supplement or Prospectus Supplements, Bearer Securities in definitive
form will have interest coupons attached. The Indenture also will provide that
Securities of a series may be issuable in temporary or permanent global form.
(Section 201) See "Global Securities -- Temporary Global Securities" and "Global
Securities -- Permanent Global Securities."
     In connection with its sale during the Restricted Period (as defined in
Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations), no
Euro-Security shall be delivered to any location in the United States or its
possessions. Except as may otherwise be provided in the applicable Prospectus
Supplement, a Euro-Security (not including a Security in temporary global form)
may be delivered in connection with its sale during the Restricted Period only
if the person entitled to physical delivery of such Euro-Security furnishes
written certification, in the form required by the Indenture, to the effect that
(i) such Euro-Security is not owned or being acquired by or on behalf of a
United States person (as defined under "Limitations on Issuance of
Euro-Securities"), (ii) such Euro-Security is owned or being acquired by or on
behalf of (A) a United States
                                       4
 


<PAGE>
person that is a financial institution within the meaning of Section
1.165-12(c)(1)(v) of the United States Treasury Regulations (a "Financial
Institution") purchasing for its own account or for resale or (B) a United
States person who acquired such Euro-Security through the foreign branch of a
United States Financial Institution and who holds such Euro-Security through
such Financial Institution on the date of such written certification (and, in
either case (A) or (B), the Financial Institution has agreed to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as from time to time amended, and the regulations thereunder), or (iii)
such Euro-Security is owned or is being acquired by a Financial Institution for
the purpose of resale during the Restricted Period. A Financial Institution
described in clause (iii) above, whether or not also described in clause (i) or
(ii) above, must certify that it has not acquired the Euro-Security for purposes
of resale directly or indirectly to a United States person or to a person within
the United States or its possessions. In the case of a Euro-Security in
permanent global form, such certification must be given in connection with the
notation of a beneficial owner's interest therein upon original issuance of such
Security or upon exchange of a portion of a temporary global Security. (Section
303) See "Global Securities -- Temporary Global Securities" and "Limitations on
Issuance of Euro-Securities."
     At the option of the Holder, subject to the terms of the Indenture,
Registered Securities of any series will be exchangeable for other Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. In addition, if Securities of any series
are issuable as both Registered Securities and Bearer Securities, at the option
of the Holder, subject to the terms of the Indenture, Bearer Securities (with
all unmatured coupons, except as provided below, and with all matured coupons in
default) of such series will be exchangeable for Registered Securities of the
same series of any authorized denominations and of a like aggregate principal
amount and tenor. Bearer Securities surrendered in exchange for Registered
Securities between a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest and interest will not be payable
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the terms of the Indenture. Registered Securities, including
Registered Securities received in exchange for Bearer Securities, may not be
exchanged for Bearer Securities. (Section 305) Each Bearer Security and coupon
will bear a legend to the following effect: "Any United States person who holds
this obligation will be subject to limitations under the United States income
tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code." (Section 201)
     Securities may be presented for exchange as provided above, and Registered
Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose with respect to any series of Securities and referred to in an
applicable Prospectus Supplement or Prospectus Supplements, without a service
charge and upon payment of any taxes and other governmental charges as described
in the Indenture. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. (Section 305) If a Prospectus
Supplement or Prospectus Supplements refer to any transfer agents (in addition
to the Security Registrar) initially designated by the Company with respect to
any series of Securities, the Company may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that, if Securities of a series are issuable
solely as Registered Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Securities of a
series are issuable as Bearer Securities, the Company will be required to
maintain (in addition to the Security Registrar) a transfer agent in a Place of
Payment for such series located outside the United States and its possessions.
The Company may at any time designate additional transfer agents with respect to
any series of Securities. (Section 1002)
     In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before any selection for redemption
of Securities of like tenor and of the series of which such Security is a part,
and ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all Holders of Securities
of like tenor and of such series to be redeemed; (ii) register the transfer of
or exchange any Registered Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part; or
(iii) exchange any Bearer Security so selected for redemption, except to
exchange such Bearer Security for a Registered Security of that series and like
tenor which is immediately surrendered for redemption. (Section 305)
PAYMENT AND PAYING AGENTS
     Unless otherwise indicated in an applicable Prospectus Supplement or
Prospectus Supplements, principal of and any premium and interest on Bearer
Securities will be payable, subject to any applicable laws and regulations, at
the offices of
                                       5
 


<PAGE>
such Paying Agents outside the United States and its possessions as the Company
may designate from time to time or, at the option of the Holder, by check or by
transfer to an account maintained by the payee with a financial institution
located outside the United States and its possessions. Unless otherwise
indicated in an applicable Prospectus Supplement or Prospectus Supplements,
payment of interest on a Bearer Security on any Interest Payment Date will be
made only against surrender to the Paying Agent of the coupon relating to such
Interest Payment Date. (Section 1001) No payment with respect to any Bearer
Security will be made at any office or agency of the Company in the United
States or its possessions or by check mailed to any address in the United States
or its possessions or by transfer to any account maintained with a financial
institution located in the United States or its possessions. Notwithstanding the
foregoing, payments of principal of and any premium and interest on Bearer
Securities denominated and payable in U.S. dollars will be made at the office of
the Paying Agent in the Borough of Manhattan, The City of New York, if (but only
if) payment of the full amount thereof in U.S. dollars at all offices or
agencies outside the United States and its possessions is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 1002)
     Unless otherwise indicated in an applicable Prospectus Supplement or
Prospectus Supplements, principal of and any premium and interest on Registered
Securities will be payable, subject to any applicable laws and regulations, at
the office of such Paying Agent or Paying Agents as the Company may designate
from time to time, except that at the option of the Company payment of any
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register. Unless otherwise
indicated in an applicable Prospectus Supplement or Prospectus Supplements,
payment of interest on a Registered Security on any Interest Payment Date will
be made to the Person in whose name such Registered Security (or Predecessor
Security) is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
     Unless otherwise indicated in an applicable Prospectus Supplement or
Prospectus Supplements, the Corporate Trust Office of the Trustee in The City of
New York will be designated as a Paying Agent for the Company for payments with
respect to Securities of each series which are issuable solely as Registered
Securities and as a Paying Agent for payments with respect to Securities of each
series (subject to the limitations described above in the case of Bearer
Securities) which are issuable solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Any Paying Agents outside the United States
and its possessions and any other Paying Agents in the United States or its
possessions initially designated by the Company for the Securities of each
series will be named in an applicable Prospectus Supplement or Prospectus
Supplements. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that if Securities of a series are
issuable solely as Registered Securities, the Company will be required to
maintain a Paying Agent in each Place of Payment for such series and, if
Securities of a series are issuable as Bearer Securities, the Company will be
required to maintain (i) a Paying Agent in the Borough of Manhattan, The City of
New York for payments with respect to any Registered Securities of the series
(and for payments with respect to Bearer Securities of the series in the
circumstances described above, but not otherwise), and (ii) a Paying Agent in a
Place of Payment located outside the United States and its possessions where
Securities of such series and any coupons appertaining thereto may be presented
and surrendered for payment; provided, however, that if the Securities of such
series are listed on The International Stock Exchange of the United Kingdom and
the Republic of Ireland, Limited (the "London Stock Exchange"), the Luxembourg
Stock Exchange or any other stock exchange located outside the United States and
its possessions and such stock exchange shall so require, the Company will
maintain a Paying Agent in London, Luxembourg or any other required city located
outside the United States and its possessions, as the case may be, for the
Securities of such series. (Section 1002)
     All moneys paid by the Company to a Paying Agent for the payment of the
principal of and any premium or interest on any Security of any series which
remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company and the
Holder of such Security or any coupon appertaining thereto will thereafter look
only to the Company for payment thereof. (Section 1003)
GLOBAL SECURITIES
     DEPOSITARY GLOBAL SECURITIES
     If so specified in an applicable Prospectus Supplement or Prospectus
Supplements, the Debt Securities of a series will be issued in book-entry form
and will be evidenced by a single permanent global Security (the "Depositary
Global Security") which will be deposited with, or on behalf of, the Depository
Trust Company, as Depositary (the "Depositary"), located in the Borough of
Manhattan, The City of New York, and will be registered in the name of the
Depositary or a nominee of the Depositary.
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     The specific terms of the depositary arrangement with respect to a series
of Debt Securities evidenced by a Depositary Global Security will be described
in the Prospectus Supplement relating to such series. Unless otherwise specified
in the applicable Prospectus Supplement, the Company anticipates that the
following provisions will apply to depositary arrangements.
     Ownership of beneficial interests in a Depositary Global Security will be
limited to institutions that have accounts with the Depositary ("participants")
or persons that may hold interests through participants. In addition, ownership
of beneficial interests in Depositary Global Securities by persons that hold
through participants will only be evidenced by, and the transfer of that
ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such laws may impair the ability to transfer beneficial
interests in a Depositary Global Security.
     Upon the issuance of a series of Debt Securities evidenced by a Depositary
Global Security, and the deposit of such Depositary Global Security with the
Depositary, the Depositary will immediately credit, on its book-entry
registration and transfer system, the respective principal amounts of the Debt
Securities evidenced by such Depositary Global Security to the accounts of
participants. The initial accounts to be credited shall be designated by the
Underwriters of such series of Debt Securities.
     Payments of principal of and interest on a series of Debt Securities
evidenced by a Depositary Global Security will be made by the Company through
Chemical Bank, as Paying Agent or such other paying agent named in the
Prospectus Supplement, to the Depositary or its nominee, as the case may be, as
the registered owner and the Holder of the Depositary Global Security. None of
the Company, the Trustee or any agent of the Company or the Trustee will have
any responsibility or liability for any aspect of the Depositary's records or
any participant's records relating to or payments made on account of Depositary
Global Securities or for maintaining, supervising or reviewing any of the
Depositary's records or any participant's records relating to such Depositary
Global Securities.
     The Company expects that the Depositary for a series of Debt Securities
evidenced by a Depositary Global Security or its nominee, upon receipt of any
payment of principal of or interest in respect of any such Depositary Global
Security, will immediately credit, on its book-entry registration and transfer
system, accounts of participants with payment in amounts proportionate to their
respective beneficial interests in the principal amount of such Depositary
Global Security as shown on the records of the Depositary. Payments by
participants to owners of beneficial interests in such Depositary Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name," and will be the
responsibility of such participants.
     The Depositary Global Security evidencing a series of Debt Securities may
not be transferred except as a whole by the Depositary for such Depositary
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor.
     Unless otherwise specified in the applicable Prospectus Supplement, a
Depositary Global Security evidencing a series of Debt Securities will be
exchangeable for definitive Securities in registered form, of like tenor and of
an equal aggregate principal amount, only if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for such
Depositary Global Security or if at any time the Depositary ceases to be a
clearing agency registered under the Exchange Act, (y) the Company in its sole
discretion determines that the Depositary Global Securities shall be
exchangeable for definitive Securities in registered form or (z) any event shall
have happened and be continuing which, after notice or lapse of time, or both,
would become an Event of Default with respect to the Debt Securities of a series
evidenced by a Depositary Global Security. In the event that the Depositary
Global Security evidencing a series of Debt Securities is exchangeable pursuant
to the preceding sentence, it shall be exchangeable in whole for definitive
Securities in registered form, of like tenor and of an equal aggregate principal
amount, in denominations of $1,000 and integral multiples thereof. Such
definitive Securities shall be registered in the name or names of such person or
persons as the Depositary shall instruct the Security Registrar. It is expected
that such instructions may be based upon directions received by the Depositary
from its participants with respect to ownership of beneficial interests in the
Depositary Global Securities.
     Except as provided above or in the applicable Prospectus Supplement, owners
of beneficial interests in Depositary Global Securities will not be entitled to
receive physical delivery of Securities in definitive form and will not be
considered the Holders thereof for any purpose under such Securities or the
Indenture, and the Depositary Global Security evidencing a series of Debt
Securities will not be exchangeable, except for another Depositary Global
Security of like denomination and tenor to be registered in the name of the
Depositary or its nominee. Accordingly, each person owning a beneficial interest
in a
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<PAGE>
Depositary Global Security must rely on the procedures of the Depositary for
such Depositary Global Security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a Holder under such Securities or the Indenture. The
Indenture allows the Depositary, as a Holder, to appoint agents and otherwise
authorize participants to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder is entitled to
give or take under the Indenture. The Company understands that under existing
industry practices, in the event that the Company requests any action of Holders
or an owner of a beneficial interest in a Depositary Global Security desires to
give or take any action a Holder is entitled to give or take under such
Securities or the Indenture, the Depositary would authorize the participants
owning beneficial interests in the relevant Depositary Global Security to give
or take such action, and such participants would authorize beneficial owners
owning through such participants to give or take such action or would otherwise
act upon the instructions of beneficial owners owning through them.
     The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations, and certain other organizations, some of
whom (and/or their representatives) own interests in the Depositary. Access to
the Depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
     TEMPORARY GLOBAL SECURITIES
     If so specified in an applicable Prospectus Supplement or Prospectus
Supplements, all or any portion of the Securities of a series issuable as Bearer
Securities will initially be represented by one or more temporary global
Securities, without interest coupons, to be deposited with Morgan Guaranty Trust
Company of New York, Brussels Office, as the operator of the Euroclear System
(the "Euroclear Operator") and CEDEL S.A. ("CEDEL") for credit to the designated
accounts. On and after the date determined as provided in any such temporary
global Security and described in an applicable Prospectus Supplement or
Prospectus Supplements (the "Exchange Date"), each such temporary global
Security will be exchanged for definitive Bearer Securities, definitive
Registered Securities or all or a portion of a permanent global Security, or any
combination thereof, as specified in an applicable Prospectus Supplement or
Prospectus Supplements, but, unless otherwise specified in an applicable
Prospectus Supplement or Prospectus Supplements, only upon receipt by the
Company of written certification in the form and to the effect described above
under "Form, Exchange, Registration and Transfer." No Security delivered in
exchange for any portion of a temporary global Security shall be delivered to
any location in the United States or its possessions in connection with such
exchange. (Section 304)
     Unless otherwise specified in an applicable Prospectus Supplement or
Prospectus Supplements, interest in respect of any portion of a temporary global
Security payable in respect of an Interest Payment Date occurring prior to the
issuance of definitive Securities (including a permanent global Security) will
be paid to each of the Euroclear Operator and CEDEL with respect to the portion
of the temporary global Security held for its account for which it provides
certification in the form described in the Indenture. Each of the Euroclear
Operator and CEDEL will undertake in such circumstances to credit such interest
received by it in respect of a temporary global Security to the respective
accounts for which it holds such temporary global Security, and for which it has
received written certification that, as of the relevant Interest Payment Date,
is in the form and to the effect described above under "Form, Exchange,
Registration and Transfer." Receipt of such certification shall be deemed to be
a request for an interest in a permanent global Security (unless the account
holder requests that such portion be exchanged for a definitive Registered
Security or Securities or a definitive Bearer Security or Securities). If an
Interest Payment Date occurs prior to the issuance of definitive Securities
(including a permanent global Security) but on or after the Exchange Date,
written certification in the form and to the effect described above under "Form,
Exchange, Registration and Transfer" will also be required to obtain an interest
payment, and upon receipt of such certificate the Euroclear Operator or CEDEL,
as the case may be, will exchange the portion of the temporary global Security
relating to such certification for an interest in a permanent global Security
(unless the account holder requests that such portion be exchanged for a
definitive Registered Security or Securities or a definitive Bearer Security or
Securities).
                                       8
 


<PAGE>
     PERMANENT GLOBAL SECURITIES
     If any Securities of a series are issuable in permanent global form, the
applicable Prospectus Supplement or Prospectus Supplements will describe the
circumstances, if any, under which beneficial owners of interests in any such
permanent global Security may exchange such interests for Securities of such
series and of like tenor and principal amount in any authorized form and
denomination. No Bearer Security delivered in exchange for any portion of a
permanent global Security shall be delivered to any location in the United
States or its possessions in connection with such exchange. (Section 305)
Principal of and any premium and interest on any permanent global Security will
be payable in the manner described in the applicable Prospectus Supplement or
Prospectus Supplements.
CERTAIN DEFINITIONS
     For purposes of the Indenture covenants described below:
     "CONSOLIDATED NET TANGIBLE ASSETS" means shareholders' equity as set forth
on the most recent consolidated balance sheet of Universal Leaf and its
subsidiaries as prepared in accordance with generally accepted accounting
principles less all intangible amounts representing goodwill, trade names,
trademarks and patents.
     "DEBT" means all indebtedness for money borrowed and capitalized leases and
any guarantee of such obligations.
     "FUNDED DEBT" means all Debt maturing more than one year after the date of
determination and all Debt, regardless of term, renewable by the obligor for
more than one year after the date of its creation which would, in accordance
with generally accepted accounting principles, be classified as long-term debt.
     "LIEN" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind (other than purchase options, rights of first refusal
and other arrangements pursuant to which capital stock or property may be sold).
     "PRINCIPAL PROPERTY" means, with respect to any Person, (i) any capital
stock of a subsidiary of Universal Leaf owned by such Person and (ii) any
manufacturing, packing or processing plant or facility of any character or any
warehouse or any other storage facility of any character owned or leased under a
capitalized lease by such Person and all land and fixtures related thereto, the
gross book value (without deduction of any depreciation reserves) of which
capital stock, plant, facility or warehouse on the date as of which the
determination is being made exceeds 1% of Consolidated Net Tangible Assets,
other than any such capital stock, plant, facility or warehouse or portion
thereof which, in the opinion of the Boards of Directors of the Company and of
Universal Leaf, is not of material importance to the total business conducted by
the Restricted Subsidiaries taken together with all other capital stock, plants,
facilities and warehouses previously so declared.
     "RESTRICTED SUBSIDIARIES" means Universal Leaf Tobacco Company,
Incorporated, Universal Leaf Tobacco Company, Incorporated's subsidiaries and
their respective successors, including, without limitation, transferees of their
Principal Property which are Affiliates of the Company and/or Universal Leaf,
but excluding any subsidiaries organized under any jurisdiction other than the
United States of America (including the States and the District of Columbia) or
Brazil of which less than 66-2/3% of the Voting Stock is owned, directly or
indirectly, by Universal Leaf, and "RESTRICTED SUBSIDIARY" means any one of the
Restricted Subsidiaries.
     "SUBSIDIARY" means a corporation or business trust, a majority of the
Voting Stock of which is owned by the Company and/or its subsidiaries.
     "UNIVERSAL LEAF" means Universal Leaf Tobacco Company, Incorporated, a
Virginia corporation, and any Affiliate of the Company and/or Universal Leaf
with which it shall consolidate or into which it shall merge or to which it
shall transfer 40% or more of its consolidated assets. (Section 101)
RESTRICTIONS ON LIENS
     The Indenture will provide that the Company will not, and will not permit
any Restricted Subsidiary to, create, or suffer to exist, any Lien upon any
Principal Property of any Restricted Subsidiary or upon any capital stock of
Universal Leaf, whether owned on the date of the Indenture or thereafter
acquired, without making effective, concurrent provision whereby all Outstanding
Securities shall be directly secured, equally and ratably with the indebtedness
or other claims or obligations (the "Indebtedness") secured by one or more
Liens; PROVIDED, HOWEVER, that this restriction will not apply, among other
things, to: (i) Liens existing on the date of the Indenture; (ii) Liens securing
Indebtedness owing by any Restricted Subsidiary to another Restricted
Subsidiary; (iii) Liens existing on any asset or shares of capital stock of any
corporation at the time such corporation becomes a subsidiary of any Restricted
Subsidiary or is merged into or consolidated with any Restricted Subsidiary;
(iv) Liens on any asset securing Indebtedness incurred or assumed or guaranteed
for the purpose of financing all or any
                                       9
 


<PAGE>
part of the cost of acquiring, constructing, improving or repairing such asset
(including, without limitation, Liens incurred in connection with pollution
control bonds, industrial revenue bonds or similar financings), PROVIDED THAT
such Liens attach within 120 days of the completion of the acquisition,
construction, improvement or repair thereof (or in the case of real property,
completion of such improvement or construction or commencement of full operation
of such property, whichever is later); (v) Liens existing on any asset prior to
the acquisition thereof by any Restricted Subsidiary; (vi) Liens on any assets
in favor of the United States of America (including the States and the District
of Columbia) or any other country (or any department, agency, instrumentality or
political subdivision thereof) and created to secure any payments pursuant to
any contract or statute, PROVIDED THAT payment thereof is not at the time
required by the Indenture; (vii) Liens arising pursuant to any statute or order
of attachment, distraint or similar legal process arising in connection with
court proceedings so long as the execution or other enforcement thereof is
effectively stayed and the claims secured thereby are being contested in good
faith by appropriate proceedings; (viii) Liens securing taxes, assessments or
governmental charges not yet delinquent or being contested in good faith by
appropriate proceedings; (ix) Liens securing obligations owing to landlords,
mechanics, materialmen, suppliers, carriers and other like Persons incurred in
the ordinary course of business for sums not yet due or being contested in good
faith by appropriate proceedings; and (x) Liens arising out of the refinancing,
extension, renewal or refunding of any Indebtedness secured by any Lien
permitted by the foregoing clauses, PROVIDED THAT such Indebtedness is not
increased and is not secured by any additional assets. Notwithstanding the
foregoing, Liens on Principal Property of the Restricted Subsidiaries are
permitted, without complying with the foregoing restrictions, in an aggregate
amount (including the value of any sale and leaseback transaction permitted by
clause (i) of the next paragraph by virtue of this sentence, but excluding the
value of (i) sale and leaseback transactions otherwise permitted by the next
paragraph and (ii) Liens permitted by clauses (i) through (x) of the preceding
sentence of this paragraph) not at the time exceeding 10% of Consolidated Net
Tangible Assets. (Section 1008) At September 30, 1995, Consolidated Net Tangible
Assets were approximately $197 million. The Indenture will not prohibit the sale
by the Company of any stock or indebtedness of the Restricted Subsidiaries.
RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS
     The Indenture will also provide that the Company will not, and will not
permit any Restricted Subsidiary to, enter into any arrangement, directly or
indirectly, with any Person whereby such Restricted Subsidiary shall sell or
transfer any Principal Property of such Restricted Subsidiary, whether owned on
the date of the Indenture or thereafter acquired, more than 120 days after the
completion of construction and commencement of full operation thereof, and then
or thereafter rent or lease as lessee for a term of more than three years such
property or any part thereof or any other property which such Restricted
Subsidiary intends to use for substantially the same purpose or purposes as the
Principal Property being sold or transferred, unless (i) a Lien would be
permitted (without securing all Outstanding Securities) under the provisions of
the immediately preceding paragraph in an amount equal to the value of such sale
and leaseback transaction; (ii) the sale and leaseback transaction is between
such Restricted Subsidiary and the Company or another Subsidiary; or (iii)
within 180 days of such sale and leaseback transaction, the Company or such
Restricted Subsidiary applies an amount equal to the greater of (a) the fair
value of such property as determined in good faith by the Boards of Directors of
Universal Leaf and of the Company, or (b) the proceeds from the sale of such
property, to (x) the purchase or acquisition (or, in the case of real property,
the construction) of assets by any Restricted Subsidiary or (y) to the voluntary
retirement of Funded Debt of the Company or any Restricted Subsidiary (which may
include the Securities), other than Funded Debt that is subordinated in right of
payment to the Securities. For purposes of clause (i) of the preceding sentence
and for purposes of the preceding paragraph, the value of any sale and leaseback
transaction shall be an amount equal to the greater of the amounts specified in
clauses (iii) (a) and (iii) (b) of the preceding sentence, in either case first
divided by the number of years in the original lease term and then multiplied by
the number of years of such term remaining at the time of determination.
(Section 1009)
CONSOLIDATION, MERGER, SALE AND LEASE OF ASSETS
     The Company may, without the consent of the Holders of any of the
Outstanding Securities of a series, consolidate with, merge into or transfer or
lease its assets substantially as an entirety to any corporation organized under
the laws of any domestic jurisdiction, PROVIDED THAT (i) the successor
corporation assumes the Company's obligations on the Securities of each series
and under the Indenture, (ii) after giving effect thereto, no Event of Default,
and no event which, after notice or lapse of time, would become an Event of
Default shall have occurred and be continuing, and (iii) certain other
conditions are met. (Sections 801, 802)
EVENTS OF DEFAULT
     The following are Events of Default under the Indenture with respect to
Securities of any series: (a) failure to pay principal of or any premium on any
of the Securities of that series when due; (b) failure to pay any interest on
any Security of
                                       10
 


<PAGE>
that series when due, continued for 30 days; (c) failure to deposit any sinking
fund payment, if applicable, when due, in respect of any Security of that
series; (d) failure to perform any other covenant of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Securities other than that series) continued for 60 days
after written notice as provided in the Indenture; (e) certain events of
bankruptcy, insolvency or reorganization of the Company; and (f) any other Event
of Default provided with respect to Securities of that series. (Section 501)
Subject to the provisions of the Indenture, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders of Securities of any series or any
related coupons unless such Holders shall have offered to the Trustee reasonable
indemnity. (Sections 601, 603) Subject to such provisions for the
indemnification of the Trustee, the Holders of a majority in aggregate principal
amount of the Outstanding Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to Securities of that series. (Section 512)
     If an Event of Default with respect to Securities of any series at the time
Outstanding shall occur and be continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of that
series may declare the principal of all such Outstanding Securities, or, if any
such Securities are Original Issue Discount Securities, such lesser amount as
may be described in an applicable Prospectus Supplement or Prospectus
Supplements, of all the Securities of that series to be due and payable
immediately. At any time after a declaration of acceleration with respect to
Securities of any series has been made but before a judgment or decree for
payment of money due has been obtained by the Trustee, the Holders of a majority
in aggregate principal amount of Outstanding Securities of that series may
rescind any declaration of acceleration and its consequences, if all payments
due (other than those due as a result of acceleration) have been made and all
Events of Default have been cured or waived. (Section 502)
     No Holder of any Securities of any series or any related coupons shall have
any right to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Securities of
that series, the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Outstanding Securities of that series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a Holder of an Outstanding Security of that series for enforcement
of payment of the principal of, or any premium or interest on, such Security on
or after the respective due dates expressed in such Security. (Sections 507,
508)
     The Company is required to furnish to the Trustee annually a statement as
to performance or fulfillment of covenants, agreements or conditions in the
Indenture and as to the absence of default. (Section 1004)
MEETINGS, MODIFICATION AND WAIVER
     Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the Holder of each Outstanding Security
affected thereby (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on any Security, (b) reduce the
principal amount of, or premium or interest on, any Security, (c) change any
obligation of the Company to pay additional amounts, (d) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (e) change the coin or currency in which any Security or
any premium or interest thereon is payable, (f) impair the right to institute
suit for the enforcement of any payment on or with respect to any Security, (g)
reduce the percentage in principal amount of Outstanding Securities of any
series, the consent of whose Holders is required for modification or amendment
of the Indenture or for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults, (h) reduce the requirements
contained in the Indenture for quorum or voting, (i) change any obligation of
the Company to maintain an office or agency in the places and for the purposes
required by the Indenture, or (j) modify any of the above provisions. (Section
902)
     The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of a series may, on behalf of all Holders of
Securities of that series and any coupons appertaining thereto, waive any past
default under the Indenture with respect to Securities of that series, except a
default (a) in the payment of principal of or any premium or interest on any
Security of such series or (b) in respect of a covenant or provision of the
Indenture which cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected. (Section 513)
                                       11
 


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     The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver thereunder or are
present at a meeting of Holders of Securities for quorum purposes, (i) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof, and (ii) the principal amount of a Security denominated in a
foreign currency or currency unit shall be the U.S. dollar equivalent,
determined on the date of original issuance of such Security, of the principal
amount of such Security or, in the case of an Original Issue Discount Security,
the U.S. dollar equivalent, determined on the date of original issuance of such
Security, of the amount determined as provided in (i) above. (Section 101)
     The Indenture contains provisions for convening meetings of the Holders of
Securities of any or all series. (Article Thirteen) A meeting may be called at
any time by the Trustee, and also, upon request, by the Company or the Holders
of at least 10% in aggregate principal amount of the Outstanding Securities of
such series, in any such case upon notice given in accordance with "Notices"
below. (Section 1302) Except for any consent which must be given by the Holder
of each Outstanding Security affected thereby, as described above, any
resolution presented at a meeting at which a quorum is present may be adopted by
the affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; PROVIDED, HOWEVER, that, except for any
consent which must be given by the Holder of each Outstanding Security affected
thereby, as described above, any resolution with respect to any consent, waiver,
request, demand, notice, authorization, direction or other action which may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series may be adopted at a meeting at which a
quorum is present only by the affirmative vote of the Holders of not less than
such specified percentage in principal amount of the Outstanding Securities of
that series. Any resolution passed or decision taken at any meeting of Holders
of Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Securities of that series and the related coupons. The
quorum at any meeting called to adopt a resolution will be Persons holding or
representing a majority in principal amount of the Outstanding Securities of a
series; PROVIDED, HOWEVER, that if any action is to be taken at such meeting
with respect to a consent, waiver, request, demand, notice, authorization,
direction or other action which may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons holding or representing such specified percentage in
principal amount of the Outstanding Securities of such series will constitute a
quorum for that purpose. (Section 1304)
NOTICES
     Except as otherwise provided in the Indenture, notices to Holders of Bearer
Securities will be given by publication at least twice in a daily newspaper of
general circulation in The City of New York and in such other city or cities as
may be specified in such Securities. Notices to Holders of Registered Securities
will be given by mail to the addresses of such Holders as they appear in the
Security Register. (Sections 101, 106)
TITLE
     Title to any Bearer Securities (including Bearer Securities in temporary
global form and in permanent global form) and any coupons appertaining thereto
will pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon and the registered owner of any Registered Security as the absolute owner
thereof (whether or not such Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
     Any mutilated Security or a Security with a mutilated coupon appertaining
thereto will be replaced by the Company at the expense of the Holder upon
surrender of such Security to the Trustee. Securities or coupons that become
destroyed, lost or stolen will be replaced by the Company at the expense of the
Holder upon delivery to the Trustee of evidence of the destruction, loss or
theft thereof satisfactory to the Company and the Trustee; in the case of any
coupon which becomes destroyed, lost or stolen, such coupon will be replaced by
issuance of a new Security in exchange for the Security to which such coupon
appertains. In the case of a destroyed, lost or stolen Security or coupon, an
indemnity satisfactory to the Trustee and the Company may be required at the
expense of the Holder of such Security or coupon before a replacement Security
will be issued. (Section 306)
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<PAGE>
DEFEASANCE AND COVENANT DEFEASANCE
     Unless otherwise indicated in the applicable Prospectus Supplement, the
Company may elect either (i) to defease and be discharged from any and all
obligations with respect to the Securities of any series (except as otherwise
provided in the Indenture) ("defeasance") or (ii) to be released from its
obligations with respect to certain covenants applicable to such Securities,
including its obligations described above under "Certain Covenants" ("covenant
defeasance"), upon the deposit with the Trustee (or other qualifying trustee),
in trust for such purpose, of money and/or U.S. Government Obligations which
through the payment of principal and interest in accordance with their terms
will provide money in an amount sufficient, without reinvestment, to pay the
principal of and any premium or interest on such Securities to Maturity or
redemption, as the case may be, and any mandatory sinking fund or analogous
payments thereon. As a condition to defeasance or covenant defeasance, the
Company must deliver to the Trustee an Opinion of Counsel to the effect that the
Holders of such Securities will not recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred. Such Opinion of
Counsel, in the case of defeasance under clause (i) above, must refer to and be
based upon a ruling of the Internal Revenue Service or a change in applicable
United States federal income tax law occurring after the date of the Indenture.
(Article Fourteen)
     The Company may exercise its defeasance option with respect to such
Securities notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its defeasance option, payment of such Securities may
not be accelerated because of an Event of Default. If the Company exercises its
covenant defeasance option, payment of such Securities may not be accelerated by
reference to the covenant noted under clause (ii) above. However, if such
acceleration were to occur, the realizable value at the acceleration date of the
money and U.S. Government Obligations in the defeasance trust could be less than
the principal and interest then due on such Securities, in that the required
deposit in the defeasance trust is based upon scheduled cash flows rather than
market value, which will vary depending upon interest rates and other factors.
GOVERNING LAW
     The Indenture, the Securities and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York. (Section 113)
CONCERNING THE TRUSTEE
     The Company and certain of its subsidiaries may from time to time maintain
lines of credit, and have other customary banking relationships, with Chemical
Bank, the Trustee under the Indenture.
                                       13
 


<PAGE>
                   LIMITATIONS ON ISSUANCE OF EURO-SECURITIES
     United States tax laws and regulations impose certain restrictions on the
issuance of any securities in bearer form. Except as may otherwise be provided
in the Prospectus Supplement applicable thereto, in accordance with the federal
tax laws and regulations of the United States, Euro-Securities may not, in
connection with their offer or sale during the Restricted Period (as defined
above under "Description of Debt Securities -- Form, Exchange, Registration and
Transfer"), be offered or sold, directly or indirectly, (i) to any person in the
United States or its possessions (as defined below), or (ii) to any United
States person (as defined below) other than (x) an office located outside the
United States or its possessions of a Financial Institution (as defined above
under "Description of Debt Securities -- Form, Exchange, Registration and
Transfer") purchasing for its own account or for the account of a customer,
provided that such Financial Institution agrees in writing to comply with the
requirements of Section 165(j)(3)(A), (B), or (C) of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder or (y) otherwise as
permitted by United States Treasury Regulation Section 1.163-5(c)(2)(i)(D). Any
underwriters, agents and dealers participating in the offering of Debt
Securities must covenant that they will not offer or sell during the Restricted
Period any Euro-Securities to any person in the United States or its possessions
or to any United States person (other than (x) an office located outside the
United States and its possessions of a Financial Institution or (y) otherwise as
permitted by United States Treasury Regulation Section 1.163-5(c)(2)(i)(D)), and
that they will not deliver Euro-Securities within the United States or its
possessions.
     In addition, any such underwriters, agents and dealers must covenant that
they have in effect procedures reasonably designed to ensure that their
employees or agents who are directly engaged in selling Euro-Securities are
aware of the above restrictions on the offer or sale of Euro-Securities.
Moreover, Bearer Securities (including a permanent global Debt Security) and any
coupons appertaining thereto will not be delivered in definitive form or, if
prior to delivery in definitive form, interest will not be paid on any
Euro-Securities, unless the Company has received a signed certificate in writing
(or an electronic certificate described in United States Treasury Regulation
Section 1.163-5(c)(2)(i)(D)(3)(ii)) in the form and to the effect described
above under "Description of Debt Securities -- Form, Exchange, Registration and
Transfer." Bearer Securities (including a permanent global Debt Security) and
coupons will bear a legend to the following effect: "Any United States person
who holds this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Section 165(j) and
1287(a) of the Internal Revenue Code." The sections referred to in such legend
provide that a United States person (other than a Financial Institution or a
United States person holding through a Financial Institution) who holds a Bearer
Security or coupon will not be allowed to deduct any loss realized on the sale,
exchange or redemption of such Bearer Security or coupon and any gain (which
might otherwise be characterized as capital gain) recognized on such sale,
exchange or redemption will be treated as ordinary income.
     As used herein, "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States and an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source. "United States" means the United States of America (including the States
and the District of Columbia) and "possessions" of the United States include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
Northern Mariana Islands.
                             FOREIGN CURRENCY RISKS
     Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets. These risks will vary
depending upon the currency or currencies involved and will be more fully
described in the Prospectus Supplement relating thereto.
                             UNITED STATES TAXATION
     The following summary of the principal United States federal income tax
consequences of ownership of Debt Securities is based upon the opinion of
McGuire, Woods, Battle & Boothe, L.L.P., special tax counsel to the Company. It
deals only with Debt Securities held as capital assets, and not with special
classes of holders, such as dealers in securities or currencies, banks,
tax-exempt organizations, life insurance companies, persons that hold Debt
Securities that are part of a hedge or that are hedged against currency risks or
that are part of a straddle or conversion transaction, or persons whose
functional currency is not the U.S. dollar. It also does not deal with Holders
other than original purchasers. Moreover, the summary deals only with Debt
Securities that are due to mature 30 years or less from the date on which they
are issued. The United States federal income tax consequences of ownership of
Debt Securities that are due to mature more than 30 years from their date of
issue will be discussed in an applicable Prospectus Supplement. The summary is
based on the Internal Revenue Code of
                                       14
 


<PAGE>
1986, as amended (the "Code"), its legislative history, existing and proposed
regulations thereunder, judicial decisions, and published rulings and other
administrative guidance issued by the Internal Revenue Service (the "Service"),
as currently in effect, all of which are subject to change at any time, possibly
with retroactive effect.
     Prospective purchasers of Debt Securities should consult their own tax
advisors concerning the consequences of ownership of Debt Securities, in their
particular circumstances, under the Code and the laws of State, local or foreign
taxing jurisdiction.
UNITED STATES HOLDERS
     PAYMENTS OF INTEREST
     Except as provided below under " -- Original Issue Discount," interest on a
Debt Security (including "qualified stated interest" on a "Discount Debt
Security," as defined below) will be taxable to a United States Holder as
ordinary income at the time it is received or accrued, depending on the holder's
method of accounting for tax purposes. A United States Holder is a beneficial
owner who or that is (i) a citizen or resident of the United States, (ii) a
domestic corporation or (iii) otherwise subject to United States federal income
taxation on a net income basis in respect of the Debt Security.
     If an interest payment is denominated in, or determined by reference to, a
currency, composite currency or basket of currencies other than the U.S. dollars
(a "foreign currency"), the amount of income recognized by a cash basis United
States Holder will be the U.S. dollar value of the interest payment, based on
the exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars.
     An accrual basis United States Holder may determine the amount of income
recognized with respect to an interest payment denominated in, or determined by
reference to, a foreign currency in accordance with either of two methods. Under
the first method, the amount of income accrued will be based on the average
exchange rate in effect during the interest accrual period (or, with respect to
an accrual period that spans two taxable years, the part of the period within
the taxable year).
     Under the second method, the United States Holder may elect to determine
the amount of income accrued on the basis of the exchange rate in effect on the
last day of the accrual period or, in the case of an accrual period that spans
two taxable years, the exchange rate in effect on the last day of the part of
the period within the taxable year. Additionally, if a payment of interest is
actually received within five business days of the last day of the accrual
period or taxable year, an electing accrual basis United States Holder may
instead translate such accrued interest into U.S. dollars at the exchange rate
in effect on the day of actual receipt. Any such election will apply to all debt
instruments held by the United States Holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the United
States Holder, and will be irrevocable without the consent of the Service.
     Upon receipt of the interest payment (including a payment attributable to
accrued but unpaid interest upon the sale or retirement of a Debt Security)
denominated in, or determined by reference to, a foreign currency, the United
States Holder will recognize ordinary income or loss measured by the difference
between (x) the average exchange rate used to accrue interest income, or the
exchange rate as determined under the second method described above if the
United States Holder elects that method, and (y) the exchange rate in effect on
the date of receipt, regardless of whether the payment is in fact converted into
U.S. dollars.
     ORIGINAL ISSUE DISCOUNT
     GENERAL. A Debt Security with a maturity of more than one year from the
date of issue will be treated as issued at an original issue discount (a
"Discount Debt Security") if the excess of its "stated redemption price at
maturity" over its issue price is more than a "de minimis amount" (as defined
below). Generally, the issue price of a Debt Security will be the first price at
which a substantial amount of Debt Securities included in the issue of which the
Debt Security is a part is sold to other than bond houses, brokers, or similar
persons or organizations acting in the capacity of underwriters, placement
agents, or wholesalers. The stated redemption price at maturity of a Debt
Security is the total of all payments provided by the Debt Security that are not
payments of "qualified stated interest." A qualified stated interest payment
generally is any one of a series of stated interest payments on a Debt Security
that are unconditionally payable at least annually at a single fixed rate (with
certain exceptions for lower rates paid during some periods) applied to the
outstanding principal amount of the Debt Security. Special rules for determining
qualified stated interest payable on certain Debt Securities bearing interest at
a variable rate are described below under " -- Variable Rate Debt Securities."
                                       15
 


<PAGE>
     In general, if the excess of a Debt Security's stated redemption price at
maturity over its issue price is less than 1/4 of 1 percent of the Debt
Security's stated redemption price at maturity multiplied by the number of
complete years to its maturity (the "de minimis amount"), then such excess, if
any, constitutes "de minimis original issue discount" and the Debt Security is
not a Discount Debt Security. Unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, a United
States Holder of a Debt Security with de minimis original issue discount must
include such de minimis original issue discount in income as stated principal
payments on the Debt Security are made. The includible amount with respect to
each such payment will equal the product of the total amount of the Debt
Security's de minimis original issue discount and a fraction, the numerator of
which is the amount of the principal payment made and the denominator of which
is the stated principal amount of the Debt Security.
     United States Holders of Discount Debt Securities having a maturity of more
than one year from their date of issue must, generally, include original issue
discount ("OID") in income calculated on a constant-yield method before the
receipt of cash attributable to such income, and generally will have to include
in income increasingly greater amounts of OID over the life of the Debt
Security. The amount of OID includible in income by a United States Holder of a
Discount Debt Security is the sum of the daily portions of OID with respect to
the Discount Debt Security for each day during the taxable year or portion of
the taxable year on which the United States Holder holds such Discount Debt
Security ("accrued OID"). The daily portion is determined by allocating to each
day in any "accrual period" a pro rata portion of the OID allocable to that
accrual period. Accrual periods with respect to a Debt Security may be of any
length selected by the United States Holder and may vary in length over the term
of the Debt Security as long as (i) no accrual period is longer than one year
and (ii) each scheduled payment of interest or principal on the Debt Security
occurs on either the final or first day of an accrual period. The amount of OID
allocable to an accrual period equals the excess of (a) the product of the
Discount Debt Security's adjusted issue price at the beginning of the accrual
period and such Debt Security's yield to maturity (determined on the basis of
compounding at the close of each accrual period and properly adjusted for the
length of the accrual period) over (b) the sum of the payments of qualified
stated interest on the Debt Security allocable to the accrual period. The
"adjusted issue price" of a Discount Debt Security at the beginning of any
accrual period is the issue price of the Debt Security increased by (x) the
amount of accrued OID for each prior accrual period and decreased by (y) the
amount of any payments previously made on the Debt Security that were not
qualified stated interest payments. For purposes of determining the amount of
OID allocable to an accrual period, if an interval between payments of qualified
stated interest on the Debt Security contains more than one accrual period, the
amount of qualified stated interest payable at the end of the interval
(including any qualified stated interest that is payable on the first day of the
accrual period immediately following the interval) is allocated pro rata on the
basis of relative lengths of each accrual period in the interval, and the
adjusted issue price at the beginning of each accrual period in the interval
must be increased by the amount of any qualified stated interest that has
accrued prior to the first day of the accrual period but that is not payable
until the end of the interval. The amount of OID allocable to an initial short
accrual period may be computed using any reasonable method if all other accrual
periods other than a final short accrual period are of equal length. The amount
of OID allocable to the final accrual period is the difference between (x) the
amount payable at the maturity of the Debt Security (other than any payment of
qualified stated interest) and (y) the Debt Security's adjusted issue price as
of the beginning of the final accrual period.
     ACQUISITION PREMIUM. A United States Holder that purchases a Debt Security
for an amount less than or equal to the sum of all amounts payable on the Debt
Security after the purchase date (other than payments of qualified stated
interest) but in excess of its adjusted issue price (any such excess being
"acquisition premium") and that does not make the election described below under
"Election to Treat All Interest as Original Issue Discount" is permitted to
reduce the daily portions of OID by a fraction, the numerator of which is the
excess of the United States Holder's adjusted basis in the Debt Security
immediately after its purchase over the adjusted issue price of the Debt
Security, and the denominator of which is the excess of the sum of all amounts
payable on the Debt Security after the purchase date, other than payments of
qualified stated interest, over the Debt Security's adjusted issue price.
     MARKET DISCOUNT. A Debt Security, other than a short-term Debt Security,
will be treated as purchased at a market discount (a "Market Discount Debt
Security") if (i) the amount for which a United States Holder purchased the Debt
Security is less than the Debt Security's issue price (as determined above under
" -- General") and (ii) the Debt Security's stated redemption price at maturity
or, in the case of a Discount Debt Security, the Debt Security's "revised issue
price," exceeds the amount for which the United States Holder purchased the Debt
Security by at least one quarter of one percent of such Debt Security's stated
redemption price at maturity or revised issue price, respectively, multiplied by
the number of complete years to the Debt Security's maturity. If such excess is
not sufficient to cause the Debt Security to be a Market Discount Debt Security,
then such excess constitutes "de minimis market discount." The Code provides
that, for these purposes, the "revised
                                       16
 


<PAGE>
issue price" of a Debt Security generally equals its issue price, increased by
the amount of any OID that has accrued on the Debt Security.
     Any gain recognized on the maturity or disposition of a Market Discount
Debt Security will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Debt Security.
Alternatively, a United States Holder of a Market Discount Debt Security may
elect to include market discount in income currently over the life of the Debt
Security. Such an election shall apply to all debt instruments with market
discount acquired by the electing United States Holder on or after the first day
of the first taxable year to which the election applies. This election may not
be revoked without the consent of the Service.
     Market discount on a Market Discount Debt Security will accrue on a
straight-line basis unless the United States Holder elects to accrue such market
discount on a constant-yield method. Such an election shall apply only to the
Debt Security with respect to which it is made and may not be revoked. A United
States Holder of a Market Discount Debt Security that does not elect to include
market discount in income currently generally will be required to defer
deductions for interest on borrowings allocable to such Debt Security in an
amount not exceeding the accrued market discount on such Debt Security until the
maturity or disposition of such Debt Security.
     PRE-ISSUANCE ACCRUED INTEREST. If (i) a portion of the initial purchase
price of a Debt Security is attributable to pre-issuance accrued interest, (ii)
the first stated interest payment on the Debt Security is to be made within one
year of the Debt Security's issue date and (iii) the payment will equal or
exceed the amount of pre-issuance accrued interest, then the United States
Holder may elect to decrease the issue price of the Debt Security by the amount
of pre-issuance accrued interest. In that event, a portion of the first stated
interest payment will be treated as a return of the excluded pre-issuance
accrued interest and not as an amount payable on the Debt Security.
     DEBT SECURITIES SUBJECT TO CONTINGENCIES INCLUDING OPTIONAL REDEMPTION. In
general, if a Debt Security provides for an alternative payment schedule or
schedules applicable upon the occurrence of a contingency or contingencies and
the timing and amounts of the payments that comprise each payment schedule are
known as of the issue date, the yield and maturity of the Debt Security are
determined by assuming that the payments will be made according to the Debt
Security's stated payment schedule. If, however, based on all the facts and
circumstances as of the issue date, it is more likely than not that the Debt
Security's stated payment schedule will not occur, then, in general, the yield
and maturity of the Debt Security are computed based on the payment schedule
most likely to occur.
     Notwithstanding the general rules for determining yield and maturity in the
case of Debt Securities subject to contingencies, if the Company or the Holder
has an unconditional option or options that, if exercised, would require
payments to be made on the Debt Security under an alternative payment schedule
or schedules, then (i) in the case of an option or options of the Company, the
Company will be deemed to exercise or not exercise an option or combination of
options in the manner that minimizes the yield on the Debt Security and (ii) in
the case of an option or options of the Holder, the Holder will be deemed to
exercise or not exercise an option or combination of options in the manner that
maximizes the yield on the Debt Security. For purposes of those calculations,
the yield on the Debt Security is determined by using any date on which the Debt
Security may be redeemed or repurchased as the maturity date and the amount
payable on such date in accordance with the terms of the Debt Security as the
principal amount payable at maturity.
     If a contingency (including the exercise of an option) fails to occur or
actually occurs in a manner inconsistent with the assumption made according to
the above rules (a "change in circumstances") then, except to the extent that a
portion of the Debt Security is repaid as a result of the change in
circumstances and solely for purposes of the accrual of OID, the yield and
maturity of the Debt Security are redetermined by treating the Debt Security as
reissued on the date of the change in circumstances for an amount equal to the
Debt Security's adjusted issue price on that date.
     ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT. A United States
Holder may elect to include in gross income all interest that accrues on a Debt
Security using the constant-yield method described above under the heading
" -- General," with the modifications described below. For purposes of this
election, interest includes stated interest, OID, de minimis original issue
discount, market discount, de minimis market discount and unstated interest, as
adjusted by any amortizable bond premium (described below under " -- Debt
Securities Purchased at a Premium") or acquisition premium.
     In applying the constant-yield method to a Debt Security with respect to
which this election has been made, the issue price of the Debt Security will
equal the electing United States Holder's adjusted basis in the Debt Security
immediately after its acquisition, the issue date of the Debt Security will be
the date of its acquisition by the electing United States Holder, and no
payments on the Debt Security will be treated as payments of qualified stated
interest. This election will generally apply only to the Debt Security with
respect to which it is made and may not be revoked without the consent of the
Service. If this
                                       17
 


<PAGE>
election is made with respect to a Debt Security with amortizable bond premium,
then the electing United States Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on which
is excludible from gross income) held by the electing United States Holder as of
the beginning of the taxable year in which the Debt Security with respect to
which the election is made is acquired or thereafter acquired. The deemed
election with respect to amortizable bond premium may not be revoked without the
consent of the Service.
     If the election to apply the constant-yield method to all interest on a
Debt Security is made with respect to a Market Discount Debt Security, the
electing United States Holder will be treated as having made the election
discussed above under " -- Market Discount" to include market discount in income
currently over the life of all debt instruments held or thereafter acquired by
such United States Holder.
     VARIABLE RATE DEBT SECURITIES. A "Variable Rate Debt Security" is a Debt
Security that: (i) has an issue price that does not exceed the total
noncontingent principal payments by more than the lesser of (1) .015 multiplied
by the product of (x) the total noncontingent principal payments and (y) the
number of complete years to maturity from the issue date, or (2) 15 percent of
the total noncontingent principal payments; (ii) provides for stated interest
compounded or paid at least annually at (1) one or more "qualified floating
rates," (2) a single fixed rate and one or more qualified floating rates, (3) a
single "objective rate" or (4) a single fixed rate and a single objective rate
that is a "qualified inverse floating rate"; and (iii) provides that a qualified
floating rate or objective rate in effect at any time during the term of the
instrument must be set at a "current value" of that rate (i.e., the value of the
rate on any day that is no earlier than three months prior to the first day on
which that value is in effect and no later than one year following that first
day).
     A variable rate is a "qualified floating rate" if (i) variations in the
value of the rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the Debt
Security is denominated or (ii) it is equal to the product of such a rate and
either (a) a fixed multiple that is greater than zero but not more than 1.35, or
(b) a fixed multiple greater than zero but not more than 1.35, increased or
decreased by a fixed rate. A rate is not a qualified floating rate, however, if
the rate is subject to certain restrictions (including caps, floors, governors
or other similar restrictions) unless such restrictions are fixed throughout the
term of the Debt Security or are not reasonably expected to significantly affect
the yield on the Debt Security.
     An "objective rate" is a rate, other than a qualified floating rate, that
is determined using a single, fixed formula and that is based on (i) one or more
qualified floating rates, (ii) one or more rates each of which would be a
qualified floating rate for a debt instrument denominated in a currency other
than the currency in which the debt instrument is denominated, (iii) the yield
or changes in the price of one or more actively traded items of personal
property other than stock or debt of the issuer or a related party or (iv) a
combination of objective rates. A variable rate is not an objective rate,
however, if it is reasonably expected that the average value of the rate during
the first half of the Debt Security's term will be either significantly less
than or significantly greater than the average value of the rate during the
final half of the Debt Security's term. An objective rate is a "qualified
inverse floating rate" if (i) the rate is equal to a fixed rate minus a
qualified floating rate, and (ii) the variations in the rate can reasonably be
expected to inversely reflect contemporaneous variations in the cost of newly
borrowed funds. Under these rules, Commercial Paper Rate Debt securities, Prime
Rate Debt securities, LIBOR Debt Securities, Treasury Rate Debt Securities, CD
Rate Debt Securities, and Federal Funds Rate Debt Securities will generally be
treated as Variable Rate Debt Securities.
     In general, if a Variable Rate Debt Security provides for stated interest
at a single qualified floating rate or objective rate, all stated interest on
the Debt Security is qualified stated interest and the amount of OID, if any, is
determined by using, in the case of a qualified floating rate or qualified
inverse floating rate, a fixed rate equal to the value as of the issue date of
the qualified floating rate or qualified inverse floating rate, or, in the case
of any other objective rate, a fixed rate that reflects the yield reasonably
expected for the Debt Security.
     If a Variable Rate Debt Security does not provide for stated interest at a
single qualified floating rate or objective rate, the amount of interest and OID
accruals on the Debt Security are generally determined by (i) determining a
fixed rate substitute for each variable rate provided under the Variable Rate
Debt Security, (ii) constructing the equivalent fixed rate debt instrument
(using the fixed rate substitute described above), (iii) determining the amount
of qualified stated interest and OID with respect to the equivalent fixed rate
debt instrument, and (iv) making the appropriate adjustments for actual variable
rates during the applicable accrual period.
     If a Variable Rate Debt Security provides for stated interest either at one
or more qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an
                                       18
 


<PAGE>
initial period), the amount of interest and OID accruals are determined as in
the immediately preceding paragraph with the modification that the Variable Rate
Debt Security is treated, for purposes of the first three steps of the
determination, as if it provided for a qualified floating rate (or a qualified
inverse floating rate, as the case may be) rather than the fixed rate. The
qualified floating rate (or qualified inverse floating rate) replacing the fixed
rate must be such that the fair market value of the Variable Rate Debt Security
as of the issue date would be approximately the same as the fair market value of
an otherwise identical debt instrument that provides for the qualified floating
rate (or qualified inverse floating rate) rather than the fixed rate.
     SHORT-TERM DEBT SECURITIES. In general, an individual or other cash basis
United States Holder of a Debt Security with a term of one year or less (a
"short-term Debt Security") is not required to accrue OID (as specially defined
below for the purposes of this paragraph) for United States federal income tax
purposes unless it elects to do so (but may be required to include any stated
interest in income as the interest is received). Accrual basis United States
Holders and certain other United States Holders, including banks, regulated
investment companies, dealers in securities, common trust funds, United States
Holders who hold Debt Securities as part of certain identified hedging
transactions, certain pass-through entities and cash basis United States Holders
who so elect, are required to accrue OID on short-term Debt Securities on either
a straight- line basis or under the constant-yield method (based on daily
compounding), at the election of the United States Holder.
     In the case of a United States Holder not required and not electing to
include OID in income currently, any gain realized on the sale or retirement of
the short-term Debt Security will be ordinary income to the extent of the OID
accrued on a straight-line basis (unless an election is made to accrue the OID
under the constant- yield method) through the date of sale or retirement. United
States Holders who are not required and do not elect to accrue OID on short-term
Debt Securities will be required to defer deductions for interest on borrowings
allocable to short-term Debt Securities in an amount not exceeding the deferred
income until the deferred income is realized.
     For purposes of determining the amount of OID subject to these rules, all
interest payments on a short-term Debt Security, including stated interest, are
included in the short-term Debt Security's stated redemption price at maturity.
     FOREIGN CURRENCY DISCOUNT DEBT SECURITIES. OID for any accrual period on a
Discount Debt Security that is denominated in, or determined by reference to, a
foreign currency will be determined in the foreign currency and then translated
into U.S. dollars in the same manner as stated interest accrued by an accrual
basis United States Holder, as described under "Payments of Interest." Upon
receipt of an amount attributable to OID (whether in connection with a payment
of interest or the sale or retirement of a Debt Security), a United States
Holder may recognize ordinary income or loss.
     DEBT SECURITIES PURCHASED AT A PREMIUM
     A United States Holder that purchases a Debt Security for an amount in
excess of its principal amount may elect to treat such excess as "amortizable
bond premium", in which case the amount required to be included in the United
States Holder's income each year with respect to interest on the Debt Security
will be reduced by the amount of amortizable bond premium allocable (based on
the Debt Security's yield to maturity) to such year. In the case of a Debt
Security that is denominated in, or determined by reference to, a foreign
currency, bond premium will be computed in units of foreign currency, and
amortizable bond premium will reduce interest income in units of the foreign
currency. At the time amortized bond premium offsets interest income, exchange
gain or loss (taxable as ordinary income or loss) is realized measured by the
difference between exchange rates at that time and at the time of the
acquisition of the Debt Securities. Any election to amortize bond premium shall
apply to all bonds (other than bonds the interest on which is excludible from
gross income) held by the United States Holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the United
States Holder, and is irrevocable without the consent of the Service. See also
"Original Issue Discount - Election to Treat All Interest as Original Issue
Discount".
     PURCHASE, SALE AND RETIREMENT OF THE DEBT SECURITIES
     A United States Holder's tax basis in a Debt Security will generally be its
U.S. dollar cost (as defined below), increased by the amount of any OID or
market discount included in the United States Holder's income with respect to
the Debt Security and the amount, if any, of income attributable to de minimis
original issue discount and de minimis market discount included in the United
States Holder's income with respect to the Debt Security, and reduced by (i) the
amount of any payments that are not qualified stated interest payments, and (ii)
the amount of any amortizable bond premium applied to reduce interest on the
Debt Security. The U.S. dollar cost of a Debt Security purchased with a foreign
currency will generally
                                       19
 


<PAGE>
be the U.S. dollar value of the purchase price on the date of purchase or, in
the case of Debt Securities traded on an established securities market, as
defined in the applicable Treasury Regulations, that are purchased by a cash
basis United States Holder (or an accrual basis United States Holder that so
elects), on the settlement date for the purchase.
     A United States Holder will generally recognize gain or loss on the sale or
retirement of a Debt Security equal to the difference between the amount
realized on the sale or retirement and its tax basis in the Debt Security. The
amount realized on a sale or retirement for an amount in foreign currency will
be the U.S. dollar value of such amount on (i) the date payment is received in
the case of a cash basis United States Holder, (ii) the date of disposition in
the case of an accrual basis United States Holder or (iii) in the case of Debt
Securities traded on an established securities market, as defined in the
applicable Treasury Regulations, sold by a cash basis United States Holder (or
an accrual basis United States Holder that so elects), on the settlement date
for the sale. Except to the extent described above under "Original Issue
Discount - Short-Term Debt Securities" or described in the next succeeding
paragraph or attributable to accrued but unpaid interest, gain or loss
recognized on the sale or retirement of a Debt Security will be capital gain or
loss and will be long-term capital gain or loss if the Debt Security was held
for more than one year.
     Gain or loss recognized by a United States Holder on the sale or retirement
of a Debt Security that is attributable to changes in exchange rates will be
treated as ordinary income or loss. However, exchange gain or loss is taken into
account only to the extent of total gain or loss realized on the transaction.
     EXCHANGE OF AMOUNTS IN OTHER THAN U.S. DOLLARS
     Foreign currency received as interest on a Debt Security or on the sale or
retirement of a Debt Security will have a tax basis equal to its U.S. dollar
value at the time such interest is received or at the time of such sale or
retirement. Foreign currency that is purchased will generally have a tax basis
equal to the U.S. dollar value of the foreign currency on the date of purchase.
Any gain or loss recognized on a sale or other disposition of a foreign currency
(including its use to purchase Debt Securities or upon exchange for U.S.
dollars) will be ordinary income or loss.
     INDEXED DEBT SECURITIES
     The applicable Prospectus Supplement will contain a discussion of any
special United States federal income tax rules with respect to Debt Securities
(other than Debt Securities subject to the rules governing Variable Rate Debt
Securities), payments on which are determined by reference to any index.
UNITED STATES ALIEN HOLDERS
     For purposes of this discussion, a "United States Alien Holder" is any
holder of a Debt Security who is (i) a nonresident alien individual or (ii) a
foreign corporation, partnership or estate or trust which is not subject to
United States federal income tax on a net income basis in respect of income or
gain from a Debt Security. This discussion assumes that the Debt Security is not
subject to the rules of Section 871(h) (4) (A) of the Code (relating to interest
payments that are determined by reference to the income, profits, changes in the
value of property or other attributes of the debtor or a related party). In
addition, solely with respect to United States federal estate tax, the
discussion assumes that the Debt Security had a maturity date, when issued, that
was not less than 184 days from the date of issuance.
     Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below:
     (1) payments of principal, premium (if any) and interest, including OID, by
the Company or any of its paying agents to any holder of a Debt Security that is
a United States Alien Holder will not be subject to United States federal
withholding tax if, in the case of interest or OID, (i) the beneficial owner of
the Debt Security does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled to
vote, (ii) the beneficial owner of the Debt Security is not a controlled foreign
corporation that is related to the Company through stock ownership, and (iii) if
the Debt Security is a Registered Security, either (a) the beneficial owner of
the Debt Security certifies to the Company or its agent, under penalties of
perjury, that it is not a United States Holder and provides its name and address
or (b) a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
(a "financial institution") and holds the Debt Security on behalf of a
beneficial owner certifies to the Company or its agent, under penalties of
perjury, that such statement has been received from the beneficial owner by it
or by a financial institution between it and the beneficial owner and furnishes
the payor with a copy thereof;
                                       20



<PAGE>
     (2) a United States Alien Holder of a Debt Security will not be subject to
United States federal withholding tax on any gain realized on the sale or
exchange of a Debt Security; and
     (3) a Debt Security held by an individual who at death is not a citizen
or resident of the United States will not be includible in the individual's
gross estate for purposes of the United States federal estate tax as a result of
the individual's death if (a) the individual did not actually or constructively
own 10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote and (b) the income on the Debt Security would not
have been effectively connected with a United States trade or business of the
individual at the individual's death.
BEARER DEBT SECURITIES
     The applicable Prospectus Supplement will contain a discussion of any
special United States federal income tax rules with respect to Debt Securities
that are issued as Bearer Securities (including Debt Securities in permanent
global form).
BACKUP WITHHOLDING AND INFORMATION REPORTING
     UNITED STATES HOLDERS
     In general, information reporting requirements will apply to payments of
principal, any premium and interest on a Debt Security and the proceeds of the
sale of a Debt Security before maturity within the United States to, and to the
accrual of OID on a Discount Debt Security with respect to, non-corporate United
States Holders, and "backup withholding" at a rate of 31% will apply to such
payments and to payments of OID if the United States Holder fails to provide an
accurate taxpayer identification number or to report all interest and dividends
required to be shown on its federal income tax returns.
     UNITED STATES ALIEN HOLDERS
     Information reporting and backup withholding will not apply to payments of
principal, premium (if any) and interest (including OID) made by the Company or
a paying agent to a United States Alien Holder on a Registered Security if
either of the certifications described in clause (1) (iii) under "United States
Alien Holders" above is received, provided that the payor does not have actual
knowledge that the holder is a United States person.
     Payments of the proceeds from the sale by a United States Alien Holder of a
Debt Security made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting may apply to such payments. Payments of
the proceeds from the sale of a Debt Security to or through the United States
office of a broker is subject to information reporting and backup withholding
unless the holder or beneficial owner certifies as to its non-United States
status or otherwise establishes an exemption from information reporting and
backup withholding.
                              PLAN OF DISTRIBUTION
     The Company may sell Debt Securities (i) to or through underwriters or
dealers, (ii) through agents, (iii) directly to purchasers, or (iv) through a
combination of any of the foregoing. Any such underwriter, dealer or agent may
be deemed to be an underwriter within the meaning of the Securities Act. Any
Prospectus Supplement relating to Debt Securities will set forth their offering
terms, including the name or names of any underwriters, the purchase price of
the Debt Securities and the proceeds to the Company from such sale, any
underwriting discounts, commissions and other items constituting underwriters'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers, and any securities exchanges on which
the Debt Securities may be listed.
     If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, or at prices related to such
prevailing market prices, or at negotiated prices. The Debt Securities may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more of such firms. Unless
otherwise set forth in the Prospectus Supplement, the obligations of the
underwriters to purchase the Debt Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all the
Debt Securities if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time. Under agreements which may be
                                       21
 


<PAGE>
entered into by the Company, underwriters, dealers and agents who participate in
the distribution of Debt Securities may be entitled to indemnification or
contribution by the Company against certain liabilities, including liabilities
under the Securities Act.
     The specific terms and manner of sale of Debt Securities will be set forth
or summarized in the Prospectus Supplement relating thereto.
     If so indicated in a Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases will be subject to acceptance by the
Company. The obligations of any purchaser under any such contracts will be
subject to the conditions that the purchase of Debt Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other persons will not have any
responsibility in respect of the validity or performance of such contracts.
     Each underwriter and agent participating in the distribution of any Debt
Securities which are issuable in bearer form will agree that it will not offer,
sell or deliver, directly or indirectly, Debt Securities in bearer form in the
United States or to United States persons (other than qualifying financial
institutions) in connection with the original issuance of Debt Securities.
                          VALIDITY OF DEBT SECURITIES
     The validity of the Debt Securities offered hereby will be passed upon for
the Company by McGuire, Woods, Battle & Boothe, L.L.P., One James Center,
Richmond, Virginia 23219, and for the Underwriters by Sullivan & Cromwell, 1701
Pennsylvania Avenue, N.W., Washington, D.C. 20006. Sullivan & Cromwell will rely
as to all matters governed by Virginia law on the opinion of McGuire, Woods,
Battle & Boothe, L.L.P.
                                    EXPERTS
     The consolidated financial statements of Universal Corporation and
Subsidiaries included in Universal Corporation's Annual Report on Form 10-K for
the year ended June 30, 1995 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report included therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
                                       22



<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE COMPANY
OR BY ANY UNDERWRITER TO SELL DEBT SECURITIES IN ANY STATE TO ANY PERSON TO WHOM
IT IS UNLAWFUL FOR THE COMPANY OR SUCH UNDERWRITER TO MAKE SUCH OFFER IN SUCH
STATE. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                       PAGE
<S>                                                    <C>
                     PROSPECTUS
Available Information...............................
Incorporation of Certain Documents by
  Reference.........................................
The Company.........................................
Ratio of Earnings to Fixed Charges..................
Use of Proceeds.....................................
Description of Debt Securities......................
Limitations on Issuance of Euro-Securities..........
Foreign Currency Risks..............................
United States Taxation..............................
Plan of Distribution................................
Validity of Debt Securities.........................
Experts.............................................
</TABLE>


                                  $200,000,000
                          [UNIVERSAL CORPORATION LOGO]
                                DEBT SECURITIES
                                   PROSPECTUS



<PAGE>

                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*

<TABLE>
<S>                                                                                          <C>
SEC registration fee......................................................................   $ 68,966
Accountants' fees and expenses............................................................     45,000
Attorneys' fees and expenses..............................................................     60,000
Printing and engraving expenses...........................................................     20,000
Fees and expenses of trustee..............................................................     15,000
State qualification fees and expenses.....................................................     18,000
Rating agencies' fees.....................................................................    125,000
Miscellaneous.............................................................................      8,034
  Total...................................................................................   $360,000
</TABLE>


* All fees and expenses other than the SEC registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
     Article 10 of the Virginia Stock Corporation Act allows, in general, for
indemnification, in certain circumstances, by a corporation of any person
threatened with or made a party to any action, suit or proceeding by reason of
the fact that he or she is, or was, a director, officer, employee or agent of
such corporation. Indemnification is also authorized with respect to a criminal
action or proceeding where the person had no reasonable cause to believe that
his conduct was unlawful. Article 9 of the Virginia Stock Corporation Act
provides limitations on damages payable by officers and directors, except in
cases of willful misconduct or knowing violation of criminal law or any federal
or state securities law.
     Article VIII of the Company's Restated Articles of Incorporation provides
for mandatory indemnification of any director or officer of the Company who is
or was a party to any proceeding by reason of the fact that he is or was a
director or officer of the Company against all liabilities and expenses incurred
in the proceeding, except such liabilities and expenses as are incurred because
of such director's or officer's willful misconduct or knowing violation of the
criminal law.
     The Company's Restated Articles of Incorporation also provide that in every
instance permitted under Virginia corporate law in effect from time to time, the
liability of a director or officer of the Company to the Company or its
shareholders shall not exceed one dollar.
     The Company maintains a standard policy of officers' and directors'
liability insurance.
     In the Underwriting Agreement, a form of which is filed as Exhibit 1.1
hereto, the Underwriters will agree to indemnify, under certain conditions, the
Company, its directors, certain of its officers and persons who control the
Company within the meaning of the Securities Act against certain liabilities.
ITEM 16. EXHIBITS

<TABLE>
<S>    <C>
*1.1   Proposed form of Underwriting Agreement
 4.1   Indenture dated as of February 1, 1991 between the Company and Chemical Bank, as Trustee, including proposed
       forms of Debt Securities (incorporated by reference to Exhibit 4.1 to Registration Statement No. 33-38586 on
       Form S-3)
 5.1   Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P., as to the validity of the Debt Securities
 8.1   Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P., as to certain tax matters
12.1   Computation of ratio of earnings to fixed charges
23.1   Consent of Ernst & Young LLP
23.2   Consents of McGuire, Woods, Battle & Boothe, L.L.P. (included as part of Exhibits 5.1 and 8.1)
24.1   Power of attorney from officers and directors of the Company signing by an attorney-in-fact
25.1   Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of
       Chemical Bank
</TABLE>


*To be filed by amendment
                                      II-1



<PAGE>
ITEM 17. UNDERTAKINGS
     1. The undersigned registrant hereby undertakes:
          (a) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this registration statement:
             (i) To include any prospectus required by Section 10(a)(3) of the
        Securities Act;
             (ii) To reflect in the prospectus any facts or events arising after
        the effective date of the registration statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in the registration statement. Notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high and of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission pursuant to Rule 424(b) if, in the aggregate, the
        changes in volume and price represent no more than 20 percent change in
        the maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective registration statement;
             (iii) To include any material information with respect to the plan
        of distribution not previously disclosed in the registration statement
        or any material change to such information in the registration
        statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
          (b) That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new registration statement relating to the securities offered therein, and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.
          (c) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.
     2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
     3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
                                      II-2
 


<PAGE>

                                   SIGNATURES
     Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond and Commonwealth of Virginia, on December
15, 1995.
                                         UNIVERSAL CORPORATION
                                         By: /s/       HENRY H. HARRELL
                                                     HENRY H. HARRELL,
                                           CHAIRMAN AND CHIEF EXECUTIVE OFFICER
     Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.

<TABLE>
<S>                                            <C>
 /s/              HENRY H. HARRELL             Chairman and Chief Executive Officer and Director
                  HENRY H. HARRELL               (Principal Executive Officer)

 /s/             HARTWELL H. ROPER             Vice President and Chief Financial Officer
                 HARTWELL H. ROPER               (Principal Financial Officer)

 /s/            WILLIAM J. CORONADO            Controller (Principal Accounting Officer)
                WILLIAM J. CORONADO

 /s/             WILLIAM W. BERRY*             Director
                 WILLIAM W. BERRY

 /s/             RONALD E. CARRIER*            Director
                 RONALD E. CARRIER

 /s/            WALLACE L. CHANDLER*           Director
                WALLACE L. CHANDLER

 /s/         LAWRENCE S. EAGLEBURGER*          Director
             LAWRENCE S. EAGLEBURGER

 /s/         CHARLES H. FOSTER, JR.*           Director
                CHARLES H. FOSTER

 /s/           RICHARD G. HOLDER*              Director
               RICHARD G. HOLDER

 /s/            ALLEN B. KING*                 President and Chief Operating Officer
                ALLEN B. KING                    and Director

</TABLE>

                                      II-3



<PAGE>

<TABLE>
<S>                                           <C>
 /s/           JOHN D. MUNFORD, II*           Director
               JOHN D. MUNFORD, II

 /s/            HUBERT R. STALLARD*           Director
                HUBERT R. STALLARD

 * By: /s/        HENRY H. HARRELL
             HENRY H. HARRELL, PRO SE AND
                 AS ATTORNEY-IN-FACT
</TABLE>


December 15, 1995
                                      II-4



                                 EXHIBIT INDEX


<TABLE>
EXHIBIT
NUMBER                 EXHIBIT
<S>      <C>
*1.1     Proposed form of Underwriting Agreement
 4.1     Indenture dated as of February 1, 1991 between the Company and Chemical Bank, as Trustee, including proposed
         forms of Debt Securities (incorporated by reference to Exhibit 4.1 to Registration Statement No. 33-38586 on
         Form S-3)
 5.1     Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P., as to the validity of the Debt Securities
 8.1     Opinion and consent of McGuire, Woods, Battle & Boothe, L.L.P., as to certain tax matters
12.1     Computation of ratio of earnings to fixed charges
23.1     Consent of Ernst & Young LLP
23.2     Consents of McGuire, Woods, Battle & Boothe, L.L.P. (included as part of Exhibits 5.1 and 8.1)
24.1     Power of attorney from officers and directors of the Company signing by an attorney-in-fact
25.1     Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of
         Chemical Bank
</TABLE>


*To be filed by amendment







<PAGE>
                                                                     EXHIBIT 5.1
                    MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
                                ONE JAMES CENTER
                              901 EAST CARY STREET
                            RICHMOND, VIRGINIA 23219
                               December 15, 1995
Universal Corporation
1501 North Hamilton Street
Richmond, Virginia 23230
Dear Sirs:
     In connection with the Registration Statement on Form S-3 (the
"Registration Statement") being filed by Universal Corporation, a Virginia
corporation (the "Company"), with the Securities and Exchange Commission for the
purpose of registering under the Securities Act of 1933, as amended (the
"Securities Act"), $200,000,000 of the Company's debt securities (the
"Securities"), we have examined such corporate records, certificates and other
documents, and reviewed such questions of law, as we have considered necessary
or appropriate for the purpose of this opinion.
     On the basis of such examination and review, we advise you that, in our
opinion when the Registration Statement has become effective under the
Securities Act, and the Securities have been duly issued and sold in the manner
contemplated by the Registration Statement, and assuming due authentication
thereof by the Trustee or the Authenticating Agent in accordance with the
provisions of the Indenture dated as of February 1, 1991 between the
 Company and
Chemical Bank, as trustee (the "Trustee"), the Securities will constitute valid
and legally binding obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles and except
further as enforcement thereof may be limited by (A) requirements that a claim
with respect to any Securities denominated other than in U.S. dollars (or a
foreign currency or foreign currency unit judgment in respect of such claim) be
converted into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (B) governmental authority to limit,
delay or prohibit the making of payments in foreign currency or currency units
or payments outside the United States.
     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to reference to us under the heading relating to the
validity of the Securities in the Registration Statement (including the
applicable Prospectus Supplement relating to such Securities). We do not admit
by giving this consent that we are in the category of persons whose consent is
required under Section 7 of the Act.
                                     Very truly yours,
                                     /s/ McGuire, Woods, Battle & Boothe, L.L.P.





                                                                     EXHIBIT 8.1
                    MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
                                ONE JAMES CENTER
                              901 EAST CARY STREET
                            RICHMOND, VIRGINIA 23219
                               December 15, 1995
Universal Corporation
1501 North Hamilton Street
Richmond, Virginia 23230
Dear Sirs:
     We have been requested, as your special tax counsel, to render federal tax
advice in connection with the Registration Statement on Form S-3 (the
"Registration Statement") being filed by Universal Corporation, a Virginia
corporation (the "Company"), with the Securities and Exchange Commission for the
purpose of registering under the Securities Act of 1933, as amended (the
"Securities Act"), $200,000,000 of the Company's debt securities.
     We have reviewed the statements set forth in the Registration Statement
under the heading "United States Taxation" and hereby advise you that such
statements, insofar as they are or refer to statements of United States law or
legal conclusions relating thereto, are accurate in all material respects.
     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "United
States Taxation" in the Registration Statement. We do not admit by giving this
consent that we are in the category of persons whose
 consent is required under
Section 7 of the Securities Act.
                                     Very truly yours,
                                     /s/ McGuire, Woods, Battle & Boothe, L.L.P.
 




                                                                    EXHIBIT 12.1
                             UNIVERSAL CORPORATION
                       RATIO OF EARNINGS TO FIXED CHARGES
                           FOR THE PERIODS INDICATED

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED
                                                              SEPT. 30,                     YEAR ENDED JUNE 30,
                                                           1995       1994        1995        1994        1993        1992
<S>                                                       <C>        <C>        <C>         <C>         <C>         <C>
                                                                              (IN THOUSANDS OF DOLLARS)
Pretax income from continuing operations...............   $15,277    $ 6,667    $ 55,768    $ 64,058    $136,104    $122,055
Pretax income of unconsolidated affiliates.............     1,974        800       2,232       3,854       2,005       1,831
Fixed charges..........................................    17,616     17,506      71,147      76,691      67,213      68,513
Earnings...............................................   $34,867    $24,973    $129,147    $144,603    $205,322    $192,399
Interest...............................................   $17,225    $17,244    $ 69,585    $ 75,438    $ 65,468    $ 66,632
Interest of unconsolidated affiliates..................       333        204       1,328       1,031       1,549       1,719
Debt discount amortization.............................        58         58         234         222         196         162
Fixed Charges..........................................   $17,616    $17,506    $ 71,147    $ 76,691    $ 67,213    $ 68,513
Ratio of Earnings to Fixed
  Charges..............................................       2.0        1.4         1.8         1.9         3.1         2.8
<CAPTION>
 
                                                           1991
<S>                                                       <C>
 
Pretax income from continuing operations...............  $ 91,996
Pretax income of unconsolidated affiliates.............     2,096
Fixed charges..........................................    69,531
Earnings...............................................  $163,623
Interest...............................................  $ 68,775
Interest of unconsolidated affiliates..................       671
Debt discount amortization.............................        85
Fixed Charges..........................................  $ 69,531
Ratio of Earnings to Fixed
  Charges..............................................       2.4

</TABLE>






                                                                  EXHIBIT 23.1


               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


We consent to the reference to our firm  under  the  caption  "Experts"  in  the
Registration   Statement   (Form   S-3)  and  related  Prospectus  of  Universal
Corporation for the registration of  $200,000,000  of  Debt  Securities  and  to
the  incorporation  by  reference  therein  of  our report dated August 3, 1995,
with  respect  to   the   consolidated   financial   statements   of   Universal
Corporation  included  in  its  Annual  Report  (Form  10-K)  for the year ended
June  30,  1995,  filed   with   the   Securities   and   Exchange   Commission.


                                  /s/ ERNST & YOUNG LLP
Richmond, Virginia
December 15, 1995






                                                                   EXHIBIT 24.1
                            POWER OF ATTORNEY


     KNOW  ALL  MEN  BY  THESE  PRESENTS  that  the  undersigned  directors  and
officers    of    Universal    Corporation,    a   Virginia   corporation   (the
"Corporation"),  hereby  constitute  and  appoint  each  of  Henry  H.  Harrell,
James  M.  White,  III,  William  L. Taylor and Francis V. Lowden, III, and each
of them acting alone with full power of  substitution,  their  true  and  lawful
attorneys-in-fact  and  agents,  to  sign,  on  behalf  of  the  undersigned,  a
registration statement under  the  Securities  Act  of  1933,  as  amended  (the
"Securities   Act"),   and   any   amendment   or  amendments,  including  post-
effective amendments  thereto  and  any  other  documents  in  support  thereof,
for  the  registration,  under  the  Securities  Act,  of debt securities of the
Corporation and  to  file  the  same,  with  all  exhibits  thereto,  and  other
documents   in   connection   therewith,   with   the  Securities  and  Exchange
Commission, and the undersigned do hereby  ratify  and  confirm  all  that  said
attorneys-in-fact,   each  acting  alone,  or  his  substitute  or  substitutes,
shall do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned have executed this  Power  of  Attorney
this 7th day of December, 1995.


Signature                             Title

/s/ William W. Berry                  Director
- ------------------------------
     William W. Berry



/s/ Ronald E. Carrier                 Director
- ------------------------------
     Ronald E. Carrier


/s/ Wallace L. Chandler               Director
- ------------------------------
     Wallace L. Chandler

/s/ Lawrence S. Eagleburger           Director
- ------------------------------
     Lawrence S. Eagleburger


/s/ Charles H. Foster, Jr.            Director
- ------------------------------
     Charles H. Foster, Jr.

/s/ Henry H. Harrell                  Chairman and Chief Executive Officer
- ------------------------------        and Director (Principal Executive Officer)
     Henry H. Harrell



/s/ Richard G. Holder                 Director
- ------------------------------
     Richard G. Holder

/s/ Allen B. King                     President and Chief Operating Officer
- ------------------------------        and Director
     Allen B. King

/s/ John D. Munford, II               Director
- ------------------------------
     John D. Munford, II


/s/ Hubert R. Stallard                Director
- ------------------------------
     Hubert R. Stallard


/s/ Hartwell H. Roper                 Vice President and Chief Financial
- ------------------------------        Officer (Principal Financial Officer)
     Hartwell H. Roper

/s/ William J. Coronado               Controller (Principal Accounting
- ------------------------------        Officer)
     William J. Coronado
 



                                                             EXHIBIT 25.1

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

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                            -------------------------

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                    UNDER THE TRUST INDENTURE ACT OF 1939 OF
                   A CORPORATION DESIGNATED TO ACT AS TRUSTEE
                   -------------------------------------------
               CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
                A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
                    ----------------------------------------

                                  CHEMICAL BANK
               (Exact name of trustee as specified in its charter)

New York                                                              13-4994650
(State of incorporation                                         (I.R.S. employer
if not a national bank)                                      identification No.)

270 Park Avenue
New York, New York                                                         10017
(Address of principal executive offices)                              (Zip Code)

                               William H. McDavid
                                 General Counsel
                                 270 Park Avenue
                            New York, New York 10017
                               Tel: (212) 270-2611
            (Name, address and telephone number of agent for service)
                  ---------------------------------------------
                              UNIVERSAL CORPORATION
               (Exact name of obligor as specified in its charter)

Virginia                                                              54-0414210
(State or other jurisdiction of                                 (I.R.S. employer
incorporation or organization)                               identification No.)

1501 North Hamilton Street
Richmond, Virginia                                                         23230
(Address of principal executive offices)                              (Zip Code)

                   -------------------------------------------
                                 Debt Securities
                       (Title of the indenture securities)
              ----------------------------------------------------

<PAGE>
                                     GENERAL

Item 1.  General Information.

         Furnish the following information as to the trustee:

         (a)  Name  and  address  of each  examining or supervising authority to
              which it is subject. New  York  State
  Banking  Department,  State
              House,  Albany, New York  12110. Board of Governors of the Federal
              Reserve System, Washington, D.C., 20551 Federal  Reserve  Bank  of
              New   York,   District   No.  2,  33  Liberty  Street,  New  York,
              N.Y. Federal  Deposit  Insurance  Corporation,  Washington,  D.C.,
              20429.

         (b)  Whether it is authorized to exercise corporate trust powers.

              Yes.


Item 2.  Affiliations with the Obligor.

         If the  obligor is an  affiliate  of the  trustee,  describe  each such
affiliation.

         None.




















                                      - 2 -


<PAGE>
Item 16.   List of Exhibits

     List below all exhibits filed as a part of this Statement of Eligibility.

     1. A copy of the Articles of  Association  of the Trustee as now in effect,
including the  Organization  Certificate and the Certificates of Amendment dated
February 17,  1969,  August 31,  1977,  December  31,  1980,  September 9, 1982,
February  28,  1985 and  December  2, 1991  (see  Exhibit 1 to Form T-1 filed in
connection with  Registration  Statement No. 33-50010,  which is incorporated by
reference).

     2. A copy of the  Certificate  of  Authority  of the  Trustee  to  Commence
Business  (see  Exhibit  2 to Form T-1  filed in  connection  with  Registration
Statement No. 33-50010, which is incorporated by reference).

     3. None,  authorization to exercise  corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.

     4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed  in  connection  with  Registration  Statement  No.  33-84460,   which  is
incorporated by reference).

     5. Not applicable.

     6. The  consent of the Trustee  required by Section  321(b) of the Act (see
Exhibit  6 to Form T-1  filed in  connection  with  Registration  Statement  No.
33-50010, which is incorporated by reference).

     7. A copy of the  latest  report of  condition  of the  Trustee,  published
pursuant to law or the requirements of its supervising or examining authority.

     8. Not applicable.

     9. Not applicable.

                                    SIGNATURE

     Pursuant  to the  requirements  of the  Trust  Indenture  Act of 1939,  the
Trustee,  Chemical Bank, a corporation  organized and existing under the laws of
the State of New York,  has duly  caused this  statement  of  eligibility  to be
signed on its behalf by the undersigned,  thereunto duly authorized,  all in the
City of New York and State of New York, on the 11th day of December, 1995.

                                           CHEMICAL BANK


                                           By   /s/P.J. Gilkeson
                                                -----------------------------
                                                  P. J. Gilkeson
                                                  Vice President

                                      - 3 -

<PAGE>
                              Exhibit 7 to Form T-1


                                Bank Call Notice

                             RESERVE DISTRICT NO. 2
                       CONSOLIDATED REPORT OF CONDITION OF

                                  Chemical Bank
                  of 270 Park Avenue, New York, New York 10017
                     and Foreign and Domestic Subsidiaries,
                     a member of the Federal Reserve System,

           at the close of business September 30, 1995, in accordance
          with a call made by the Federal Reserve Bank of this District
             pursuant to the provisions of the Federal Reserve Act.

<TABLE>
<CAPTION>


                                                                       Dollar Amounts
                     ASSETS                                              in Millions

<S>                                                                         <C>
Cash and balances due from depository institutions:
     Noninterest-bearing balances and
     currency and coin ..................................                   $  5,319
     Interest-bearing balances ..........................                      3,591
Securities:  ............................................
Held to maturity securities..............................                      6,402
Available for sale securities............................                     22,966
Federal Funds sold and securities purchased under
     agreements to resell in domestic offices of the
     bank and of its Edge and Agreement subsidiaries,
     and in IBF's:
     Federal funds sold .................................                      1,088
     Securities purchased under agreements to resell ....                      1,015
Loans and lease financing receivables:
     Loans and leases, net of unearned income  $76,064
     Less: Allowance for loan and lease losses   1,878
     Less: Allocated transfer risk reserve ...     104
     Loans and leases, net of unearned income,
     allowance, and reserve .............................                     74,082
Trading Assets ..........................................                     28,967
Premises and fixed assets (including capitalized
     leases).............................................                      1,380
Other real estate owned .................................                         65
Investments in unconsolidated subsidiaries and
     associated companies................................                        160
Customer's liability to this bank on acceptances
     outstanding ........................................                      1,187
Intangible assets .......................................                        467
Other assets ............................................                      6,418
                                                                               -----

TOTAL ASSETS ............................................                   $153,107
                                                                           =========
</TABLE>














                                      - 4 -

<PAGE>

<TABLE>
<CAPTION>

                                   LIABILITIES

<S>                                                                          <C>
Deposits
     In domestic offices ................................                    $44,067
     Noninterest-bearing .........................$14,227
     Interest-bearing ............................ 29,840
     In foreign offices, Edge and Agreement subsidiaries,
     and IBF's ..........................................                     37,004
Noninterest-bearing ..............................$   173
     Interest-bearing ............................ 36,831

Federal funds  purchased and securities  sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBF's
     Federal funds purchased ............................                     16,136
     Securities sold under agreements to repurchase .....                      1,274
Demand notes issued to the U.S. Treasury ................                        903
Trading liabilities .....................................                     22,513
Other Borrowed money:
     With original maturity of one year or less .........                     11,674
With original maturity of more than one year ............                        613
Mortgage indebtedness and obligations under capitalized
     leases .............................................                         16
Bank's liability on acceptances executed and outstanding                       1,190
Subordinated notes and debentures .......................                      3,411
Other liabilities .......................................                      6,333

TOTAL LIABILITIES .......................................                    145,134
                                                                             -------
</TABLE>


<TABLE>
<CAPTION>


                                 EQUITY CAPITAL
<S>                                                                         <C>
Common stock ............................................                        620
Surplus .................................................                      4,611
Undivided profits and capital reserves ..................                      2,890
Net unrealized holding gains (Losses)
on available-for-sale securities ........................                       (156)
Cumulative foreign currency translation adjustments .....                          8

TOTAL EQUITY CAPITAL ....................................                      7,973
                                                                              ------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
     STOCK AND EQUITY CAPITAL ...........................                   $153,107
                                                                          ==========
</TABLE>


I, Joseph L. Sclafani,  S.V.P. & Controller of the  above-named  bank, do hereby
declare that this Report of Condition has been prepared in conformance  with the
instructions issued by the appropriate Federal regulatory  authority and is true
to the best of my knowledge and belief.

                               JOSEPH L. SCLAFANI


We, the  undersigned  directors,  attest to the  correctness  of this  Report of
Condition  and declare  that it has been  examined by us, and to the best of our
knowledge  and belief has been  prepared in  conformance  with the  instructions
issued by the appropriate Federal regulatory authority and is true and correct.


                                    WALTER V. SHIPLEY       )
                                    EDWARD D. MILLER        )DIRECTORS
                                    WILLIAM B. HARRISON     )



                                      - 5 -