COLONIAL REALTY LIMITED PARTNERSHIP
424B3, 1999-08-24
REAL ESTATE INVESTMENT TRUSTS
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<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY 8, 1998)

                                  $370,000,000
                      COLONIAL REALTY LIMITED PARTNERSHIP
                               MEDIUM-TERM NOTES
                   DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
                             ---------------------

    Colonial Realty Limited Partnership (the "Company") may offer from time to
time up to $370,000,000 aggregate initial offering price, or the equivalent
thereof in one or more foreign or composite currencies, of its Medium-Term Notes
Due Nine Months or More From Date of Issue (the "Notes"). Such aggregate initial
offering price is subject to reduction as a result of the sale by the Company of
other Debt Securities described in the accompanying Prospectus. Each Note will
mature on any day nine months or more from the date of issue, as specified in
the applicable pricing supplement hereto (each, a "Pricing Supplement"), and may
be subject to redemption at the option of the Company or repayment at the option
of the Holder thereof, in each case, in whole or in part, prior to its Stated
Maturity Date, or the Stated Maturity Date may be extended, if specified in the
applicable Pricing Supplement. In addition, each Note will be denominated and/or
payable in United States dollars or a foreign or composite currency, as
specified in the applicable Pricing Supplement. The Notes, other than Foreign
Currency Notes, will be issued in minimum denominations of $1,000 and integral
multiples thereof, unless otherwise specified in the applicable Pricing
Supplement, while Foreign Currency Notes will be issued in the minimum
denominations specified in the applicable Pricing Supplement.

    The Company may issue Notes that bear interest at fixed rates ("Fixed Rate
Notes") or at floating rates ("Floating Rate Notes"). The applicable Pricing
Supplement will specify whether a Floating Rate Note is a Regular Floating Rate
Note, a Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note and
whether the rate of interest thereon is determined by reference to one or more
of the CD Rate, the CMT Rate, the Commercial Paper Rate, the Eleventh District
Cost of Funds Rate, the Federal Funds Rate, LIBOR, the Prime Rate or the
Treasury Rate (each, an "Interest Rate Basis"), or any other interest rate basis
or formula, as adjusted by any Spread and/or Spread Multiplier. Interest on each
Floating Rate Note will accrue from its date of issue and, unless otherwise
specified in the applicable Pricing Supplement, will be payable monthly,
quarterly, semiannually or annually in arrears, as specified in the applicable
Pricing Supplement, and on the Maturity Date. Unless otherwise specified in the
applicable Pricing Supplement, the rate of interest on each Floating Rate Note
will be reset daily, weekly, monthly, quarterly, semiannually or annually, as
specified in the applicable Pricing Supplement. Interest on each Fixed Rate Note
will accrue from its date of issue and, unless otherwise specified in the
applicable Pricing Supplement, will be payable semiannually in arrears on June
15 and December 15 of each year and on the Maturity Date. The Company may also
issue Discount Notes, Indexed Notes and Amortizing Notes.

    The interest rate, or formula for the determination of the interest rate, if
any, applicable to each Note and the other variable terms thereof will be
established by the Company on the date of issue of such Note and will be
specified in the applicable Pricing Supplement. Interest rates or formulas and
other terms of Notes are subject to change by the Company, but no such change
will affect any Note previously issued or as to which an offer to purchase has
been accepted by the Company.

    Each Note will be issued in book-entry form (a "Book-Entry Note") or in
fully registered certificated form (a "Certificated Note"), as specified in the
applicable Pricing Supplement. Each Book-Entry Note will be represented by one
or more fully registered global securities (the "Global Securities") deposited
with or on behalf of The Depository Trust Company (or such other depositary
identified in the applicable Pricing Supplement) (the "Depositary") and
registered in the name of the Depositary or the Depositary's nominee. Interests
in the Global Securities will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary (with respect to its
participants) and the Depositary's participants (with respect to beneficial
owners). Except in limited circumstances, Book-Entry Notes will not be
exchangeable for Certificated Notes.

    SEE "RISK FACTORS" COMMENCING ON PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT AND
PAGE 3 OF THE ACCOMPANYING PROSPECTUS FOR A DISCUSSION OF CERTAIN RISKS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES OFFERED
HEREBY.
                            ------------------------
 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
     EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
           PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
          SUPPLEMENT, THE PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY
            REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
                                               PRICE TO            AGENTS' DISCOUNTS              PROCEEDS TO
                                               PUBLIC(1)         AND COMMISSIONS(1)(2)           COMPANY(1)(3)
<S>                                      <C>                    <C>                       <C>
Per Note...............................          100%                 .125%-.750%               99.250%-99.875%
Total(4)...............................      $370,000,000         $462,500-$2,775,000      $367,225,000-$369,537,500
</TABLE>

(1) Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
    Lehman Brothers Inc., J.P. Morgan Securities Inc. and UBS Securities LLC
    (the "Agents"), individually or in a syndicate, may purchase Notes, as
    principal, from the Company for resale to investors and other purchasers at
    varying prices relating to prevailing market prices at the time of resale as
    determined by the applicable Agent or, if so specified in the applicable
    Pricing Supplement, for resale at a fixed offering price. Unless otherwise
    specified in the applicable Pricing Supplement, any Note sold to an Agent as
    principal will be purchased by such Agent at a price equal to 100% of the
    principal amount thereof less a percentage of the principal amount equal to
    the commission applicable to an agency sale (as described below) of a Note
    of identical maturity. If agreed to by the Company and an Agent, such Agent
    may utilize its reasonable efforts on an agency basis to solicit offers to
    purchase the Notes at 100% of the principal amount thereof, unless otherwise
    specified in the applicable Pricing Supplement. The Company will pay a
    commission to an Agent, ranging from .125% to .750% of the principal amount
    of a Note, depending upon its stated maturity, sold through an Agent.
    Commissions with respect to Notes with stated maturities in excess of 30
    years that are sold through such Agent will be negotiated between the
    Company and such Agent at the time of such sale. See "Plan of Distribution."

(2) The Company has agreed to indemnify the Agents against, and to provide
    contribution with respect to, certain liabilities, including liabilities
    under the Securities Act of 1933, as amended. See "Plan of Distribution."

(3) Before deducting expenses payable by the Company estimated at $510,000.

(4) Or the equivalent thereof in one or more foreign or composite currencies.
                       ----------------------------------

    The Notes are being offered on a continuing basis by the Company to or
through the Agents. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will not be listed on any securities exchange. There is no
assurance that the Notes offered hereby will be sold or, if sold, that there
will be a secondary market for the Notes or liquidity in the secondary market if
one develops. The Company reserves the right to cancel or modify the offer made
hereby without notice. The Company or an Agent, if it solicits the offer on an
agency basis, may reject any offer to purchase Notes in whole or in part. See
"Plan of Distribution."
                       ----------------------------------

MERRILL LYNCH & CO.

                LEHMAN BROTHERS

                                J.P. MORGAN & CO.

                                                 UBS SECURITIES
                       ----------------------------------

           The date of this Prospectus Supplement is August 4, 1999.
<PAGE>
    IN CONNECTION WITH AN OFFERING OF NOTES PURCHASED BY ONE OR MORE AGENTS AS
PRINCIPAL ON A FIXED OFFERING PRICE BASIS, SUCH AGENT(S) MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

                                      S-2
<PAGE>
                                  RISK FACTORS

    THIS PROSPECTUS SUPPLEMENT DOES NOT DESCRIBE ALL OF THE RISKS OF AN
INVESTMENT IN NOTES, WHETHER RESULTING FROM SUCH NOTES BEING DENOMINATED OR
PAYABLE IN OR DETERMINED BY REFERENCE TO A CURRENCY OR COMPOSITE CURRENCY OTHER
THAN UNITED STATES DOLLARS OR TO ONE OR MORE INTEREST RATE, CURRENCY OR OTHER
INDICES OR FORMULAS, OR OTHERWISE. THE COMPANY AND THE AGENTS DISCLAIM ANY
RESPONSIBILITY TO ADVISE PROSPECTIVE INVESTORS OF SUCH RISKS AS THEY EXIST AT
THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS THEY CHANGE FROM TIME TO TIME.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS
TO THE RISKS ENTAILED BY AN INVESTMENT IN SUCH NOTES AND THE SUITABILITY OF
INVESTING IN SUCH NOTES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES. THE NOTES
ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH
RESPECT TO FOREIGN CURRENCY TRANSACTIONS OR TRANSACTIONS INVOLVING THE
APPLICABLE INTEREST RATE OR CURRENCY INDEX OR OTHER INDICES OR FORMULAS.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, AMONG OTHER FACTORS, INCLUDING
THOSE DESCRIBED IN THE ACCOMPANYING PROSPECTUS UNDER THE HEADING "RISK FACTORS,"
THE MATTERS DESCRIBED BELOW.

STRUCTURE RISKS

    An investment in Notes indexed, as to principal, premium, if any, and/or
interest, if any, to one or more interest rate, currency (including exchange
rates and swap indices between currencies or composite currencies) or other
indices or formulas, either directly or inversely, entails significant risks
that are not associated with similar investments in a conventional fixed rate or
floating rate debt security. Such risks include, without limitation, the
possibility that such indices or formulas may be subject to significant changes,
that no interest will be payable in respect of such Notes or will be payable at
a rate lower than one applicable to a conventional fixed rate or floating rate
debt security issued by the Company at the same time, that repayment of the
principal and/or premium, if any, in respect of such Notes may occur at times
other than that expected by the Holders (as defined in the accompanying
Prospectus), and that the Holders could lose all or a substantial portion of
principal and/or premium, if any, payable with respect to such Notes on the
Maturity Date (as defined under "Description of Notes--General"). Such risks
depend on a number of interrelated factors, including economic, financial and
political events, over which the Company has no control. Additionally, if the
formula used to determine the amount of principal, premium, if any, and/or
interest, if any, payable with respect to such Notes contains a multiplier or
leverage factor, the effect of any change in the applicable index or indices or
formula or formulas will be magnified. In recent years, values of certain
indices and formulas have been highly volatile and such volatility may be
expected to continue in the future. Fluctuations in the value of any particular
index or formula that have occurred in the past are not necessarily indicative,
however, of fluctuations that may occur in the future.

    Any optional redemption feature of Notes might affect the market value of
such Notes. Since the Company may be expected to redeem such Notes when
prevailing interest rates are relatively low, Holders generally will not be able
to reinvest the redemption proceeds in a comparable security at an effective
interest rate as high as the current interest rate on such Notes.

    The Notes will not have an established trading market when issued, and there
can be no assurance of a secondary market for the Notes or the liquidity of the
secondary market if one develops. See "Plan of Distribution."

    The secondary market, if any, for Notes will be affected by a number of
factors independent of the creditworthiness of the Company and the value of the
applicable index or indices or formula or formulas, including the complexity and
volatility of each such index or formula, the method of calculating the
principal, premium, if any, and/or interest, if any, in respect of such Notes,
the time remaining to the maturity of such Notes, the outstanding amount of such
Notes, any redemption features of such Notes, the amount of other debt
securities linked to such index or formula and the level, direction and
volatility of market interest rates generally. Such factors also will affect the
market value of such Notes. In addition, certain Notes may be designed for
specific investment objectives or strategies and, therefore, may have a more
limited secondary market and experience more price volatility than conventional
debt securities.

                                      S-3
<PAGE>
Holders may not be able to sell such Notes readily or at prices that will enable
them to realize their anticipated yield. No investor should purchase Notes
unless such investor understands and is able to bear the risk that such Notes
may not be readily saleable, that the value of such Notes will fluctuate over
time and that such fluctuations may be significant.

EXCHANGE RATES AND EXCHANGE CONTROLS

    An investment in Foreign Currency Notes (as defined under "Description of
Notes--General") entails significant risks that are not associated with a
similar investment in a debt security denominated and payable in United States
dollars. Such risks include, without limitation, the possibility of significant
changes in the rate of exchange between the United States dollar and the
Specified Currency (as defined under "Description of Notes--General") and the
possibility of the imposition or modification of exchange controls by the
applicable governments or monetary authorities. Such risks generally depend on
factors over which the Company has no control, such as economic, financial and
political events and the supply and demand for the Specified Currency. In
addition, if the formula used to determine the amount of principal, premium, if
any, and/or interest, if any, payable with respect to Foreign Currency Notes
contains a multiplier or leverage factor, the effect of any change in the
applicable currencies or composite currencies will be magnified. In recent
years, rates of exchange between the United States dollar and certain foreign or
composite currencies have been highly volatile and such volatility may be
expected to continue in the future. Fluctuations in any particular exchange rate
that have occurred in the past are not necessarily indicative, however, of
fluctuations that may occur in the future. Depreciation of the Specified
Currency applicable to a Foreign Currency Note against the United States dollar
would result in a decrease in the United States dollar-equivalent yield of such
Foreign Currency Note, in the United States dollar-equivalent value of the
principal and premium, if any, payable on the Maturity Date of such Foreign
Currency Note, and, generally, in the United States dollar-equivalent market
value of such Foreign Currency Note.

    Governments or monetary authorities have imposed from time to time, and may
in the future impose or revise, exchange controls at or prior to the date on
which any payment of principal of, or premium, if any, or interest, if any, on,
a Foreign Currency Note is due, which could affect exchange rates as well as the
availability of the Specified Currency on such date. Even if there are no
exchange controls, it is possible that the Specified Currency would not be
available on the applicable payment date due to other circumstances beyond the
control of the Company. In such cases, the Company will be entitled to satisfy
its obligations in respect of such Foreign Currency Note in United States
dollars. See "Special Provisions Relating to Foreign Currency
Notes--Availability of Specified Currency."

CREDIT RATINGS

    The credit ratings assigned to the Company's medium-term note program may
not reflect the potential impact of all risks related to structure and other
factors on the value of the Notes. Accordingly, prospective investors should
consult their own financial and legal advisors as to the risks entailed by an
investment in the Notes and the suitability of investing in such Notes in light
of their particular circumstances.

                              DESCRIPTION OF NOTES

    The Notes will be issued as a series of Debt Securities under an Indenture,
dated as of July 22, 1996, as amended or modified from time to time (the
"Indenture"), between the Company and Bankers Trust Company, as trustee (the
"Trustee"). The Indenture is subject to, and governed by, the Trust Indenture
Act of 1939, as amended. The following summary of certain provisions of the
Notes and the Indenture does not purport to be complete and is qualified in its
entirety by reference to the actual provisions of the Notes and the Indenture.
Capitalized terms used but not defined herein shall have the meanings given to
them in the accompanying Prospectus, the Notes or the Indenture, as the case may
be. The term "Debt Securities," as

                                      S-4
<PAGE>
used in this Prospectus Supplement, refers to all debt securities, including the
Notes, issued and issuable from time to time under the Indenture. The following
description of the Notes supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of the Debt
Securities set forth in the Prospectus, to which reference is hereby made. The
following description of Notes will apply to each Note offered hereby unless
otherwise specified in the applicable Pricing Supplement. The variable terms of
the Notes sold pursuant to any Pricing Supplement will be described therein.

GENERAL

    All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be unsecured general obligations of the Company and will rank
PARI PASSU with all other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding. No partner of the Company, including the
Company's general partner, will have any liability with respect to the Notes or
the Indenture. The Indenture does not limit the aggregate initial offering price
of Debt Securities that may be issued thereunder, and Debt Securities may be
issued thereunder from time to time in one or more series up to the aggregate
initial offering price from time to time authorized by the Company for each
series. The Company may, from time to time, without the consent of the Holders
of the Notes, provide for the issuance of Notes or other Debt Securities under
the Indenture in addition to the $370,000,000 aggregate initial offering price
of Notes offered hereby.

    The Notes will be offered on a continuing basis by the Company to or through
the Agents and are currently limited to up to $370,000,000 aggregate initial
offering price, or the equivalent thereof in one or more foreign or composite
currencies. Each Note will mature on any day nine months or more from its date
of issue (the "Stated Maturity Date"), as specified in the applicable Pricing
Supplement, unless the principal thereof (or any installment of principal
thereof) becomes due and payable prior to the Stated Maturity Date, whether by
the declaration of acceleration of maturity, notice of redemption at the option
of the Company, notice of the Holder's option to elect repayment or otherwise,
or if the maturity of the Note is extended in accordance with its terms (the
Stated Maturity Date or such prior or later date, as the case may be, is herein
referred to as the "Maturity Date" with respect to the principal of such Note
repayable on such date). A Pricing Supplement will specify whether the Stated
Maturity Date may be extended by the Company and, if so, the Final Maturity Date
(as hereinafter defined). Unless otherwise specified in the applicable Pricing
Supplement, interest-bearing Notes will either be Fixed Rate Notes or Floating
Rate Notes, as specified in the applicable Pricing Supplement. The Company may
also issue Discount Notes, Indexed Notes and Amortizing Notes (as such terms are
hereinafter defined).

    Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be denominated in, and payments of principal, premium, if any, and/or
interest, if any, in respect thereof will be made in, United States dollars. The
Notes also may be denominated in, and payments of principal, premium, if any,
and/or interest, if any, in respect thereof may be made in, one or more foreign
or composite currencies ("Foreign Currency Notes"). See "Special Provisions
Relating to Foreign Currency Notes--Payment of Principal, Premium, if any, and
Interest, if any." The currency or composite currency in which a particular Note
is denominated (or, if such currency or composite currency is no longer legal
tender for the payment of public and private debts, such other currency or
composite currency of the relevant country which is then legal tender for the
payment of such debts) is herein referred to as the "Specified Currency" with
respect to such Note. References herein to "United States dollars," "U.S.
dollars" or "$" are to the lawful currency of the United States of America (the
"United States").

    Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for the Notes in the applicable Specified Currencies. At the
present time, there are limited facilities in the United States for the
conversion of United States dollars into foreign or composite currencies and
vice versa, and commercial banks do not generally offer non-United States dollar
checking or savings account facilities in the United States. The Agent from or
through which a Foreign Currency Note is purchased will

                                      S-5
<PAGE>
be prepared to arrange for the conversion of United States dollars into the
Specified Currency in order to enable the purchaser to pay for such Foreign
Currency Note, provided that a request is made to such Agent on or prior to the
fifth Business Day (as hereinafter defined) preceding the date of delivery of
such Foreign Currency Note, or by such other day as determined by such Agent.
Each such conversion will be made by such Agent on such terms and subject to
such conditions, limitations and charges as such Agent may from time to time
establish in accordance with its regular foreign exchange practices. All costs
of exchange will be borne by the purchaser of each such Foreign Currency Note.
See "Special Provisions Relating to Foreign Currency Notes."

    Interest rates offered by the Company with respect to the Notes may differ
depending upon, among other factors, the aggregate principal amount of Notes
purchased in any single transaction. Notes with different variable terms other
than interest rates may also be offered concurrently to different investors.
Interest rates or formulas and other terms of Notes are subject to change by the
Company from time to time, but no such change will affect any Note previously
issued or as to which an offer to purchase has been accepted by the Company.

    Each Note will be issued as a Book-Entry Note represented by one or more
fully registered Global Securities or as a fully registered Certificated Note.
The minimum denominations of each Note other than a Foreign Currency Note will
be $1,000 and integral multiples thereof, unless otherwise specified in the
applicable Pricing Supplement, while the minimum denominations of each Foreign
Currency Note will be specified in the applicable Pricing Supplement.

    Payments of principal of, and premium, if any, and interest, if any, on,
Book-Entry Notes will be made by the Company through the Trustee to the
Depositary. See "--Book-Entry Notes." In the case of Certificated Notes, payment
of principal and premium, if any, due on the Maturity Date will be made in
immediately available funds upon presentation and surrender thereof (and, in the
case of any repayment on an Optional Repayment Date specified in the applicable
Pricing Supplement, upon submission of a duly completed election form in
accordance with the provisions described below) at the office or agency
maintained by the Company for such purpose in the Borough of Manhattan, The City
of New York, currently the corporate trust office of the Trustee located at Four
Albany Street, New York, New York 10006. Payment of interest, if any, due on the
Maturity Date of a Certificated Note will be made to the person to whom payment
of the principal thereof and premium, if any, thereon shall be made. Payment of
interest, if any, due on a Certificated Note on any Interest Payment Date (as
hereinafter defined) other than the Maturity Date will be made by check mailed
to the address of the Holder entitled thereto as such address shall appear in
the Security Register of the Company at the close of business on the Record Date
(as hereinafter defined). Notwithstanding the foregoing, a Holder of $10,000,000
(or, if the Specified Currency is other than United States dollars, the
equivalent thereof in such Specified Currency) or more in aggregate principal
amount of Certificated Notes (whether having identical or different terms and
provisions) will be entitled to receive interest payments, if any, on any
Interest Payment Date other than the Maturity Date by wire transfer of
immediately available funds if appropriate wire transfer instructions have been
received in writing by the Trustee not less than 15 days prior to such Interest
Payment Date. Any such wire transfer instructions received by the Trustee shall
remain in effect until revoked by such Holder. For special payment terms
applicable to Foreign Currency Notes, see "Special Provisions Relating to
Foreign Currency Notes--Payment of Principal, Premium, if any, and Interest, if
any."

    As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that, with respect to Foreign Currency
Notes, such day is also not a day on which banking institutions are authorized
or required by law, regulation or executive order to close in the Principal
Financial Center (as hereinafter defined) of the country issuing the Specified
Currency (unless the Specified Currency is European Currency Units ("ECU"), in
which case such day is also not a day that appears as an ECU non-settlement day
on the display designated as "ISDE" on the Reuter Monitor Money Rates Service
(or is not a day designated as

                                      S-6
<PAGE>
an ECU non-settlement day by the ECU Banking Association) or, if ECU
non-settlement days do not appear on that page (and are not so designated), a
day that is not a day on which payments in ECU cannot be settled in the
international interbank market); provided, further, that, with respect to Notes
as to which LIBOR is an applicable Interest Rate Basis, such day is also a
London Business Day (as hereinafter defined). "London Business Day" means a day
on which dealings in the Designated LIBOR Currency (as hereinafter defined) are
transacted in the London interbank market.

    "Principal Financial Center" means (i) the capital city of the country
issuing the Specified Currency (except as described in the immediately preceding
paragraph with respect to ECU) or (ii) the capital city of the country to which
the Designated LIBOR Currency, if applicable, relates (or, in the case of ECU,
Luxembourg), except, in each case, that with respect to United States dollars,
Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian
lire and Swiss francs, the "Principal Financial Center" shall be The City of New
York, Sydney, Toronto, Frankfurt, Amsterdam, Milan (solely in the case of clause
(i) above) and Zurich, respectively.

    Book-Entry Notes may be transferred or exchanged only through the
Depositary. See "--Book-Entry Notes." Registration of transfer or exchange of
Certificated Notes will be made at the office or agency maintained by the
Company for such purpose in the Borough of Manhattan, The City of New York,
currently the corporate trust office of the Trustee located at Four Albany
Street, New York, New York 10006. No service charge will be made by the Company
or the Trustee for any such registration of transfer or exchange of Notes, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith (other than
exchanges pursuant to the Indenture not involving any transfer).

    The defeasance and covenant defeasance provisions contained in the Indenture
shall apply to the Notes.

REDEMPTION AT THE OPTION OF THE COMPANY

    Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund. The Notes will be redeemable at the
option of the Company prior to the Stated Maturity Date only if an Initial
Redemption Date is specified in the applicable Pricing Supplement. If so
specified, the Notes will be subject to redemption at the option of the Company
on any date on and after the applicable Initial Redemption Date in whole or from
time to time in part in increments of $1,000 or such other minimum denomination
specified in such Pricing Supplement (provided that any remaining principal
amount thereof shall be at least $1,000 or such minimum denomination), at the
applicable Redemption Price (as hereinafter defined), together with unpaid
interest accrued thereon to the date of redemption, on written notice given to
the Holders thereof not more than 60 nor less than 30 calendar days prior to the
date of redemption in accordance with the provisions of the Indenture.
"Redemption Price," with respect to a Note, means an amount equal to the Initial
Redemption Percentage specified in the applicable Pricing Supplement (as
adjusted by the Annual Redemption Percentage Reduction, if applicable)
multiplied by the unpaid principal amount to be redeemed. The Initial Redemption
Percentage, if any, applicable to a Note shall decline at each anniversary of
the Initial Redemption Date by an amount equal to the applicable Annual
Redemption Percentage Reduction, if any, until the Redemption Price is equal to
100% of the unpaid principal amount to be redeemed. For a discussion of the
redemption of Discount Notes, see "--Discount Notes."

                                      S-7
<PAGE>
EXTENSION OF MATURITY

    The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity Date of such Note for one
or more periods of from one to five whole years (each an "Extension Period") up
to but not beyond the date (the "Final Maturity Date") set forth in such Pricing
Supplement.

    The Company may exercise such option with respect to a Note by notifying the
Trustee of such exercise not more than 60 nor less than 45 calendar days prior
to the Stated Maturity Date of such Note or, if the maturity of such Note has
been previously extended, the date of maturity in effect prior to the exercise
of such option (the "Original Maturity Date"). If the Company so notifies the
Trustee of such exercise, the Trustee will send not later than 40 calendar days
prior to the Original Maturity Date, by telegram, telex, facsimile transmission,
hand delivery or letter (first class, postage prepaid), to the Holder of such
Note a notice (the "Extension Notice") relating to such Extension Period,
indicating (i) that the Company has elected to extend the Original Maturity Date
of such Note, (ii) the new date of maturity of such Note specified in the
Extension Notice, (iii) in the case of a Fixed Rate Note, the interest rate
applicable to such Extension Period or, in the case of a Floating Rate Note, the
Spread and/or Spread Multiplier applicable to the Extension Period, and (iv) the
provisions, if any, for redemption at the option of the Company during the
Extension Period, including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
the Extension Period. Upon the sending by the Trustee of an Extension Notice to
the Holder of a Note, the Original Maturity Date of such Note will be extended
automatically, and, except as modified by the Extension Notice and as described
in the next two paragraphs, such Note will continue to bear the same terms in
effect prior to the sending of such Extension Notice.

    Notwithstanding the foregoing, not later than 20 calendar days prior to the
Original Maturity Date for a Note, the Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, specified in the Extension
Notice and establish a higher interest rate, in the case of a Fixed Rate Note,
or a Spread and/or Spread Multiplier resulting in a higher interest rate, in the
case of a Floating Rate Note, for the Extension Period by causing the Trustee to
send by telegram, telex, facsimile transmission, hand delivery or letter (first
class, postage prepaid) notice of such higher interest rate or Spread and/or
Spread Multiplier resulting in a higher interest rate, as the case may be, to
the Holder of such Note. Such notice will be irrevocable. All Notes with respect
to which the Original Maturity Date is extended will bear such higher interest
rate, in the case of a Fixed Rate Note, or Spread and/or Spread Multiplier
resulting in a higher interest rate, in the case of a Floating Rate Note, for
the Extension Period, whether or not tendered for repayment as provided in the
next paragraph.

    If the Company extends the Original Maturity Date of a Note, the Holder of
such Note will have the option to elect repayment of such Note, in whole but not
in part, by the Company on the Original Maturity Date at a price equal to the
principal amount thereof plus unpaid interest accrued to the date of repayment.
In order for a Note to be so repaid on the Original Maturity Date, the Holder of
such Note must follow the procedures set forth below under "--Repayment at the
Option of the Holder" for optional repayment, except that the period for
delivery of such Note or notification to the Trustee will be not more than 35
nor less than 25 calendar days prior to the Original Maturity Date. A Holder who
has tendered a Note for repayment following receipt of an Extension Notice may
revoke such tender for repayment by written notice to the Trustee received prior
to 5:00 P.M., New York City time, on the tenth calendar day prior to the
Original Maturity Date.

REPAYMENT AT THE OPTION OF THE HOLDER

    The Notes will be repayable by the Company at the option of the Holders
thereof prior to the Stated Maturity Date only if one or more Optional Repayment
Dates are specified in the applicable Pricing

                                      S-8
<PAGE>
Supplement. If so specified, the Notes will be subject to repayment at the
option of the Holders thereof on any Optional Repayment Date in whole or from
time to time in part in increments of $1,000 or such other minimum denomination
specified in the applicable Pricing Supplement (provided that any remaining
principal amount thereof shall be at least $1,000 or such other minimum
denomination), at a repayment price equal to 100% of the unpaid principal amount
to be repaid, together with unpaid interest accrued thereon to the date of
repayment, unless such Note is a Discount Note, in which case the Pricing
Supplement will specify the amount payable upon such repayment. For any Note to
be repaid, the Trustee must receive at its office maintained for such purpose in
the Borough of Manhattan, The City of New York (currently the corporate trust
office of the Trustee located at Four Albany Street, New York, New York 10006),
not more than 60 nor less than 30 calendar days prior to the date of repayment,
(i) such Note, together with the form thereon entitled "Option to Elect
Repayment" duly completed or (ii) a telegram, telex, facsimile transmission, or
a letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the holder of such Note, the
principal amount of such Note, the principal amount of such Note to be repaid,
the certificate number or a description of the tenor and terms of such Note, a
statement that the option to elect repayment is being exercised thereby, and a
guarantee that such Note, together with the duly completed form entitled "Option
to Elect Repayment" on the reverse of such Note, in either case, will be
received by the Trustee not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter, provided that such
telegram, telex, facsimile transmission, or letter shall only be effective if
such Note and form duly completed are received by the Trustee by such fifth
Business Day. Except in the case of Extendible Notes, and unless otherwise
specified in the applicable Pricing Supplement, exercise of such repayment
option by the Holder will be irrevocable.

    Only the Depositary may exercise the repayment option in respect of Global
Securities representing Book-Entry Notes. Accordingly, Beneficial Owners (as
hereinafter defined) of Global Securities that desire to have all or any portion
of the Book-Entry Notes represented by such Global Securities repaid must
instruct the Participant (as hereinafter defined) through which they own their
interest to direct the Depositary to exercise the repayment option on their
behalf by delivering the related Global Security and duly completed election
form to the Trustee as aforesaid. In order to ensure that such Global Security
and election form are received by the Trustee on a particular day, the
applicable Beneficial Owner must so instruct the Participant through which it
owns its interest before such Participant's deadline for accepting instructions
for that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, Beneficial Owners should consult
the Participants through which they own their interest for the respective
deadlines for such Participants. All instructions given to Participants from
Beneficial Owners of Global Securities relating to the option to elect repayment
shall be irrevocable. In addition, at the time such instructions are given, each
such Beneficial Owner shall cause the Participant through which it owns its
interest to transfer such Beneficial Owner's interest in the Global Security or
Securities representing the related Book-Entry Notes, on the Depositary's
records, to the Trustee. See "--Book-Entry Notes."

    If applicable, the Company will comply with the requirements of Section
14(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules promulgated thereunder, and any other securities laws or
regulations in connection with any such repayment.

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

                                      S-9
<PAGE>
INTEREST

    GENERAL

    Unless otherwise specified in the applicable Pricing Supplement, each
interest-bearing Note will bear interest from its date of issue at the rate per
annum, in the case of a Fixed Rate Note, or pursuant to the interest rate
formula, in the case of a Floating Rate Note, in each case as specified in the
applicable Pricing Supplement, except as described above under "--Extension of
Maturity," until the principal thereof is paid or duly made available for
payment. Unless otherwise specified in the applicable Pricing Supplement,
interest payments in respect of Fixed Rate Notes and Floating Rate Notes will be
made in an amount equal to the interest accrued from and including the
immediately preceding Interest Payment Date in respect of which interest has
been paid or duly made available for payment (or from and including the date of
issue, if no interest has been paid or duly made available for payment) to but
excluding the applicable Interest Payment Date or the Maturity Date, as the case
may be (each, an "Interest Period").

    Interest on Fixed Rate Notes and Floating Rate Notes will be payable in
arrears on each Interest Payment Date and on the Maturity Date. Unless otherwise
specified in the applicable Pricing Supplement, the first payment of interest on
any such Note originally issued between a Record Date (as hereinafter defined)
and the related Interest Payment Date will be made on the Interest Payment Date
immediately following the next succeeding Record Date to the Holder on such next
succeeding Record Date. Unless otherwise specified in the applicable Pricing
Supplement, a "Record Date" shall be the fifteenth calendar day (whether or not
a Business Day) immediately preceding the related Interest Payment Date.

    FIXED RATE NOTES

    Interest on Fixed Rate Notes will be payable on June 15 and December 15 of
each year or on such other date(s) specified in the applicable Pricing
Supplement (each, an "Interest Payment Date" with respect to Fixed Rate Notes)
and on the Maturity Date. Unless otherwise specified in the applicable Pricing
Supplement, interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months.

    If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls
on a day that is not a Business Day, the required payment of principal, premium,
if any, and/or interest will be made on the next succeeding Business Day as if
made on the date such payment was due, and no interest will accrue on such
payment for the period from and after such Interest Payment Date or the Maturity
Date, as the case may be, to the date of such payment on the next succeeding
Business Day.

    FLOATING RATE NOTES

    Interest on Floating Rate Notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may, as described
below, include (i) the CD Rate, (ii) the CMT Rate, (iii) the Commercial Paper
Rate, (iv) the Eleventh District Cost of Funds Rate, (v) the Federal Funds Rate,
(vi) LIBOR, (vii) the Prime Rate, (viii) the Treasury Rate, or (ix) such other
Interest Rate Basis or interest rate formula as may be specified in the
applicable Pricing Supplement. The applicable Pricing Supplement will specify
certain terms with respect to which each Floating Rate Note is being delivered,
including: whether such Floating Rate Note is a "Regular Floating Rate Note," a
"Floating Rate/Fixed Rate Note" or an "Inverse Floating Rate Note," the Fixed
Rate Commencement Date, if applicable, Fixed Interest Rate, if applicable,
Interest Rate Basis or Bases, Initial Interest Rate, if any, Initial Interest
Reset Date, Interest Reset Dates, Interest Payment Dates, Index Maturity,
Maximum Interest Rate and/or Minimum Interest Rate, if any, and Spread and/or
Spread Multiplier, if any, as such terms are defined below. If one or more of
the applicable Interest Rate Bases is LIBOR or the CMT Rate, the applicable
Pricing Supplement will also specify the Designated LIBOR Currency and
Designated LIBOR Page or the Designated CMT Maturity Index and Designated CMT
Telerate Page, respectively, as such terms are defined below.

                                      S-10
<PAGE>
    The interest rate borne by the Floating Rate Notes will be determined as
follows:

        (i) Unless such Floating Rate Note is designated as a "Floating
    Rate/Fixed Rate Note" or an "Inverse Floating Rate Note," or as having an
    addendum attached or having "Other/Additional Provisions" apply, in each
    case relating to a different interest rate formula, such Floating Rate Note
    will be designated as a "Regular Floating Rate Note" and, except as
    described below or in the applicable Pricing Supplement, will bear interest
    at the rate determined by reference to the applicable Interest Rate Basis or
    Bases (a) plus or minus the applicable Spread, if any, and/or (b) multiplied
    by the applicable Spread Multiplier, if any. Commencing on the Initial
    Interest Reset Date, the rate at which interest on such Regular Floating
    Rate Note shall be payable shall be reset as of each Interest Reset Date;
    provided, however, that the interest rate in effect for the period, if any,
    from the date of issue to the Initial Interest Reset Date will be the
    Initial Interest Rate.

        (ii) If such Floating Rate Note is designated as a "Floating Rate/Fixed
    Rate Note," then, except as described below or in the applicable Pricing
    Supplement, such Floating Rate Note will bear interest at the rate
    determined by reference to the applicable Interest Rate Basis or Bases (a)
    plus or minus the applicable Spread, if any, and/or (b) multiplied by the
    applicable Spread Multiplier, if any. Commencing on the Initial Interest
    Reset Date, the rate at which interest on such Floating Rate/Fixed Rate Note
    shall be payable shall be reset as of each Interest Reset Date; provided,
    however, that (y) the interest rate in effect for the period, if any, from
    the date of issue to the Initial Interest Reset Date will be the Initial
    Interest Rate and (z) the interest rate in effect for the period commencing
    on the Fixed Rate Commencement Date to the Maturity Date shall be the Fixed
    Interest Rate, if such rate is specified in the applicable Pricing
    Supplement or, if no such Fixed Interest Rate is specified, the interest
    rate in effect thereon on the day immediately preceding the Fixed Rate
    Commencement Date.

        (iii) If such Floating Rate Note is designated as an "Inverse Floating
    Rate Note," then, except as described below or in the applicable Pricing
    Supplement, such Floating Rate Note will bear interest at the Fixed Interest
    Rate minus the rate determined by reference to the applicable Interest Rate
    Basis or Bases (a) plus or minus the applicable Spread, if any, and/or (b)
    multiplied by the applicable Spread Multiplier, if any; provided, however,
    that, unless otherwise specified in the applicable Pricing Supplement, the
    interest rate thereon will not be less than zero. Commencing on the Initial
    Interest Reset Date, the rate at which interest on such Inverse Floating
    Rate Note shall be payable shall be reset as of each Interest Reset Date;
    provided, however, that the interest rate in effect for the period, if any,
    from the date of issue to the Initial Interest Reset Date will be the
    Initial Interest Rate.

    The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate Note.
The "Spread Multiplier" is the percentage of the related Interest Rate Basis or
Bases applicable to such Floating Rate Note by which such Interest Rate Basis or
Bases will be multiplied to determine the applicable interest rate on such
Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the related Interest Rate Basis
or Bases will be calculated.

    Unless otherwise specified in the applicable Pricing Supplement, the
interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth above or in
the applicable Pricing Supplement, the interest rate in effect on each day shall
be (i) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as hereinafter defined) immediately preceding
such Interest Reset Date or (ii) if such day is not an Interest Reset Date, the
interest rate determined as of the Interest Determination Date immediately
preceding the most recent Interest Reset Date (or, if none, the Initial Interest
Rate).

    The applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually or annually or on such other specified basis (each, an
"Interest Reset Period") and the dates on which such rate of interest will be
reset

                                      S-11
<PAGE>
(each, an "Interest Reset Date"). Unless otherwise specified in the applicable
Pricing Supplement, the Interest Reset Dates will be, in the case of Floating
Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the Wednesday
of each week (with the exception of weekly reset Floating Rate Notes as to which
the Treasury Rate is an applicable Interest Rate Basis, which will reset the
Tuesday of each week, except as described below); (iii) monthly, the third
Wednesday of each month (with the exception of monthly reset Floating Rate Notes
as to which the Eleventh District Cost of Funds Rate is an applicable Interest
Rate Basis, which will reset on the first calendar day of the month); (iv)
quarterly, the third Wednesday of March, June, September and December of each
year; (v) semiannually, the third Wednesday of the two months specified in the
applicable Pricing Supplement; and (vi) annually, the third Wednesday of the
month specified in the applicable Pricing Supplement; provided however, that,
with respect to Floating Rate/Fixed Rate Notes, the rate of interest thereon
will not reset after the applicable Fixed Rate Commencement Date. If any
Interest Reset Date for any Floating Rate Note would otherwise be a day that is
not a Business Day, such Interest Reset Date will be postponed to the next
succeeding Business Day, except that in the case of a Floating Rate Note as to
which LIBOR is an applicable Interest Rate Basis and such Business Day falls in
the next succeeding calendar month, such Interest Reset Date will be the
immediately preceding Business Day.

    The interest rate applicable to each Interest Reset Period commencing on the
related Interest Reset Date will be the rate determined by the Calculation Agent
as of the applicable Interest Determination Date and calculated on or prior to
the Calculation Date (as hereinafter defined), except with respect to LIBOR and
the Eleventh District Cost of Funds Rate, which will be calculated on such
Interest Determination Date. The "Interest Determination Date" with respect to
the CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and
the Prime Rate will be the second Business Day immediately preceding the
applicable Interest Reset Date; the "Interest Determination Date" with respect
to the Eleventh District Cost of Funds Rate will be the last working day of the
month immediately preceding the applicable Interest Reset Date on which the
Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes
the Index (as hereinafter defined); and the "Interest Determination Date" with
respect to LIBOR will be the second London Business Day immediately preceding
the applicable Interest Reset Date, unless the Designated LIBOR Currency is
British pounds sterling, in which case the "Interest Determination Date" will be
the applicable Interest Reset Date. With respect to the Treasury Rate, the
"Interest Determination Date" will be the day in the week in which the
applicable Interest Reset Date falls on which day Treasury Bills (as hereinafter
defined) are normally auctioned (Treasury Bills are normally sold at an auction
held on Monday of each week, unless that day is a legal holiday, in which case
the auction is normally held on the following Tuesday, except that such auction
may be held on the preceding Friday); provided, however, that if an auction is
held on the Friday of the week preceding the applicable Interest Reset Date, the
"Interest Determination Date" will be such preceding Friday; provided, further,
that if the Interest Determination Date would otherwise fall on an Interest
Reset Date, then such Interest Reset Date will be postponed to the next
succeeding Business Day. The "Interest Determination Date" pertaining to a
Floating Rate Note the interest rate of which is determined by reference to two
or more Interest Rate Bases will be the most recent Business Day which is at
least two Business Days prior to the applicable Interest Reset Date for such
Floating Rate Note on which each Interest Rate Basis is determinable. Each
Interest Rate Basis will be determined as of such date, and the applicable
interest rate will take effect on the applicable Interest Reset Date.

    Notwithstanding the foregoing, a Floating Rate Note may also have either or
both of the following: (i) a Maximum Interest Rate, or ceiling, that may accrue
during any Interest Period and (ii) a Minimum Interest Rate, or floor, that may
accrue during any Interest Period. In addition to any Maximum Interest Rate that
may apply to any Floating Rate Note, the interest rate on Floating Rate Notes
will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States law of general application. Under
current New York law, the maximum rate of interest, subject to certain
exceptions, for any loan in an amount less than $250,000 is 16% and for any loan
in the amount of $250,000

                                      S-12
<PAGE>
or more but less than $2,500,000 is 25% per annum on a simple interest basis.
These limits do not apply to loans of $2,500,000 or more.

    Except as provided below or in the applicable Pricing Supplement, interest
will be payable, in the case of Floating Rate Notes which reset: (i) daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Pricing Supplement; (ii) quarterly, on the third Wednesday of
March, June, September and December of each year; (iii) semiannually, on the
third Wednesday of the two months of each year specified in the applicable
Pricing Supplement; and (iv) annually, on the third Wednesday of the month of
each year specified in the applicable Pricing Supplement (each, an "Interest
Payment Date" with respect to Floating Rate Notes) and, in each case, on the
Maturity Date. If any Interest Payment Date other than the Maturity Date for any
Floating Rate Note would otherwise be a day that is not a Business Day, such
Interest Payment Date will be postponed to the next succeeding Business Day,
except that in the case of a Floating Rate Note as to which LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date will be the immediately
preceding Business Day. If the Maturity Date of a Floating Rate Note falls on a
day that is not a Business Day, the required payment of principal, premium, if
any, and interest will be made on the next succeeding Business Day as if made on
the date such payment was due, and no interest will accrue on such payment for
the period from and after the Maturity Date to the date of such payment on the
next succeeding Business Day.

    All percentages resulting from any calculation on Floating Rate Notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five-one millionths of a percentage point rounded upwards (e.g., 9.876545% (or
 .09876545) would be rounded to 9.87655% (or .0987655)), and all amounts used in
or resulting from such calculation on Floating Rate Notes will be rounded, in
the case of United States dollars, to the nearest cent or, in the case of a
foreign or composite currency, to the nearest unit (with one-half cent or unit
being rounded upwards).

    With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day in the applicable Interest Period. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for each such day will be
computed by dividing the interest rate applicable to such day by 360, in the
case of Floating Rate Notes for which an applicable Interest Rate Basis is the
CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate,
the Federal Funds Rate, LIBOR or the Prime Rate, or by the actual number of days
in the year in the case of Floating Rate Notes for which an applicable Interest
Rate Basis is the CMT Rate or the Treasury Rate. Unless otherwise specified in
the applicable Pricing Supplement, the interest factor for Floating Rate Notes
for which the interest rate is calculated with reference to two or more Interest
Rate Bases will be calculated in each period in the same manner as if only the
applicable Interest Rate Basis specified in the applicable Pricing Supplement
applied.

    Unless otherwise specified in the applicable Pricing Supplement, Bankers
Trust Company will be the "Calculation Agent." Upon request of the Holder of any
Floating Rate Note, the Calculation Agent will disclose the interest rate then
in effect and, if determined, the interest rate that will become effective as a
result of a determination made for the next succeeding Interest Reset Date with
respect to such Floating Rate Note. Unless otherwise specified in the applicable
Pricing Supplement, the "Calculation Date," if applicable, pertaining to any
Interest Determination Date will be the earlier of (i) the tenth calendar day
after such Interest Determination Date or, if such day is not a Business Day,
the next succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or the Maturity Date, as the case may be.

    Unless otherwise specified in the applicable Pricing Supplement, the
Calculation Agent shall determine each Interest Rate Basis in accordance with
the following provisions.

                                      S-13
<PAGE>
    CD RATE.  Unless otherwise specified in the applicable Pricing Supplement,
"CD Rate" means, with respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference to
the CD Rate (a "CD Rate Interest Determination Date"), the rate on such date for
negotiable United States dollar certificates of deposit having the Index
Maturity specified in the applicable Pricing Supplement as published by the
Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" or any successor publication ("H.15(519)")
under the heading "CDs (Secondary Market)," or, if not published by 3:00 P.M.,
New York City time, on the related Calculation Date, the rate on such CD Rate
Interest Determination Date for negotiable United States dollar certificates of
deposit of the Index Maturity specified in the applicable Pricing Supplement as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 P.M. Quotations for U.S. Government Securities" or any
successor publication ("Composite Quotations") under the heading "Certificates
of Deposit." If such rate is not yet published in either H.15(519) or Composite
Quotations by 3:00 P.M., New York City time, on the related Calculation Date,
then the CD Rate on such CD Rate Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Rate Interest
Determination Date, of three leading nonbank dealers in negotiable United States
dollar certificates of deposit in The City of New York (which may include the
Agents or their affiliates) selected by the Calculation Agent for negotiable
United States dollar certificates of deposit of major United States money center
banks for negotiable certificates of deposit with a remaining maturity closest
to the Index Maturity specified in the applicable Pricing Supplement in an
amount that is representative for a single transaction in that market at that
time; provided, however, that if the dealers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the CD Rate determined as
of such CD Rate Interest Determination Date will be the CD Rate in effect on
such CD Rate Interest Determination Date.

    CMT RATE.  Unless otherwise specified in the applicable Pricing Supplement,
"CMT Rate" means, with respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference to
the CMT Rate (a "CMT Rate Interest Determination Date"), the rate displayed on
the Designated CMT Telerate Page under the caption "... Treasury Constant
Maturities... Federal Reserve Board Release H.15... Mondays Approximately 3:45
P.M.," under the column for the Designated CMT Maturity Index for (i) if the
Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
weekly or monthly average, as specified in the applicable Pricing Supplement,
for the week or the month, as applicable, ended immediately preceding the week
or the month, as applicable, in which the related CMT Rate Interest
Determination Date falls. If such rate is no longer displayed on the relevant
page or is not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in H.15(519). If such rate is no longer published or
is not published by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate on such CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the Designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT Maturity Index) for the
CMT Rate Interest Determination Date with respect to such Interest Reset Date as
may then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such information is
not provided by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate on the CMT Rate Interest Determination Date will be calculated
by the Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market offered rates as of approximately 3:30
P.M., New York City time, on such CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers in The City of New York (which may include the
Agents or their affiliates) (each, a "Reference Dealer") selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest

                                      S-14
<PAGE>
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain
three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on such CMT Rate
Interest Determination Date of three Reference Dealers in The City of New York
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least $100 million. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offered rates obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if fewer than
three Reference Dealers so selected by the Calculation Agent are quoting as
mentioned herein, the CMT Rate determined as of such CMT Rate Interest
Determination Date will be the CMT Rate in effect on such CMT Rate Interest
Determination Date. If two Treasury Notes with an original maturity as described
in the second preceding sentence have remaining terms to maturity equally close
to the Designated CMT Maturity Index, the Calculation Agent will obtain
quotations for the Treasury Note with the shorter remaining term to maturity.

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

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

    COMMERCIAL PAPER RATE.  Unless otherwise specified in the applicable Pricing
Supplement, "Commercial Paper Rate" means, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the Commercial Paper Rate (a "Commercial Paper
Rate Interest Determination Date"), the Money Market Yield (as hereinafter
defined) on such date of the rate for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "Commercial Paper." In the event that such rate is not published by
3:00 P.M., New York City time, on the related Calculation Date, then the
Commercial Paper Rate on such Commercial Paper Rate Interest Determination Date
will be the Money Market Yield of the rate for commercial paper having the Index
Maturity specified in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If such rate is not yet published
in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the related Calculation Date, then the Commercial Paper Rate on such Commercial
Paper Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the Money Market Yield of the arithmetic mean of the offered
rates at approximately 11:00 A.M., New York City time, on such Commercial Paper
Rate Interest Determination Date of three leading dealers of commercial paper in
The City of New York (which may include the Agents or their affiliates) selected
by the Calculation Agent (after consultation with the Company) for commercial
paper having the Index Maturity specified in the applicable Pricing Supplement
placed for an industrial issuer whose bond rating is

                                      S-15
<PAGE>
"Aa", or the equivalent, from a nationally recognized statistical rating
organization; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.

    "Money Market Yield" means a yield (expressed as a percentage) calculated in
accordance with the following formula:

<TABLE>
<S>                             <C>        <C>               <C>        <C>        <C>
                                               D X 360
                                           ---------------
            Money Market Yield      =       360 - (D X M)        X         100
</TABLE>

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

    ELEVENTH DISTRICT COST OF FUNDS RATE.  Unless otherwise specified in the
applicable Pricing Supplement, "Eleventh District Cost of Funds Rate" means,
with respect to any Interest Determination Date relating to a Floating Rate Note
for which the interest rate is determined with reference to the Eleventh
District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate Interest
Determination Date"), the rate equal to the monthly weighted average cost of
funds for the calendar month immediately preceding the month in which such
Eleventh District Cost of Funds Rate Interest Determination Date falls, as set
forth under the caption "11th District" on Telerate Page 7058 as of 11:00 A.M.,
San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.

    FEDERAL FUNDS RATE.  Unless otherwise specified in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for United States dollar
federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if not published by 3:00 P.M., New York City time, on the
related Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the rates for the last transaction in overnight United
States dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent (after consultation with the
Company) prior to 9:00 A.M., New York City time, on such Federal Funds Rate
Interest Determination Date; provided, however, that if the brokers so selected
by the Calculation Agent are not quoting as mentioned in this sentence, the
Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Rate Interest Determination Date.

                                      S-16
<PAGE>
    LIBOR.  Unless otherwise specified in the applicable Pricing Supplement,
"LIBOR" means the rate determined in accordance with the following provisions:

        (i) With respect to any Interest Determination Date relating to a
    Floating Rate Note for which the interest rate is determined with reference
    to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will be either: (a)
    if "LIBOR Reuters" is specified in the applicable Pricing Supplement, the
    arithmetic mean of the offered rates (unless the Designated LIBOR Page by
    its terms provides only for a single rate, in which case such single rate
    shall be used) for deposits in the Designated LIBOR Currency having the
    Index Maturity specified in such Pricing Supplement, commencing on the
    applicable Interest Reset Date, that appear (or, if only a single rate is
    required as aforesaid, appears) on the Designated LIBOR Page as of 11:00
    A.M., London time, on such LIBOR Interest Determination Date, or (b) if
    "LIBOR Telerate" is specified in the applicable Pricing Supplement or if
    neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
    Pricing Supplement as the method for calculating LIBOR, the rate for
    deposits in the Designated LIBOR Currency having the Index Maturity
    specified in such Pricing Supplement, commencing on such Interest Reset
    Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London
    time, on such LIBOR Interest Determination Date. If fewer than two such
    offered rates so appear (if "LIBOR Reuters" is applicable) or if no such
    rate so appears (if "LIBOR Telerate" is applicable), LIBOR on such LIBOR
    Interest Determination Date will be determined in accordance with the
    provisions described in clause (ii) below.

        (ii) With respect to a LIBOR Interest Determination Date on which fewer
    than two offered rates appear (if "LIBOR Reuters" is applicable) or no rate
    appears (if "LIBOR Telerate" is applicable) on the Designated LIBOR Page as
    specified in clause (i) above, the Calculation Agent will request the
    principal London offices of each of four major reference banks (which may
    include affiliates of the Agents) in the London interbank market, as
    selected by the Calculation Agent, to provide the Calculation Agent with its
    offered quotation for deposits in the Designated LIBOR Currency for the
    period of the Index Maturity specified in the applicable Pricing Supplement,
    commencing on the applicable Interest Reset Date, to prime banks in the
    London interbank market at approximately 11:00 A.M., London time, on such
    LIBOR Interest Determination Date and in a principal amount that is
    representative for a single transaction in the Designated LIBOR Currency in
    such market at such time. If at least two such quotations are so provided,
    then LIBOR on such LIBOR Interest Determination Date will be the arithmetic
    mean of such quotations. If fewer than two such quotations are so provided,
    then LIBOR on such LIBOR Interest Determination Date will be the arithmetic
    mean of the rates quoted at approximately 11:00 A.M., in the applicable
    Principal Financial Center, on such LIBOR Interest Determination Date by
    three major banks (which may include affiliates of the Agents) in such
    Principal Financial Center selected by the Calculation Agent for loans in
    the Designated LIBOR Currency to leading European banks, having the Index
    Maturity specified in the applicable Pricing Supplement and in a principal
    amount that is representative for a single transaction in the Designated
    LIBOR Currency in such market at such time; provided, however, that if the
    banks so selected by the Calculation Agent are not quoting as mentioned in
    this sentence, LIBOR determined as of such LIBOR Interest Determination Date
    will be LIBOR in effect on such LIBOR Interest Determination Date.

    "Designated LIBOR Currency" means the currency or composite currency
specified in the applicable Pricing Supplement as to which LIBOR shall be
calculated or, if no such currency or composite currency is specified in the
applicable Pricing Supplement, United States dollars.

    "Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the display on the Reuter Monitor Money Rates
Service (or any successor service) on the page specified in such Pricing
Supplement (or any other page as may replace such page on such service) for the
purpose of displaying the London interbank rates of major banks for the
Designated LIBOR Currency, or (b) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement or neither "LIBOR Reuters"

                                      S-17
<PAGE>
nor "LIBOR Telerate" is specified in the applicable Pricing Supplement as the
method for calculating LIBOR, the display on the Dow Jones Telerate Service (or
any successor service) on the page specified in such Pricing Supplement (or any
other page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency.

    PRIME RATE.  Unless otherwise specified in the applicable Pricing
Supplement, "Prime Rate" means, with respect to any Interest Determination Date
relating to a Floating Rate Note for which the interest rate is determined with
reference to the Prime Rate (a "Prime Rate Interest Determination Date"), the
rate on such date as such rate is published in H.15(519) under the heading "Bank
Prime Loan." If such rate is not published prior to 3:00 P.M., New York City
time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 Page (as hereinafter defined) as such
bank's prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
USPRIME1 Page for such Prime Rate Interest Determination Date, then the Prime
Rate shall be the arithmetic mean of the prime rates or base lending rates
quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date by four major money center banks (which may include
affiliates of the Agents) in The City of New York selected by the Calculation
Agent (after consultation with the Company). If fewer than four such quotations
are so provided, then the Prime Rate shall be the arithmetic mean of four prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date as furnished in The City of New York by the major money
center banks, if any, that have provided such quotations and by a reasonable
number of substitute banks or trust companies (which may include affiliates of
the Agents) to obtain four such prime rate quotations, provided such substitute
banks or trust companies are organized and doing business under the laws of the
United States, or any State thereof, each having total equity capital of at
least $500 million and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent (after consultation with the
Company) to provide such rate or rates; provided, however, that if the banks or
trust companies so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Prime Rate determined as of such Prime Rate
Interest Determination Date will be the Prime Rate in effect on such Prime Rate
Interest Determination Date.

    "Reuters Screen USPRIME1 Page" means the display on the Reuter Monitor Money
Rates Service (or any successor service) on the "USPRIME1" page (or such other
page as may replace the USPRIME1 page on such service) for the purpose of
displaying prime rates or base lending rates of major United States banks.

    TREASURY RATE.  Unless otherwise specified in the applicable Pricing
Supplement, "Treasury Rate" means, with respect to any Interest Determination
Date relating to a Floating Rate Note for which the interest rate is determined
by reference to the Treasury Rate (a "Treasury Rate Interest Determination
Date"), the rate from the auction held on such Treasury Rate Interest
Determination Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified in the applicable Pricing
Supplement, as such rate is published in H.15(519) under the heading "Treasury
Bills-auction average (investment)" or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the auction average rate of such
Treasury Bills (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced by
the United States Department of the Treasury. In the event that the results of
the Auction of Treasury Bills having the Index Maturity specified in the
applicable Pricing Supplement are not reported as provided by 3:00 P.M., New
York City time, on the related Calculation Date, or if no such Auction is held,
then the Treasury Rate will be calculated by the Calculation Agent and will be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Interest Determination Date, of three leading
primary United States government

                                      S-18
<PAGE>
securities dealers (which may include the Agents or their affiliates) selected
by the Calculation Agent (after consultation with the Company), for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity specified
in the applicable Pricing Supplement; provided, however, that if the dealers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Treasury Rate determined as of such Treasury Rate Interest Determination
Date will be the Treasury Rate in effect on such Treasury Rate Interest
Determination Date.

OTHER/ADDITIONAL PROVISIONS; ADDENDUM

    Any provisions with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Stated Maturity Date, any redemption or repayment provisions or any other
term relating thereto, may be modified and/or supplemented as specified under
"Other/Additional Provisions" on the face thereof or in an addendum relating
thereto, if so specified on the face thereof and described in the applicable
Pricing Supplement.

DISCOUNT NOTES

    The Company may offer Notes ("Discount Notes") from time to time that have
an Issue Price (as specified in the applicable Pricing Supplement) that is less
than 100% of the principal amount thereof (I.E., par) by more than a percentage
equal to the product of 0.25% and the number of full years to the Stated
Maturity Date. Discount Notes may not bear any interest currently or may bear
interest at a rate that is below market rates at the time of issuance. The
difference between the Issue Price of a Discount Note and par is referred to
herein as the "Discount." In the event of redemption, repayment or acceleration
of maturity of a Discount Note, the amount payable to the Holder of such
Discount Note will be equal to the sum of (i) the Issue Price (increased by any
accruals of Discount) and, in the event of any redemption of such Discount Note
(if applicable), multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable) and (ii) any unpaid
interest accrued thereon to the date of such redemption, repayment or
acceleration of maturity, as the case may be.

    Unless otherwise specified in the applicable Pricing Supplement, for
purposes of determining the amount of Discount that has accrued as of any date
on which a redemption, repayment or acceleration of maturity occurs for a
Discount Note, such Discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year convention,
a compounding period that, except for the Initial Period (as hereinafter
defined), corresponds to the shortest period between Interest Payment Dates for
the applicable Discount Note (with ratable accruals within a compounding
period), a coupon rate equal to the initial coupon rate applicable to such
Discount Note and an assumption that the maturity of such Discount Note will not
be accelerated. If the period from the date of issue to the initial Interest
Payment Date for a Discount Note (the "Initial Period") is shorter than the
compounding period for such Discount Note, a proportionate amount of the yield
for an entire compounding period will be accrued. If the Initial Period is
longer than the compounding period, then such period will be divided into a
regular compounding period and a short period with the short period being
treated as provided in the preceding sentence. The accrual of the applicable
Discount may differ from the accrual of original issue discount for purposes of
the Internal Revenue Code of 1986, as amended (the "Code"), certain Discount
Notes may not be treated as having original issue discount within the meaning of
the Code, and Notes other than Discount Notes may be treated as issued with
original issue discount for federal income tax purposes. See "United States
Federal Income Tax Considerations."

                                      S-19
<PAGE>
INDEXED NOTES

    The Company may from time to time offer Notes ("Indexed Notes") with the
amount of principal, premium and/or interest payable in respect thereof to be
determined with reference to the price or prices of specified commodities or
stocks, to the exchange rate of one or more designated currencies (including a
composite currency such as the ECU) relative to an indexed currency or to other
items, in each case as specified in the applicable Pricing Supplement. In
certain cases, Holders of Indexed Notes may receive a principal payment on the
Maturity Date that is greater than or less than the principal amount of such
Indexed Notes depending upon the relative value on the Maturity Date of the
specified indexed item. Information as to the method for determining the amount
of principal, premium, if any, and/or interest, if any, payable in respect of
Indexed Notes, certain historical information with respect to the specified
indexed item and any material tax considerations associated with an investment
in Indexed Notes will be specified in the applicable Pricing Supplement. See
also "Risk Factors."

AMORTIZING NOTES

    The Company may from time to time offer Notes ("Amortizing Notes") with the
amount of principal thereof and interest thereon payable in installments over
the term of such Notes. Unless otherwise specified in the applicable Pricing
Supplement, interest on each Amortizing Note will be computed on the basis of a
360-day year of twelve 30-day months. Payments with respect to Amortizing Notes
will be applied first to interest due and payable thereon and then to the
reduction of the unpaid principal amount thereof. Further information concerning
additional terms and provisions of Amortizing Notes will be specified in the
applicable Pricing Supplement, including a table setting forth repayment
information for such Amortizing Notes.

BOOK-ENTRY NOTES

    The Company has established a depositary arrangement with The Depository
Trust Company with respect to the Book-Entry Notes, the terms of which are
summarized below. Any additional or differing terms of the depositary
arrangement with respect to the Book-Entry Notes will be described in the
applicable Pricing Supplement.

    Upon issuance, all Book-Entry Notes of like tenor and terms up to
$200,000,000 aggregate principal amount will be represented by a single Global
Security. Each Global Security representing Book-Entry Notes will be deposited
with, or on behalf of, the Depositary and will be registered in the name of the
Depositary or a nominee of the Depositary. No Global Security may be transferred
except as a whole by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or such nominee to a successor
of the Depositary or a nominee of such successor.

    So long as the Depositary or its nominee is the registered owner of a Global
Security, the Depositary or its nominee, as the case may be, will be the sole
Holder of the Book-Entry Notes represented thereby for all purposes under the
Indenture. Except as otherwise provided below, the Beneficial Owners of the
Global Security or Securities representing Book-Entry Notes will not be entitled
to receive physical delivery of Certificated Notes and will not be considered
the Holders thereof for any purpose under the Indenture, and no Global Security
representing Book-Entry Notes shall be exchangeable or transferable.
Accordingly, each Beneficial Owner must rely on the procedures of the Depositary
and, if such Beneficial Owner is not a Participant, on the procedures of the
Participant through which such Beneficial Owner owns its interest in order to
exercise any rights of a Holder under such Global Security or the Indenture. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. Such limits and laws
may impair the ability to transfer beneficial interests in a Global Security
representing Book-Entry Notes.

    Unless otherwise specified in the applicable Pricing Supplement, each Global
Security representing Book-Entry Notes will be exchangeable for Certificated
Notes of like tenor and terms and of differing

                                      S-20
<PAGE>
authorized denominations in a like aggregate principal amount, only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Securities, or the Company becomes aware that the
Depositary has ceased to be a clearing agency registered under the Exchange Act
and, in any such case, the Company shall not have appointed a successor to the
Depositary within 90 days thereafter, (ii) the Company, in its sole discretion,
determines that the Global Securities shall be exchangeable for Certificated
Notes or (iii) an Event of Default shall have occurred and be continuing with
respect to the Notes under the Indenture and the Beneficial Owners representing
a majority in principal amount of the Notes advise the Depositary to cease
acting as depositary for the Notes. Upon any such exchange, the Certificated
Notes shall be registered in the names of the Beneficial Owners of the Global
Security or Securities representing Book-Entry Notes, which names shall be
provided by the Depositary's relevant Participants (as identified by the
Depositary) to the Trustee.

    The following is based on information furnished by the Depositary:

        The Depositary will act as securities depository for the Book-Entry
    Notes. The Book-Entry Notes will be issued as fully-registered securities
    registered in the name of Cede & Co. (the Depositary's partnership nominee).
    One fully registered Global Security will be issued for each issue of
    Book-Entry Notes, each in the aggregate principal amount of such issue, and
    will be deposited with the Depositary. If, however, the aggregate principal
    amount of any issue exceeds $200,000,000, one Global Security will be issued
    with respect to each $200,000,000 of principal amount and an additional
    Global Security will be issued with respect to any remaining principal
    amount of such issue.

        The Depositary is a limited-purpose trust company organized under the
    New York Banking Law, a "banking organization" within the meaning of the New
    York Banking Law, a member of the Federal Reserve System, a "clearing
    corporation" within the meaning of the New York Uniform Commercial Code, and
    a "clearing agency" registered pursuant to the provisions of Section 17A of
    the Exchange Act. The Depositary holds securities that its participants
    ("Participants") deposit with the Depositary. The Depositary also
    facilitates the settlement among Participants of securities transactions,
    such as transfers and pledges, in deposited securities through electronic
    computerized book-entry changes in Participants' accounts, thereby
    eliminating the need for physical movement of securities certificates.
    Direct Participants of the Depositary ("Direct Participants") include
    securities brokers and dealers (including the Agents), banks, trust
    companies, clearing corporations and certain other organizations. The
    Depositary is owned by a number of its Direct Participants and by the New
    York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
    National Association of Securities Dealers, Inc. Access to the Depositary's
    system is also available to others such as securities brokers and dealers,
    banks and trust companies that clear through or maintain a custodial
    relationship with a Direct Participant, either directly or indirectly
    ("Indirect Participants"). The Rules applicable to the Depositary and its
    Participants are on file with the Securities and Exchange Commission.

        Purchases of Book-Entry Notes under the Depositary's system must be made
    by or through Direct Participants, which will receive a credit for such
    Book-Entry Notes on the Depositary's records. The ownership interest of each
    actual purchaser of each Book-Entry Note represented by a Global Security
    ("Beneficial Owner") is in turn to be recorded on the records of Direct
    Participants and Indirect Participants. Beneficial Owners will not receive
    written confirmation from the Depositary of their purchase, but Beneficial
    Owners are expected to receive written confirmations providing details of
    the transaction, as well as periodic statements of their holdings, from the
    Direct Participants or Indirect Participants through which such Beneficial
    Owner entered into the transaction. Transfers of ownership interests in a
    Global Security representing Book-Entry Notes are to be accomplished by
    entries made on the books of Participants acting on behalf of Beneficial
    Owners. Beneficial Owners of a Global Security representing Book-Entry Notes
    will not receive Certificated Notes representing their ownership interests
    therein, except in the event that use of the book-entry system for such
    Book-Entry Notes is discontinued.

                                      S-21
<PAGE>
        To facilitate subsequent transfers, all Global Securities representing
    Book-Entry Notes deposited by Participants with the Depositary are
    registered in the name of the Depositary's partnership nominee, Cede & Co.
    The deposit of Global Securities with the Depositary and their registration
    in the name of Cede & Co. effect no change in beneficial ownership. The
    Depositary has no knowledge of the actual Beneficial Owners of the Global
    Securities representing the Book-Entry Notes; the Depositary's records
    reflect only the identity of the Direct Participants to whose accounts such
    Book-Entry Notes are credited, which may or may not be the Beneficial
    Owners. The Participants will remain responsible for keeping account of
    their holdings on behalf of their customers.

        Conveyance of notices and other communications by the Depositary to
    Direct Participants, by Direct Participants to Indirect Participants, and by
    Direct Participants and Indirect Participants to Beneficial Owners will be
    governed by arrangements among them, subject to any statutory or regulatory
    requirements as may be in effect from time to time.

        Neither the Depositary nor Cede & Co. will consent or vote with respect
    to the Global Securities representing the Book-Entry Notes. Under its usual
    procedures, the Depositary mails an Omnibus Proxy to the Company as soon as
    possible after the applicable record date. The Omnibus Proxy assigns Cede &
    Co.'s consenting or voting rights to those Direct Participants to whose
    accounts the Book-Entry Notes are credited on the applicable record date
    (identified in a listing attached to the Omnibus Proxy).

        If applicable, redemption notices shall be sent to Cede & Co. If less
    than all of the Book-Entry Notes within an issue are being redeemed, the
    Depositary's practice is to determine by lot the amount of the interest of
    each Direct Participant in such issue to be redeemed.

        Principal, premium, if any, and/or interest, if any, payments on the
    Global Securities representing the Book-Entry Notes will be made to the
    Depositary. The Depositary's practice is to credit Direct Participants'
    accounts on the applicable payment date in accordance with their respective
    holdings shown on the Depositary's records unless the Depositary has reason
    to believe that it will not receive payment on such date. Payments by
    Participants to Beneficial Owners will be governed by standing instructions
    and customary practices, as is the case with securities held for the
    accounts of customers in bearer form or registered in "street name," and
    will be the responsibility of such Participant and not of the Depositary,
    the Trustee or the Company, subject to any statutory or regulatory
    requirements as may be in effect from time to time. Payment of principal,
    premium, if any, and/or interest, if any, to the Depositary is the
    responsibility of the Company and the Trustee, disbursement of such payments
    to Direct Participants shall be the responsibility of the Depositary, and
    disbursement of such payments to the Beneficial Owners shall be the
    responsibility of Direct Participants and Indirect Participants.

        A Beneficial Owner shall give notice of any option to elect to have its
    Book-Entry Notes repaid by the Company, through its Participant, to the
    Trustee, and shall effect delivery of such Book-Entry Notes by causing the
    Direct Participant to transfer the Participant's interest in the Global
    Security or Securities representing such Book-Entry Notes, on the
    Depositary's records, to the Trustee. The requirement for physical delivery
    of Book-Entry Notes in connection with a demand for repayment will be deemed
    satisfied when the ownership rights in the Global Security or Securities
    representing such Book-Entry Notes are transferred by Direct Participants on
    the Depositary's records.

        The Depositary may discontinue providing its services as securities
    depository with respect to the Book-Entry Notes at any time by giving
    reasonable notice to the Company or the Trustee. Under such circumstances,
    in the event that a successor securities depository is not obtained,
    Certificated Notes are required to be printed and delivered.

        The Company may decide to discontinue use of the system of book-entry
    transfers through the Depositary (or a successor securities depository). In
    that event, Certificated Notes will be printed and delivered.

                                      S-22
<PAGE>
    The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.

    None of the Company, any Agents, the Trustee or the registrar for the Notes
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

EVENTS OF DEFAULT

    Pursuant to resolutions adopted by the general partner of the Company, and
notwithstanding any provision to the contrary in the Indenture or the
Prospectus, the following events are "Events of Default" with respect to the
Notes: (i) default for 30 days in the payment of any installment of interest on
any Note; (ii) default in the payment of principal of (or premium, if any, on)
any Note at its maturity or in connection with any redemption, repayment,
acceleration of maturity or otherwise; (iii) default in the performance or
breach of any other covenant or warranty of the Company contained in the
Indenture (other than a covenant added to the Indenture solely for the benefit
of a series of Debt Securities issued thereunder other than the Notes),
continued for 60 days after written notice as provided in the Indenture; (iv)
default in the payment of an aggregate principal amount exceeding $10,000,000 of
any recourse indebtedness of the Company or any mortgage, indenture or other
instrument under which such indebtedness is issued or by which such indebtedness
is secured, such default having occurred after the expiration of any applicable
grace period and having resulted in the acceleration of the maturity of such
indebtedness, but only if such indebtedness is not discharged or such
acceleration is not rescinded or annulled; (vi) certain events of bankruptcy,
insolvency or reorganization, or court appointment of a receiver, liquidator or
trustee of the Company or any Significant Subsidiary; and (vi) any other Event
of Default provided with respect to the Notes. "SIGNIFICANT SUBSIDIARY" means
any Subsidiary that is a "significant subsidiary" (within the meaning of
Regulation S-X promulgated under the Securities Act (as defined under "Plan of
Distribution") of the Company.

             SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES

GENERAL

    Unless otherwise specified in the applicable Pricing Supplement, Foreign
Currency Notes will not be sold in, or to residents of, the country issuing the
applicable currency. The information set forth in this Prospectus Supplement is
directed to prospective purchasers who are United States residents and, with
respect to Foreign Currency Notes, is by necessity incomplete. The Company and
the Agents disclaim any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any matters
that may affect the purchase, holding or receipt of payments of principal of,
and premium, if any, and interest, if any, on, Foreign Currency Notes. Such
persons should consult their own financial and legal advisors with regard to
such matters. See "Risk Factors--Exchange Rates and Exchange Controls."

PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, IF ANY

    Unless otherwise specified in the applicable Pricing Supplement, the Company
is obligated to make payments of principal of, and premium, if any, and
interest, if any, on, a Foreign Currency Note in the Specified Currency. Any
such amounts payable by the Company in the Specified Currency will be converted
by the exchange rate agent named in the applicable Pricing Supplement (the
"Exchange Rate Agent") into United States dollars for payment to Holders unless
otherwise specified in the applicable Pricing Supplement or the Holder of such
Foreign Currency Note elects, in the manner hereinafter described, to receive
such amounts in the Specified Currency.

                                      S-23
<PAGE>
    Any United States dollar amount to be received by a Holder of a Foreign
Currency Note will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 A.M., New York City
time, on the second Business Day preceding the applicable payment date from
three recognized foreign exchange dealers (one of whom may be the Exchange Rate
Agent) selected by the Exchange Rate Agent and approved by the Company for the
purchase by the quoting dealer of the Specified Currency for United States
dollars for settlement on such payment date in the aggregate amount of such
Specified Currency payable to all Holders of Foreign Currency Notes scheduled to
receive United States dollar payments and at which the applicable dealer commits
to execute a contract. All currency exchange costs will be borne by the Holders
of such Foreign Currency Notes by deductions from such payments. If three such
bid quotations are not available, payments will be made in the Specified
Currency.

    Holders of Foreign Currency Notes may elect to receive all or a specified
portion of any payment of principal, premium, if any, and/or interest, if any,
in the Specified Currency by submitting a written request for such payment to
the Trustee at its corporate trust office in The City of New York on or prior to
the applicable Record Date or at least fifteen calendar days prior to the
Maturity Date, as the case may be. Such written request may be mailed or hand
delivered or sent by cable, telex or other form of facsimile transmission.
Holders of Foreign Currency Notes may elect to receive all or a specified
portion of all future payments in the Specified Currency and need not file a
separate election for each payment. Such election will remain in effect until
revoked by written notice to the Trustee, but written notice of any such
revocation must be received by the Trustee on or prior to the applicable Record
Date or at least fifteen calendar days prior to the Maturity Date, as the case
may be. Holders of Foreign Currency Notes to be held in the name of a broker or
nominee should contact such broker or nominee to determine whether and how an
election to receive payments in the Specified Currency may be made.

    Unless otherwise specified in the applicable Pricing Supplement, if the
Specified Currency is other than United States dollars, a Beneficial Owner of
the related Global Security or Securities which elects to receive payments of
principal, premium, if any, and/or interest, if any, in the Specified Currency
must notify the Participant through which it owns its interest on or prior to
the applicable Record Date or at least fifteen calendar days prior to the
Maturity Date, as the case may be, of such Beneficial Owner's election. Such
Participant must notify the Depositary of such election on or prior to the third
Business Day after such Record Date or at least twelve calendar days prior to
the Maturity Date, as the case may be, and the Depositary will notify the
Trustee of such election on or prior to the fifth Business Day after such Record
Date or at least ten calendar days prior to the Maturity Date, as the case may
be. If complete instructions are received by the Participant from the Beneficial
Owner and forwarded by the Participant to the Depositary, and by the Depositary
to the Trustee, on or prior to such dates, then such Beneficial Owner will
receive payments in the Specified Currency.

    Payments of the principal of, and premium, if any, and/or interest, if any,
on, Foreign Currency Notes which are to be made in United States dollars will be
made in the manner specified herein with respect to Notes denominated in United
States dollars. See "Description of Notes--General." Payments of interest, if
any, on Foreign Currency Notes which are to be made in the Specified Currency on
an Interest Payment Date other than the Maturity Date will be made by check
mailed to the address of the Holders of such Foreign Currency Notes as they
appear in the Security Register, subject to the right to receive such interest
payments by wire transfer of immediately available funds under the circumstances
described under "Description of Notes--General." Payments of principal of, and
premium, if any, and/or interest, if any, on, Foreign Currency Notes which are
to be made in the Specified Currency on the Maturity Date will be made by wire
transfer of immediately available funds to an account with a bank designated at
least fifteen calendar days prior to the Maturity Date by each Holder thereof,
provided that such bank has appropriate facilities therefor and that the
applicable Foreign Currency Note is presented and surrendered at the office or
agency maintained by the Company for such purpose in the Borough of Manhattan,
The City of New York, currently the corporate trust office of the Trustee
located at Four Albany Street, New York, New

                                      S-24
<PAGE>
York 10006, in time for the Trustee to make such payments in such funds in
accordance with its normal procedures.

AVAILABILITY OF SPECIFIED CURRENCY

    Except as set forth below, if the Specified Currency for a Foreign Currency
Note is not available for the required payment of principal, premium, if any,
and/or interest, if any, in respect thereof due to the imposition of exchange
controls or other circumstances beyond the control of the Company, then the
Company will be entitled to satisfy its obligations to the Holder of such
Foreign Currency Note by making such payment in United States dollars on the
basis of the Market Exchange Rate, computed by the Exchange Rate Agent, on the
second Business Day prior to such payment or, if such Market Exchange Rate is
not then available, on the basis of the most recently available Market Exchange
Rate, or as otherwise specified in the applicable Pricing Supplement.

    If the Specified Currency for a Foreign Currency Note is a composite
currency that is not available for the required payment of principal, premium,
if any, and/or interest, if any, in respect thereof due to the imposition of
exchange controls or other circumstances beyond the control of the Company, the
Company will be entitled to satisfy its obligations to the Holder of such
Foreign Currency Note by making such payment in United States dollars on the
basis of the equivalent of the composite currency in United States dollars. The
component currencies of the composite currency for this purpose (the "Component
Currencies") shall be the currency amounts that were components of the composite
currency as of the last day on which the composite currency was used. The
equivalent of the composite currency in United States dollars shall be
calculated by aggregating the United States dollar equivalents of the Component
Currencies. The United States dollar equivalent of each of the Component
Currencies shall be determined by the Exchange Rate Agent on the basis of the
Market Exchange Rate on the second Business Day prior to the required payment
or, if such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate for each such Component Currency, or as
otherwise specified in the applicable Pricing Supplement.

    If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.

    The "Market Exchange Rate" for a Specified Currency other than United States
dollars means the noon dollar buying rate in The City of New York for cable
transfers for such Specified Currency as certified for customs purposes (or, if
not so certified, as otherwise determined) by the Federal Reserve Bank of New
York. Any payment made in United States dollars under such circumstances where
the required payment is in a Specified Currency other than United States dollars
will not constitute an Event of Default under the Indenture with respect to the
Notes.

    All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holders of the Foreign Currency
Notes.

GOVERNING LAW AND JUDGMENTS

    The Notes will be governed by and construed in accordance with the laws of
the State of New York. Under current New York law, a state court in the State of
New York rendering a judgment in respect of a Foreign Currency Note would be
required to render such judgment in the Specified Currency, and such

                                      S-25
<PAGE>
foreign currency judgment would be converted into United States dollars at the
exchange rate prevailing on the date of entry of such judgment. Accordingly, the
Holder of such Foreign Currency Note would be subject to exchange rate
fluctuations between the date of entry of such foreign currency judgment and the
time the amount of such foreign currency judgment is paid to such Holder in
United States dollars and converted by such Holder into the Specified Currency.
It is not certain, however, whether a non-New York state court would follow the
same rules and procedures with respect to conversions of foreign currency
judgments.

    The Company will indemnify the Holder of any Note against any loss incurred
by such Holder as a result of any judgment or order being given or made for any
amount due under such Note and such judgment or order requiring payment in a
currency or composite currency (the "Judgment Currency") other than the
Specified Currency, and as a result of any variation between (i) the rate of
exchange at which the Specified Currency amount is converted into the Judgment
Currency for the purpose of such judgment or order, and (ii) the rate of
exchange at which the Holder of such Note, on the date of payment of such
judgment or order, is able to purchase the Specified Currency with the amount of
the Judgment Currency actually received by such Holder, as the case may be.

                                      S-26
<PAGE>
            CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

    The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change, possibly with retroactive effect, or possible differing
interpretations. It deals only with Notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, tax-exempt
organizations, dealers in securities or currencies, persons holding Notes that
are a hedge or that are hedged against currency risks or as a position in a
"straddle" or "conversion transaction" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers (except where otherwise specifically
noted). Persons considering the purchase of the Notes should consult their own
tax advisors concerning the application of United States Federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the Notes arising under the laws of any other
taxing jurisdiction.

    As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate the income of which is subject to United
States Federal income taxation regardless of its source, (iv) a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust, or (v) any other
person whose income or gain in respect of a Note is effectively connected with
the conduct of a United States trade or business. Certain trusts not described
in clause (iv) above in existence on August 20, 1996 that elect to be treated as
a United States person will also be a U.S. Holder for purposes of the following
discussion. As used herein, the term "non-U.S. Holder" means a beneficial owner
of a Note that is not a U.S. Holder.

U.S. HOLDERS

    PAYMENTS OF INTEREST

    Payments of interest on a Note, other than interest on an "Original Issue
Discount Note" that is not "qualified stated interest" (each as defined below
under "Original Issue Discount--General"), generally will be taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting).

    ORIGINAL ISSUE DISCOUNT

    GENERAL.  The following summary is a general discussion of the United States
Federal income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount ("Original Issue
Discount Notes"). The following summary is based upon final Treasury regulations
(the "OID Regulations") released by the Internal Revenue Service ("IRS") on
January 27, 1994, as amended on June 11, 1996, under the original issue discount
provisions of the Code.

    For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its issue
price, if such excess equals or exceeds a DE MINIMIS amount (generally 1/4 of 1%
of the Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date or, in the case of a Note
providing for the payment of any amount other than qualified stated interest (as
hereinafter defined) prior to maturity, multiplied by the weighted average
maturity of such Note). The issue price of each Note in an issue of Notes equals
the first price at which a substantial amount of such Notes has been sold
(ignoring sales to bond houses, brokers, or similar persons or organizations
acting in the capacity of underwriters, placement agents, or wholesalers). The
stated redemption price at maturity of a Note is the sum of all payments
provided by the Note other than "qualified stated interest" payments. The term
"qualified stated interest" generally means stated interest that is
unconditionally payable in cash or property (other than debt instruments of the
issuer) at least annually at a single fixed rate or at certain specified types
of variable rates (as discussed below under "Original Issue Discount--Variable
Notes"). In addition, under the OID Regulations, if a Note bears

                                      S-27
<PAGE>
interest for one or more accrual periods at a rate below the rate applicable for
the remaining term of such Note (E.G., Notes with teaser rates or interest
holidays), and if the greater of either the resulting foregone interest on such
Note or any "true" discount on such Note (I.E., the excess of the Note's stated
principal amount over its issue price) is less than a specified DE MINIMIS
amount, then the stated interest on the Note will be treated as qualified stated
interest.

    Payments of qualified stated interest on a Note are taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of an Original Issue Discount Note having a maturity
of more than one year from its date of issue must include original issue
discount in income as ordinary interest for United States Federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of such U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of an Original Issue
Discount Note is the sum of the daily portions of original issue discount with
respect to such Original Issue Discount Note for each day during the taxable
year (or portion of the taxable year) on which such U.S. Holder held such
Original Issue Discount Note. The "daily portion" of original issue discount on
any Original Issue Discount Note is determined by allocating to each day in any
accrual period a ratable portion of the original issue discount allocable to
that accrual period. An "accrual period" may be of any length and the accrual
periods may vary in length over the term of the Original Issue Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the excess of
(i) the product of the Original Issue Discount Note's adjusted issue price at
the beginning of such accrual period and its yield to maturity (determined on
the basis of compounding at the close of each accrual period and appropriately
adjusted to take into account the length of the particular accrual period) and
(ii) the amount of any qualified stated interest payments allocable to such
accrual period. The "adjusted issue price" of an Original Issue Discount Note at
the beginning of any accrual period is the sum of the issue price of the
Original Issue Discount Note plus the amount of original issue discount
allocable to all prior accrual periods minus the amount of any prior payments on
the Original Issue Discount Note that were not qualified stated interest
payments. The amount of original issue discount 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 original issue discount allocable to the final accrual period is the
difference between (x) the amount payable at the maturity of the Original Issue
Discount Note (other than any payment of qualified stated interest) and (y) the
Original Issue Discount Note's adjusted issue price as of the beginning of the
final accrual period. Under these rules, U.S. Holders generally will have to
include in income increasingly greater amounts of original issue discount in
successive accrual periods.

    ACQUISITION PREMIUM.  A U.S. Holder who purchases an Original Issue Discount
Note for an amount that is greater than its adjusted issue price as of the
purchase date and less than or equal to the sum of all amounts payable on the
Original Issue Discount Note after the purchase date other than payments of
qualified stated interest, will be considered to have purchased the Original
Issue Discount Note at an "acquisition premium." Under the acquisition premium
rules, the amount of original issue discount which such U.S. Holder must include
in its gross income with respect to such Original Issue Discount Note for any
taxable year (or portion thereof in which the U.S. Holder holds the Original
Issue Discount Note) will be reduced (but not below zero) by the portion of the
acquisition premium properly allocable to the period.

    VARIABLE NOTES.  Under the OID Regulations, Floating Rate Notes and Indexed
Notes ("Variable Notes") are subject to special rules whereby a Variable Note
will qualify as a "variable rate debt instrument" if (a) its issue price does
not exceed the total noncontingent principal payments due under the Variable
Note by more than a specified DE MINIMIS amount and (b) it does not provide for
stated interest other than stated interest, paid or compounded at least
annually, at current values of (i) one or more

                                      S-28
<PAGE>
qualified floating rates, (ii) a single fixed rate and one or more qualified
floating rates, (iii) a single objective rate, or (iv) a single fixed rate and a
single objective rate that is a qualified inverse floating rate.

    A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Variable Note (E.G., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Variable Note's
issue date) will be treated as a single qualified floating rate. Notwithstanding
the foregoing, a variable rate that would otherwise constitute a qualified
floating rate but which is subject to one or more restrictions such as a maximum
numerical limitation (I.E., a cap) or a minimum numerical limitation (I.E., a
floor) may, under certain circumstances, fail to be treated as a qualified
floating rate under the OID Regulations unless such cap or floor is fixed
throughout the term of the Note or is not reasonably expected to significantly
affect the yield on the Variable Note. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula and which is based upon objective financial or economic information. A
rate will not qualify as an objective rate if (i) it is based on information
that is within the control of the issuer (or a related party) or that is unique
to the circumstances of the issuer (or a related party), such as dividends,
profits or the value of the issuer's stock (although a rate does not fail to be
an objective rate merely because it is based on the credit quality of the
issuer) or (ii) it is reasonably expected that the average value of the rate
during the first half of the Note's term will be either significantly less than
or significantly greater than the value of the rate during the final half of the
Note's term. An Objective Rate includes a "qualified inverse floating rate,"
which is a rate equal to a fixed rate minus a qualified floating rate, as long
as variations in the rate can reasonably be expected to inversely reflect
contemporaneous variations in the qualified floating rate. The OID Regulations
also provide that if a Variable Note provides for stated interest at a fixed
rate for an initial period of one year or less followed by a variable rate that
is either a qualified floating rate or an objective rate and if the variable
rate on the Variable Note's issue date is intended to approximate the fixed rate
(E.G., the value of the variable rate on the issue date does not differ from the
value of the fixed rate by more than 25 basis points), then the fixed rate and
the variable rate together will constitute either a single qualified floating
rate or objective rate, as the case may be.

    If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations and if
interest on such Note is unconditionally payable in cash or property (other than
debt instruments of the issuer) at least annually, then all stated interest on
such Note will constitute qualified stated interest and will be taxed
accordingly. Thus, a Variable Note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof and that qualifies as a "variable rate debt instrument" under the OID
Regulations will generally not be treated as having been issued with original
issue discount unless the Variable Note is issued at a "true" discount (I.E., at
a price below the Note's stated principal amount) in excess of a specified DE
MINIMIS amount. The amount of qualified stated interest and the amount of
original issue discount, if any, that accrues during an accrual period on such
Variable Note is determined under the rules applicable to fixed rate debt
instruments by assuming that the variable rate is a fixed rate equal to (i) in
the case of a qualified floating rate or qualified inverse floating rate, the
value as of the issue date of the qualified floating rate or qualified inverse
floating rate, or (ii) in the case of an objective rate (other than a qualified
inverse floating rate), a fixed rate that reflects the yield that is reasonably
expected for the Variable Note. The qualified stated interest allocable to an
accrual period is increased (or decreased) if the interest actually paid during

                                      S-29
<PAGE>
an accrual period exceeds (or is less than) the interest assumed to be paid
during the accrual period pursuant to the foregoing rules.

    In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the Variable Note's
issue date. Any objective rate (other than a qualified inverse floating rate)
provided for under the terms of the Variable Note is converted into a fixed rate
that reflects the yield that is reasonably expected for the Variable Note. In
the case of a Variable Note that qualifies as a "variable rate debt instrument"
and provides for stated interest at a fixed rate in addition to either one or
more qualified floating rates or a qualified inverse floating rate, the fixed
rate is initially converted into a qualified floating rate (or a qualified
inverse floating rate, if the Variable Note provides for a qualified inverse
floating rate). Under such circumstances, the qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the Variable Note as of the Variable Note's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Variable Note is then converted into an "equivalent"
fixed rate debt instrument in the manner described above.

    Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Variable Note will account for such original issue discount and qualified
stated interest as if the U.S. Holder held the "equivalent" fixed rate debt
instrument. Each accrual period, appropriate adjustments will be made to the
amount of qualified stated interest or original issue discount assumed to have
been accrued or paid with respect to the "equivalent" fixed rate debt instrument
in the event that such amounts differ from the actual amount of interest accrued
or paid on the Variable Note during the accrual period.

    If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. On June 11, 1996, the Treasury Department
issued final regulations (the "CPDI Regulations") concerning the proper United
States Federal income tax treatment of contingent payment debt instruments. The
CPDI Regulations generally require a U.S. Holder of such an instrument to
include future contingent and noncontingent interest payments in income as such
interest accrues based upon a projected payment schedule. Moreover, in general,
under the CPDI Regulations, any gain recognized by a U.S. Holder on the sale,
exchange, or retirement of a contingent payment debt instrument will be treated
as ordinary income and all or a portion of any loss realized could be treated as
ordinary loss as opposed to capital loss (depending upon the circumstances). The
CPDI Regulations apply to debt instruments issued on or after August 13, 1996.
The proper United States Federal income tax treatment of Variable Notes that are
treated as contingent payment debt obligations will be more fully described in
the applicable Pricing Supplement. Furthermore, any other special United States
Federal income tax considerations, not otherwise discussed herein, which are
applicable to any particular issue of Notes will be discussed in the applicable
Pricing Supplement.

    OPTIONAL REDEMPTION.  Certain of the Notes (i) may be redeemable at the
option of the Company prior to their stated maturity (a "call option") and/or
(ii) may be repayable at the option of the holder prior to their stated maturity
(a "put option"). For purposes of accruing original issue discount, a call
option exercisable by the Company or a put option exercisable by a holder will
be presumed to be exercised if, by utilizing any date on which the Note may be
redeemed or repaid as its maturity date and the amount payable on that date in
accordance with the terms of the Note (the "redemption price") as its

                                      S-30
<PAGE>
stated redemption price at maturity, the yield on the Note is (i) in the case of
a call option exercisable by the Company, lower than its yield to maturity or,
(ii) in the case of a put option exercisable by a Holder, is greater than its
yield to maturity. If such an option is not in fact exercised when presumed to
be, solely for purposes of accruing original issue discount, the Note will be
treated as if it were redeemed, and a new Note issued, on the presumed exercise
date for an amount equal to its adjusted issue price on that date. Investors
intending to purchase Notes with such features should consult their own tax
advisors, since the original issue discount consequences will depend, in part,
on the particular terms and features of the purchased Notes.

    ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT.  U.S. Holders may
generally, upon election, include in income all interest (including stated
interest, acquisition discount, original issue discount, DE MINIMIS original
issue discount, market discount, DE MINIMIS market discount, and unstated
interest, as adjusted by any amortizable bond premium or acquisition premium)
that accrues on a debt instrument by using the constant yield method applicable
to original issue discount, subject to certain limitations and exceptions. The
election is irrevocable except with the approval of the IRS. U.S. Holders should
consult their tax advisors regarding the advisability of making such an
election.

    SHORT-TERM NOTES.  Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be treated as having been issued with original issue
discount equal to the excess of the total principal and interest payments on the
Short-Term Note over its issue price. In general, an individual or other cash
method U.S. Holder is not required to accrue such original issue discount unless
the U.S. Holder elects to do so. If such an election is not made, any gain
recognized by the U.S. Holder on the sale, exchange or maturity of the
Short-Term Note will be ordinary income to the extent of the original issue
discount accrued on a straight-line basis, or upon election under the constant
yield method (based on daily compounding), through the date of sale or maturity,
and a portion of the deductions otherwise allowable to the U.S. Holder for
interest on borrowings incurred or maintained to purchase or carry the
Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States Federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).

    MARKET DISCOUNT

    If a U.S. Holder purchases a Note, other than an Original Issue Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of an Original Issue Discount Note, for an amount that is less than its
"revised" issue price (generally, adjusted issued price) as of the purchase
date, such U.S. Holder will be treated as having purchased such Note at a
"market discount," unless such market discount is less than a specified DE
MINIMIS amount.

    Under the market discount rules, a U.S. Holder will be required to treat any
partial principal payment (or, in the case of an Original Issue Discount Note,
any payment that does not constitute qualified stated interest) on, or any gain
realized on the sale, exchange, retirement or other disposition of, a Note as
ordinary income to the extent of the lesser of (i) the amount of such payment or
realized gain or (ii) the market discount which has not previously been included
in income and is treated as having accrued on such Note at the time of such
payment or disposition. Market discount will be considered to accrue ratably
during the period from the date of acquisition to the maturity date of the Note,
unless the U.S. Holder elects to accrue market discount on a constant yield
basis.

    A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
certain earlier dispositions, because a current deduction is only allowed to the
extent the interest expense exceeds an allocable portion of market discount. A
U.S. Holder may elect to include market discount in income currently as it
accrues (on either a ratable or constant yield), in which

                                      S-31
<PAGE>
case the rules described above regarding the treatment as ordinary income of
gain upon the disposition of the Note and upon the receipt of certain cash
payments and regarding the deferral of interest deductions will not apply.
Generally, such currently included market discount is treated as ordinary
interest for United States Federal income tax purposes. Such an election will
apply to all debt instruments acquired by the U.S. Holder on or after the first
day of the first taxable year to which such election applies and may be revoked
only with the consent of the IRS.

    PREMIUM

    If a U.S. Holder purchases a Note for an amount that is greater than the sum
of all amounts payable on the Note after the purchase date other than payments
of qualified stated interest, such U.S. Holder will be considered to have
purchased the Note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a constant yield
method over the remaining term of the Note and may offset interest (including
original issue discount) otherwise required to be included in respect of the
Note during any taxable year by the amortized amount of such excess for the
taxable year. However, if the Note may be optionally redeemed after the U.S.
Holder acquires it at a price in excess of its stated redemption price at
maturity, special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the Note. Any
election to amortize bond premium applies to all taxable debt instruments then
owned and thereafter acquired by the U.S. Holder on or after the first day of
the first taxable year to which such election applies and may be revoked only
with the consent of the IRS.

    DISPOSITION OF A NOTE

    Except as discussed above, upon the sale, exchange or retirement of a Note,
a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a
Note generally will equal such U.S. Holder's initial investment in the Note
increased by any original issue discount included in income (and accrued market
discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
such Note. Such gain or loss generally will be capital gain or loss, and will be
long-term capital gain or loss if the Note were held for more than one year. The
excess of net long-term capital gains over net short-term capital losses is
taxed at a lower rate than ordinary income for certain non-corporate taxpayers.
The distinction between capital gain or loss and ordinary income or loss is also
relevant for purposes of, among other things, limitations on the deductibility
of capital losses.

    EXTENSION OF MATURITY

    Under Final Treasury Regulations under Section 1001 of the Code, published
on June 26, 1996 (the "Section 1001 Regulations"), the exercise of an option
provided to the Company to extend the maturity of a Note will result in a
taxable deemed exchange of an old Note for a new Note if such option cannot be
unilaterally exercised by the Company and if such exercise modifies the terms of
the Note to a degree that is "economically significant." Generally, an option is
not unilaterally exercisable if the Holder's consent is required, the Holder can
demand repayment, or the Holder can put the Note to an affiliate of the Company.
Therefore, unless the Company eliminates a Holder's right to demand repayment
upon a maturity extension, such option would not be considered to be
unilaterally exercisable. The exercise of an option that changes the timing of
payments under a debt instrument is considered economically significant if there
is a "material deferral" of scheduled payments. The Section 1001 Regulations
generally provide that a deferral of scheduled payments within a safe-harbor
period which begins on the original due date for the first deferred payment and
extends for a period not longer than the lesser of five years or 50 percent of
the original term of the debt instrument will not be considered a material
deferral. Under the Section 1001 Regulations, the exercise of an option that
changes the yield on a debt instrument will generally be considered economically
significant if it alters the annual yield of the debt instrument by more than
the greater of (i) 25 basis points or (ii) 5 percent of the annual yield of the
debt instrument prior to modification. The presence of an option to extend the
maturity of a Note may also affect the calculation of original issue discount,
among other things.

                                      S-32
<PAGE>
NOTES DENOMINATED, OR IN RESPECT OF WHICH INTEREST IS PAYABLE, IN A FOREIGN
  CURRENCY

    As used herein, "Foreign Currency" means a currency or composite currency
other than U.S. dollars.

    PAYMENTS OF INTEREST IN A FOREIGN CURRENCY

    CASH METHOD. A U.S. Holder who uses the cash method of accounting for United
States Federal income tax purposes and who receives a payment of interest on a
Note (other than original issue discount or market discount) will be required to
include in income the U.S. dollar value of the Foreign Currency payment (based
on the exchange rate in effect on the date such payment is received) regardless
of whether the payment is in fact converted to U.S. dollars at that time, and
such U.S. dollar value will be the U.S. Holder's tax basis in such Foreign
Currency.

    ACCRUAL METHOD. A U.S. Holder who uses the accrual method of accounting for
United States Federal income tax purposes, or who otherwise is required to
accrue interest prior to receipt, will be required to include in income the U.S.
dollar value of the amount of interest income (including original issue discount
or market discount and reduced by amortizable bond premium to the extent
applicable) that has accrued and is otherwise required to be taken into account
with respect to a Note during an accrual period. The U.S. dollar value of such
accrued income will be determined by translating such income at the average rate
of exchange for the accrual period or, with respect to an accrual period that
spans two taxable years, at the average rate for the partial period within the
taxable year. A U.S. Holder may elect, however, to translate such accrued
interest income using the rate of exchange on the last day of the accrual period
or, with respect to an accrual period that spans two taxable years, using the
rate of exchange on the last day of the taxable year. If the last day of an
accrual period is within five business days of the date of receipt of the
accrued interest, a U.S. Holder may translate such interest using the rate of
exchange on the date of receipt. The above election will apply to other debt
obligations held by the U.S. Holder and may not be changed without the consent
of the IRS. A U.S. Holder should consult a tax advisor before making the above
election. A U.S. Holder will recognize exchange gain or loss (which will be
treated as ordinary income or loss) with respect to accrued interest income on
the date such income is received. The amount of ordinary income or loss
recognized will equal the difference, if any, between the U.S. dollar value of
the Foreign Currency payment received (based on the exchange rate in effect on
the date such payment is received) in respect of such accrual period and the
U.S. dollar value of interest income that has accrued during such accrual period
(as determined above).

    PURCHASE, SALE AND RETIREMENT OF NOTES

    A U.S. Holder who purchases a Note with previously owned Foreign Currency
will recognize ordinary income or loss in an amount equal to the difference, if
any, between such U.S. Holder's tax basis in the Foreign Currency and the U.S.
dollar fair market value of the Foreign Currency used to purchase the Note,
determined on the date of purchase.

    Except as discussed above with respect to Short-Term Notes, upon the sale,
exchange or retirement of a Note, a U.S. Holder will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement and such U.S. Holder's adjusted tax basis in the Note. Such gain
or loss generally will be capital gain or loss (except to the extent of any
accrued market discount not previously included in the U.S. Holder's income) and
will be long-term capital gain or loss if at the time of sale, exchange or
retirement the Note has been held by such U.S. Holder for more than one year. To
the extent the amount realized represents accrued but unpaid interest, however,
such amounts must be taken into account as interest income, with exchange gain
or loss computed as described in "Payments of Interest in a Foreign Currency"
above. If a U.S. Holder receives Foreign Currency on such a sale, exchange or
retirement, the amount realized will be based on the U.S. dollar value of the
Foreign Currency on the date the payment is received or the Note is disposed of
(or deemed disposed of as a result of a material change in the terms of such
Note). In the case of a Note that is denominated in Foreign Currency and is
traded on

                                      S-33
<PAGE>
an established securities market, a cash basis U.S. Holder (or, upon election,
an accrual basis U.S. Holder) will determine the U.S. dollar value of the amount
realized by translating the Foreign Currency payment at the spot rate of
exchange on the settlement date of the sale. A U.S. Holder's adjusted tax basis
in a Note will equal the cost of the Note to such holder, increased by the
amounts of any market discount or original issue discount previously included in
income by the holder with respect to such Note and reduced by any amortized
acquisition or other premium and any payments received by the holder other than
payments of qualified stated interest. A U.S. Holder's tax basis in a Note, and
the amount of any subsequent adjustments to such holder's tax basis, will be the
U.S. dollar value of the Foreign Currency amount paid for such Note, or of the
Foreign Currency amount of the adjustment, determined on the date of such
purchase or adjustment.

    Gain or loss realized upon the sale, exchange or retirement of a Note that
is attributable to fluctuations in currency exchange rates will be ordinary
income or loss which will not be treated as interest income or expense. Gain or
loss attributable to fluctuations in exchange rates will equal the difference
between the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date such payment is received or the Note is disposed
of, and the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date the U.S. Holder acquired the Note. Such Foreign
Currency gain or loss will be recognized only to the extent of the total gain or
loss realized by the U.S. Holder on the sale, exchange or retirement of the
Note.

    ORIGINAL ISSUE DISCOUNT

    In the case of an Original Issue Discount Note or Short-Term Note, (i)
original issue discount is determined in units of the Foreign Currency, (ii)
accrued original issue discount is translated into U.S. dollars as described in
"Payments of Interest in a Foreign Currency--Accrual Method" above and (iii) the
amount of Foreign Currency gain or loss on the accrued original issue discount
is determined by comparing the amount of income received attributable to the
discount (either upon payment, maturity or an earlier disposition), as
translated into U.S. dollars at the rate of exchange on the date of such
receipt, with the amount of original issue discount accrued, as translated
above.

    PREMIUM AND MARKET DISCOUNT

    In the case of a Note with market discount, (i) market discount is
determined in units of the Foreign Currency, (ii) accrued market discount taken
into account upon the receipt of any partial principal payment or upon the sale,
exchange, retirement or other disposition of the Note (other than accrued market
discount required to be taken into account currently) is translated into U.S.
dollars at the exchange rate on such disposition date (and no part of such
accrued market discount is treated as exchange gain or loss) and (iii) accrued
market discount currently includible in income by a U.S. Holder for any accrual
period is translated into U.S. dollars on the basis of the average exchange rate
in effect during such accrual period, and the exchange gain or loss is
determined upon the receipt of any partial principal payment or upon the sale,
exchange, retirement or other disposition of the Note in the manner described in
"Payments of Interest in a Foreign Currency--Accrual Method" above with respect
to computation of exchange gain or loss on accrued interest.

    With respect to a Note issued with amortizable bond premium, such premium is
determined in the relevant Foreign Currency and reduces interest income in units
of the Foreign Currency. Although not entirely clear, a U.S. Holder should
recognize exchange gain or loss equal to the difference between the U.S. dollar
value of the bond premium amortized with respect to a period, determined on the
date the interest attributable to such period is received, and the U.S. dollar
value of the bond premium determined on the date of the acquisition of the Note.

                                      S-34
<PAGE>
    EXCHANGE OF FOREIGN CURRENCIES

    A U.S. Holder will have a tax basis in any Foreign Currency received as
interest or on the sale, exchange or retirement of a Note equal to the U.S.
dollar value of such Foreign Currency, determined at the time the interest is
received or at the time of the sale, exchange or retirement. Any gain or loss
realized by a U.S. Holder on a sale or other disposition of Foreign Currency
(including its exchange for U.S. dollars or its use to purchase Notes) will be
ordinary income or loss.

NON-U.S. HOLDERS

    Subject to the discussion below under "--Backup Withholding," a non-U.S.
Holder will not be subject to United States Federal income taxes on payments of
principal, premium (if any) or interest (including original issue discount, if
any) on a Note, unless such non-U.S. Holder is a direct or indirect 10% or
greater shareholder of the Company, a controlled foreign corporation related to
the Company or a bank receiving interest described in section 881(c)(3)(A) of
the Code. To qualify for the exemption from taxation, the last United States
payor in the chain of payment prior to payment to a non-U.S. Holder (the
"Withholding Agent") must have received in the year in which a payment of
interest or principal occurs, or in either of the two preceding calendar years,
a statement that (i) is signed by the beneficial owner of the Note under
penalties of perjury, (ii) certifies that such owner is not a U.S. Holder and
(iii) provides the name and address of the beneficial owner. The statement may
be made on an IRS Form W-8 or a substantially similar form, and the beneficial
owner must inform the Withholding Agent of any change in the information on the
statement within 30 days of such change. If a Note is held through a securities
clearing organization or certain other financial institutions, the organization
or institution may provide a signed statement to the Withholding Agent. However,
in such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form provided by the beneficial owner to the organization
or institution. The Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.

    On October 6, 1997, the Treasury Department issued new regulations (the "New
Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
1999, subject to certain transition rules. Prospective investors are urged to
consult their own tax advisors regarding the New Regulations.

    Generally, a non-U.S. Holder will not be subject to Federal income taxes on
any amount which constitutes capital gain upon retirement or disposition of a
Note, provided the gain is not effectively connected with the conduct of a trade
or business in the United States by the non-U.S. Holder. Certain other
exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.

    The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of the Company
or, at the time of such individual's death, payments in respect of the Notes
would have been effectively connected with the conduct by such individual of a
trade or business in the United States.

BACKUP WITHHOLDING

    Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the Notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption.

                                      S-35
<PAGE>
Compliance with the identification procedures described in the preceding section
would establish an exemption from backup withholding for those non-U.S. Holders
who are not exempt recipients.

    In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S.
Holder (and certain other conditions are met). Such a sale must also be reported
by the broker to the IRS, unless either (i) the broker determines that the
seller is an exempt recipient or (ii) the seller certifies its non-U.S. status
(and certain other conditions are met). Certification of the registered owner's
non-U.S. status would be made normally on an IRS Form W-8 under penalties of
perjury, although in certain cases it may be possible to submit other
documentary evidence. In addition, prospective investors are urged to consult
their own tax advisors with respect to the New Regulations described above under
"Non-U.S. Holders."

    Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.

                              PLAN OF DISTRIBUTION

    The Notes are being offered on a continuing basis for sale by the Company to
or through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Lehman Brothers Inc., J.P. Morgan Securities Inc. and UBS
Securities LLC (the "Agents"). The Agents, individually or in a syndicate, may
purchase Notes, as principal, from the Company from time to time for resale to
investors and other purchasers at varying prices relating to prevailing market
prices at the time of resale as determined by the applicable Agent or, if so
specified in the applicable Pricing Supplement, for resale at a fixed offering
price. If agreed to by the Company and an Agent, such Agent will utilize its
reasonable efforts on an agency basis to solicit offers to purchase the Notes at
100% of the principal amount thereof, unless otherwise specified in the
applicable Pricing Supplement. The Company will pay a commission to an Agent,
ranging from .125% to .750% of the principal amount of each Note, depending upon
its stated maturity, sold through such Agent as an agent of the Company.
Commissions with respect to Notes with stated maturities in excess of 30 years
that are sold through an Agent as an agent of the Company will be negotiated
between the Company and such Agent at the time of such sale.

    Unless otherwise specified in the applicable Pricing Supplement, any Note
sold to an Agent as principal will be purchased by such Agent at a price equal
to 100% of the principal amount thereof less a percentage of the principal
amount equal to the commission applicable to an agency sale of a Note of
identical maturity. An Agent may sell Notes it has purchased from the Company as
principal to certain dealers less a concession equal to all or any portion of
the discount received in connection with such purchase. Such Agent may allow,
and such dealers may reallow, a discount to certain other dealers and, unless
otherwise specified in the applicable Pricing Supplement, such discount allowed
to any dealer will not be in excess of the discount to be received by such Agent
from the Company. After the initial offering of Notes, the offering price (in
the case of Notes to be resold on a fixed offering price basis), the concession
and the reallowance may be changed.

    The Company has reserved the right to sell the Notes directly to investors
and other purchasers, and may accept offers to purchase Notes directly from
investors and other purchasers from time to time on its own behalf.

    The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject offers in whole or in part (whether placed
directly with the Company or through an Agent). Each Agent will have the right,
in its discretion reasonably exercised, to reject in whole or in part any offer
to purchase Notes received by it on an agency basis.

                                      S-36
<PAGE>
    Unless otherwise specified in the applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in the Specified Currency in The City of New York on the date of
settlement. See "Description of Notes--General."

    Upon issuance, the Notes will not have an established trading market. The
Notes will not be listed on any securities exchange. The Agents may from time to
time purchase and sell Notes in the secondary market, but the Agents are not
obligated to do so, and there can be no assurance that there will be a secondary
market for the Notes or that there will be liquidity in the secondary market if
one develops. From time to time, the Agents may make a market in the Notes, but
the Agents are not obligated to do so and may discontinue any market-making
activity at any time.

    The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The Company has
agreed to indemnify the Agents against, and to provide contribution with respect
to, certain liabilities (including liabilities under the Securities Act). The
Company has agreed to reimburse the Agents for certain other expenses.

    In the ordinary course of its business, the Agents and their affiliates have
engaged and may in the future engage in investment and commercial banking
transactions with the Company and certain of its affiliates.

    From time to time, the Company may issue and sell other Debt Securities
described in the accompanying Prospectus, and the amount of Notes offered hereby
is subject to reduction as a result of such sales.

                                 LEGAL MATTERS

    The legality of the Notes offered hereby will be passed upon for the Company
by Hogan & Hartson L.L.P., Washington, D.C. Certain legal matters will be passed
upon for the Agents by Brown & Wood LLP, New York, New York. Hogan & Hartson
L.L.P. and Brown & Wood LLP will rely on the opinion of Sirote & Permutt P.C.,
Birmingham, Alabama, as to matters of Alabama law.

                                      S-37
<PAGE>
PROSPECTUS

                                  $450,000,000

                      Colonial Realty Limited Partnership

                                Debt Securities

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

    Colonial Realty Limited Partnership (the "Company") may from time to time
offer in one or more series debt securities ("Debt Securities") with an
aggregate public offering price of up to $450,000,000 (or its equivalent based
on the exchange rate at the time of sale) in amounts, at prices and on terms to
be determined at the time of offering. The Debt Securities may be offered in
separate series in amounts, at prices and on terms to be described in one or
more supplements to this Prospectus (a "Prospectus Supplement").

    The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable, the specific title, aggregate
principal amount, currency, form (which may be registered or bearer, or
certificated or global), authorized denominations, maturity, rate (or manner of
calculation thereof) and time of payment of interest, any terms for redemption
at the option of the Company or repayment at the option of the holder, any terms
for any sinking fund payments, additional covenants and any initial public
offering price.

    The applicable Prospectus Supplement also will contain information, where
applicable, about certain U.S. federal income tax considerations relating to,
and any listing on a securities exchange of, the Debt Securities covered by such
Prospectus Supplement.

    The Debt Securities may be offered directly, through agents designated from
time to time by the Company, or to or through underwriters or dealers. If any
agents or underwriters are involved in the sale of any of the Debt Securities,
their names, and any applicable purchase price, fee, commission or discount
arrangement with, between or among them, will be set forth, or will be
calculable from the information set forth, in an accompanying Prospectus
Supplement. See "Plan of Distribution." No Debt Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Debt Securities.

    SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN FACTORS RELATING TO AN
INVESTMENT IN THE DEBT SECURITIES.

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

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 date of this Prospectus is January 8, 1998.
<PAGE>
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

    Certain statements in this Prospectus and the documents incorporated by
reference herein and any accompanying Prospectus Supplement, including those set
forth in "Risk Factors" and "Use of Proceeds" herein, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forwarding-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
or industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general economic
and business conditions which will, among other things, affect demand for
multifamily properties, availability and creditworthiness of prospective
tenants, lease rents and the availability of financing, adverse changes in the
real estate markets including, among other things, competition with other
companies, risks of real estate acquisition, governmental actions and
initiatives, and environmental/safety requirements. See "Risk Factors."

                                  THE COMPANY

    The Debt Securities offered hereby are being issued by the Company, which is
the "operating partnership" of Colonial Properties Trust ("Colonial"), an
Alabama real estate investment trust ("REIT") whose common shares are listed on
the New York Stock Exchange ("NYSE") under the symbol "CLP." The Company is
managed by Colonial, through its wholly owned subsidiary, Colonial Properties
Holding Company, Inc., an Alabama corporation ("CPHC"), which in turn owns
approximately 67.8% of the common equity interests in the Company as of December
10, 1997 and serves as the sole general partner of the Company. The Company's
activities as of December 10, 1997 include ownership of a diversified portfolio
of 92 multifamily, retail and office properties located in Alabama, Florida,
Georgia, Mississippi, South Carolina, North Carolina, Virginia and Tennessee,
development of new properties, acquisitions of existing properties, and
build-to-suit development.

    As of December 10, 1997, the Company owned a portfolio of 43 garden-style
multifamily apartment communities containing a total of 13,631 apartment units
(the "Multifamily Properties"), 36 retail properties (including 12 regional
malls, two "power centers," and 22 neighborhood shopping centers) containing a
total of approximately 10.2 million square feet of retail space (the "Retail
Properties"), 13 office properties containing a total of approximately 1.9
million square feet of office space (the "Office Properties") and parcels of
land adjacent to or near certain of these properties (the "Land"). (The
Multifamily Properties, the Retail Properties, the Office Properties and the
Land are referred to collectively as the "Properties.").

    Colonial currently conducts all of its business through CPHC, the Company,
Colonial Properties Services Limited Partnership (the "Management Partnership"),
which provides management services for the Properties, and Colonial Properties
Services, Inc. (the "Management Corporation"), which provides management
services for properties owned by third parties. The Company owns all of the
Properties (or interests therein). The Company is the sole general partner of
the Management Partnership and owns 99% of the interests therein.

    The Company's experienced staff of approximately 660 employees provides a
full range of real estate services from its headquarters in Birmingham, Alabama
and from seven regional offices located in the Mobile, Huntsville and
Montgomery, Alabama, Orlando and Tampa, Florida, Atlanta, Georgia and
Burlington, North Carolina metropolitan areas.

    The principal executive offices of the Company are located at 2101 Sixth
Avenue North, Suite 750, Birmingham, Alabama 35203, and its telephone number is
(205) 250-8700.

                                       2
<PAGE>
                                  RISK FACTORS

    Prospective investors should carefully consider, among other factors, the
matters described below.

REAL ESTATE INVESTMENT RISKS

    GENERAL.  Real property investments are subject to varying degrees of risk.
The Company's ability to service debt will depend in large part on the amount of
income generated, expenses incurred and capital expenditures required. The
Company's income from retail, multifamily or office properties may be adversely
affected by a number of factors, including the general economic climate and
local real estate conditions, such as an oversupply of, or a reduction in demand
for, retail, apartment or office space in the area and the attractiveness of the
properties to shoppers, residents and tenants. In addition, income from
properties and real estate values also are affected by such factors as the cost
of compliance with government regulation, including zoning and tax laws, the
potential for liability under applicable laws, interest rate levels and the
availability of financing. Certain significant expenditures associated with each
equity investment by the Company in a property (such as mortgage payments, if
any, real estate taxes and maintenance costs) also are generally not reduced
when circumstances cause a reduction in income from the property.

    RENEWAL OF LEASES AND RELETTING OF SPACE.  The Company is subject to the
risks that upon expiration of leases for space located at the Properties, the
leases may not be renewed, the space may not be relet or the terms of the
renewal or reletting (including the cost of required renovations or concessions
to tenants) may be less favorable than current lease terms. Although the Company
has established an annual budget for renovation and reletting expenses that it
believes are reasonable in light of each Property's situation, no assurance can
be given that this budget will be sufficient to cover these expenses. If the
Company is unable promptly to relet or renew leases for all or substantially all
of the space at its Properties, if the rental rates upon such renewal or
reletting are significantly lower than expected, or if the Company's reserves
for these purposes prove inadequate, then the Company's cash provided by
operating activities and ability to make debt service payments could be
adversely affected.

    DEPENDENCE ON PRIMARY MARKETS.  All of the Properties are located in the
southern United States, and 41 of the Properties are located in Birmingham and
Montgomery, Alabama, Orlando, Florida and Macon, Georgia. The Company's
performance and its ability to make debt service payments could be adversely
affected by economic conditions in the Southeast and in Birmingham, Montgomery,
central Florida and Macon in particular.

    POSSIBLE ENVIRONMENTAL LIABILITIES.  Under various Federal, state and local
laws, ordinances and regulations, a current or previous owner or operator of
real estate may be required to investigate and clean up certain hazardous
substances released at the property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and cleanup
costs incurred by such parties in connection with the contamination. In
addition, some environmental laws create a lien on the contaminated site in
favor of the government for damages and costs it incurs in connection with the
contamination. The presence of contamination or the failure to remediate
contamination may adversely affect the owner's ability to sell or lease real
estate or to borrow using the real estate as collateral. The owner or operator
of a site also may be liable under common law to third parties for damages and
injuries resulting from environmental contamination emanating from the site. The
Company has not been notified by any governmental authority of any material
non-compliance, liability or other claim in connection with any of the
Properties and the Company is not aware of any other environmental condition
with respect to any of the Properties that could be material. No assurance,
however, can be given that no prior owner created any material environmental
condition not known to the Company, that no material environmental condition
with respect to any Property has occurred during the Company's ownership
thereof, or that future uses or conditions (including, without limitation,
changes in applicable environmental laws and regulations) will not result in
imposition of environmental liability.

                                       3
<PAGE>
    At one of the Company's Properties, the Gadsden Mall in Gadsden, Alabama,
four underground storage tanks were removed in 1989. In connection with the
removal of these gasoline storage tanks, associated petroleum contamination was
discovered in the soil and groundwater. The Company is currently working with
the state regulatory agency to remediate the contamination in accordance with
applicable requirements. Because the tanks were registered with the Alabama
Department of Environmental Management and the facility was in compliance with
regulations prior to the incident, the Company has been reimbursed under the
Alabama Underground Storage Tank Trust Fund for the costs incurred to date in
connection with the ongoing cleanup, and expects to be reimbursed for the
remaining costs as well. Currently, a free product recovery program is underway.

    At the Bardmoor Village Shopping Center in Largo, Florida, which the Company
acquired in October 1996, soil and groundwater contamination was discovered in
May 1995. The contamination included dry cleaning solvents, primarily
perchloroethylene, and was determined to have been released from a dry cleaning
business operated by a tenant at the property. The Company and the seller of the
property, Reynolds Metals Development Company ("Reynolds"), have entered into an
indemnity agreement under which Reynolds is obligated to indemnify the Company
against any claims brought by any governmental authorities or third parties as a
result of the contamination, including costs incurred in the investigation and
remediation of the contamination, as well as damages to persons, property or
natural resources. In addition, the Florida Department of Environmental
Protection has determined that the property is eligible for the State of
Florida's Drycleaning Solvent Cleanup Program, which means that remediation of
the contamination will be funded by the State's Hazardous Waste Management Trust
Fund.

DEBT FINANCING

    The Company is subject to the risks associated with debt financing,
including the risk that the Company's cash provided by operating activities will
be insufficient to meet required payments of principal and interest, the risks
of rising interest rates on the Company's floating rate debt, the risk that the
Company will not be able to prepay or refinance existing indebtedness on the
Properties (which generally will not have been fully amortized at maturity) or
that the terms of such refinancing will not be as favorable as the terms of
existing indebtedness. In the event the Company is unable to secure refinancing
of such indebtedness on acceptable terms, the Company might be forced to dispose
of properties upon disadvantageous terms, which might result in losses to the
Company and might adversely affect the cash flow available for debt service. In
addition, If one or more properties are mortgaged to secure payment of
indebtedness and the Company is unable to meet mortgage payments, the mortgage
securing the property could be foreclosed upon by, or the property could be
otherwise transferred to, the mortgagee with a consequent loss of income and
asset value to the Company.

CONFLICTS OF INTEREST

    The Lowder family (which includes Thomas, James, Robert and Catherine Lowder
and their affiliates) holds interests in certain companies that in the past have
performed construction management, insurance brokerage and other services with
respect to the Properties. These companies may perform similar services for the
Company in the future. As a result of its financial interest in these companies,
the Lowder family may realize benefits from transactions between such companies
and the Company that are not realized by other holders of interests in the
Company. In addition, Thomas Lowder and his brother, James Lowder, as directors
of CPHC, may be in a position to influence the Company to do business with
companies in which the Lowder family has a financial interest. Although the
Company is subject to certain policies designed to eliminate or minimize
potential conflicts of interest, including a policy which requires that
transactions in which a director or officer of CPHC has a conflict of interest
be approved by a majority of the disinterested directors, there can be no
assurance that these policies will be successful in eliminating the influence of
such conflicts, or that such transactions, if any, will be on terms as favorable
to the Company as could be obtained in an arms-length transaction with a third
party.

                                       4
<PAGE>
DEVELOPMENT AND ACQUISITION RISKS

    The Company intends to continue development of new multifamily, retail and
office properties (including expansions of existing Properties on the land
adjacent to those Properties) and to consider acquisitions of multifamily,
retail and office properties where it believes that such development or
acquisition is consistent with the business strategies of the Company. New
project development is subject to a number of risks, including construction
delays or cost overruns that may increase project costs, financing risks as
described above, the failure to meet anticipated occupancy or rent levels,
failure to receive required zoning, occupancy and other governmental permits and
authorizations and changes in applicable zoning and land use laws, which may
result in the incurrence of development costs in connection with projects that
are not pursued to completion. In addition, because Colonial must distribute 95%
of its taxable income in order to maintain its qualification as a REIT, the
Company anticipates that new developments and acquisitions will be financed
primarily through lines of credit or other forms of secured or unsecured
construction financing. If permanent debt or equity financing is not available
on acceptable terms to refinance such new developments or acquisitions are
undertaken without permanent financing, further development activities or
acquisitions may be curtailed or cash available for distribution to shareholders
or to meet debt service obligations may be adversely affected. Acquisitions
entail risks that investments will fail to perform in accordance with
expectations and that judgments with respect to the costs of improvements to
bring an acquired property up to standards established for the market position
intended for that property will prove inaccurate, as well as general investment
risks associated with any new real estate investment. See "--Real Estate
Investment Risks" above.

CHANGES IN POLICIES

    The major policies of the Company, including its policies with respect to
development, acquisitions, financing, growth, operations, debt capitalization
and distributions, are determined by the board of directors of CPHC. Although it
has no present intention to do so, the board may amend or revise these and other
policies from time to time. A change in these policies could adversely affect
the Company's financial condition, results of operations, or ability to make
debt service payments.

                                USE OF PROCEEDS

    Unless otherwise specified in the applicable Prospectus Supplement, the
Company intends to use the net proceeds of any sale of Debt Securities for
general business purposes, including, without limitation, the development and
acquisition of additional properties as suitable opportunities arise, the
repayment of certain debt outstanding at such time, capital expenditures,
improvements to certain properties in the Company's portfolio, working capital
and other general purposes.

                      RATIOS OF EARNINGS TO FIXED CHARGES

    The Company's ratio of earnings to fixed charges for the years ended
December 31, 1993, 1994, 1995 and 1996 and the nine months ended September 30,
1997 was 1.26, 2.23, 1.91, 2.40 and 1.97, respectively.

    The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings consist of income (loss) before
gains from sales of property and extraordinary items plus fixed charges. Fixed
charges consist of interest expense (including interest costs capitalized) and
the amortization of debt issuance costs.

    Prior to completion of Colonial's initial public offering ("IPO"), certain
of the predecessor entities to the Company operated in a highly leveraged
manner. As a result, although the Properties have historically generated
positive net cash flow, the combined financial statements of the predecessor
entities for the fiscal year ended December 31, 1992 show net losses.
Consequently, the computation of the ratio of earnings to fixed charges for such
periods indicates that earnings were inadequate to cover fixed charges by
approximately $0.8 million for the year ended December 31, 1992.

                                       5
<PAGE>
    The reorganization and recapitalization effected in connection with the IPO
permitted the Company to de-leverage the Properties significantly, resulting in
an improved ratio of earnings to fixed charges for periods subsequent to the
IPO.

                         DESCRIPTION OF DEBT SECURITIES

    The following description sets forth certain general terms and provisions of
the Debt Securities to which this Prospectus and any applicable Prospectus
Supplement may relate. The particular terms of the Debt Securities being offered
and the extent to which such general provisions may apply will be described in a
Prospectus Supplement relating to such Debt Securities.

    The Debt Securities will be issued under an Indenture, as amended or
supplemented from time to time (the "Indenture"), between the Company and
Bankers Trust Company, as trustee (the "Trustee"). The Indenture has been filed
as an exhibit to the Registration Statement of which this Prospectus is a part
and is available for inspection at the corporate trust office of the Trustee or
as described above under "Available Information." The Indenture is subject to,
and governed by, the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made hereunder relating to the Indenture and the Debt Securities to
be issued thereunder are summaries of certain provisions thereof and do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture and such Debt Securities. All
section references appearing herein are to sections of the Indenture, and
capitalized terms used but not defined herein shall have the respective meanings
set forth in the Indenture.

GENERAL

    The Debt Securities will be direct, unsecured recourse obligations of the
Company and will rank equally with all other unsecured and unsubordinated
indebtedness of the Company. Unless otherwise specified in the applicable
Prospectus Supplement, Colonial has no obligation for payment of principal or
interest on the Debt Securities. Except as set forth in the Indenture or in one
or more indentures supplemental thereto and described in a Prospectus Supplement
relating thereto, the Debt Securities may be issued without limit as to
aggregate principal amount, in one or more series, in each case as established
from time to time in or pursuant to authority granted by a resolution of the
Board of Directors of CPHC, as general partner of the Company, or as established
in the Indenture (or in accordance with) or in one or more indentures
supplemental to the Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series. The Debt
Securities, while recourse to all of the assets of the Company, will not be
recourse to either CPHC, as general partner of the Company, or to Colonial, as
sole shareholder of CPHC.

    The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect to
such series. In the event that two or more persons are acting as Trustee with
respect to different series of Debt Securities, each such Trustee shall be a
trustee of a trust under the Indenture separate and apart from the trust
administered by any other Trustee, and, except as otherwise indicated herein,
any action described herein to be taken by each Trustee may be taken by each
such Trustee with respect to, and only with respect to, the one or more series
of Debt Securities for which it is Trustee under the Indenture.

                                       6
<PAGE>
    The Prospectus Supplement relating to any series of Debt Securities being
offered will contain the specific terms thereof, including, without limitation:

        (1) The title of such Debt Securities;

        (2) The aggregate principal amount of such Debt Securities and any limit
    on such aggregate principal amount;

        (3) The percentage of the principal amount at which such Debt Securities
    will be issued and, if other than the principal amount thereof, the portion
    of the principal amount thereof payable upon declaration of acceleration of
    the maturity thereof;

        (4) The date or dates, or the method for determining such date or dates,
    on which the principal of such Debt Securities will be payable;

        (5) The rate or rates (which may be fixed or variable), or the method by
    which such rate or rates shall be determined, at which such Debt Securities
    will bear interest, if any;

        (6) The date or dates, or the method for determining such date or dates,
    from which any interest will accrue, the dates on which any such interest
    will be payable, the regular record dates for such interest payment dates,
    or the method by which such dates shall be determined, the persons to whom
    such interest shall be payable, and the basis upon which interest shall be
    calculated if other than that of a 360-day year of twelve 30-day months;

        (7) The place or places where the principal of (and premium, if any) and
    interest, if any, on such Debt Securities will be payable, where such Debt
    Securities may be surrendered for conversion or registration of transfer or
    exchange and where notices or demands to or upon the Company in respect of
    such Debt Securities and the Indenture may be served;

        (8) The period or periods within which, the price or prices at which and
    the other terms and conditions upon which such Debt Securities may be
    redeemed, in whole or in part, at the option of the Company, if the Company
    is to have such an option;

        (9) The obligation, if any, of the Company to redeem, repay or purchase
    such Debt Securities pursuant to any sinking fund or analogous provision or
    at the option of a Holder thereof, and the period or periods within which or
    the date and dates on which, the price or prices at which and the other
    terms and conditions upon which such Debt Securities will be redeemed,
    repaid or purchased, in whole or in part, pursuant to such obligation;

        (10) If other than U.S. dollars, the currency or currencies in which
    such Debt Securities are denominated and/or payable, which may be a foreign
    currency or units of two or more foreign currencies or a composite currency
    or currencies, and the terms and conditions relating thereto;

        (11) Whether the amount of payments of principal of (and premium, if
    any) or interest, if any, on such Debt Securities may be determined with
    reference to an index, formula or other method (which index, formula or
    method may, but need not be, based on a currency, currencies, currency unit
    or units or composite currency or currencies) and the manner in which such
    amounts shall be determined;

        (12) Any additions to, modifications of or deletions from the terms of
    such Debt Securities with respect to Events of Default or covenants set
    forth in the Indenture;

        (13) Whether such Debt Securities will be issued in certificated and/or
    book-entry form;

        (14) Whether such Debt Securities will be in registered or bearer form
    and, if in registered form, the denominations thereof if other than $1,000
    and any integral multiple thereof and, if in bearer form, the denominations
    thereof and the terms and conditions relating thereto;

                                       7
<PAGE>
        (15) The applicability, if any, of the defeasance and covenant
    defeasance provisions of Article Fourteen of the Indenture;

        (16) Whether and under what circumstances the Company will pay any
    additional amounts on such Debt Securities in respect of any tax, assessment
    or governmental charge and, if so, whether the Company will have the option
    to redeem such Debt Securities in lieu of making such payment;

        (17) The terms and conditions, if any, upon which such Debt Securities
    may be subordinated to other indebtedness of the Company; and

        (18) Any other terms of such Debt Securities not inconsistent with the
    provisions of the Indenture (Section 301).

    The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.

    Except as set forth below under "Certain Covenants--Limitations on
Incurrence of Debt," the Indenture does not contain any provisions that would
limit the ability of the Company to incur indebtedness or that would afford
Holders of Debt Securities protection in the event of a highly leveraged or
similar transaction involving the Company or in the event of a change of
control. Restrictions on ownership and transfers of Colonial's common shares of
beneficial interest and preferred shares of beneficial interest are designed to
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. Reference is made to the applicable Prospectus Supplement for
information with respect to any deletions from, modifications of or additions to
the Events of Default or covenants of the Company that are described below,
including any addition of a covenant or other provision providing event risk or
similar protection.

                                       8
<PAGE>
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER

    Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302).

    Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, Four
Albany Street, New York, New York 10006; provided that, at the option of the
Company, payment of interest may be made by check mailed to the address of the
person entitled thereto as it appears in the register for such Debt Securities
or by wire transfer of funds to such person at an account maintained within the
United States (Sections 301, 305, 306, 307 and 1002).

    Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable regular record
date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of such Debt Security not
less than ten days prior to such Special Record Date, or may be paid at any time
in any other lawful manner, all as more completely described in the Indenture
(Section 307).

    Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the Trustee referred to above.
In addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer or exchange thereof at the corporate
trust office of the Trustee. Every Debt Security surrendered for conversion,
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable Prospectus Supplement
refers to any transfer agent (in addition to the Trustee) initially designated
by the Company with respect to any series of Debt 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 the
Company will be required to maintain a transfer agent in each place of payment
for such series. The Company may at any time designate additional transfer
agents with respect to any series of Debt Securities (Section 1002).

    Neither the Company nor the Trustee shall be required to (i) issue, register
the transfer of or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed in
part; or (iii) issue, register the transfer of or exchange any Debt Security
that has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such Debt Security not to be so repaid (Section 305).

MERGER, CONSOLIDATION OR SALE

    The Company will be permitted to consolidate with, or sell, lease or convey
all or substantially all of its assets to, or merge with or into, any other
entity, provided that (a) either the Company shall be the continuing entity, or
the successor entity (if other than the Company) formed by or resulting from any
such consolidation or merger or which shall have received the transfer of such
assets shall expressly assume payment of the principal of (and premium, if any)
and interest on all of the Debt Securities and the due and punctual performance
and observance of all of the covenants and conditions contained in the

                                       9
<PAGE>
Indenture; (b) immediately after giving effect to such transaction and treating
any indebtedness that becomes an obligation of the Company or any Subsidiary as
a result thereof as having been incurred by the Company or such Subsidiary at
the time of such transaction, no Event of Default under the Indenture, and no
event which, after notice or the lapse of time, or both, would become such an
Event of Default, shall have occurred and be continuing; and (c) an officer's
certificate and legal opinion covering such conditions shall be delivered to the
Trustee (Sections 801 and 803).

CERTAIN COVENANTS

    LIMITATIONS ON INCURRENCE OF DEBT.  The Company will not, and will not
permit any Subsidiary to, incur any Debt (as defined below), other than
intercompany Debt (representing Debt to which the only parties are Colonial, any
of its subsidiaries, the Company and any Subsidiary, or Debt owed to the
Management Corporation arising from routine cash management practices, but only
so long as such Debt is held solely by any of Colonial, any of its subsidiaries,
the Company and any Subsidiary), that is subordinate in right of payment to the
Debt Securities, if, immediately after giving effect to the incurrence of such
Debt and the application of the proceeds thereof, the aggregate principal amount
of all outstanding Debt of the Company and its Subsidiaries on a consolidated
basis determined in accordance with generally accepted accounting principles is
greater than 60% of the sum of (i) the Company's Adjusted Total Assets (as
defined below) as of the end of the most recent fiscal quarter prior to the
incurrence of such additional Debt, (ii) the purchase price of any real estate
assets or mortgages receivable (or interests therein) acquired by the Company or
any Subsidiary since the end of such fiscal quarter, including those obtained in
connection with the incurrence of such additional Debt and (iii) the net amount
of any securities offering proceeds received by the Company or any Subsidiary
since the end of such fiscal quarter (to the extent that such proceeds were not
used to acquire such real estate assets or mortgages receivable or used to
reduce Debt) (Section 1004(a)).

    In addition to the foregoing limitation on the incurrence of Debt, the
Company will not, and will not permit any Subsidiary to, incur any Debt if the
ratio of Consolidated Income Available for Debt Service to the Annual Service
Charge for the four consecutive fiscal quarters most recently ended prior to the
date on which such additional Debt is to be incurred shall have been less than
1.5 to 1, on a pro forma basis after giving effect to the incurrence of such
Debt and to the application of the proceeds thereof (Section 1004(b)).

    Further, the Company will not, and will not permit any Subsidiary to, incur
any Debt secured by any mortgage, lien, charge, pledge, encumbrance or security
interest of any kind upon any of the property of the Company or any Subsidiary
("Secured Debt"), whether owned at the date of the Indenture or thereafter
acquired, if, immediately after giving effect to the incurrence of such Secured
Debt and the application of the proceeds thereof, the aggregate principal amount
of all outstanding Secured Debt of the Company and its Subsidiaries on a
consolidated basis is greater than 40% of the sum of (i) the Company's Adjusted
Total Assets as of the end of the most recent fiscal quarter prior to the
incurrence of such additional Debt, (ii) the purchase price of any real estate
assets or mortgages receivable (or interests therein) acquired by the Company or
any Subsidiary since the end of such fiscal quarter, including those obtained in
connection with the incurrence of such additional Debt and (iii) the amount of
any securities offering proceeds received by the Company or any Subsidiary since
the end of such fiscal quarter (to the extent that such proceeds were not used
to acquire such real estate assets or mortgages receivable or used to reduce
Debt) (Section 1004(c)).

    For purposes of the foregoing provisions regarding the limitation on the
incurrence of Debt, Debt shall be deemed to be "incurred" by the Company or a
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof.

                                       10
<PAGE>
    MAINTENANCE OF UNENCUMBERED TOTAL ASSET VALUE.  The Company will at all
times maintain an Unencumbered Total Asset Value in an amount not less than 150%
of the aggregate principal amount of all outstanding unsecured Debt of the
Company and its Subsidiaries (Section 1004(d)).

    EXISTENCE.  Except as described above under "Merger, Consolidation or Sale,"
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights (by partnership agreement
and statute) and franchises; provided, however, that the Company shall not be
required to preserve any right or franchise if it determines that the
preservation thereof is no longer desirable in the conduct of its business and
that the loss thereof is not disadvantageous in any material respect to the
Holders of the Debt Securities (Section 1006).

    MAINTENANCE OF PROPERTIES.  The Company will cause all of its material
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that the Company and its Subsidiaries shall not
be prevented from selling or otherwise disposing of for value its properties in
the ordinary course of business (Section 1007).

    INSURANCE.  The Company will, and will cause each of its Subsidiaries to,
keep all of its insurable properties insured against loss or damage at least
equal to their then full insurable value with insurers of recognized
responsibility and having an A.M. Best policy holder's rating of not less than
A-:V (Section 1008).

    PAYMENT OF TAXES AND OTHER CLAIMS.  The Company will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings or for which the Company has set apart and maintains
an adequate reserve (Section 1009).

    PROVISION OF FINANCIAL INFORMATION.  Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act (as defined below), the Company will,
to the extent permitted under the Exchange Act, file with the Commission the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to such Section 13 or
15(d) if the Company were so subject (the "Financial Information"), such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company also will in
any event (x) within 15 days of each Required Filing Date (i) transmit by mail
to all Holders of Debt Securities, as their names and addresses appear in the
Security Register, without cost to such Holders, copies of the Financial
Information and (ii) file with the Trustee copies of the Financial Information,
and (y) if filing such documents by the Company with the Commission is not
permitted under the Exchange Act, promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents
to any prospective Holder (Section 1010).

As used herein,

    "ADJUSTED TOTAL ASSETS" as of any date means the sum of (i) $328,177,823
(which represents the amount determined by multiplying the price at which
Colonial's common shares of beneficial interest were offered in the IPO by the
sum of (A) the common shares of beneficial interest of Colonial issued in the
IPO and

                                       11
<PAGE>
(B) the Units of the Company not held by Colonial that were issued in connection
with the IPO), (ii) $108,841,000 (which represents the principal amount of
outstanding Debt of the Company immediately following the IPO) and (iii) the
purchase price or cost of any real estate assets or mortgages receivable (or
interests therein) acquired (including the value of any Units issued in
connection therewith) or developed after the IPO and the amount of any
securities offering proceeds and other proceeds of Debt received after the IPO
(to the extent such proceeds were not used to acquire real estate assets or
mortgages receivable or used to reduce Debt), adjusted for the proceeds of any
real estate assets disposed of by the Company. This definition of "Adjusted
Total Assets" values the assets owned by the Company at the time of the IPO at
the market capitalization of the Company at that time, which the Company
believes to be a more appropriate measure of the value of those assets than
undepreciated book value, which reflects their pre-IPO cost before accumulated
depreciation.

    "ANNUAL SERVICE CHARGE" as of any date means the amount of any interest
expensed during the four consecutive fiscal quarters most recently ended prior
to such date.

    "CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE" for any period means
Consolidated Net Income (as defined below) of the Company and its Subsidiaries
plus amounts which have been deducted for (a) interest on Debt of the Company
and its Subsidiaries, (b) provision for taxes of the Company and its
Subsidiaries based on income, (c) amortization of debt discount, (d) provisions
for gains and losses on properties, (e) depreciation and amortization, (f) the
effect of any noncash charge resulting from a change in accounting principles in
determining Consolidated Net Income for such period and (g) amortization of
deferred charges.

    "CONSOLIDATED NET INCOME" for any period means the amount of net income (or
loss) of the Company and its Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting principles.

    "DEBT" of the Company or any Subsidiary means any indebtedness of the
Company or any Subsidiary, whether or not contingent, in respect of (i) borrowed
money evidenced by bonds, notes, debentures or similar instruments, (ii)
indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or any
security interest existing on property owned by the Company or any Subsidiary,
(iii) reimbursement obligations in connection with any letters of credit
actually issued or amounts representing the balance deferred and unpaid of the
purchase price of any property except any such balance that constitutes an
accrued expense or trade payable or (iv) any lease of property by the Company or
any Subsidiary as lessee which is reflected on the Company's consolidated
balance sheet as a capitalized lease in accordance with generally accepted
accounting principles; in the case of items of indebtedness incurred under (i)
through (iii) above to the extent that any such items (other than letters of
credit) would appear as a liability on the Company's consolidated balance sheet
in accordance with generally accepted accounting principles, and also includes,
to the extent not otherwise included, any obligation of the Company or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
indebtedness of another person (other than the Company or any Subsidiary).

    "DISQUALIFIED STOCK" means, with respect to any person, any capital stock or
partnership interest of such person which by the terms of such capital stock or
partnership interest (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the occurrence
of any event or otherwise: (i) matures or is mandatorily redeemable, pursuant to
a sinking fund obligation or otherwise; (ii) is convertible into or exchangeable
or exercisable for Debt or Disqualified Stock; or (iii) is redeemable at the
option of the holder thereof, in whole or in part, in each case or prior to the
maturity of the relevant series of Debt Securities.

    "SUBSIDIARY" means a corporation, partnership or limited liability company,
a majority of the outstanding voting stock, partnership interests or membership
interests, as the case may be, of which is owned or controlled, directly or
indirectly, by the Company or by one or more Subsidiaries of the Company. For
the purposes of this definition, "voting stock" means stock having the voting
power for the election of

                                       12
<PAGE>
directors, general partners, managers or trustees, as the case may be, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency. The Management Corporation would not be considered
a Subsidiary of the Company.

    "UNENCUMBERED TOTAL ASSET VALUE" as of any date means the sum of (i) the
portion of Adjusted Total Assets allocable to the Company's real estate assets
and (ii) the value of all other assets of the Company and its Subsidiaries on a
consolidated basis determined in accordance with generally accepted accounting
principles (but excluding intangibles and accounts receivable), in each case
which are unencumbered by any mortgage, lien, charge, pledge or security
interest. For purposes of this definition, the portion of Adjusted Total Assets
allocable to each of the 36 properties owned by the Company at the time of the
IPO shall be determined by reference to each such property's contribution to net
operating income of the Company at the time of the IPO, and the portion
allocable to each property acquired or developed after the IPO shall be equal to
the purchase price or cost of such property.

ADDITIONAL COVENANTS AND/OR MODIFICATIONS TO THE COVENANTS DESCRIBED ABOVE

    Any additional covenants of the Company and/or modifications to the
covenants described above with respect to any Debt Securities or series thereof,
will be described in the Prospectus Supplement relating thereto.

EVENTS OF DEFAULT, NOTICE AND WAIVER

    The Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (i) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (ii) default in the payment of principal of (or premium, if any,
on) any Debt Security of such series at its maturity; (iii) default in making
any sinking fund payment as required for any Debt Security of such series; (iv)
default in the performance or breach of any other covenant or warranty of the
Company contained in the Indenture (other than a covenant added to the Indenture
solely for the benefit of a series of Debt Securities issued thereunder other
than such series), continued for 60 days after written notice as provided in the
Indenture; (v) default in the payment of an aggregate principal amount exceeding
$10,000,000 of any indebtedness of the Company or any mortgage, indenture or
other instrument under which such indebtedness is issued or by which such
indebtedness is secured, such default having occurred after the expiration of
any applicable grace period and having resulted in the acceleration of the
maturity of such indebtedness, but only if such indebtedness is not discharged
or such acceleration is not rescinded or annulled; (vi) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Company or any SIGNIFICANT SUBSIDIARY or the
property of either; and (vii) any other Event of Default provided with respect
to a particular series of Debt Securities (Section 501). "Significant
Subsidiary" means any Subsidiary that is a "significant subsidiary" (within the
meaning of Regulation S-X promulgated under the Securities Act (as defined
below)) of the Company.

    If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% of the principal
amount of the Outstanding Debt Securities of that series will have the right to
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Company (and to the applicable Trustee if given by the Holders).
However, at any time after such a declaration of acceleration with respect to
Debt Securities of such series (or of all Debt Securities then Outstanding under
the Indenture, as the case may be) has been made, but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
Holders of not less than a majority in principal amount of Outstanding Debt
Securities of such series (or of all Debt Securities then Outstanding under the
Indenture, as the case may be) may rescind and annul such declaration and its
consequences if (a) the

                                       13
<PAGE>
Company shall have deposited with the Trustee all required payments of the
principal of (and premium, if any) and interest on the Debt Securities of such
series (or of all Debt Securities then Outstanding under the Indenture, as the
case may be), plus certain fees, expenses, disbursements and advances of the
Trustee and (b) all events of default, other than the non-payment of accelerated
principal (or specified portion thereof), with respect to Debt Securities of
such series (or of all Debt Securities then Outstanding under the Indenture, as
the case may be) have been cured or waived as provided in the Indenture (Section
502). The Indenture also provides that the Holders of not less than a majority
in principal amount of the Outstanding Debt Securities of any series (or of all
Debt Securities then Outstanding under the Indenture, as the case may be) may
waive any past default with respect to such series and its consequences, except
a default (x) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series or (y) in respect of a covenant or
provision contained in the Indenture that cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security affected thereby
(Section 513).

    The Trustee will be required to give notice to the Holders of Debt
Securities within 90 days of a default under the Indenture unless such default
shall have been cured or waived; provided, however, that the Trustee may
withhold notice to the Holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal of
(or premium, if any) or interest on any Debt Security of such series or in the
payment of any sinking fund installment in respect of any Debt Security of such
series) if specified responsible officers of the Trustee consider such
withholding to be in the interest of such Holders (Section 601).

    The Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the cases of failure of the Trustee, for
60 days, to act after it has received a written request to institute proceedings
in respect of an Event of Default from the Holders of not less than 25% in
principal amount of the Outstanding Debt Securities of such series, as well as
an offer of indemnity reasonably satisfactory to it (Section 507). This
provision will not prevent, however, any Holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Debt Securities at the respective due
dates thereof (Section 508).

    Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under the Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
(Section 602). The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series (or of all Debt Securities then
Outstanding under the Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred upon
such Trustee. However, the Trustee may refuse to follow any direction which is
in conflict with any law or the Indenture, which may involve the Trustee in
personal liability or which may be unduly prejudicial to the Holders of Debt
Securities of such series not joining therein (Section 512).

    Within 120 days after the close of each fiscal year, the Company will be
required to deliver to the Trustee a certificate, signed by one of several
specified officers of CPHC, stating whether or not such officer has knowledge of
any default under the Indenture and, if so, specifying each such default and the
nature and status thereof (Section 1011).

                                       14
<PAGE>
MODIFICATION OF THE INDENTURES

    Modifications and amendments of the Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities issued under the Indenture which are affected by
such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each such Debt Security
affected thereby, (a) change the stated maturity of the principal of, or any
installment of interest (or premium, if any) on, any such Debt Security; (b)
reduce the principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the Holder
of any such Debt Security; (c) change the place of payment, or the coin or
currency, for payment of principal or premium, if any, or interest on any such
Debt Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the
above-stated percentage of Outstanding Debt Securities of any series necessary
to modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Debt Security
(Section 902).

    The Holders of not less than a majority in principal amount of Outstanding
Debt Securities of each series affected thereby have the right to waive
compliance by the Company with certain covenants in the Indenture (Section
1013).

    Modifications and amendments of the Indenture may be permitted to be made by
the Company and the Trustee without the consent of any Holder of Debt Securities
for any of the following purposes: (i) to evidence the succession of another
person to the Company as obligor under the Indenture; (ii) to add to the
covenants of the Company for the benefit of the Holders of all or any series of
Debt Securities or to surrender any right or power conferred upon the Company in
the Indenture; (iii) to add Events of Default for the benefit of the Holders of
all or any series of Debt Securities; (iv) to add or change any provisions of
the Indenture to facilitate the issuance of, or to liberalize certain terms of,
Debt Securities in bearer form, or to permit or facilitate the issuance of Debt
Securities in uncertificated form, provided that such action shall not adversely
affect the interests of the Holders of the Debt Securities of any series in any
material respect; (v) to change or eliminate any provisions of the Indenture,
provided that any such change or elimination shall become effective only when
there are no Debt Securities Outstanding of any series created prior thereto
which are entitled to the benefit of such provision; (vi) to secure the Debt
Securities; (vii) to establish the form or terms of Debt Securities of any
series; (viii) to provide for the acceptance of appointment by a successor
Trustee or facilitate the administration of the trusts under the Indenture by
more than one Trustee; (ix) to cure any ambiguity, defect or inconsistency in
the Indenture, provided that such action shall not adversely affect the
interests of Holders of Debt Securities of any series issued under the Indenture
in any material respect; or (x) to supplement any of the provisions of the
Indenture to the extent necessary to permit or facilitate defeasance and
discharge of any series of such Debt Securities, provided that such action shall
not adversely affect the interests of the Holders of the Debt Securities of any
series in any material respect (Section 901).

    The Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (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
declaration of acceleration of the maturity thereof, (ii) the principal amount
of any Debt Security denominated in a foreign currency that shall be deemed
Outstanding shall be the U.S. dollar

                                       15
<PAGE>
equivalent, determined on the issue date for such Debt Security, of the
principal amount (or, in the case of Original Issue Discount Security, the U.S.
dollar equivalent on the issue date of such Debt Security of the amount
determined as provided in (i) above), (iii) the principal amount of an indexed
security that shall be deemed Outstanding shall be the principal face amount of
such indexed security at original issuance, unless otherwise provided with
respect to such indexed security pursuant to the Indenture and (iv) Debt
Securities owned by the Company or any other obligor upon the Debt Securities or
any affiliate of the Company or of such other obligor shall be disregarded
(Section 101).

    The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 1501). A meeting will be permitted to be
called at any time by the Trustee, and also, upon request, by the Company or the
Holders of at least 10% in principal amount of the Outstanding Debt Securities
of such series, in any such case upon notice given as provided in the Indenture
(Section 1502). Except for any consent that must be given by the Holder of each
Debt Security affected by certain modifications and amendments of the Indenture,
any resolution presented at a meeting or adjourned meeting duly reconvened 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 Debt Securities of that
series; provided, however, that, except as referred to above, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
Outstanding Debt Securities of a series may be adopted at a meeting or adjourned
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Debt Securities of that series. Any resolution passed or
decision taken at any meeting of Holders of Debt Securities of any series duly
held in accordance with the Indenture will be binding on all Holders of Debt
Securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the Outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the Holders of
not less than a specified percentage in principal amount of the Outstanding Debt
Securities of a series, the persons holding or representing such specified
percentage in principal amount of the Outstanding Debt Securities of such series
will constitute a quorum (Section 1504).

    Notwithstanding the foregoing provisions, the Indenture provides that if any
action is to be taken at a meeting of Holders of Debt Securities of any series
with respect to any request, demand, authorization, direction, notice, consent,
waiver and other action that the Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Debt Securities affected thereby, or the Holders of such series and
one or more additional series: (i) there shall be no minimum quorum requirement
for such meeting, and (ii) the principal amount of the Outstanding Debt
Securities of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or taken
under the Indenture (Section 1504).

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

    The Company may be permitted under the Indenture to discharge certain
obligations to Holders of any series of Debt Securities issued thereunder that
have not already been delivered to the Trustee for cancellation and that either
have become due and payable or will become due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
Trustee, in trust, funds in such currency or currencies, currency unit or units
or composite currency or currencies in which such Debt Securities are payable in
an amount sufficient to pay the entire indebtedness on such Debt Securities in
respect of principal (and premium, if any) and interest to the date of such
deposit (if such Debt Securities have become due and payable) or to the stated
maturity or redemption date, as the case may be.

                                       16
<PAGE>
    The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of the Indenture, the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for the obligation to pay additional amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402) or (b) to be released from its obligations with
respect to such Debt Securities under certain specified sections of Article Ten
of the Indenture as specified in the applicable Prospectus Supplement and any
omission to comply with such obligations shall not constitute an Event of
Default with respect to such Debt Securities ("covenant defeasance") (Section
1403), in either case upon the irrevocable deposit by the Company with the
Trustee, in trust, of an amount, in such currency or currencies, currency unit
or units or composite currency or currencies in which such Debt Securities are
payable at stated maturity, or Government Obligations (as defined below), or
both, applicable to such Debt Securities which through the scheduled 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 premium, if
any) and interest on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor.

    Such a trust may only be established if, among other things, the Company has
delivered to the Trustee an opinion of counsel (as specified in the Indenture)
to the effect that the Holders of such Debt Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to 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, and such
opinion of counsel, in the case of defeasance, will be required to refer to and
be based upon a ruling of the Internal Revenue Service or a change in applicable
U.S. federal income tax law occurring after the date of the Indenture (Section
1404).

    "Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the foreign
currency in which the Debt Securities of such series are payable, the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation of the United States of America or such government, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the Holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the Holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt (Section 101).

    Unless otherwise provided in the applicable Prospectus Supplement, if, after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the Holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the Indenture or the terms of such Debt Security to receive payment
in a currency, currency unit or composite currency other than that in which such
deposit has been made in respect of such Debt Security, or (b) a Conversion
Event (as defined below) occurs in respect of the currency, currency unit or
composite currency in which such deposit has been made, the indebtedness
represented by such Debt Security will be deemed to have been, and will be,
fully discharged and satisfied through the payment of the principal of (and
premium, if any) and interest on such Debt Security as they become due

                                       17
<PAGE>
out of the proceeds yielded by converting the amount so deposited in respect of
such Debt Security into the currency, currency unit or composite currency in
which such Debt Security becomes payable as a result of such election or
Conversion Event or such cessation of usage based on the applicable market
exchange rate (Section 1405). "Conversion Event" means the cessation of use of
(i) a currency, currency unit or composite currency both by the government of
the country which issued such currency and for the settlement of transactions by
a central bank or other public institutions of or within the international
banking community, (ii) the ECU both within the European Monetary System and for
the settlement of transactions by public institutions of or within the European
Communities or (iii) any currency unit or composite currency other than the ECU
for the purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S.
dollars (Section 101).

    In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default described
in clause (iv) under "Events of Default, Notice and Waiver" with respect to
certain specified sections of Article Ten of the Indenture (which sections would
no longer be applicable to such Debt Securities as a result of such covenant
defeasance) or described in clause (vii) under "Events of Default, Notice and
Waiver" with respect to any other covenant as to which there has been covenant
defeasance, the amount in such currency, currency unit or composite currency in
which such Debt Securities are payable, and Government Obligations on deposit
with the Trustee, will be sufficient to pay amounts due on such Debt Securities
at the time of their stated maturity but may not be sufficient to pay amounts
due on such Debt Securities at the time of the acceleration resulting from such
Default. However, the Company would remain liable to make payment of such
amounts due at the time of acceleration.

    The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.

REDEMPTION OF SECURITIES

    The Indenture provides that the Debt Securities may be redeemed at any time
at the option of the Company, in whole or in part, at the Redemption Price,
except as may otherwise be provided in connection with any Debt Securities or
series thereof.

    From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Debt Securities called for redemption shall have been
made available on such redemption date, such Debt Securities will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of the Holders of the Debt Securities will be to receive payment of
the Redemption Price (Section 1106).

    Notice of any optional redemption of any Debt Securities will be given to
Holders at their addresses, as shown in the Security Register, not more than 60
nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the Redemption Price and the
principal amount of the Debt Securities held by such Holder to be redeemed
(Section 1104).

    If the Company elects to redeem Debt Securities, it will notify the Trustee
at least 45 days prior to the redemption date (or such shorter period as is
satisfactory to the Trustee) of the aggregate principal amount of Debt
Securities to be redeemed and the redemption date (Section 1102). If less than
all the Debt Securities are to be redeemed, the Trustee shall select the Debt
Securities to be redeemed in such manner as it shall deem fair and appropriate.

                                       18
<PAGE>
NO CONVERSION RIGHTS

    The Debt Securities will not be convertible into or exchangeable for any
capital stock of Colonial or equity interest in the Company.

GLOBAL SECURITIES

    The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depository identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.

                              PLAN OF DISTRIBUTION

    The Company may sell the Debt Securities to or through underwriters for
public offer and sale by them, and also may sell the Debt Securities offered
hereby to investors directly or through agents. Any such underwriter or agent
involved in the offer and sale of the Debt Securities will be named in the
applicable Prospectus Supplement.

    Underwriters may offer and sell the Debt Securities at a fixed price or
prices, which may be changed, at prices related to the prevailing market prices
at the time of sale or at negotiated prices. The Company also may, from time to
time, authorize underwriters acting as the Company's agents to offer and sell
the Debt Securities upon terms and conditions set forth in the applicable
Prospectus Supplement. In connection with the sale of the Debt Securities,
underwriters may be deemed to have received compensation from the Company in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of the Debt Securities for whom they may act as agent.
Underwriters may sell the Debt Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.

    Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Debt Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Debt Securities may be deemed
to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements to be entered
into with the Company, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act.

    If so indicated in the applicable 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 at the public offering price set forth in such Prospectus Supplement
pursuant to delayed delivery contracts ("Contracts") providing for payment and
delivery on the date or dates stated in such Prospectus Supplement. Each
Contract will be for an amount not less than, and the aggregate principal amount
of Debt Securities sold pursuant to Contracts shall be not less nor more than,
the respective amounts stated in the applicable Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions but
will in all cases be subject to the approval of the Company. Contracts will not
be subject to any conditions except (i) the purchase by an institution of the
Debt Securities covered by its Contracts shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is

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subject, and (ii) if the Debt Securities are being sold to underwriters, the
Company shall have sold to such underwriters the total principal amount of the
Debt Securities less the principal amount thereof covered by Contracts.

    Certain of the underwriters and their affiliates may be customers of, engage
in transactions with and perform services for the Company and its Subsidiaries
in the ordinary course of business.

                             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 filed by the Company with the Commission in accordance with the
Exchange Act can be inspected at the Public Reference Section maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and the
following regional offices of the Commission: 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.

    The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement"), of which this Prospectus is a part, under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Debt Securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other documents are not necessarily complete, and in each instance, reference is
made to the copy of such contract or documents filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference and the exhibits and schedules thereto. For further information
regarding the Company and the Debt Securities, reference is hereby made to the
Registration Statement and such exhibits and schedules which may be obtained
from the Commission at its principal office in Washington, D.C. upon payment of
the fees prescribed by the Commission. The Commission maintains a 'web site'
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The address of
such site is "http://www.sec.gov".

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

    The documents listed below have been filed by the Company under the Exchange
Act with the Commission and are integrated herein by reference:

        1.  The Company's Form 10 filed with the Commission on May 13, 1996,
    File No. 0-20707, and as amended on June 21, 1996, July 3, 1996 and July 5,
    1996.

        2.  The Company's Annual Report on Form 10-K for the year ended December
    31, 1996 (the "Form 10-K").

        3.  The Company's Quarterly Reports on Form 10-Q for the quarters ended
    March 31, 1997, June 30, 1997 and September 30, 1997.

        4.  The Company's Current Reports on Form 8-K filed on July 21, 1997,
    September 17, 1997 and December 10, 1997.

    All documents filed by the Company subsequent to the date of this Prospectus
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to
termination of the offering of all Debt Securities to which this Prospectus
relates shall be deemed to be incorporated by reference in this Prospectus and
shall be part hereof from the date of filing of such document.

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<PAGE>
    Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus (in the case of a statement in a previously filed document
incorporated or deemed to be incorporated by reference herein), in any
accompanying Prospectus Supplement relating to a specific offering of Debt
Securities or in any other subsequently filed document that is also incorporated
or deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus or
any accompanying Prospectus Supplement. Subject to the foregoing, all
information appearing in this Prospectus and each accompanying Prospectus
Supplement is qualified in its entirety by the information appearing in the
documents incorporated by reference.

    The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon their
written or oral request, a copy of the Form 10 and any or all other documents
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference in such documents).
Written requests for such copies should be addressed to Douglas B. Nunnelley,
Senior Vice President and Secretary of Colonial Properties Holding Company,
Inc., at 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama 35203,
telephone number (205) 250-8700.

                                 LEGAL MATTERS

    The legality of the Debt Securities offered hereby will be passed upon for
the Company by Hogan & Hartson L.L.P., Washington, D.C.

                                    EXPERTS

    The consolidated balance sheets as of December 31, 1996 and 1995 and the
consolidated statements of operations, partners' capital, and cash flows for
each of the three years in the period ended December 31, 1996, which are
included in the Company's Form 10-K (incorporated herein by reference) and the
historical summaries of revenues and direct operating expenses of Acquired
Properties--Riverchase Center Building 2100, Beechwood Shopping Center,
Brookwood Mall, The Meadows at Trussville, and the Proposed Office and Retail
Merger, all of which are included in the Company's Form 8-K filed July 21, 1997
(incorporated herein by reference), and the historical summaries of revenues and
direct operating expenses of Acquired Properties--Georgia Malls, Mark Trace
Apartments and the Retail Portfolio, all of which are included in the Company's
Form 8-K filed December 10, 1997 (incorporated herein by reference), have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.

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