IRT PROPERTY CO, 10-K405, 1996-02-16

IRT PROPERTY CO
10-K405, 1996-02-16
REAL ESTATE INVESTMENT TRUSTS

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<PAGE> 1

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 1995
---------------------------
OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to
---------- ----------
Commission File Number 1-7859
- --------------------------------------------------------------------------

IRT PROPERTY COMPANY
- --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Georgia 58-1366611
- --------------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
- ---------------------------------------- --------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (770) 955-4406
---------------

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered
------------------- ------------------------
Shares of Common Stock New York Stock Exchange
$1 Par Value

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. X
----
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Based upon the assumption that directors and executive officers of the
registrant are not affiliates of the registrant, the aggregate market value of
the voting stock of the registrant held by nonaffiliates of the registrant at
February 9, 1996 was $237,658,363. Presuming that such directors and executive
officers are affiliates of the registrant, the aggregate market value of the
voting stock of the registrant held by nonaffiliates of the registrant at
February 9, 1996 was $234,063,374.

25,692,796 shares of Common Stock, $1 Par Value, outstanding at February 9,
1996.

DOCUMENTS INCORPORATED BY REFERENCE

The information called for by Part III (Items 10, 11, 12 and 13) is
incorporated by reference to the registrant's definitive proxy statement to be
filed pursuant to Regulation 14A.
<PAGE> 2

PART I

Item 1. Business.

General Development of Business . IRT Property Company (the
"Company"), founded in 1969, is a self-administered and self-managed equity
real estate investment trust which invests primarily in neighborhood and
community shopping centers which are located in the Southeastern United States
and are anchored by necessity-oriented retailers such as supermarkets, drug
stores and/or discount variety stores. IRT Property Company was incorporated
under the laws of Georgia in June 1979. It was organized in order to
accommodate a merger of Investors Realty Trust, a Tennessee business trust
organized in 1969, and Summit Properties, an Ohio business trust organized in
1965. That merger was accomplished effective June 20, 1979, and the Company
then succeeded to all of the assets and liabilities of both trusts.

The Company and its predecessor, Investors Realty Trust, have each
elected since their inceptions to be treated as "Real Estate Investment Trusts"
("REITs") under the Internal Revenue Code (the "Code"). The Company intends to
continue such election, although it is not required to do so. For the special
provisions applicable to REITs, reference is made to Sections 856-860 of the
Code, as amended.

The Company has two wholly-owned subsidiaries. IRT Management Company
("IRTMC") was formed in 1990. The only business conducted thus far by IRTMC
has been the purchase of a portion of the Company's 2% convertible subordinated
debentures, although it may engage in other activities in the future. VW Mall,
Inc. ("VWM") was formed in July 1994. Upon its formation, VWM purchased the
land underlying Valley West Mall and now holds 100% of the Company's interest
in this investment.

Financial Information and Description of Business. The Company's sole
business is the ownership of real estate investments which consist principally
of equity investments in income-producing properties, with primary emphasis on
neighborhood and community shopping centers in the Southeastern United States.
The Company's investment portfolio also includes some apartment, industrial and
other properties, and to a lesser extent various purchase-money mortgages taken
back on the sales of former equity investments. In addition, the Company has
authority to make other types of equity and mortgage investments in real
estate. The Company considers its investment activity to consist of a single
industry segment.

For a description of the Company's individual investments and of
material developments during the year regarding these investments and the
Company as a whole, reference is made to Items 2 and 7 hereof. For financial
information about the Company's 1987 and 1993 debenture offerings, reference is
made to Items 6 and 7

1
<PAGE> 3

and to Note 7 to the consolidated financial statements. For information
regarding the Company's 1993 common stock offering, reference is made to Item 7
and to Note 2 to the consolidated financial statements. Readers are also urged
to review the Company's Annual Report to Shareholders for the year ended
December 31, 1995.

In making new real estate investments, the Company intends to continue
to place primary emphasis on obtaining equity interests in well-located
income-producing properties, principally shopping centers in the Southeastern
United States, with attractive yields and potential for increases in income and
capital appreciation. The Company will also from time to time consider the
disposition or exchange of existing investments in order to improve its
investment portfolio or increase its funds from operations. Existing
investments are continuously reviewed by Company management, and appropriate
programs to renovate and modernize properties are designed and implemented in
order to improve leasing arrangements, thereby increasing funds from operations
and property values. The Company's investment and portfolio management
philosophy is designed to implement its overall objective of maximizing funds
from operations and distributions to shareholders.

The Company directly provides property management and leasing services
for all but one of its operating properties. Self-management enables the
Company to emphasize and more closely control leasing and property management.
Internal property management also provides the Company opportunities for
operating efficiencies by enabling it to acquire additional properties without
proportionate increases in property management expenses. The Company's
property management program is implemented by on-site property managers and
property management and leasing professionals located in offices in Atlanta,
Charlotte, Orlando and New Orleans.

The results of the Company's operations depend upon the performance of
its existing investment portfolio, the availability of suitable opportunities
for new investments and the yields then available on such investments. Such
yields will vary with the type of investment involved, the condition of the
financial and real estate markets, the nature and geographic location of the
investment, competition and other factors. The performance of a real estate
investment company is strongly influenced by the cycles of the real estate
industry. As financial intermediaries providing equity funds for real estate
projects, real estate investment companies are generally subject to the same
market and economic forces as other real estate investors.

Competitive Conditions. In seeking new investment opportunities, the
Company competes with other real estate investors, including pension funds,
foreign investors, real estate partnerships, and other domestic real estate
companies. On properties presently owned by the Company or in which it has

2
<PAGE> 4

investments, the Company and its tenants and borrowers compete with other
owners of like properties for tenants and/or customers depending on the nature
of the investment. Management believes that the Company is well positioned to
compete effectively for new investments and tenants.

For any borrowed funds that may be used in new investment activity,
the Company would be in competition with other borrowers seeking both secured
and unsecured borrowings in the banking, real estate lending and public debt
markets. For a description of the Company's mortgage debt, reference is made
to Table V in Item 2 hereof, to Item 7 and to Note 6 to the consolidated
financial statements included as a part of this report. For a description of
the Company's 7.3% convertible subordinated debentures, reference is made to
Item 7 and to Note 7 to the consolidated financial statements. For a
description of the Company's $100,000,000 revolving term loan, reference is
made to Item 7 and to Note 8 to the consolidated financial statements.

Regulation. Investments in real property create a potential for
environmental liability on the part of the owner of or any mortgage lender on
such real property. If hazardous substances are discovered on or emanating
from any of the Company's properties, the owner or operator of the property
(including the Company) may be held strictly liable for all costs and
liabilities relating to such hazardous substances. In 1989, the Company
adopted a policy of obtaining a Phase I environmental study on each property it
seeks to acquire.

The Company's Charlotte, North Carolina industrial facility is among
the sites appearing on the Comprehensive Environmental Response, Compensation
and Liability Information System List ("CERCLIS") maintained by the United
States Environmental Protection Agency ("EPA"). The CERCLIS list contains
sites which have possible environmental contamination. The EPA regularly
requests that state environmental agencies conduct screening site
investigations ("SSI") at various sites appearing on the CERCLIS list. At the
request of the EPA, the North Carolina Department of Environment, Health, and
Natural Resources ("DEHNR") conducted an SSI at this facility on May 28, 1991.
Following receipt of results of such SSI, the DEHNR advised the Company that it
would not recommend further action to the EPA with respect to this facility.
The Company understands that the EPA has determined that no further action is
necessary at the site, and the site currently appears in the CERCLIS list as a
"delisted" site.

3
<PAGE> 5

Actions") must be performed by the Company to, among other things, determine
the level of soil and/or groundwater contamination due to suspected leakage
from some of the USTs. The Company has investigated the property to the
satisfaction of DEHNR. The investigation confirmed the presence of petroleum
product-related substances in soil and groundwater at levels that exceed
applicable standards. The investigation also revealed the presence of free
phase liquids in one monitoring well at the property.

The Company has begun removing free phase liquids from the well on the
property. In addition, the Company has submitted to DEHNR a Corrective Action
Plan ("CAP") and schedule to address petroleum-impacted soil and groundwater at
the site. Soil excavation work has been completed, and the Company plans to
address petroleum-impacted groundwater in due course. According to the CAP,
the estimated remaining cost for site remediation ranges from $129,000 to
$193,000 over a period of 3 to 6 years. Although the Company believes that
certain of the costs of Corrective Action are reimburseable under the North
Carolina Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund,
the Company has accrued $129,000 based on these estimates. The CAP may be
revised, and the estimated costs may change, but based on the information
presently available, the Company believes any additional costs of any such
Corrective Action would not have a material adverse effect on the Company's
results of operations, financial position, or liquidity.

During its soil and groundwater investigation at Bluebonnet Village
Shopping Center in Baton Rouge, Louisiana, the Company's environmental
consultant discovered concentrations of various chemicals in groundwater
monitoring well BB-1 that exceeded the maximum contaminant levels under the
Federal Safe Drinking Water Act ("MCLs"). The Company has notified the
Louisiana Department of Environmental Quality-Groundwater Protection Division
("LDEQ-GWPD") of such discovery. The Company has been advised that the
groundwater impact appears to be very localized, since six other groundwater
monitoring wells placed around the initial well did not exhibit any impact. At
the request of LDEQ-GWPD, the Company subsequently installed two additional
wells in the immediate area of well BB-1 and sampled them at different depths,
confirming concentrations of chemicals above MCLs at that location. There can
be no assurance that the LDEQ-GWPD will not require remediation, but based on
information presently available to the Company and discussions with the
Company's environmental consultant, the Company believes the cost of any such
remediation would not have a material adverse effect on the Company's results
of operations, financial position, or liquidity.

Leaking petroleum USTs formerly located at the Company's Venice Plaza
Shopping Center in Venice, Florida, have affected soil and groundwater at this
center. Kash n' Karry Food Stores, Inc., the Florida food division of Lucky
Stores, Inc., formerly operated

4
<PAGE> 6

such USTs at Venice Plaza Shopping Center and is addressing the releases. No
Corrective Action concerning such leaking USTs has been requested or required
of the Company by any federal, state or local agency or any other party.

Solvents apparently relating to drycleaning activities have been
discovered in soil and groundwater in the immediate vicinity of the premises of
a current tenant operating a dry cleaning facility at the Company's Westgate
Square Shopping Center in Sunrise, Florida. The tenant has agreed to
investigate this discovery, and the Company expects to receive a report from
the tenant. In addition, the Company has been informed that costs of any
necessary Corrective Action may be funded in part through a program established
by the State of Florida. No Corrective Action concerning the solvents has been
requested or required of the Company by any federal, state or local agency or
any other party.

Based on information presently available to the Company, the Company
believes that Kash n' Karry Food Stores, Inc. and/or Lucky Stores, Inc. in the
case of Venice Plaza Shopping Center, or the drycleaning facility tenant in the
case of Westgate Square, have the primary responsibility for undertaking any
necessary Corrective Action at these properties. There can be no assurance
that the Company will not be required to undertake Corrective Action at these
sites, but based on the information presently available to the Company, the
Company believes that the costs of any such Corrective Action would not have a
material adverse effect on the Company's results of operations, financial
position, or liquidity.

Leaking petroleum USTs and other environmental concerns located on
property owned by third parties may affect certain properties of the Company.
Examples include Gulf Gate Plaza Shopping Center, Naples, Florida; Thomasville
Commons, Thomasville, North Carolina; Wesley Chapel Crossing, Decatur, Georgia;
and Chestnut Square, Brevard, North Carolina. Based on information presently
available to the Company, the Company believes that the third party landowners
or UST operators are responsible for Corrective Action for any such matters.
Accordingly, the Company believes that the costs of any such Corrective Action
would not have a material adverse effect on the Company's results of
operations, financial position, or liquidity.

The Company has not commissioned independent environmental analyses
with respect to properties acquired prior to 1989, except as required pursuant
to a former secured revolving term loan. Phase I environmental site
assessments (which generally did not include environmental sampling, monitoring
or laboratory analysis) were implemented by the Company with respect to those
properties which the Company acquired from 1989 to the present, prior to the
acquisition of such properties. No assurance can be given that hazardous
substances are not located on any of the properties. However, the Company has
no reason to believe that any

5
<PAGE> 7

environmental contamination has occurred nor any violation of any applicable
environmental law, statute, regulation or ordinance exists that would have a
material adverse effect on the Company's results of operations, financial
position or liquidity. The Company presently carries no insurance coverage for
the types of environmental risks described above.

Employees . The Company presently employs 57 persons, 10 of whom are
on-site management, maintenance and security personnel at four of the Company's
real estate investments.

Item 2. Properties.

The following tables and notes thereto describe the properties in
which the Company had investments at December 31, 1995, as well as the mortgage
indebtedness to which the Company's investments were subject. Reference is
made to Note 3 to the consolidated financial statements included as a part of
this report for information on minimum base rentals on noncancellable operating
leases for the next five years and thereafter.

6
<PAGE> 8
I. EQUITY INVESTMENTS (LAND & BUILDINGS)

The Company had a fee or leasehold interest in land and improvements
thereon as follows:

<TABLE>
<CAPTION>
Percent Cost to Depreciated Property Property
Date Area or Leased Year Company Cost FFO Net Income
Description Acquired Rental Units 12/31/95 Completed 12/31/95 12/31/95 1995 (1) 1995 (2)
----------- -------- ------------ -------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS
Abbeville Plaza 4/86 59,525 sq. ft. 53% 1970 $516,598 $327,328 $33,874 $14,373
Abbeville, SC
Ambassador Row 12/94 193,982 sq. ft. 83% 1980 & 9,766,940 9,582,153 989,432 808,318
Lafayette, LA 1991
Ambassador Row Courtyard 12/94 155,483 sq. ft. 79% 1986 & 11,597,751 11,375,369 1,133,717 916,259
Lafayette, LA 1991
Asheville Plaza 4/86 49,800 sq. ft. 100% 1967 405,287 294,719 95,736 84,540
Asheville, NC
Bluebonnet Village 12/94 89,879 sq. ft. 99% 1983 8,075,331 7,933,066 838,504 700,754
Baton Rouge, LA
The Boulevard 12/94 68,012 sq. ft. 97% 1976 & 3,797,687 3,724,683 415,787 344,662
Lafayette, LA 1994
Carolina Place 5/89 36,560 sq. ft. 100% 1989 2,351,494 2,023,114 224,385 174,045
Hartsville, SC
Centre Pointe Plaza 12/92 & 163,642 sq. ft. 100% 1989 & 9,141,906 8,528,368 861,159 650,436
Smithfield, NC 12/93 1993
Chadwick Square 1/92 31,700 sq. ft. 100% 1985 1,456,727 1,341,201 196,566 97,324
Hendersonville, NC
Chelsea Place 7/93 81,144 sq. ft. 100% 1992 6,937,585 6,596,476 733,963 595,207
New Port Richey, FL
Chester Plaza 4/86 & 71,443 sq. ft. 66% 1967 & 2,199,971 1,776,111 218,447 134,588
Chester, SC 2/92 1992
Chestnut Square 1/92 39,640 sq. ft. 100% 1985 1,416,987 1,304,551 228,192 95,232
Brevard, NC
Colony Square 2/88 50,000 sq. ft. 100% 1987 2,929,230 2,344,643 258,894 165,109
Fitzgerald, GA
Commerce Crossing 12/92 100,668 sq. ft. 100% 1988 4,482,688 4,173,413 416,287 313,029
Commerce, GA
Country Club Plaza 1/95 64,686 sq. ft. 81% 1982 4,091,000 4,016,759 420,653 346,412
Slidell, LA
Countryside Shops 6/94 173,161 sq. ft. 100% 1986,1988 16,692,632 16,279,162 1,734,868 1,458,318
Cooper City, FL & 1991
The Crossing 12/94 113,989 sq. ft. 100% 1988 & 4,565,502 4,481,921 464,286 383,946
Slidell, LA 1993
Delchamps Plaza 4/88 66,857 sq. ft. 100% 1987 4,515,233 3,710,104 467,848 56,687
Pascagoula, MS
Douglas Commons 8/92 97,027 sq. ft. 95% 1988 8,609,091 8,081,659 784,751 9,823
Douglasville, GA
</TABLE>

7
<PAGE> 9

I. EQUITY INVESTMENTS (LAND & BUILDINGS), continued

<TABLE>
<CAPTION>
Percent Cost to Depreciated Property Property
Date Area or Leased Year Company Cost FFO Net Income
Description Acquired Rental Units 12/31/95 Completed 12/31/95 12/31/95 1995 (1) 1995 (2)
----------- -------- ------------ -------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS,continued
Eden Centre 11/94 56,355 sq. ft. 100% 1991 $3,527,217 $3,442,596 $406,816 $334,283
Eden, NC
Elmwood Oaks 1/92 130,284 sq. ft. 100% 1989 11,125,788 10,476,539 1,179,547 269,525
Harahan, LA
First Street Station 8/94 52,230 sq. ft. 93% 1989 3,041,668 2,947,269 290,935 220,114
Albemarle, NC
Forest Hills Centre 8/90 74,180 sq. ft. 98% 1990 & 5,516,321 4,993,548 523,452 405,125
Wilson, NC 1995
Forrest Gallery 12/92 214,450 sq. ft. 98% 1987 12,352,182 11,569,695 1,071,683 793,463
Tullahoma, TN
Ft. Walton Beach Plaza 7/86 48,248 sq. ft. 100% 1986 2,676,717 2,087,405 225,962 40,963
Ft. Walton Beach, FL
The Galleria 8/86 & 81,544 sq. ft. 91% 1986 & 7,582,706 6,246,633 515,830 324,996
Wrightsville Beach, NC 12/87 1990
Gulf Gate Plaza 6/79 173,259 sq. ft. 87% 1969 & 4,293,296 2,014,948 617,093 370,008
Naples, FL 1974
Harris Teeter 6/88 & 36,535 sq. ft. 100% 1981 & 2,600,657 2,038,917 295,744 218,704
Lexington, VA 6/89 1989
Heritage Walk 6/93 159,362 sq. ft. 100% 1991 & 8,757,752 8,246,260 946,046 747,410
Milledgeville, GA 1992
Hoffner Plaza 6/79 39,370 sq. ft. 20% 1972 1,146,933 427,817 28,996 (3,005)
Orlando, FL
Lancaster Plaza 4/86 77,400 sq. ft. 100% 1971 1,163,909 756,486 135,497 93,182
Lancaster, SC
Lancaster Shopping Center 8/86 & 29,047 sq. ft. 100% 1963 & 1,595,667 1,243,232 168,490 127,099
Lancaster, SC 12/87 1987
Lawrence Commons 8/92 52,295 sq. ft. 100% 1987 3,459,173 3,224,693 382,505 54,113
Lawrenceburg, TN
Litchfield Landing 8/86 42,201 sq. ft. 98% 1984 2,632,685 2,117,935 313,146 256,085
North Litchfield, SC
Macland Pointe 1/93 79,699 sq. ft. 100% 1992 & 6,113,405 5,759,166 709,611 285,791
Marietta, GA 1993
Masonova Plaza 6/79 157,955 sq. ft. 42% 1969 3,030,852 941,591 48,850 (100,368)
Daytona Beach, FL
Millervillage Shopping Center 12/94 94,559 sq. ft. 93% 1983 & 7,622,652 7,476,388 795,353 653,803
Baton Rouge, LA 1992
</TABLE>

8
<PAGE> 10

I. EQUITY INVESTMENTS (LAND & BUILDINGS), continued
<TABLE>
<CAPTION>
Percent Cost to Depreciated Property Property
Date Area or Leased Year Company Cost FFO Net Income
Description Acquired Rental Units 12/31/95 Completed 12/31/95 12/31/95 1995 (1) 1995 (2)
----------- -------- ------------ -------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS,continued
New Smyrna Beach Regional 8/92 118,451 sq. ft. 98% 1987 $10,347,833 $9,771,471 $903,950 $715,413
New Smyrna Beach, FL
North River Village Center 12/92 & 177,128 sq. ft. 99% 1988 & 10,163,755 9,728,914 1,064,762 884,172
Ellenton, FL 12/93 1993
North Village Center (3) 8/86 60,356 sq. ft. 98% 1984 3,284,033 2,675,959 299,342 15,201
North Myrtle Beach, SC
Old Kings Commons 5/88 84,759 sq. ft. 100% 1988 6,102,943 5,199,241 578,831 447,925
Palm Coast, FL
Palm Gardens 6/79 52,670 sq. ft. 100% 1970 2,030,412 1,262,601 295,413 169,024
Largo, FL
Parkmore Plaza 12/92 159,067 sq. ft. 100% 1986 & 8,315,223 7,824,772 930,950 767,053
Milton, FL 1992
Paulding Commons 8/92 192,391 sq. ft. 99% 1991 12,962,464 12,052,654 1,300,639 356,068
Dallas, GA
Pensacola Plaza 7/86 56,098 sq. ft. 100% 1985 2,644,579 1,830,950 221,732 77,516
Pensacola, FL
Pinhook Plaza 12/94 190,319 sq. ft. 97% 1979 & 11,092,104 10,878,829 1,146,092 198,041
Lafayette, LA 1992
Plaza Acadienne (4) 12/94 105,419 sq. ft. 100% 1980 2,929,925 2,855,027 389,392 68,307
Eunice, LA
Plaza North 8/92 47,240 sq. ft. 97% 1986 2,460,095 2,306,155 269,072 223,683
Hendersonville, NC
Providence Square 12/71 85,690 sq. ft. 91% 1973 4,311,233 1,978,218 412,598 240,612
Charlotte, NC
Riverview Shopping Center 3/72 130,058 sq. ft. 87% 1973 & 6,352,151 4,622,128 562,955 351,596
Durham, NC 1994
Scottsville Square 8/92 38,450 sq. ft. 90% 1986 2,438,204 2,285,885 286,681 242,073
Bowling Green, KY
Seven Hills 7/93 64,890 sq. ft. 100% 1991 4,897,220 4,711,781 503,076 55,655
Spring Hill, FL
Shelby Plaza (4) 4/86 103,000 sq. ft. 75% 1972 1,115,149 705,311 117,116 60,552
Shelby, NC
Sherwood South 12/94 75,607 sq. ft. 82% 1972, 1988 1,984,695 1,946,067 274,792 237,580
Baton Rouge, LA & 1992
Siegen Village 12/94 115,762 sq. ft. 100% 1988 6,372,713 6,264,215 595,679 488,111
Baton Rouge, LA
Smyrna Village 8/92 83,334 sq. ft. 98% 1992 5,846,141 5,434,452 624,809 183,349
Smyrna, TN
</TABLE>

9
<PAGE> 11
I. EQUITY INVESTMENTS (LAND & BUILDINGS), continued
<TABLE>
<CAPTION>
Percent Cost to Depreciated Property Property
Date Area or Leased Year Company Cost FFO Net Income
Description Acquired Rental Units 12/31/95 Completed 12/31/95 12/31/95 1995 (1) 1995 (2)
----------- -------- ------------ -------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS,continued
Smyth Valley Crossing 12/92 126,841 sq. ft. 99% 1989 $7,040,075 $6,627,067 $628,774 $486,210
Marion, VA
South Beach Regional 8/92 289,319 sq. ft. 99% 1990 & 21,849,366 20,309,698 2,282,699 616,729
Jacksonville Beach, FL 1991
Spalding Village 8/92 235,318 sq. ft. 100% 1989 15,382,786 14,312,094 1,529,348 129,197
Griffin, GA
Stadium Plaza 8/92 70,475 sq. ft. 99% 1988 4,463,323 4,236,822 449,749 16,853
Phenix City, AL
Stanley Market Place 1/92 40,364 sq. ft. 100% 1980 & 1,800,935 1,643,955 225,106 185,026
Stanley, NC 1991
Tarpon Heights 1/95 56,605 sq. ft. 85% 1982 2,825,407 2,773,198 369,133 77,656
Galliano, LA
Taylorsville Shopping Center 8/86 & 48,537 sq. ft. 95% 1982 & 2,612,159 2,073,457 244,542 165,325
Taylorsville, NC 12/88 1988
Thomasville Commons 8/92 148,754 sq. ft. 100% 1991 7,172,961 6,635,939 813,909 115,602
Thomasville, NC
University Center 12/89 56,180 sq. ft. 95% 1989 3,970,972 3,482,939 366,638 282,926
Greenville, NC
Valley West Mall (5) 3/86 478,180 sq. ft. 42% 1973 10,207,598 5,304,956 287,854 (213,304)
Glendale, AZ
Venice Plaza (3) 6/79 144,850 sq. ft. 93% 1971 & 2,803,349 1,325,948 435,520 294,707
Venice, FL 1979
Village at Northshore 12/94 144,373 sq. ft. 100% 1988 & 8,268,206 8,109,112 891,186 216,999
Slidell, LA 1993
Waterlick Plaza 10/89 98,694 sq. ft. 97% 1973 & 6,266,874 5,435,818 665,773 523,039
Lynchburg, VA 1988
Watson Central 12/92 & 227,747 sq. ft. 98% 1989 & 13,057,349 12,239,753 1,315,738 1,029,330
Warner Robins, GA 10/93 1993
Wesley Chapel Crossing 12/92 170,792 sq. ft. 100% 1989 10,914,408 10,377,517 973,637 793,554
Decatur, GA
West Gate Plaza 6/74 & 64,378 sq. ft. 97% 1974 & 4,736,006 4,014,273 189,051 81,694
Mobile, AL 1/85 1995
West Towne Square 3/90 89,596 sq. ft. 92% 1988 6,002,851 5,179,765 434,535 281,180
Rome, GA
Westgate Square 6/94 104,893 sq. ft. 95% 1984 & 9,139,604 8,882,857 909,521 738,267
Sunrise, FL 1988
</TABLE>

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<PAGE> 12
I. EQUITY INVESTMENTS (LAND & BUILDINGS), continued
<TABLE>
<CAPTION>
Percent Cost to Depreciated Property Property
Date Area or Leased Year Company Cost FFO Net Income
Description Acquired Rental Units 12/31/95 Completed 12/31/95 12/31/95 1995 (1) 1995 (2)
----------- -------- ------------ -------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHOPPING CENTERS,continued
Willowdaile Shopping Center 8/86 & 120,815 sq. ft. 93% 1986 $8,534,548 $6,863,539 $1,004,588 $786,180
Durham, NC 12/87
---------- ----------------------------------------------------
7,963,571 sq. ft. 444,488,869 398,069,255 43,968,087 24,829,454
========== ----------------------------------------------------

APARTMENTS
Whitehall Kent Apartments 6/79 188 units 95% 1968 3,644,359 1,507,124 704,742 554,057
Kent, OH ========== ----------------------------------------------------

INDUSTRIAL PROPERTIES
Industrial Buildings 6/79 109,810 sq. ft. 72% 1956 & 2,964,142 321,650 303,913 303,913
Charlotte, NC 1963
Plasti-Kote 6/79 41,000 sq. ft. 100% 1961 & 482,939 81,390 116,594 116,594
Medina, OH 1966
========== ----------------------------------------------------
150,810 sq. ft. 3,447,081 403,040 420,507 420,507
----------------------------------------------------

$451,580,309 $399,979,419 $45,093,336 $25,804,018
====================================================
</TABLE>

NOTES:
(1) Property FFO represents cash flows from operating activities before
interest expense excluding changes in accrued assets and liabilities
for the fiscal year ended December 31, 1995 or from the date of
acquisition (if acquired in 1995) through December 31, 1995. Property
FFO should not be considered an alternative to net income or other
measurements under generally accepted accounting principles as an
indicator of operating performance; or to cash flows from operating,
investing, or financing activities as a measure of liquidity.
Property FFO is presented as an additional measure in valuing and
analyzing the underlying real estate investments.

(2) Property Net Income represents net income of the property calculated in
accordance with generally accepted accounting principles, excluding
any allocation of general and administrative expenses of the Company.

(3) The Company owns a 54.5% interest in North Village Center and a 75%
interest in Venice Plaza Shopping Center, which are consolidated for
financial reporting purposes and minority interests recorded.

(4) Subject to ground leases expiring in 1997 for Shelby Plaza and 1998 and
2008 for Plaza Acadienne. The Company has an option to purchase the
land at Shelby Plaza for $265,000 in 1997.

(5) Property FFO and Property Net Income for 1995 include $45,015 of
percentage rentals and $194,620 of lease cancellation fees.

<PAGE> 13
II. EQUITY INVESTMENTS (DIRECT FINANCING LEASES)

The Company also had a fee interest in land and improvements thereon in
the following properties occupied by tenants under leases which are
treated as direct financing leases:

<TABLE>
<CAPTION>
Percent Cost to Property Property
Date Leased Year Company FFO Net Income
Description Acquired Square Feet 12/31/95 Completed 12/31/95 1995 (1) 1995 (2)
----------- -------- ----------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE
The Old Phoenix National Bank (3) 12/84 73,074 sq. ft 100% Various $2,164,013 $313,049 $283,976
Medina County, OH ====== ----------------------------------

SHOPPING CENTERS
Wal-Mart Stores, Inc. (4) 6/85 54,223 sq. ft 100% 1985 1,313,310 199,399 166,897
Mathews, LA
Wal-Mart Stores, Inc. (4) 6/85 64,890 sq. ft 100% 1985 1,673,334 282,343 240,848
Fremont, NE
Wal-Mart Stores, Inc. (4) 6/85 & 83,249 sq. ft 100% 1985 2,483,419 428,209 367,539
Kearney, NE 1/91
Wal-Mart Stores, Inc. (4) 7/85 53,571 sq. ft 100% 1985 1,463,641 265,333 229,147
Marble Falls, TX ------ ----------------------------------

255,933 sq. ft. 6,933,704 1,175,284 1,004,431
======= ----------------------------------

$9,097,717 $1,488,333 $1,288,407
==================================
</TABLE>

NOTES:

(1) Property FFO represents cash flows from operating activities before
interest expense excluding changes in accrued assets and liabilities
for the fiscal year ended December 31, 1995 or from the date of
acquisition (if acquired in 1995) through December 31, 1995. Property
FFO should not be considered an alternative to net income or other
measurements under generally accepted accounting principles as an
indicator of operating performance; or to cash flows from operating,
investing or financing activities as a measure of liquidity. Property
FFO is presented as an additional measure in valuing and analyzing the
underlying real estate investments.

(3) This investment represents ten banking facilities leased to The Old
Phoenix National Bank at an annual rental of $313,049. The leases
expire March 2013 with no purchase or renewal options.

(4) These four retail facilities are leased to Wal-Mart Stores, Inc. at a
total annual rental of $827,925 plus percentage rentals of 1% of gross
sales in excess of fourth year sales. The leases expire January 2011,
with five 5-year renewal options. There are no purchase options.
Percentage rentals totaling $347,359 were received during the fiscal
year ended December 31, 1995.

12
<PAGE> 14
III. EQUITY INVESTMENTS (LAND PURCHASE-LEASEBACKS)

The Company owned land under the following properties, all of which are
net leased back to lessees on terms summarized below. The improvements
on such properties are owned by others but will revert to the Company at
the end of the lease terms unless the purchase options of the lessees, as
referred to below, are exercised. The interest of the Company in two of
the properties is subordinate to first mortgage loans to the lessees,
aggregating $721,347 as of December 31, 1995.

Date Land Area Year
Description Acquired In Acres Improvements Completed
----------- -------- -------- ------------ ---------
<S> <C> <C> <C> <C>
SHOPPING CENTERS
Lawrence County Shopping Cen 5/71 13.62 135,605 sq. ft. 1971
Sybene, OH
Grand Marche Shopping Center 9/72 11.38 200,585 sq. ft. 1969
Lafayette, LA
Manatee County Shopping Cent 5/71 16.00 120,500 sq. ft. 1971
Bradenton, FL -------

456,690 sq. ft.
=======

Lease Cost to Property Property
Expiration Company FFO Net Income
Description Date 12/31/95 1995 (1) 1995 (2)
----------- ----- -------- -------- --------
<S> <C> <C> <C> <C>
SHOPPING CENTERS
Lawrence County Shopping Cen 2069 (3) $435,994 $67,200 $67,200
Sybene, OH
Grand Marche Shopping Center 2012 250,500 27,500 27,500
Lafayette, LA
Manatee County Shopping Cent 2069 (3) 241,798 30,000 30,000
Bradenton, FL ---------------------------------

$928,292 $124,700 $124,700
=================================

</TABLE>

NOTES:

(3) Each lessee has a repurchase option exercisable at a specified price
(in each case higher than the cost to the Company of its investment)
which increases annually by a fixed amount.

13
<PAGE> 15
IV. MORTGAGE LOAN INVESTMENTS

The Company had mortgage loans receivable on the following properties:

<TABLE>
<CAPTION> Security
-------- Principal Stated
Type of Land Area Outstanding Maturity Interest
Location Loan In Acres Improvements 12/31/95 Date Rate
-------- ---- -------- ------------ -------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Walton Plaza Shopping Center 1st Mortgage 5.53 43,460 sq. ft. $3,220,575 8/98 (1) 10.25%
Augusta, GA

Spanish Quarter Apartments Wrap-Around 15.00 276 units 5,140,809 9/01 (2) (2)
Montgomery, AL Mortgage 249,295 9/01 (2) (2)

Mill Creek Club Condominiums 1st Mortgage --- 4 units 38,415 2006- (3) 8.63% -
Nashville, TN Participation 2007 12.38%

Cypress Chase "A" Condominiums 1st Mortgage 2.00 recreational 138,003 5/09 (4) 10.00%
Lauderdale Lakes, FL ----------

8,787,097

Less interest discounts and negative goodwill (287,887)
----------

$8,499,210
==========

</TABLE>

(1) Monthly payments of $29,670 of principal and interest at an annual rate
of 10.25%, with a balloon payment at maturity August 1, 1998.

(2) Modified effective December 1, 1994 to extend the term for three years to
September 1, 2001 and to reduce the cash interest rate from 10% to 9.5%
prospectively, requiring monthly payments of $45,382 of principal and
interest for the remaining term, with a balloon payment at maturity.
Additional interest at an annual rate of 1% accrues for the periods
September 1, 1984 through August 31, 1989 and September 1, 1991 through
August 31, 2001 and is payable at maturity or on sale of the property.
In addition, during 1995 the Company funded additional principal of
$260,000 under this mortgage to make certain capital improvements,
requiring monthly payments of $4,703 of principal and interest. This
wrap-around mortgage is subject to two first mortgages having an
aggregate balance of $917,598 as of December 31, 1995. See Table V.
Mortgage Indebtedness for a summary of the terms of the first mortgages.

(3) Principal outstanding December 31, 1995 represents the Company's 46.154%
participation in the total loan outstanding of $83,232.

(4) Monthly payments include principal and interest of $1,561.

<PAGE> 16
V. MORTGAGE INDEBTEDNESS

Indebtedness of the Company secured by its investments (not including
mortgage debt owed by lessees of its land purchase-leaseback investments)
was as follows:

<TABLE>
<CAPTION>
Principal Balance Annual
Investment 12/31/95 Maturity Date Interest Rate Constant Payment
---------- -------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Douglas Commons $6,270,451 3/01/96 (3) 9.780% $659,281
Douglasville, GA

Chestnut Square 1,050,926 5/01/96 (3) 13.875% 155,100
Brevard, NC

Lawrence Commons 2,739,060 8/01/96 (3) 9.375% 291,944
Lawrenceburg, TN

Spanish Quarter Apartments Phase I 101,568 9/20/96 8.500% 140,244
Montgomery, AL Phase II 816,030 7/15/02 8.250% 162,360

Stadium Plaza 3,850,000 11/01/96 9.500% 365,750 (1)
Phenix City, AL

Seven Hills 3,800,000 2/01/97 9.750% 370,500 (1)
Spring Hill, FL

Delchamps Plaza 3,233,587 8/01/97 (3) 9.375% 349,335
Pascagoula, MS

Paulding Commons 8,732,846 8/01/97 (3) 7.600% 762,561
Dallas, GA (4)

Smyrna Village 4,172,360 8/01/97 (3) 7.600% 364,335
Smyrna, TN (4)

South Beach Regional 15,365,624 8/01/97 (3) 7.600% 1,396,598
Jacksonville Beach, FL (4)

Tarpon Heights 2,383,454 3/01/98 11.000% 262,180 (1)
Galliano, LA

Pinhook Plaza Phase I 1,889,551 1/01/00 (3) 9.875% 250,320
Lafayette, LA Phase II 1,990,293 1/01/00 (3) 9.875% 258,504
Phase III 3,542,210 1/01/00 (3) 9.875% 396,072

Macland Pointe 3,834,068 2/01/00 (3) 7.750% 362,558
Marietta, GA

Plaza Acadienne 2,388,785 7/01/00 (3) 10.250% 317,420
Eunice, LA

Thomasville Commons 5,582,694 6/01/02 (3) 9.625% 583,303
Thomasville, NC

Elmwood Oaks 7,500,000 6/01/05 8.375% 628,125 (1)
Harahan, LA

North Village Center 2,779,144 (2) 3/15/09 8.125% 343,171
North Myrtle Beach, SC
</TABLE>

15
<PAGE> 17

V. MORTGAGE INDEBTEDNESS. continued

<TABLE>
<CAPTION>
Principal Balance Annual
Investment 12/31/95 Maturity Date Interest Rate Constant Payment
---------- -------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Spalding Village $11,376,691 9/01/10 (3) 8.194% $932,206 (5)
Griffin, GA

Village at Northshore 5,710,182 7/01/13 (6) 9.000% 647,803
Slidell, LA
----------- ----------
99,109,524 $9,999,670
==========
Interest Premium (7) 78,657
-----------
$99,188,181
===========
</TABLE>

NOTES:

(1) Interest only. Entire principal due at maturity.

(2) Although the Company is a partner or joint venturer in this investment,
100% of the mortgage note payable is recorded for financial reporting
purposes.

(3) Balloon payment at maturity.

(4) The Company has the option to extend for two additional years.

(5) Interest only through 9/01/00; then principal and interest of $1,158,448
annually for the last 10 years.

(6) Callable anytime after 7/30/03.

(7) For financial reporting purposes, mortgage indebtedness is valued
assuming current interest rates at the dates of acquisition.

16
<PAGE> 18

Rental Properties. On January 6, 1995, the Company acquired two
additional centers in Slidell and Galliano, Louisiana. The cost to the Company
aggregated $6,901,000, consisting of the intial purchase price of $6,658,000,
$162,000 of acquisition costs and an $80,890 premium recorded on the valuation
of the mortgage debt assumed. This acquisition was funded by the assumption of
the $2,383,000 existing mortgage debt and cash of approximately $4,437,000.
Country Club Plaza in Slidell, Louisiana contains 64,686 square feet and Tarpon
Heights Plaza in Galliano, Louisiana contains 56,605 square feet. Both centers
are anchored by Delchamps Supermarkets. These two centers were part of a
package of thirteen centers, eleven of which were acquired December 21, 1994.

During 1995, the Company completed construction of an 8,800 square
foot expansion of its Forest Hills Shopping Center in Wilson, North Carolina
for a total cost of approximately $458,000 of which approximately $6,000
represented capitalized interest costs. Additionally, the Company funded
approximately $346,000 for upgrading the parking lot and painting the exterior
of its Riverview Shopping Center in Durham, North Carolina.

During 1995, the Company completed the redevelopment of its West Gate
Plaza Shopping Center in Mobile, Alabama. This redevelopment included the
demolition of approximately 35,000 square feet of space and the construction of
a new 44,000 square foot store for a new grocery tenant. The cost of this
redevelopment and renovation of the existing center totaled approximately
$3,040,000, of which approximately $87,000 represented capitalized interest
costs. Of the total cost of this redevelopment, $661,000 was funded in 1994.

Also, the Company funded approximately $34,000, of which approximately
$1,000 represented capitalized interest costs, for an expansion project at The
Galleria Shopping Center in Wrightsville Beach, North Carolina which commenced
late in 1995 and is expected to be completed in 1996. Additionally, the Company
funded approximately $6,000 in initial expenditures on one additional potential
tenant expansion.

Mortgage Investments. During 1995, the Company funded additional
principal of $260,000 under the Spanish Quarter Apartments wrap-around mortgage
for capital improvements to the property.

Mortgage Indebtedness. The mortgage note payable secured by one of
the two shopping centers acquired during 1995 totals $2,383,000 at an interest
rate of 11.00% with a March 1998 maturity.

17
<PAGE> 19

During 1995, the Company (a) repaid at maturity two variable rate
mortgages totaling $3,524,000, (b) repaid at maturity an $860,000 mortgage
bearing interest at 13.875% (discounted to 9.5% for financial reporting
purposes), (c) refinanced a $9,000,000 mortgage, reducing the face of the
mortgage to $7,500,000 and the interest rate from 9.75% to 8.375% and (d)
refinanced a $12,330,000 mortgage, reducing the face of the mortgage to
$11,377,000 and the interest rate from 9.375% to 8.194%.

In addition, a 9.5% fully amortizing mortgage note payable was
extinguished at maturity in August 1995.

Item 3. Legal Proceedings.

There are no material pending legal proceedings of which the Company
is aware involving the Company or its properties.

Item 4. Submission of Matters to a Vote of Security Holders.

Not applicable.

18
<PAGE> 20

PART II

Item 5. Market for the Registrant's Common Equity and Related
Security Holder Matters.

a) The following table shows the high and low sale prices for the
Company's common stock, as reported on the New York Stock Exchange for
the periods indicated.

<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
1994
----
First Quarter $11.75 $10.38
Second Quarter 10.75 9.75
Third Quarter 10.50 8.75
Fourth Quarter 10.38 9.00

1995
----
First Quarter $10.38 $ 9.00
Second Quarter 10.38 9.00
Third Quarter 10.13 9.13
Fourth Quarter 10.00 9.13
</TABLE>

b) Approximate number of Equity Security Holders.

<TABLE>
<CAPTION>
Approximate Number of Record
Title of Class Holders at February 9, 1996
-------------- ----------------------------
<S> <C>
Shares of Common Stock 4,000
$1 Par Value
</TABLE>

c) IRT Property Company paid quarterly cash dividends during the years
1994 and 1995 as follows:

<TABLE>
<CAPTION>
Cash Dividends Paid
-------------------
<S> <C>
1994
----
First Quarter $ .210
Second Quarter .210
Third Quarter .210
Fourth Quarter .210

1995
----
First Quarter .210
Second Quarter .225
Third Quarter .225
Fourth Quarter .225
</TABLE>

IRT has paid 72 consecutive quarterly dividends. The current
annualized dividend rate is $.90. The Company does not foresee any
restrictions upon its ability to continue its dividend payment policy
of distributing at least the 95% of its otherwise taxable ordinary
income required for qualification as a REIT.

19
<PAGE> 21
Item 6: Selected Consolidated Financial Data

The following table sets forth selected consolidated financial data for the
Company and should be read in conjunction with the consolidated financial
statements and notes thereto included elsewhere in this report.

<TABLE>
<CAPTION>
December 31, December 31, December 31, December 31, December 31,
As of or for the years ended 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross revenues $60,196,247 $49,202,144 $45,062,911 $34,006,687 $28,686,196
============ ============ ============ ============ ===========
Earnings from operations $15,550,026 $12,788,923 $11,772,265 $7,441,692 $6,261,200
Gain (loss) on real estate investments 173,025 (3,825,418) 4,556,511 3,547,071 1,134,475
------------ ------------ ------------ ------------ -----------
Earnings before extraordinary items 15,723,051 8,963,505 16,328,776 10,988,763 7,395,675

Extraordinary items:
Gain (loss) on extinguishment of debt (137,260) 3,748,095 (1,440,478) (14,811) -
Gain on purchase of debentures - - - - 17,400
------------ ------------ ------------ ------------ -----------
Net earnings $15,585,791 $12,711,600 $14,888,298 $10,973,952 $7,413,075
============ ============ ============ ============ ===========

Per share:

Earnings before extraordinary items $ .61 $ .35 $ .72 $ .74 $ .59
Extraordinary items - .15 (.06) - -
------------ ------------ ------------ ------------ -----------
Net earnings $ .61 $ .50 $ .66 $ .74 $ .59
============ ============ ============ ============ ===========
Dividends paid $ .885 $ .84 $ .84 $ .81 $ .80
============ ============ ============ ============ ===========
Federal income tax status of dividends
paid to shareholders:
Ordinary income $ .635 $ .72 $ .39 $ .39 $ .55
Capital gain - .04 .45 .42 .13
Return of capital .250 .08 - - .12
------------ ------------ ------------ ------------ -----------
$ .885 $ .84 $ .84 $ .81 $ .80
============ ============ ============ ============ ===========
Weighted average number of shares
outstanding 25,590,129 25,349,303 22,457,131 14,896,369 12,633,644
============ ============ ============ ============ ===========
Total assets $427,398,018 $428,579,355 $402,319,125 $297,590,922 $184,627,532
============ ============ ============ ============ ===========
Indebtedness:
Mortgage notes payable $99,188,181 $105,107,084 $98,878,505 $115,379,078 $72,865,897
7.3% convertible subordinated debentures 84,905,000 86,250,000 86,250,000 - -
2.0% convertible subordinated debentures - - - 5,730,000 5,730,000
Indebtedness to bank 36,000,000 26,000,000 - 1,200,100 7,000,000
------------ ------------ ------------ ------------ -----------
$220,093,181 $217,357,084 $185,128,505 $122,309,178 $85,595,897
============ ============ ============ ============ ===========

Shareholders' equity $198,630,147 $203,038,464 $210,335,167 $168,574,002 $93,610,551
============ ============ ============ ============ ===========
Other Data:
Funds from operations (1) $26,621,364 $21,615,588 $19,825,901 $13,847,999 $11,865,950
Net Cash Flows from (used in) -
Operating Activities $25,946,987 $22,511,731 $19,116,142 $14,274,651 $10,195,538
Investing Activities ($7,769,022) ($99,052,456) ($16,990,558) ($55,114,524) ($4,206,753)
Financing Activities $20,002,953 ($247,587) $76,370,567 $40,247,232 ($5,837,312)
</TABLE>

(1) Funds from operations is defined as net cash flows from operating
activities before changes in accrued assets and liabilities.
Management believes funds from operations should be considered along
with, but not as an alternative to, net income as defined by
generally accepted accounting principles as a measure of the
Company's operating performance. Funds from operations does not
represent cash generated from operating activities in accordance
with generally accepted accounting principles and is not necessarily
indicative of cash available to fund cash needs.

20
<PAGE> 22

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.

Changes in Financial Condition. During 1995, the Company utilized
funds of:

a) $6,820,000, exclusive of an $81,000 premium recorded on the
valuation of the mortgage debt, for the acquisition of two
shopping center investments, consisting of cash of
approximately $4,437,000 and the assumption of mortgage debt
of approximately $2,383,000 secured by one of the centers,

b) $3,223,000 to fund expansions or redevelopment costs of five
existing investments,

c) $260,000 to fund capital improvements under its mortgage loan
investment secured by Spanish Quarter Apartments, and

d) $6,837,000 to repay three mortgage notes payable at maturity
and pay down two mortgage notes payable on refinancing.

These transactions were funded with $10,000,000 of borrowings under the
Company's revolving term loan, cash proceeds of approximately $1,311,000 on
sales of two parcels of land and three shopping center investments, and
internally generated funds. Additionally, in March 1995, $1,345,000 of the
Company's 7.3% convertible subordinated debentures were converted into 119,554
shares of common stock at $11.25 per share.

During 1994, the Company utilized funds of:

a) $108,408,000 for the acquisition of fifteen shopping center
investments, consisting of cash of $92,528,000 and mortgage
debt of $15,880,000 secured by four of the centers,

b) $4,347,000 to fund expansion or redevelopment costs of seven
existing investments,

c) $1,500,000 for the purchase of the land underlying Valley West
Mall, extinguishing approximately $204,000 of annual ground
lease payments, and

d) $4,500,000 to purchase the $8,248,000 mortgage note payable
secured by Valley West Mall, extinguishing approximately
$1,076,000 of annual debt service payments (see Note 10 to the
consolidated financial statements).

21
<PAGE> 23

These transactions were funded with the remaining proceeds from the 1993 public
offerings and $26,000,000 of borrowings under the Company's revolving term
loan.

Changes in Results of Operations. The $13,327,000 increase in income
from rental properties during 1995 was primarily due to approximately
$13,619,000 of income earned from the 17 shopping centers acquired during 1994
and 1995 and the recent property expansions and redevelopments funded by the
Company. This was partially offset by $862,000 less income earned from the
investments sold and targeted for sale during 1995. Similarly, the $3,074,000
increase in income from rental properties during 1994 was due to approximately
$4,646,000 of income earned from the 19 shopping centers acquired during 1993
and 1994 and the recent property expansions purchased or funded by the Company.
This was partially offset by $1,332,000 less income earned from the investments
sold during 1993 and 1994 as well as approximately $240,000 less income due to
the ongoing redevelopment of two shopping center investments.

The percentage leased of the Company's shopping center investments
remained stable at 93% at December 31, 1993 and 1994, and decreased to 92% in
1995. The average occupancy of the Company's Ohio apartment investment
increased from 89% in 1993 to 92% in 1994, and decreased to 90% in 1995.
Percentage rentals received from shopping center investments, excluding
percentage rentals received from the four Wal-Mart investments classified as
direct financing leases, totaled approximately $755,000 in 1993, $470,000 in
1994 and $576,000 in 1995.

The decrease in interest income during 1995 was primarily the result
of the investment of the remaining proceeds of the Company's 1993 public
offerings in December 1994. During 1994, the Company earned approximately
$2,388,000 on short-term money market investments.

During 1993 and 1992, three of the Company's mortgage loan investments
were repaid in full. These loan repayments resulted in decreased interest
income of $421,000 in 1994. The decrease was more than offset by a $1,541,000
increase in interest earned on short-term investments in 1994.

The increases in interest on direct financing leases in 1995 and 1994
were primarily due to the receipt of percentage rentals from the four Wal-Mart
investments, which were approximately $347,000, $292,000 and $219,000 during
1995, 1994 and 1993, respectively. Wal-Mart has ceased operations in two of
the four Wal-Mart investments, from which the Company received $215,000,
$189,000 and $138,000 of percentage rentals during 1995, 1994 and

22
<PAGE> 24

1993, respectively. Wal-Mart remains liable under the leases which expire in
January 2011 and continues to pay base rentals, but no further percentage
rentals are anticipated to be earned from these two facilities.

The increases in operating expenses of rental properties and
depreciation during 1995 and 1994 were primarily due to property acquisitions
and dispositions during the three-year period. The Company acquired two
shopping center investments in 1995, 15 in 1994 and four in 1993. The
additional operating expenses and depreciation related to these centers was
partially offset by the sale of three shopping center investments in 1995 and
the sale of an apartment investment in October 1993. Depreciation also
increased in 1995 and 1994 due to two property redevelopments and four property
expansions purchased or funded during 1995, 1994 and 1993.

The 1995, 1994 and 1993 acquisitions also resulted in increased
interest expense on mortgages in 1995 and 1994. The increase in 1995 was
partially offset by (a) the repayment of a $1,750,000 variable rate mortgage in
May 1995, (b) the refinancing of a $9,000,000 mortgage in June 1995, reducing
the face of the mortgage to $7,500,000 and the interest rate from 9.75% to
8.375%, (c) the maturity of a 9.5% fully amortized mortgage note payable in
August 1995, (d) the refinancing of a $12,330,000 mortgage in September 1995,
reducing the face of the mortgage to $11,377,000 and the interest rate from
9.375% to 8.194%, (e) the repayment of an $860,000 mortgage at 13.875%
(discounted to 9.5% for financial reporting purposes) in November 1995, and (f)
the repayment of a $1,774,000 variable rate interest only mortgage in December
1995. The increase in 1994 was fully offset by the repayment of eleven
mortgage notes payable during 1993 aggregating $22,816,000 of principal with
interest rates ranging from 7% to 13.625%. The 1995 and 1994 increases were
further offset by the refinancing of one mortgage note payable in February 1994
which reduced the interest rate from 12.625% to 8.125% and the prepayment of
the 9.5% mortgage secured by Valley West Mall in June 1994.

The $3,764,000 increase in interest on debentures during 1994 was
primarily due to the 7.3% convertible subordinated debentures issued in
August 1993. Similarly, the issuance of the 7.3% debentures resulted in
an increase in amortization of debt cost of $234,000 during 1994.

The Company had average borrowings under its revolving term loan of
$33,507,000, $789,000 and $6,494,000 during 1995, 1994 and 1993, respectively,
which resulted in increased interest on bank debt during 1995 and decreased
interest on bank debt during 1994. The interest rate on the $50 million
secured revolver was, at the option of the Company, either prime or 1.25% over
adjusted LIBOR. The $50 million revolver was replaced December 15, 1995 with
a $100 million unsecured revolver with an interest rate, at the option of the
Company, of either LIBOR plus an Applicable Margin or prime. The current

23
<PAGE> 25

Applicable Margin for LIBOR borrowings is 1.5%.

The increases in general and administrative expenses in 1995 and 1994
were primarily due to the costs of increased administrative and property
management personnel as well as increased shareholder relations costs. The
increase in 1995 was also due to increased state franchise taxes and director's
fees, the appointment of a new President and Chief Operating Officer, as well
as approximately $97,000 of costs incurred in due diligence on potential
mergers and acquisitions which were not consummated. The increase in 1994 was
also due to increased professional services.

The amount of gains recognized on sales of investments have fluctuated
and in the future may continue to fluctuate depending upon sales activity in
any given year. During 1995, 1994 and 1993, the Company recognized gains on
sales of properties of approximately $173,000, $257,000 and $4,557,000,
respectively. The gain in 1994 was more than offset by $4,125,000 of
reductions in carrying values of certain investments, primarily Valley West
Mall. These adjustments to carrying value were a result of the Company's
quarterly evaluations of its individual investments based on current and
forecasted net operating income of the investment, competition resulting from
new properties in the market place and other changes in the local economy. The
development of a new mall which would directly compete with Valley West Mall
was announced in 1992, and in November 1992, one of the anchor tenants at
Valley West gave notice to terminate its lease effective November 1993. Based
on this lease termination and the predicted impact of the new mall when opened
on the tenants of Valley West, the Company determined that a permanent
impairment of $3,565,000 had occurred and reflected such writedown in its
financial statements during the fourth quarter of 1992. The new mall opened
for business in October 1993, the terminating tenant ceased operations in
November 1993, and another anchor tenant changed its business to an outlet
concept. After a concerted leasing effort which commenced in 1992, review of
tenant sales reductions since the opening of the new mall, meetings with the
City and potential purchasers of the center, and restructuring of the Company's
ownership in this investment, including prepayment of the mortgage and
negotiations with the land lessor concerning a joint venture or the ultimate
purchase of the underlying land, the Company determined that a further
permanent impairment of the value of this mall had developed. An additional
indicator of value was the discount received by the Company in the prepayment
of the underlying mortgage debt in June 1994. Accordingly, the Company
recorded an additional writedown of this investment in June 1994.

During 1995, the Company replaced its $50 million secured revolving
term loan with a $100 million unsecured revolving term loan and recognized an
extraordinary loss on the extinguishment of the old revolver of $137,000.
During 1994, the Company recognized an extraordinary gain of approximately
$3,748,000 on the purchase

24
<PAGE> 26

of the 9.5% mortgage note payable secured by Valley West Mall. The mortgage
had an outstanding balance of $8,248,000 and was purchased for $4,500,000.
During 1993, the Company recognized extraordinary losses of approximately
$1,440,000 on the prepayment of nine mortgage notes payable totaling
$21,896,000 with interest rates ranging from 9.3% to 13.625%. This
extraordinary loss included $186,000 of unamortized net interest discounts and
$1,254,000 of prepayment penalties.

Funds From Operations . The Company currently defines funds from
operations as net cash flows from operating activities before changes in
accrued assets and liabilities. During the first quarter of 1995, the National
Association of Real Estate Investment Trusts ("NAREIT") adopted a White Paper
recommending certain changes to the calculation of funds from operations.
NAREIT defines funds from operations as net income before gains (losses) on
real estate investments and extraordinary items plus depreciation and
amortization of capitalized leasing costs. Management believes funds from
operations should be considered along with, but not as an alternative to, net
income as defined by generally accepted accounting principles as a measure of
the Company's operating performance. Funds from operations does not represent
cash generated from operating activities in accordance with generally accepted
accounting principles and is not necessarily indicative of cash available to
fund cash needs.

The following data is presented with respect to the calculation of
funds from operations under the NAREIT definition and the Company's current
definition for the years ended December 31, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net earnings $15,585,791 $12,711,600 $14,888,298
Depreciation 10,427,268 8,214,192 7,668,797
Loss (gain) on real estate investments (173,025) 3,825,418 (4,556,511)
Extraordinary loss (gain) 137,260 (3,748,095) 1,440,478
Amortization of convertible debenture costs 366,391 - -
Amortization of capitalized leasing income 198,163 166,019 172,418
----------- ----------- -----------
Funds from operations - NAREIT 26,541,848 21,169,134 19,613,480

Amortization of debt costs -
Convertible debentures - 371,664 140,273
Other debt 79,516 74,790 72,148
----------- ----------- -----------
Funds from operations - Company $26,621,364 $21,615,588 $19,825,901
=========== =========== ===========
</TABLE>

Amortization of convertible debenture costs is added to funds from
operations under the NAREIT definition when assumed conversion of the
debentures is dilutive. Weighted average shares outstanding were 33,156,750,

25
<PAGE> 27

25,349,303 and 22,457,131 for the years ended December 31, 1995, 1994 and 1993,
respectively, with conversion of the debentures dilutive and therefore assumed
in 1995 only.

During 1994 and 1993, the Company had an average of approximately
$57,000,000 and $25,000,000, respectively, of the proceeds of the August 1993
equity and debenture offerings invested in short-term money market investments
earning an average interest rate of approximately 4.2% and 3.4%, respectively.
This resulted in temporary dilution in funds from operations. This temporary
dilution ceased when the remaining cash was invested in higher-yielding real
estate investments on December 21, 1994.

In addition, funds from operations for 1995, 1994 and 1993 did not
include rental income received through the rental guarantees related to major
portfolio acquisitions completed in July and December 1992. Rental income
covered by the guarantees for 17 centers totaled approximately $64,000,
$510,000 and $838,000 for 1995, 1994 and 1993, respectively.

Liquidity and Capital Resources. In 1995 and 1994, the Company's
dividends, mortgage amortization payments and capital improvements were funded
primarily by funds from operations and also through supplemental funding from
mortgage financing, available cash investments, bank borrowings and other
sources. The Company believes that dividends, mortgage amortization payments
and necessary capital improvements will continue to be funded primarily by funds
from operations. Other planned activities, including property acquisitions,
certain capital improvement programs and debt repayments are expected to be
funded to the extent necessary by bank borrowings, mortgage financing, periodic
sales or exchanges of existing properties and public or private offerings of
stock or debt.

For a description of the Company's mortgage debt, reference is made to
Table V in Item 2 hereof and to Note 6 to the consolidated financial statements
included as a part of this report. For a description of commitments and
contingencies, reference is made to Notes 15 and 16 to the consolidated
financial statements included as a part of this report.

On August 31, 1993, the Company completed concurrent public offerings
of 4,127,580 shares of its common stock and $86,250,000 of 7.3% convertible
subordinated debentures for net proceeds aggregating approximately
$126,330,000.

The Company has a shelf registration statement covering up to $200
million of common stock, senior debt and subordinated debt. The Company
intends to use the net proceeds of any offerings under such shelf registration
to repay debt; to improve, expand or redevelop its properties; to acquire
additional properties; and for working capital.

On November 1, 1990, the Company obtained a $25,000,000 secured
revolving term loan maturing November 1, 1995. On July 31, 1992, the loan
agreement was modified to increase the commitment from $25,000,000 to
$50,000,000 and to extend the maturity from November 1, 1995 to August 1, 1997.
The interest rate on this loan was either prime or 1.25% over adjusted LIBOR,
at the option of the

26
<PAGE> 28

Company. As of December 31, 1994, the borrowings under this credit facility
totaled $26,000,000. On December 15, 1995, the Company terminated this
$50,000,000 secured revolving term loan.

On December 15, 1995, the Company obtained a $100,000,000 unsecured
revolving term loan maturing January 4, 1999. Not later than June 30 of each
year commencing June 30, 1996, the Company may request to extend the maturity
date for an additional twelve-month period beyond the existing maturity date.
The interest rate is, at the option of the Company, either prime, fluctuating
daily or LIBOR plus the "Applicable Margin" (currently 1.5%), which is subject
to adjustment based upon the rating of the senior unsecured long-term debt
obligations of the Company. The Company may borrow, repay and/or reborrow
under this loan at any time. As of December 31, 1995, the borrowings under
this credit facility totaled $36,000,000. For additional information on this
revolving term loan, reference is made to Note 8 to the consolidated financial
statements.

The Company's 7.3% convertible subordinated debentures are convertible
into common stock of the Company at any time prior to maturity on August 15,
2003 at $11.25 per share, subject to adjustment in certain events. In March
1995, $1,345,000 of the Company's 7.3% convertible subordinated debentures
were converted into 119,554 shares of common stock at $11.25 per share. The
remaining $84,905,000 of debentures was outstanding as of December 31, 1995.
As of December 31, 1994, the entire issue of $86,250,000 of debentures was
outstanding. On August 1, 1993, the Company's 2% convertible subordinated
debentures were redeemed in full at a premium of 45% over par. For additional
information on the debentures, reference is made to Note 7 to the consolidated
financial statements.

The Company's Dividend Reinvestment Plan allows shareholders to elect
to reinvest all or a portion of their distributions in newly issued shares of
the Company at 95% of the market price of the shares. During 1995, 1994 and
1993, the Company received net proceeds under this plan of $1,107,000, $938,000
and $1,249,000, respectively. For additional information on the Dividend
Reinvestment Plan, reference is made to Note 11 to the consolidated financial
statements.

Inflationary and Economic Factors. The effects of inflation upon the
Company's results of operations and investment portfolio are varied. From the
standpoint of revenues, inflation has the dual effect of both increasing the
tenant revenues upon which percentage rentals are based and allowing increased
fixed rentals as rental rates rise generally to reflect higher construction
costs on new properties. This positive effect is partially offset by
increasing operating expenses, but usually not to the extent of the increases
in revenues.

Environmental Factors. On March 2, 1994, the Company was advised by
the North Carolina Department of Environment, Health and Natural Resources that
certain Corrective Actions must be performed at the Company's Charlotte, North
Carolina industrial facility.

27
<PAGE> 29

According to the CAP, the estimated remaining cost for site remediation ranges
from $129,000 to $193,000 over a period of 3 to 6 years. Although the Company
believes that certain of the costs of Corrective Action are reimburseable under
the North Carolina Leaking Petroleum Underground Storage Tank Cleanup Fund, the
Company has accrued $129,000 based on these estimates. The CAP may be revised,
and the estimated costs may change, but based on the information presently
available, the Company believes any additional costs of any such Corrective
Action would not have a material adverse effect on the Company's results of
operations, financial position or liquidity.

During its soil and groundwater investigation at the Bluebonnet
Village Shopping Center in Baton Rouge, Louisiana, the Company's environmental
consultant discovered concentrations of various chemicals in groundwater that
exceeded the maximum contaminant levels under the Federal Safe Drinking Water
Act. For additional information, see "Regulation" under Item 1 and Note 16 to
the consolidated financial statements included as a part of this report.
Based on the information presently available, the Company believes the costs
of any corrective action would not have a material adverse effect on the
Company's results of operations, financial position or liquidity.

Recent Accounting Pronouncements. In March 1995, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards No. 121 ("FAS 121") "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of," which becomes effective
for fiscal years beginning after December 15, 1995. FAS 121 establishes
standards for determining when impairment losses on long-lived assets have
occurred and how impairment losses should be measured. The Company intends to
adopt FAS 121 in 1996. The financial statement impact of adopting FAS 121 is
not expected to be material.

In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123 ("FAS 123") "Accounting for Stock-Based Compensation," which
becomes effective for fiscal years beginning after December 15, 1995. FAS 123
establishes new financial accounting and reporting standards for stock-based
compensation plans. Entities will be allowed to measure compensation cost for
stock-based compensation under FAS 123 or APB Opinion No. 25, "Accounting for
Stock Issued to Employees." Entities electing to remain with the accounting in
APB Opinion No. 25 will be required to make pro forma disclosures of net income
and earnings per share as if the provisions of FAS 123 had been applied. The
Company is in the process of evaluating FAS 123. The potential impact on the
Company of adopting the new standard has not been quantified at this time. The
Company must adopt FAS 123 no later than January 1, 1996.

28
<PAGE> 30

Item 8. Financial Statements and Supplementary Data.

IRT PROPERTY COMPANY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
------
<S> <C>
Report of Independent Public Accountants 30

Consolidated Balance Sheets -
December 31, 1995 and 1994 31

Consolidated Statements of Earnings -
For the Years Ended December 31, 1995,
1994 and 1993 32

Consolidated Statements of Changes
in Shareholders' Equity - For the Years Ended
December 31, 1995, 1994 and 1993 33

Consolidated Statements of Cash Flows -
For the Years Ended December 31, 1995,
1994 and 1993 34

Notes to Consolidated Financial Statements -
December 31, 1995, 1994 and 1993 36

Schedules:

Schedule
Number
- --------

III Real Estate and Accumulated Depreciation 54

IV Mortgage Loans on Real Estate 66
</TABLE>

29
<PAGE> 31

Report of Independent Public Accountants

To The Shareholders of

IRT Property Company:

We have audited the accompanying consolidated balance sheets of IRT
PROPERTY COMPANY (a Georgia corporation) and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of earnings, changes in
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements and the schedules referred
to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IRT Property
Company and subsidiaries as of December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed in the index
to consolidated financial statements are presented for purposes of complying
with the Securities and Exchange Commission's rules and are not part of the
basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
January 23, 1996

30
<PAGE> 32

IRT PROPERTY COMPANY

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
------------- ------------
<S> <C> <C>
ASSETS
Real estate investments:

Rental properties $452,508,601 $442,642,705
Accumulated depreciation (51,600,890) (41,677,722)
------------ ------------
400,907,711 400,964,983

Net investment in direct financing leases 9,097,717 9,295,880
Mortgage loans, net 8,499,210 8,292,143
------------ ------------
Net real estate investments 418,504,638 418,553,006

Cash and cash equivalents 16,400 1,841,388
Accrued interest receivable 544,073 544,712
Prepaid expenses and other assets 8,332,907 7,640,249
------------ ------------
$427,398,018 $428,579,355
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY

Liabilities:
Mortgage notes payable plus net interest premium of
$78,657 in 1995 and $92,683 in 1994 $ 99,188,181 $105,107,084
7.3% convertible subordinated debentures due August
15, 2003 84,905,000 86,250,000
Indebtedness to banks 36,000,000 26,000,000
Accrued interest on debentures 2,341,488 2,378,583
Accrued expenses and other
liabilities 5,265,202 4,726,224
Deferred income taxes 1,068,000 1,079,000
------------ ------------
Total liabilities 228,767,871 225,540,891
------------ ------------

Commitments and Contingencies (Notes 15 and 16)

Shareholders' Equity:
Common stock, $1 par value, 75,000,000 shares
authorized; 25,689,002 shares issued and
outstanding in 1995 and 25,420,747 25,689,002 25,420,747
shares in 1994 200,318,168 197,937,465
Additional paid-in capital (27,377,023) (20,319,748)
------------ ------------
Cumulative distributions in excess of net earnings 198,630,147 203,038,464
------------ ------------
Total shareholders' equity $427,398,018 $428,579,355
============ ============
</TABLE>

The accompanying notes are an integral part of these
consolidated balance sheets.

31
<PAGE> 33

IRT PROPERTY COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues:
Income from rental properties $58,008,386 $44,681,220 $41,607,391
Interest, including $2,388,308 in 1994 and
$846,938 in 1993 on cash equivalents 899,454 3,267,486 2,257,405
Interest on direct financing leases 1,288,407 1,253,438 1,198,115
----------- ----------- -----------

60,196,247 49,202,144 45,062,911
----------- ----------- -----------
Expenses:
Operating expenses of rental
properties 12,733,705 10,318,596 10,022,610
Interest on mortgages 9,150,400 8,191,240 10,269,423
Interest on debentures 6,210,062 6,202,025 2,438,114
Interest on indebtedness to banks 2,211,980 159,603 384,687
Depreciation 10,427,268 8,214,192 7,668,797
Amortization of debt costs 445,907 446,454 212,421
General & administrative 3,466,899 2,881,111 2,294,594
----------- ----------- -----------

44,646,221 36,413,221 33,290,646
----------- ----------- -----------

Earnings before gain (loss) on
real estate investments and
extraordinary item 15,550,026 12,788,923 11,772,265
----------- ----------- -----------

Gain (loss) on real estate investments:
Gain on sales of properties 173,025 300,036 4,556,511
Valuation loss - (4,125,454) -
----------- ----------- -----------

173,025 (3,825,418) 4,556,511
----------- ----------- -----------
Earnings before extraordinary
item 15,723,051 8,963,505 16,328,776

Extraordinary item -
Gain (loss) on extinguishment of debt (137,260) 3,748,095 (1,440,478)
----------- ----------- -----------

Net earnings $15,585,791 $12,711,600 $14,888,298
=========== =========== ===========
Per Share:

Earnings before extraordinary item $ 0.61 $ 0.35 $ 0.72

Extraordinary item - 0.15 (0.06)
----------- ----------- -----------

Net earnings $ 0.61 $ 0.50 $ 0.66
=========== =========== ===========

Weighted average number of shares
outstanding 25,590,129 25,349,303 22,457,131
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

32
<PAGE> 34

IRT PROPERTY COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
Cumulative
Additional Distributions Total
Common Paid-In in Excess of Shareholders'
Stock Capital Net Earnings Equity
------ ---------- ------------- -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1992 $21,016,570 $155,618,551 $ (8,061,119) $168,574,002

Net earnings - - 14,888,298 14,888,298
Cash dividends declared -
$.84 per share - - (18,573,786) (18,573,786)

Issuance of shares under
Dividend Reinvestment
Plan, net 109,807 1,138,821 - 1,248,628

Exercise of Incentive Stock
Options 5,689 30,891 - 36,580

Issuance of shares for the
acquisition of properties 28,978 350,997 - 379,975

Issuance of common stock,
net 4,127,580 39,653,890 - 43,781,470
----------- ------------ ------------ ------------
Balance at December 31, 1993 25,288,624 196,793,150 (11,746,607) 210,335,167

Net earnings - - 12,711,600 12,711,600

Cash dividends declared -
$.84 per share - - (21,284,741) (21,284,741)

Issuance of shares under
Dividend Reinvestment
Plan, net 99,477 838,273 - 937,750

Exercise of Incentive Stock
Options 1,010 2,131 - 3,141

Issuance of shares for the
acquisition of properties 31,636 303,911 - 335,547
----------- ------------ ------------ ------------
Balance at December 31, 1994 25,420,747 197,937,465 (20,319,748) 203,038,464

Net earnings - - 15,585,791 15,585,791

Cash dividends declared -
$.885 per share - - (22,643,066) (22,643,066)

Issuance of shares under
Dividend Reinvestment
Plan, net 121,831 985,430 - 1,107,261

Conversion of debentures, net 119,554 1,175,718 - 1,295,272

Exercise of Incentive Stock
Options 7,000 46,375 - 53,375

Issuance of shares for the
acquisition of properties 19,870 173,180 - 193,050
----------- ------------ ------------ ------------
Balance at December 31, 1995 $25,689,002 $200,318,168 $(27,377,023) $198,630,147
=========== ============ ============ ============
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

33
<PAGE> 35

IRT PROPERTY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 15,585,791 $12,711,600 $14,888,298
Adjustments to reconcile net earnings to net cash flows
from operating activities:
Depreciation 10,427,268 8,214,192 7,668,797
Loss (gain) on real estate investments (173,025) 3,825,418 (4,556,511)
Extraordinary loss (gain) 137,260 (3,748,095) 1,440,478
Amortization of debt costs 445,907 446,454 212,421
Amortization of capitalized leasing income 198,163 166,019 172,418
------------ ------------- ------------
26,621,364 21,615,588 19,825,901

Changes in accrued assets and
liabilities:
Increase (decrease) in accrued
interest on debentures -
7.3% interest payable (37,095) 262,343 2,084,302
2.0% interest payable - - (9,550)
Accrued premium on 2.0%
debentures - - (2,291,542)
Increase in interest receivable,
prepaid expenses and other assets (1,187,639) (592,782) (785,054)
Increase in accrued expenses and
other liabilities 550,357 1,226,582 292,085
------------ ------------- -----------

Net cash flows from operating activities 25,946,987 22,511,731 19,116,142
------------ ------------- -----------

Cash flows from (used in) investing activities:
Proceeds from sales of properties, net 1,310,531 562,070 7,779,046
Additions to real estate investments, net -
Acquisitions, expansions and renovations (7,672,184) (98,461,982) (27,697,142)
Improvements (1,200,302) (1,253,360) (1,208,045)
Collections of mortgage loans, net 52,933 100,816 4,135,583
Additions to mortgage loans (260,000) - -
------------ ------------- -----------
Net cash flows used in investing
activities (7,769,022) (99,052,456) (16,990,558)
------------ ------------- -----------

Cash flows from (used in) financing activities:
Cash dividends paid, net of dividends
reinvested (21,535,805) (20,346,991) (17,325,158)
Issuance of common stock, net - - 43,781,470
Cash in lieu of fractional shares on - -
conversion of debentures (15)
Exercise of Incentive Stock Options, net 53,375 3,141 36,580
Issuance of 7.3% convertible subordinated
debentures, net - - 82,548,826
Redemption of 2.0% convertible subordinated
debentures - - (5,730,000)
Principal amortization of mortgage notes
payable, net (1,546,572) (1,273,737) (1,484,658)
Repayment of mortgage notes payable, net (6,836,676) (8,378,095) (22,815,915)
Increase (decrease) in bank indebtedness, net 10,000,000 26,000,000 (1,200,100)
Extraordinary item -

Gain (loss) on extinguishment of debt (137,260) 3,748,095 (1,440,478)
------------ ------------- -----------
Net cash flows from (used in) financing
activities (20,002,953) (247,587) 76,370,567
------------ ------------- -----------

Net increase (decrease) in cash and cash
equivalents (1,824,988) (76,788,312) 78,496,151

Cash and cash equivalents at beginning of year 1,841,388 78,629,700 133,549
------------ ------------- -----------
Cash and cash equivalents at end of year $ 16,400 $ 1,841,388 $78,629,700
============ ============= ===========
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

34
<PAGE> 36

IRT PROPERTY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Supplemental disclosures of cash flow information:

Cash paid during the year for interest related to:

Mortgage notes payable $ 9,207,974 $ 8,082,615 $10,428,907

Convertible subordinated debentures -
7.3% interest, net of $94,225
capitalized in 1994 6,247,157 6,033,906 -
2.0% interest - - 57,404
Premiums on 2.0% debentures - - 2,578,500

Indebtedness to banks, net of $93,591
capitalized in 1995 2,449,034 153,941 457,816
----------- ------------ -----------
Total cash paid during the year for
interest $17,904,165 $ 14,270,462 $13,522,627
=========== ============ ===========

Supplemental schedule of noncash
investing and financing activities:

Acquisitions, expansions and renovations:

Cost of acquisitions, expansions and
renovations $10,329,579 $114,677,940 $35,877,117

Additions to mortgage notes payable -
Assumed (2,464,345) (15,880,411) (7,800,000)
Acquired - - -

Issuance of common stock (193,050) (335,547) (379,975)
----------- ------------ -----------

Cash paid for acquisitions, expansions and
renovations of real estate investments
$ 7,672,184 $ 98,461,982 $27,697,142
=========== ============ ===========
Dispositions:

Fair values of assets sold $ 1,310,531 $ 562,070 $ 7,779,046

Repayment of mortgage notes payable - - -
----------- ------------ -----------

Proceeds from sales of properties, net $ 1,310,531 $ 562,070 $ 7,779,046
=========== ============ ===========

Conversion of debentures:

Debentures converted $ 1,345,000 $ - $ -
Associated unamortized debenture costs (49,713) - -
Equity issued on conversion (1,295,272) - -
----------- ------------ -----------

Cash paid in lieu of fractional shares $ 15 $ - $ -
=========== ============ ===========
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

35
<PAGE> 37

IRT PROPERTY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1994 and 1993

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Consolidation-

The accompanying consolidated financial statements include the
accounts of IRT Property Company and its wholly-owned subsidiaries,
IRT Management Company and VW Mall, Inc., (collectively, the
"Company"). Intercompany transactions and balances have been
eliminated in consolidation.

Business -

IRT Property Company, founded in 1969, is a self-administered
and self-managed equity real estate investment trust which invests
primarily in neighborhood and community shopping centers which are
located in the Southeastern United States and are anchored by
necessity-oriented retailers such as supermarkets, drug stores and/or
discount variety stores. No one retailer accounts for more than 8% of
the Company's gross revenues.

Income Taxes -

The Company has in past years elected to qualify, and intends
to continue such election, to be taxed as a "Real Estate Investment
Trust" ("REIT") under Sections 856-860 of the Internal Revenue Code,
as amended. In general terms, under such Code provisions a trust or
corporation which, in any taxable year, meets certain requirements and
distributes to its shareholders at least 95% of its taxable income
will not be subject to Federal income tax to the extent of the income
which it distributes.

The Company computes taxable income on a basis different from
that used for financial reporting purposes due to differences in the
estimated useful lives used to compute depreciation, timing
differences in the recognition of loan commitment fees, and certain
interest discounts which are not recognized for tax purposes. The
Company also reports certain gains on sales of properties on the
installment basis for tax purposes.

36
<PAGE> 38

Income Recognition-

The Company follows the policy of suspending the accrual of
income on any investments where interest or rental payments are
delinquent 60 days or more. Percentage rental income is recorded upon
collection.

Gains from the sale of real estate are deferred until such
time as minimum down payment and loan amortization requirements are
met in conformity with the provisions of Statement of Financial
Accounting Standards No. 66. Interest discounts are imputed on
financed sales when the contractual interest rates are less than
prevailing market rates at the time of sale.

Depreciation-

The Company provides depreciation on buildings and other
improvements on the straight-line basis over their estimated useful
lives. Such lives are from 14 to 40 years for buildings and 6 years
for improvements. Maintenance and repairs are charged to expense as
incurred, while significant improvements are capitalized. The profit
or loss on assets retired or otherwise disposed of is credited or
charged to operations and the cost and related accumulated
depreciation are removed from the asset and accumulated depreciation
accounts.

Valuation Loss-

The need for any allowance for possible losses or reductions
in carrying values applicable to the Company's investments is
evaluated by management by means of quarterly reviews of the portfolio
on an individual investment basis considering such factors as current
and projected net operating income and other market factors. Rental
properties are carried at the lower of depreciated cost or net
realizable value.

Use of Estimates-

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.

37
<PAGE> 39

Cash Equivalents-

The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.

Earnings Per Share-

Earnings per share is computed by dividing net earnings by the
weighted average number of shares outstanding. The effect on earnings
per share assuming conversion of the 2% and the 7.3% convertible
subordinated debentures would be anti-dilutive. Exercise of the
outstanding stock options would not have a material dilutive effect on
earnings per share.

Reclassification of Prior Year Amounts-

Certain items in the consolidated financial statements
have been reclassified to conform with the 1995 presentation.

Recent Accounting Pronouncements-

In March 1995, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 121
("FAS 121") "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," which becomes effective for
fiscal years beginning after December 15, 1995. FAS 121 establishes
standards for determining when impairment losses on long-lived assets
have occurred and how impairment losses should be measured. The
Company intends to adopt FAS 121 in 1996. The financial statement
impact of adopting FAS 121 is not expected to be material.

In October 1995, the FASB issued Statement of Financial
Accounting Standards No. 123 ("FAS 123") "Accounting for Stock-Based
Compensation," which becomes effective for fiscal years beginning
after December 15, 1995. FAS 123 establishes new financial accounting
and reporting standards for stock-based compensation plans. Entities
will be allowed to measure compensation cost for stock-based
compensation under FAS 123 or APB Opinion No. 25, "Accounting for
Stock Issued to Employees." Entities electing to remain with the
accounting in APB Opinion No. 25 will be required to make pro forma
disclosures of net income and earnings per share as if the provisions
of FAS 123 had been applied. The Company is in the process of
evaluating FAS 123. The potential impact on the Company of adopting
the new standard has not been quantified at this time. The Company
must adopt FAS 123 no later than January 1, 1996.

38
<PAGE> 40

2. PUBLIC OFFERINGS:

On August 31, 1993, the Company completed concurrent public
offerings of 4,127,580 shares of its common stock at $11.25 per share
and $86,250,000 of 7.3% convertible subordinated debentures due August
15, 2003. Net proceeds from these offerings totaled approximately
$126,330,000. For more information regarding the convertible
debentures, see Note 7.

3. RENTAL PROPERTIES:

Rental properties are comprised of the following:

<TABLE>
<CAPTION>
December 31,
---------------------------
1995 1994
---- ----
<S> <C> <C>
Land covered by purchase-
leaseback agreements $ 928,292 $ 928,292

Land related to buildings
and improvements 92,453,973 91,181,819

Buildings & improvements 359,126,336 350,532,594
------------ ------------

$452,508,601 $442,642,705
============ ============
</TABLE>

Upon expiration of the leases for land covered by
purchase-leaseback agreements, all improvements on the land will
become the property of the Company.

At December 31, 1995, land covered by two purchase-leaseback
agreements having an aggregate cost of $677,792 is subordinate to
first mortgage liens of $721,347 which are on both land and
improvements but are not obligations of the Company. In addition,
the lessees of these two properties have the option, subject to
certain conditions, to repurchase the land. Such option prices are
for amounts greater than the Company's carrying value of the related
land.

39
<PAGE> 41

Minimum base rentals on noncancellable operating leases for
the Company's shopping center, industrial and land purchase-leaseback
investments for the next five years and thereafter are as follows:

Year Amount
---- ------
<S> <C>
1996 $ 46,514,923
1997 42,227,154
1998 37,793,317
1999 33,678,716
2000 37,905,657
Thereafter 258,720,430
------------

$456,840,197
============
</TABLE>

4. NET INVESTMENT IN DIRECT FINANCING LEASES:

Four retail facilities are leased to Wal-Mart Stores, Inc. at
a total annual rental of $827,925 plus percentage rentals of 1% of
gross sales in excess of the tenant's actual sales for its fiscal year
ended January 31, 1990. Rental income from these leases totaled
$1,175,284 (including $347,359 of percentage rentals) in 1995,
$1,120,161 (including $292,236 of percentage rentals) in 1994 and
$1,046,737 (including $218,812 of percentage rentals) in 1993. Of
this rental income, $198,163, $166,019 and $172,418 were recorded as
amortization of capitalized leasing income in 1995, 1994 and 1993,
respectively.

The Company acquired ten branch bank buildings in a 1984
merger. These facilities are leased to The Old Phoenix National Bank
at a total annual rental of $313,049.

The Company is to receive minimum lease payments of $1,140,974
per year during 1996 through 2000 and a total of $12,183,091
thereafter through the remaining lease terms. The estimated residual
values of the leased properties included in net investment in direct
financing leases totaled $644,872 as of December 31, 1995 and 1994.

40
<PAGE> 42

5. MORTGAGE LOANS:

The Company's investments in mortgage loans, all of which are
secured by real estate investments, are summarized by type of loan at
December 31, 1995 and 1994, as follows:

<TABLE>
<CAPTION>
1995 1994
----------------------- --------------------------
Number Amount Number Amount
of Loans Outstanding of Loans Outstanding
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
First mortgage 2 $ 3,358,578 2 $3,390,491
Mortgage
participation 1 38,415 1 40,504
Wrap-around
mortgage 1 5,390,104 1 5,194,228
- ----------- - ----------

4 8,787,097 4 8,625,223

Less-Interest
discounts and
negative
goodwill - (287,887) - (333,080)
- ----------- - ----------

Mortgage
loans, net 4 $ 8,499,210 4 $8,292,143
= =========== = ==========
</TABLE>

During April, 1994, the borrower under the Spanish Quarter
Apartments wrap-around mortgage loan filed Chapter 11 bankruptcy. In
December, 1994, the Bankruptcy Court approved the plan of
reorganization which amended the loan effective December 1, 1994 to
extend the term for 3 years to September 1, 2001 and to reduce the
cash interest rate from 10% to 9.5% prospectively. Additional
interest at an annual rate of 1% continues to accrue through the
remainder of the term. In addition, during 1995, the Company funded
additional principal of $260,000 under this mortgage for capital
improvements. The Company will realize total proceeds in excess of
the carrying value of the indebtedness at the time of the
restructuring over the remaining term of the mortgage. Therefore, no
loss has been recorded related to the restructuring in accordance with
SFAS No. 15.

41
<PAGE> 43

Annual principal payments applicable to mortgage loan
investments in the next five years and thereafter are as follows:

Year Amount
---- ------
<S> <C>
1996 $ 84,375
1997 97,355
1998 3,241,594
1999 90,468
2000 103,835
Thereafter 4,881,583
----------

$8,499,210
==========
</TABLE>

Based on current rates at which similar loans would be made,
the estimated fair value of mortgage loans was approximately
$9,079,000 and $8,576,000 at December 31, 1995 and 1994, respectively.

6. MORTGAGE NOTES PAYABLE:

Mortgage notes payable are collateralized by various real
estate investments having a net carrying value of approximately
$132,695,208 as of December 31, 1995. These notes have stated
interest rates ranging from 7.6% to 13.875% and are due in monthly
installments with maturity dates ranging from 1996 to 2013.

During 1995, the Company (a) repaid at maturity two variable
rate mortgages totaling $3,524,000, (b) repaid at maturity an $860,000
mortgage bearing interest at 13.875% (discounted to 9.5% for financial
reporting purposes), (c) refinanced a $9,000,000 mortgage, reducing
the face of the mortgage to $7,500,000 and the interest rate from
9.75% to 8.375% and (d) refinanced a $12,330,000 mortgage, reducing
the face of the mortgage to $11,377,000 and the interest rate from
9.375% to 8.194%. In addition, a 9.5% fully amortizing mortgage note
payable was extinguished at maturity in August 1995.

The mortgage note payable secured by one of the two shopping
centers acquired during 1995 totals $2,383,000 at a rate of 11.00%
with a March 1998 maturity.

During 1994, the Company purchased for $4,500,000 the mortgage
note payable secured by Valley West Mall which had a balance
outstanding of approximately $8,248,000. During 1993, the Company
paid in full eleven mortgage notes payable aggregating approximately
$22,816,000. See also Note 10 where some of these prepayments
resulted in extraordinary gains and losses.

42
<PAGE> 44

Principal amortization and balloon payments applicable to
mortgage notes payable in the next five years and thereafter are as
follows:

<TABLE>
<CAPTION>
BALLOON
YEAR AMORTIZATION PAYMENTS TOTAL
---- ------------ -------- -----
<S> <C> <C> <C>
1996 $ 1,305,172 $13,882,380 $15,187,552
1997 1,079,895 34,653,165 35,733,060
1998 881,160 2,385,917 3,267,077
1999 958,888 - 958,888
2000 695,988 12,079,779 12,764,942
Thereafter 10,656,758 20,609,079 31,276,662
----------- ----------- -----------

$15,577,861 $83,610,320 $99,188,181
=========== =========== ===========
</TABLE>

Based on the borrowing rates currently available to the
Company for mortgages with similar terms and maturities, the estimated
fair value of mortgage notes payable was approximately $99,417,000 and
$102,098,000 at December 31, 1995 and 1994, respectively.

7. CONVERTIBLE SUBORDINATED DEBENTURES:

Pursuant to the terms of the debentures, the Company redeemed
$5,530,000 of its 2% convertible subordinated debentures on August 1,
1991 at a premium to par of 27% and the remaining $5,730,000 of this
issue on August 1, 1993 at a premium to par of 45%. The premium paid
by the Company totaled $2,578,500 and $1,493,100 on August 1, 1993 and
1991, respectively.

Effective August 31, 1993, the Company issued $86,250,000 of
7.3% convertible subordinated debentures due August 15, 2003,
$84,905,000 of which is outstanding as of December 31, 1995. Interest
on the debentures is payable semi-annually on February 15 and August
15. The debentures are convertible at any time prior to maturity into
common stock of the Company at $11.25 per share, subject to adjustment
in certain events. The Company has the option to redeem the
debentures at par at any time after August 15, 1996.

In March 1995, $1,345,000 of the Company's 7.3% convertible
subordinated debentures were converted into 119,554 shares of common
stock at $11.25 per share. Based upon the $11.25 conversion price,
7,547,111 authorized but unissued common shares have been reserved for
possible issuance if the $84,905,000 debentures outstanding at
December 31, 1995 are converted.

Costs associated with the issuance of the debentures were
approximately $3,701,000 and are being amortized over the life of the
debentures.

43
<PAGE> 45

Based on the closing market price at year end, the estimated
fair value of the 7.3% debentures was approximately $80,660,000 and
$79,350,000 at December 31, 1995 and 1994, respectively.

8. INDEBTEDNESS TO BANKS:

On November 1, 1990, the Company obtained from a financial
institution a $25,000,000 revolving term loan maturing November 1,
1995. On July 31, 1992, the Company amended and restated this
revolving term loan to increase the lender's commitment to a maximum
of $50,000,000 ($38,520,000 at December 31, 1994, based on existing
collateral) and extend the maturity to August 1, 1997. The interest
rate was, at the option of the Company, either a) prime, fluctuating
daily, or b) 1.25% over the adjusted London Interbank Offered Rates
("LIBOR"), set for periods of one, two, three, or six months at the
option of the Company. Prepayments could be made with no fee at any
time on prime rate advances and at the maturity of LIBOR advances.
The Company paid a fee of 0.25% per annum of the aggregate unused
portion of the commitment.

On December 15, 1995, the Company terminated the $50,000,000
secured revolving term loan, and obtained a $100,000,000 unsecured
revolving term loan maturing January 4, 1999. Not later than June
30th of each year commencing June 30, 1996, the Company may request to
extend the maturity date for an additional twelve-month period beyond
the existing maturity date.

The interest rate is, at the option of the Company, either a)
prime fluctuating daily, or b) LIBOR plus the "Applicable Margin"
ranging from 1.3% to 1.5% based upon the rating of the senior unsecured
long-term debt obligations of the Company. LIBOR borrowings may be
set for periods of one, two, three, six or twelve months at the option
of the Company. The Applicable Margin based on the Company's
current rating is 1.5%.

Prepayments may be made on prime rate and LIBOR advances
provided that the Company will reimburse the lenders for any loss or
out-of-pocket expense incurred in connection with any LIBOR
prepayment. The Company pays a fee of 0.25% per annum of the
aggregate unused portion of the commitment.

The loan agreement contains restrictive covenants pertaining
to net worth, the ratio of debt to equity, interest coverage, debt
service coverage, net operating losses, and the ratio of total
liabilities to total assets. The Company has agreed not to encumber
certain properties ("Negative Pledge Properties"). The commitment may
fluctuate up to a maximum of $100,000,000 based on 65% of the value of
the Negative Pledge Properties and as of December 31, 1995, the
Company may borrow the maximum commitment amount.

44
<PAGE> 46

The following data is presented with respect to the line of
credit agreements in 1995 and 1994:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Unused at year-end $64,000,000 $12,520,000

Average borrowing for
the period 33,506,945 788,890

Maximum amount outstanding
during the period 36,000,000 26,000,000

Average interest rate for
the period 7.63% 8.16%

Interest rate at
year-end 7.4375% 8.1250%
</TABLE>

9. DEFERRED INCOME TAXES, GAIN ON SALES AND VALUATION LOSS:

During 1984, the Company recognized a gain on sale for
financial reporting purposes, net of a deferred tax provision of
$1,122,000, which reflected the timing differences arising from the
Company's election to recognize the gain on this property sale on the
installment basis for tax purposes. Installment gains are recognized
for tax purposes based on the principal payments received in each year
under the purchase-money financing taken back on the sales.

The purchase-money financing on this sale commenced principal
amortization in 1987 based on a 25-year amortization period, with a
balloon payment in 2001. The Company had a deferred tax liability
related to this sale of $1,068,000 and $1,079,000 at December 31, 1995
and 1994, respectively. Should the Company elect to distribute the
taxable installment gain recognized in future years to its
shareholders as capital gain distributions, the reversal of this
previously recorded tax liability would be reflected in income for
financial reporting purposes in the periods in which the distributions
are elected.

During 1995, the Company sold three shopping center
investments and two parcels of land for gains totaling approximately
$160,000. In addition, the company recorded gains of approximately
$2,000 on the condemnation of 2,814 square feet of land at two of the
Company's shopping center investments.

45
<PAGE> 47

During 1994, the Company sold two parcels of land for gains
totaling approximately $257,000. During 1993, the Company sold an
apartment investment, two parcels of land and a third parcel of land
with the buildings thereon for a total gain of approximately
$4,557,000.

In 1994, the Company recorded approximately $4,125,000 of
reductions in the carrying values of certain investments, primarily
Valley West Mall due to permanent impairments in the values of the
investments. In addition, in December 1992 the Company recorded a
$3,565,000 reduction in the carrying value of Valley West Mall. These
adjustments to carrying value were a result of the Company's quarterly
evaluations of its individual investments based on current and
forecasted net operating income of the investment, competition
resulting from new properties in the market place and other changes in
the local economy. For tax purposes, the Company will not be able to
claim these deductions until the actual disposition of the properties.

10. EXTRAORDINARY ITEM:

During 1995, the Company recognized an extraordinary loss of
approximately $137,000 on the early extinguishment of debt. This
extraordinary loss represented the unamortized portion of loan costs
on the $50 million secured revolver terminated in December 1995.

During 1994, the Company purchased the 9.5% mortgage note
payable secured by Valley West Mall in Glendale, Arizona for
$4,500,000. The mortgage note payable had an outstanding principal
balance of $8,248,000 at the time of purchase, which resulted in an
extraordinary gain on extinguishment of this indebtedness of
approximately $3,748,000 for both financial reporting and tax
purposes.

During 1993, the Company prepaid in full nine mortgage notes
payable totaling approximately $21,896,000 with interest rates ranging
from 9.3% to 13.625% for financial reporting purposes. The Company
recognized an extraordinary loss on these prepayments of approximately
$1,440,000, representing $186,000 of unamortized net interest
discounts and $1,254,000 of prepayment penalties.

46
<PAGE> 48

11. CASH DISTRIBUTIONS AND DIVIDEND REINVESTMENT PLAN:

The taxability of per share distributions paid to shareholders
during the years ended December 31, 1995, 1994 and 1993 was as
follows:

1995 1994 1993
---- ---- ----
<S> <C> <C>
Ordinary income $.635 $ .72 $ .39
Capital gains - .04 .45
Return of capital .250 .08 -
----- ----- -----

$.885 $ .84 $ .84
===== ===== =====
</TABLE>

In addition, the 5% discount received upon purchase of shares
under the Dividend Reinvestment Plan is taxable as ordinary income to
the participant.

In 1984, the Company implemented a Dividend Reinvestment Plan
(the "Plan") under which shareholders of the Company may elect to
reinvest all or a portion of their dividends in the purchase of newly
issued shares of the Company. The price of shares so purchased is 95%
of the average high and low sales prices of the Company's common stock
on the applicable dividend payment date. During 1995, 1994 and 1993,
shares issued under the Plan totaled 121,831, 99,477 and 109,807,
respectively, and dividends totaling $1,107,261, $937,750 and
$1,248,628, respectively, were reinvested to purchase these shares.

12. STOCK OPTIONS:

Effective May 8, 1989, the Company adopted and its
shareholders approved the 1989 Stock Option Plan (the "1989 Plan").
In May 1993, the shareholders approved a 750,000 share increase in the
number of shares authorized to be granted under the 1989 Plan. The
1989 Plan, which expires on May 8, 1999, replaces the prior Key
Employee Stock Option Plan (the "Prior Plan"), except that options
granted under the Prior Plan and unexercised as of the date of the
1989 Plan shall remain in full force and effect.

The 1989 Plan includes provisions for a) the granting of both
Incentive Stock Options ("ISOs") (as defined in Section 422A of the
Internal Revenue Code) and nonqualified options to officers and
employees and b) the automatic granting of nonqualified options for
1,250 shares to each non-employee director upon the election and each
annual re-election of each non-employee director. Under the terms of
the 1989 Plan, the option price shall be no less than the fair market
value of the optioned shares at the date of grant.

47
<PAGE> 49

Details of the stock option activity during 1995, 1994 and
1993 are as follows:
<TABLE>
<CAPTION>
Number of Shares
---------------- Option Price
Employees Directors Per Share
--------- --------- --------------
<S> <C> <C> <C>
Options outstanding,
December 31, 1992 130,015 37,500 $7.63-$15.10
Granted, 1993 56,000 - $12.00
Granted, 1993 - 8,750 $13.38
Exercised, 1993 (1,800) (6,250) $7.63-$10.25
Expired unexercised,
1993 (3,000) - $ 9.25
------- ------
Options outstanding,
December 31, 1993 181,215 40,000 $7.63-$15.10
Granted, 1994 66,000 - $10.75
Granted, 1994 - 7,500 $10.63
Exercised, 1994 (6,210) - $7.63-$10.24
Expired unexercised,
1994 (16,350) - $9.25-$15.10
------- ------

Options outstanding,
December 31, 1994 224,655 47,500 $7.63-$15.10
Granted, 1995 80,500 - $10.125
Granted, 1995 - 7,500 $ 9.75
Granted, 1995 50,000 - $ 9.625
Exercised, 1995 (7,000) - $ 7.625
Expired unexercised,
1995 (12,000) - $10.125-$12.00
------- ------

Options outstanding,
December 31, 1995 336,155 55,000
======= ======
</TABLE>

There are currently ISOs outstanding on 372,343 shares
(including 40,625 shares granted under the Prior Plan), non-qualified
options outstanding on 105,000 shares, and 577,050 unoptioned shares
remaining in the 1989 Plan after the granting of ISOs for 89,000
additional shares at $9.25 per share on January 2, 1995 and the
expiration of an option on 2,812 shares at $10.16 per share on January
19, 1996.

13. EMPLOYEE RETIREMENT BENEFITS:

During 1980 the Board of Directors approved and adopted a
pension program for the employees of the Company. The program
included a noncontributory pension plan for all employees of the
Company, under which the Company accrued and funded pension costs each
year equal to 12% of employees' salaries. Effective June 30, 1990,
the Board of Directors of the Company elected to terminate the pension
plan.

Upon termination of the pension plan, the Board of Directors
determined that it would be appropriate to substitute in lieu thereof
a program of year-end cash payments to certain employees of the
Company. This program was instituted in 1990. Under this program,
participants receive a year-end cash payment from the Company, the
amount of which is based upon each participant's length of service
with the Company. Each participant who has been employed by the
Company for more than five years will receive a year-end cash

48
<PAGE> 50

payment equal to 12% of his or her salary. Each participant with less
than five years will receive year-end cash payments in graduated
amounts designed to produce a cumulative 12% payment after completion
of five years of service. The Company accrued approximately $200,000,
$168,000 and $154,000 under this program in 1995, 1994 and 1993,
respectively.

Certain employees whose time in service with the Company was
significantly greater than that of the remaining employees were
provided with employment contracts during 1980. These employment
contracts call for annual payments to each of these employees equal to
12% of the employee's salary in the event the Company's pension plan
is terminated and deferred compensation amounts to be paid at
retirement. The Company accrued approximately $23,000 for these
contracts in 1995, $23,000 in 1994, and $21,000 in 1993.

The Company currently has no postretirement or postemployment
benefits, and therefore Statements of Financial Accounting Standards
Nos. 106 and 112 have no effect on the Company.

14. TRANSACTIONS WITH RELATED PARTIES:

The former Chairman of the Executive Committee of the Company,
who is also a member of the Board of Directors and was appointed
President and Chief Operating Officer of the Company effective October
1, 1995, received consulting fees included in general and
administrative expenses for the years ended December 31, 1994 and 1993
totaling approximately $2,000 and $24,000, respectively. This
consulting arrangement was discontinued in January 1994.

The holdback shares and dividend equivalents related thereto
on the Sofran Centers were issued or paid to entities which were
directly or indirectly owned or controlled by Norman Zavalkoff, a
director of the Company from August 14, 1992 to January 27, 1994, and
nine other investors. (See Note 15).

15. COMMITMENTS AND CONTINGENCIES:

During 1992, the Company purchased 17 shopping centers (the
"Sofran Centers" and the "Dreyfus Centers") which had certain rental
guaranties from the sellers. At the time of the purchases, 290,762
shares of the Company's common stock (representing approximately
$3,003,000 of the purchase prices) were retained as "holdback shares."
The Company was required to issue all or a portion of the holdback
shares at various dates over the holdback periods if certain occupancy
levels on a portfolio basis or on agreed-upon spaces were achieved by
the end of the respective periods.

49
<PAGE> 51

The Sofran holdback, which expired January 1995, contained a
total of 169,290 shares. Over the term of this holdback, 9,182 shares
were earned by and issued to the sellers and the remaining 160,108
shares were forfeited.

The Dreyfus holdback, which expired December 1995, contained a
total of 121,472 shares. For the period December 23, 1992 through
September 30, 1995, the number of shares available to the sellers was
reduced by 34,378 shares and the Company issued 81,623 shares to the
sellers, leaving a balance of 5,471 holdback shares. Of the remaining
balance of holdback shares, 5,158 were issued to the sellers and 313
were forfeited in January 1996.

The shares issued represented additional cost of acquisition
for financial reporting purposes. In addition, during the holdback
periods, the sellers were entitled to amounts equivalent to dividends
on the holdback shares until such time as their right to receive such
holdback shares was extinguished. The Company paid dividend
equivalents of $41,637 and $100,466 during 1994 and 1993,
respectively, to the sellers of the Sofran Centers. Also, the Company
paid dividend equivalents of $12,100, $45,700 and $87,697 during 1995,
1994 and 1993, respectively, to the sellers of the Dreyfus Centers.
These payments were considered part of the cost of acquisition on the
respective payment dates.

Additionally, the seller of one of the Dreyfus Centers pledged
115,343 of its IRT Property Company shares to the Company as
collateral for a guarantee of rents payable by one of the anchor
tenants which had filed bankruptcy. For the period December 23, 1992
through September 30, 1995, 40,662 shares held as collateral were
released to the seller and 10,321 shares were retired, leaving a
balance of 64,360 shares.

In December 1995, the Company entered into a contract for the
expansion of one of its shopping center investments. The cost to the
Company will be approximately $693,000 of which approximately $34,000
had been incurred through December 31, 1995.

Effective October 1, 1995, the Company entered into agreements
with the Chairman, the President and the Executive Vice President and
Chief Financial Officer. The agreements contain provisions entitling
each such officer to receive from two to three times his or her annual
compensation (as defined) if there is a change in control of the
Company (as defined) and a termination of his or her employment.

Additionally, the President's agreement entitles him to
receive an amount equal to his annual compensation (as defined) if his

50
<PAGE> 52

employment is terminated within two years (a) by the Company
without cause or (b) by the President if his position and duties are
materially reduced or diminished.

16. ENVIRONMENTAL INVESTIGATIONS:

The Charlotte industrial facility contained underground
petroleum and used oil storage tanks ("USTs") believed to have been
owned by the previous owner of this property. The Company (through an
environmental consulting firm) removed the USTs in December 1993, and
on March 2, 1994, DEHNR notified the Company that certain
investigative, corrective and/or remedial actions ("Corrective
Actions") must be performed by the Company to, among other things,
determine the level of soil and/or groundwater contamination due to
suspected leakage from some of the USTs. The Company has investigated
the property to the satisfaction of DEHNR. The investigation
confirmed the presence of petroleum product-related substances in soil
and groundwater at levels that exceed applicable standards. The
investigation also revealed the presence of free phase liquids in one
monitoring well at the property.

The Company has begun removing free phase liquids from the
well on the property. In addition, the Company has submitted to DEHNR
a Corrective Action Plan ("CAP") and schedule to address
petroleum-impacted soil and groundwater at the site. Soil excavation
work has been completed, and the Company plans to address
petroleum-impacted groundwater in due course. According to the CAP,
the estimated remaining cost for site remediation ranges from $129,000
to $193,000 over a period of 3 to 6 years. Although the Company
believes that certain of the costs of Corrective Action are
reimburseable under the North Carolina Commercial Leaking Petroleum
Underground Storage Tank Cleanup Fund, the Company has accrued
$129,000 based on these estimates. The CAP may be revised, and the
estimated costs may change, but based on the information presently
available, the Company believes any additional costs of any such
Corrective Action would not have a material adverse effect on the
Company's results of operations, financial position or liquidity.

51
<PAGE> 53

did not exhibit any impact. There can be no assurance that the
LDEQ-GWPD will not require remediation, but based on information
presently available to the Company and discussions with the Company's
environmental consultant, the Company believes the cost of any such
remediation would not have a material adverse effect on the Company's
results of operations, financial position or liquidity.

52
<PAGE> 54

17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED):

The following is a summary of the unaudited quarterly financial
information for the years ended December 31, 1995 and 1994.

<TABLE>
<CAPTION>
1995
-----------------------------------------------------------------

First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- ------
<S> <C> <C> <C> <C>
Revenues $15,280,307 $14,837,565 $14,986,831 $15,091,544
=========== =========== =========== ===========

Earnings before gain (loss) on real
estate investments and extraordinary
item $ 4,196,221 $ 3,890,861 $ 3,910,440 $ 3,552,504
Gain (loss) on sales of properties,
net (16,673) (58,084) - 247,782
----------- ----------- ----------- -----------

Earnings before extraordinary
item 4,179,548 3,832,777 3,910,440 3,800,286
Extraordinary item - - - (137,260)
----------- ----------- ----------- -----------
Net earnings $ 4,179,548 $ 3,832,777 $ 3,910,440 $ 3,663,026
=========== =========== =========== ===========

Per Share:
Earnings before extraordinary
item $ .16 $ .15 $ .15 $ .14
Extraordinary item - - - -
----------- ----------- ----------- -----------
Net earnings $ .16 $ .15 $ .15 $ .14
=========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
1994
-----------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues $12,038,799 $11,755,214 $12,306,661 $13,101,470
=========== =========== =========== ===========
Earnings before gain (loss) on real
estate investments and extraordinary
item $ 3,131,931 $ 2,888,770 $ 3,150,599 $ 3,617,623
----------- ----------- ----------- -----------

Gain (loss) on real estate
investments: - - 257,036 43,000
Gain on sales of properties - (3,685,454) - (440,000)
----------- ----------- ----------- -----------
Valuation loss - (3,685,454) 257,036 (397,000)
----------- ----------- ----------- -----------

Earnings before extraordinary
item 3,131,931 (796,684) 3,407,635 3,220,623
Extraordinary item - 3,748,095 - -
----------- ----------- ----------- -----------

Net earnings $ 3,131,931 $ 2,951,411 $ 3,407,635 $ 3,220,623
=========== =========== =========== ===========

Per Share:
Earnings before extraordinary
item $ .12 $ (.03) $ .13 $ .13
Extraordinary item - .15 - -
----------- ----------- ----------- -----------

Net earnings $ .12 $ .12 $ .13 $ .13
=========== =========== =========== ===========
</TABLE>

53
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IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>

Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Abbeville Plaza
Abbeville, SC
Land $ - $ 48,066 $ - $ 48,066
Buildings 458,062 10,470 468,532

Ambassador Row
Lafayette, LA
Land - 2,451,860 - 2,451,860
Buildings 7,244,580 70,500 7,315,080

Ambassador Row Courtyard
Lafayette, LA
Land - 2,899,438 - 2,899,438
Buildings 8,698,313 - 8,698,313

Asheville Plaza
Asheville, NC
Land - 52,710 15,000 67,710
Buildings 335,717 1,860 337,577

Bluebonnet Village
Baton Rouge, LA
Land - 2,540,594 - 2,540,594
Buildings 5,509,995 24,742 5,534,737

The Boulevard
Lafayette, LA
Land - 948,334 - 948,334
Buildings 2,845,003 4,350 2,849,353

Carolina Place
Hartsville, SC
Land - 345,000 - 345,000
Buildings 2,006,494 - 2,006,494

Centre Pointe Plaza
Smithfield, NC
Land - 983,138 12,583 995,721
Buildings 7,999,263 146,922 8,146,185

<CAPTION>
Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Abbeville Plaza
Abbeville, SC
Land $ - 30 April, 1986 1970
Buildings 189,270

Ambassador Row
Lafayette, LA
Land - 40 December, 1994 1980 &
Buildings 184,787 1991

Ambassador Row Courtyard
Lafayette, LA
Land - 40 December, 1994 1986 &
Buildings 222,382 1991

Asheville Plaza
Asheville, NC
Land - 30 April, 1986 1967
Buildings 110,568

Bluebonnet Village
Baton Rouge, LA
Land - 40 December, 1994 1983
Buildings 142,265

The Boulevard
Lafayette, LA
Land - 40 December, 1994 1976 &
Buildings 73,004 1994

Carolina Place
Hartsville, SC
Land - 40 May, 1989 1989
Buildings 328,380

Centre Pointe Plaza
Smithfield, NC
Land - 40 December, 1992 1989 &
Buildings 613,538 1993

</TABLE>

54
<PAGE> 56
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Chadwick Square
Hendersonville, NC
Land $ - $ 276,778 $ - $ 276,778
Buildings 1,179,949 - 1,179,949

Chelsea Place
New Port Richey, FL
Land - 1,387,517 - 1,387,517
Buildings 5,550,068 - 5,550,068

Chester Plaza
Chester, SC
Land - 68,649 143,504 212,153
Buildings 414,117 1,573,701 1,987,818

Chestnut Square
Brevard, NC
Land 1,069,609 295,984 - 295,984
Buildings 1,113,464 7,539 1,121,003

Colony Square
Fitzgerald, GA
Land - 272,833 - 272,833
Buildings 2,455,826 200,571 2,656,397

Commerce Crossing
Commerce, GA
Land - 379,380 889 380,269
Buildings 4,086,850 15,569 4,102,419

Country Club Plaza
Slidell, LA
Land 1,068,686 1,068,686
Buildings 3,010,039 12,275 3,022,314

Countryside Shops
Cooper City, FL
Land - 5,675,614 - 5,675,614
Buildings 10,954,065 62,953 11,017,018

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Chadwick Square
Hendersonville, NC
Land $ - 40 January, 1992 1985
Buildings 115,526

Chelsea Place
New Port Richey, FL
Land - 40 July, 1993 1992
Buildings 341,109

Chester Plaza
Chester, SC
Land - 30 April, 1986 1967 &
Buildings 423,860 1992

Chestnut Square
Brevard, NC
Land - 40 January, 1992 1985
Buildings 112,436

Colony Square
Fitzgerald, GA
Land - 40 February, 1988 1987
Buildings 584,587

Commerce Crossing
Commerce, GA
Land - 40 December, 1992 1988
Buildings 309,275

Country Club Plaza
Slidell, LA
Land - 40 January, 1995 1982
Buildings 74,241

Countryside Shops
Cooper City, FL
Land - 40 June, 1994 1986, 1988
Buildings 413,470 & 1991

</TABLE>

55
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IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
The Crossing
Slidell, LA
Land $ - $ 1,282,036 $ - $ 1,282,036
Buildings 3,213,616 69,850 3,283,466

Delchamps Plaza
Pascagoula, MS
Land 3,233,587 359,000 - 359,000
Buildings 4,130,247 25,986 4,156,233

Douglas Commons
Douglasville, GA
Land 6,270,451 2,543,385 2,951 2,546,336
Buildings 5,958,475 104,280 6,062,755

Eden Centre
Eden, NC
Land - 625,901 - 625,901
Buildings 2,901,316 - 2,901,316

Elmwood Oaks
Harahan, LA
Land 7,500,000 4,558,654 - 4,558,654
Buildings 6,560,014 7,120 6,567,134

First Street Station
Albemarle, NC
Land - 202,578 - 202,578
Buildings 2,832,092 6,998 2,839,090

Forest Hills Centre
Wilson, NC
Land - 869,981 (9,160) 860,821
Buildings 4,102,906 552,594 4,655,500

Forrest Gallery
Tullahoma, TN
Land - 2,136,573 10,639 2,147,212
Buildings 9,976,227 228,743 10,204,970

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
The Crossing
Slidell, LA
Land $ - 40 December, 1994 1988 &
Buildings 83,581 1993

Delchamps Plaza
Pascagoula, MS
Land - 40 April, 1988 1987
Buildings 805,129

Douglas Commons
Douglasville, GA
Land - 40 August, 1992 1988
Buildings 527,432

Eden Centre
Eden, NC
Land - 40 November, 1994 1991
Buildings 84,621

Elmwood Oaks
Harahan, LA
Land - 40 January, 1992 1989
Buildings 649,249

First Street Station
Albemarle, NC
Land - 40 August, 1994 1989
Buildings 94,399

Forest Hills Centre
Wilson, NC
Land - 40 August, 1990 1990
Buildings 522,773

Forrest Gallery
Tullahoma, TN
Land - 40 December, 1992 1987
Buildings 782,487

</TABLE>

56
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IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Ft. Walton Beach Plaza
Ft. Walton Beach, FL
Land $ - $ 787,583 $ - $ 787,583
Buildings 1,860,360 28,774 1,889,134

The Galleria
Wrightsville Beach, NC
Land - 1,069,672 - 1,069,672
Buildings 5,256,991 1,256,043 6,513,034

Gulf Gate Plaza
Naples, FL
Land - 277,562 - 277,562
Buildings 1,857,532 2,158,202 4,015,734

Harris Teeter
Lexington, VA
Land - 312,105 - 312,105
Buildings 1,638,552 650,000 2,288,552

Heritage Walk
Milledgeville, GA
Land - 810,292 - 810,292
Buildings 7,944,260 3,200 7,947,460

Hoffner Plaza
Orlando, FL
Land - 185,293 - 185,293
Buildings 476,469 485,171 961,640

Lancaster Plaza
Lancaster, SC
Land - 120,790 - 120,790
Buildings 743,852 299,267 1,043,119

Lancaster Shopping Center
Lancaster, SC
Land - 338,355 - 338,355
Buildings 1,227,552 29,760 1,257,312

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Ft. Walton Beach Plaza
Ft. Walton Beach, FL
Land $ - 30 July, 1986 1986
Buildings 589,312

The Galleria
Wrightsville Beach, NC
Land - 40 August, 1986 & 1986 &
Buildings 1,336,073 December, 1987 1990

Gulf Gate Plaza
Naples, FL
Land - 28 June, 1979 1969 &
Buildings 2,278,348 1974

Harris Teeter
Lexington, VA
Land - 30 June, 1988 & 1981 &
Buildings 561,740 June, 1989 1989

Heritage Walk
Milledgeville, GA
Land - 40 June,1993 1991 &
Buildings 511,492 1992

Hoffner Plaza
Orlando, FL
Land - 28 June, 1979 1972
Buildings 719,116

Lancaster Plaza
Lancaster, SC
Land - 30 April, 1986 1971
Buildings 407,423

Lancaster Shopping Center
Lancaster, SC
Land - 30 August, 1986 & 1963 &
Buildings 352,435 December, 1987 1987

</TABLE>

57
<PAGE> 59
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Lawrence Commons
Lawrenceburg, TN
Land $ 2,739,060 $ 715,653 $ 829 $ 716,482
Buildings 2,726,635 16,056 2,742,691

Litchfield Landing
North Litchfield, SC
Land - 475,000 - 475,000
Buildings 2,118,429 39,256 2,157,685

Macland Pointe
Marietta, GA
Land 3,834,068 1,252,098 - 1,252,098
Buildings 4,317,234 544,073 4,861,307

Masonova Plaza
Daytona Beach, FL
Land - 296,643 - 296,643
Buildings 1,680,977 1,053,232 2,734,209

Millervillage Shopping Center
Baton Rouge, LA
Land - 1,926,535 - 1,926,535
Buildings 5,661,992 34,125 5,696,117

New Smyrna Beach Regional
New Smyrna Beach, FL
Land - 3,704,368 6,757 3,711,125
Buildings 6,400,556 236,152 6,636,708

North River Village
Ellenton, FL
Land - 2,949,031 - 2,949,031
Buildings 7,150,403 64,321 7,214,724

North Village Center
North Myrtle Beach, SC
Land 2,779,144 483,400 - 483,400
Buildings 2,785,154 15,479 2,800,633

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Lawrence Commons
Lawrenceburg, TN
Land $ - 40 August, 1992 1987
Buildings 234,480

Litchfield Landing
North Litchfield, SC
Land - 40 August, 1986 1984
Buildings 514,750

Macland Pointe
Marietta, GA
Land - 40 January, 1993 1992 &
Buildings 354,239 1993

Masonova Plaza
Daytona Beach, FL
Land - 16 June, 1979 1969
Buildings 2,089,261

Millervillage Shopping Center
Baton Rouge, LA
Land - 40 December, 1994 1983 &
Buildings 146,264 1992

New Smyrna Beach Regional
New Smyrna Beach, FL
Land - 40 August, 1992 1987
Buildings 576,362

North River Village
Ellenton, FL
Land - 40 December, 1992 & 1988 &
Buildings 434,841 December, 1993 1993

North Village Center
North Myrtle Beach, SC
Land - 37 August, 1986 1984
Buildings 608,074

</TABLE>

58
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IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Old Kings Commons
Palm Coast, FL
Land $ - $ 1,491,458 $ - $ 1,491,458
Buildings 4,474,372 137,113 4,611,485

Palm Gardens
Largo, FL
Land - 98,279 - 98,279
Buildings 657,716 1,274,417 1,932,133

Parkmore Plaza
Milton, FL
Land - 1,797,774 8,141 1,805,915
Buildings 6,448,360 60,948 6,509,308

Paulding Commons
Dallas, GA
Land 8,732,846 2,312,372 2,687 2,315,059
Buildings 10,606,781 40,624 10,647,405

Pensacola Plaza
Pensacola, FL
Land - 130,688 - 130,688
Buildings 2,392,249 121,642 2,513,891

Pinhook Plaza
Lafayette, LA
Land 7,422,055 2,768,151 - 2,768,151
Buildings 8,304,453 19,500 8,323,953

Plaza Acadienne
Eunice, LA
Land 2,388,785 - - -
Buildings 2,917,925 12,000 2,929,925

Plaza North
Hendersonville, NC
Land - 657,797 121 657,918
Buildings 1,795,992 6,185 1,802,177

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>

Old Kings Commons
Palm Coast, FL
Land $ - 40 May, 1988 1988
Buildings 903,702

Palm Gardens
Largo, FL
Land - 26 June, 1979 1970 &
Buildings 767,811 1993

Parkmore Plaza
Milton, FL
Land - 40 December, 1992 1986 &
Buildings 490,451 1992

Paulding Commons
Dallas, GA
Land - 40 August, 1992 1991
Buildings 909,810

Pensacola Plaza
Pensacola, FL
Land - 30 July, 1986 1985
Buildings 813,629

Pinhook Plaza
Lafayette, LA
Land - 40 December, 1994 1979 &
Buildings 213,275 1992

Plaza Acadienne
Eunice, LA
Land - 40 December, 1994 1980
Buildings 74,898

Plaza North
Hendersonville, NC
Land - 40 August, 1992 1986
Buildings 153,940

</TABLE>

59
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IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

Providence Square
Charlotte, NC
Land $ - $ 450,000 $ 300 $ 450,300
Buildings 1,895,606 1,965,327 3,860,933

Riverview Shopping Center
Durham, NC
Land - 400,000 322 400,322
Buildings 1,822,918 4,128,911 5,951,829

Scottsville Square
Bowling Green, KY
Land - 653,010 765 653,775
Buildings 1,782,340 2,089 1,784,429

Seven Hills
Spring Hill, FL
Land 3,800,000 1,903,090 - 1,903,090
Buildings 2,976,628 17,502 2,994,130

Shelby Plaza
Shelby, NC
Land - - - -
Buildings 937,483 177,666 1,115,149

Sherwood South
Baton Rouge, LA
Land - 496,174 - 496,174
Buildings 1,488,521 - 1,488,521

Siegen Village
Baton Rouge, LA
Land - 2,375,168 (325,000) 2,050,168
Buildings 4,302,715 19,830 4,322,545

Smyrna Village
Smyrna, TN
Land 4,172,360 968,358 20,601 988,959
Buildings 4,743,708 113,474 4,857,182

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Providence Square
Charlotte, NC
Land $ - 35 December, 1971 1973
Buildings 2,333,015

Riverview Shopping Center
Durham, NC
Land - 35 March, 1972 1973
Buildings 1,730,023

Scottsville Square
Bowling Green, KY
Land - 40 August, 1992 1986
Buildings 152,319

Seven Hills
Spring Hill, FL
Land - 40 July, 1993 1991
Buildings 185,439

Shelby Plaza
Shelby, NC
Land - 30 April, 1986 1972
Buildings 409,838

Sherwood South
Baton Rouge, LA
Land - 40 December, 1994 1972, 1988
Buildings 38,628 & 1992

Siegen Village
Baton Rouge, LA
Land - 40 December, 1994 1988
Buildings 108,498

Smyrna Village
Smyrna, TN
Land - 40 August, 1992 1992
Buildings 411,689

</TABLE>

60
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IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Smyth Valley Crossing
Marion, VA
Land $ - $ 1,692,081 $ 6,523 $ 1,698,604
Buildings 5,226,952 114,519 5,341,471

South Beach Regional
Jacksonville Beach, FL
Land 15,365,624 3,972,815 19,710 3,992,525
Buildings 17,115,106 741,735 17,856,841

Spalding Village
Griffin, GA
Land 11,376,691 2,813,854 3,281 2,817,135
Buildings 12,470,446 95,205 12,565,651

Stadium Plaza
Phenix City, AL
Land 3,850,000 1,828,942 2,130 1,831,072
Buildings 2,614,155 18,096 2,632,251

Stanley Market Place
Stanley, NC
Land - 198,103 - 198,103
Buildings 1,602,832 - 1,602,832

Tarpon Heights
Galliano, LA
Land 2,443,428 705,570 705,570
Buildings 2,116,712 3,125 2,119,837

Taylorsville Shopping Center
Taylorsville, NC
Land - 89,689 - 89,689
Buildings 1,443,704 1,078,766 2,522,470

Thomasville Commons
Thomasville, NC
Land 5,582,694 963,333 - 963,333
Buildings 6,183,052 26,576 6,209,628

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Smyth Valley Crossing
Marion, VA
Land $ - 40 December, 1992 1989
Buildings 413,008

South Beach Regional
Jacksonville Beach, FL
Land - 40 August, 1992 1990 &
Buildings 1,539,668 1991

Spalding Village
Griffin, GA
Land - 40 August, 1992 1989
Buildings 1,070,692

Stadium Plaza
Phenix City, AL
Land - 40 August, 1992 1988
Buildings 226,501

Stanley Market Place
Stanley, NC
Land - 35 January, 1992 1980 &
Buildings 156,980 1991

Tarpon Heights
Galliano, LA
Land - 40 January, 1995 1982
Buildings 52,209

Taylorsville Shopping Center
Taylorsville, NC
Land - 40 August, 1986 & 1982 &
Buildings 538,702 December, 1988 1988

Thomasville Commons
Thomasville, NC
Land - 40 August, 1992 1991
Buildings 537,022

</TABLE>

61
<PAGE> 63
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
University Center
Greenville, NC
Land $ - $ 750,000 $ - $ 750,000
Buildings 3,159,065 61,907 3,220,972

Valley West Mall
Glendale, AZ
Land - 1,500,000 - 1,500,000
Buildings 5,801,772 2,905,826 8,707,598

Venice Plaza
Venice, FL
Land - 333,127 - 333,127
Buildings 1,887,721 582,501 2,470,222

Village at Northshore
Slidell, LA
Land 5,710,182 2,065,633 - 2,065,633
Buildings 6,196,900 5,673 6,202,573

Waterlick Plaza
Lynchburg, VA
Land - 1,071,000 - 1,071,000
Buildings 5,091,222 104,652 5,195,874

Watson Central
Warner Robins, GA
Land - 1,644,699 12,478 1,657,177
Buildings 11,312,051 88,121 11,400,172

Wesley Chapel Crossing
Decatur, GA
Land - 3,827,798 9,154 3,836,952
Buildings 7,029,915 47,541 7,077,456

West Gate Plaza
Mobile, AL
Land - 475,270 - 475,270
Buildings 3,779,546 481,190 4,260,736

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>

University Center
Greenville, NC
Land $ - 40 December, 1989 1989
Buildings 488,033

Valley West Mall
Glendale, AZ
Land - 30 March, 1986 1973
Buildings 4,902,642

Venice Plaza
Venice, FL
Land - 27 June, 1979 1971 &
Buildings 1,477,401 1979

Village at Northshore
Slidell, LA
Land - 40 December, 1994 1988 &
Buildings 159,094 1993

Waterlick Plaza
Lynchburg, VA
Land - 40 October, 1989 1973 &
Buildings 831,056 1988

Watson Central
Warner Robins, GA
Land - 40 December, 1992 & 1989 &
Buildings 817,596 October, 1993 1993

Wesley Chapel Crossing
Decatur, GA
Land - 40 December, 1992 1989
Buildings 536,891

West Gate Plaza
Mobile, AL
Land - 25 June, 1974 & 1974
Buildings 721,733 January, 1985

</TABLE>

62
<PAGE> 64
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
West Towne Square
Rome, GA
Land $ - $ 324,800 $ - $ 324,800
Buildings 5,580,776 97,275 5,678,051

Westgate Square
Sunrise, FL
Land - 2,238,886 - 2,238,886
Buildings 6,839,969 60,749 6,900,718

Willowdaile Shopping Center
Durham, NC
Land - 936,977 (60,579) 876,398
Buildings 7,351,612 306,538 7,658,150

Whitehall Kent Apartments
Kent, OH
Land - 136,404 117,938 254,342
Buildings 2,136,996 1,253,021 3,390,017

Industrial Buildings
Charlotte, NC - Industrial
Land - 143,160 178,490 321,650
Buildings 2,170,057 472,435 2,642,492

Plasti-Kote
Medina, OH - Industrial
Land - 81,390 - 81,390
Buildings 346,979 54,570 401,549

Lawrence County
Shopping Center
Sybene, OH
Land - 435,994 - 435,994

Grand Marche
Shopping Center
Lafayette, LA
Land - 250,000 500 250,500

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
West Towne Square
Rome, GA
Land $ - 40 April, 1990 1988
Buildings 823,086

Westgate Square
Sunrise, FL
Land - 40 June, 1994 1984 &
Buildings 256,747 1988

Willowdaile Shopping Center
Durham, NC
Land - 40 August, 1986 & 1986
Buildings 1,671,009 December, 1987

Whitehall Kent Apartments
Kent, OH
Land - 29 June, 1979 1968
Buildings 2,137,235

Industrial Buildings
Charlotte, NC - Industrial
Land - 14 June, 1979 1956 &
Buildings 2,642,492 1963

Plasti-Kote
Medina, OH - Industrial
Land - 14 June, 1979 1961 &
Buildings 401,549 1966

Lawrence County
Shopping Center
Sybene, OH
Land - May, 1971 1971

Grand Marche
Shopping Center
Lafayette, LA
Land - September, 1972 1969

</TABLE>

63
<PAGE> 65
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

<TABLE>
<CAPTION>
Costs Gross Amount
Initial Capitalized at Which
Cost to Subsequent to Carried at
Description Encumbrances Company Acquisition Close of Year
----------- ------------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Manatee County
Shopping Center
Bradenton, FL
Land $ - $ 241,798 $ - $ 241,798
-------------- ------------- -------------- ---------------

$ 98,270,584 $ 425,589,664 $ 26,918,937 $ 452,508,601
============== ============= ============== ================

Estimated
Accumulated Useful
Depreciation Life of
at Close Buildings Date Year
Description of Year (Years) Acquired Completed
----------- ------- ------- -------- ---------
<S> <C> <C> <C> <C>
Manatee County
Shopping Center
Bradenton, FL
Land $ - May, 1971 1971
--------------

$ 51,600,890
==============

</TABLE>

64
<PAGE> 66
IRT PROPERTY COMPANY SCHEDULE III
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995

NOTE:

Real estate activity is summarized as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
RENTAL PROPERTIES:

Cost -
Balance at beginning of year $442,642,705 $331,012,764 $300,285,526

Acquisitions and improvements 11,518,502 115,813,729 37,157,578

Retirements - - -

Reduction in carrying value - (3,878,754) -
------------ ------------ ------------

454,161,207 442,947,739 337,443,104

Cost of properties sold (1,652,606) (305,034) (6,430,340)
------------ ------------ ------------

Balance at end of year $452,508,601 $442,642,705 $331,012,764
============ ============ ============

Accumulated depreciation -
Balance at beginning of year $41,677,722 $33,463,530 $29,002,538

Depreciation 10,427,268 8,214,192 7,668,797

Retirements - - -
------------ ------------ ------------

52,104,990 41,677,722 36,671,335

Accumulated depreciation related to
rental properties sold (504,100) - (3,207,805)
------------ ------------ ------------

Balance at end of year $ 51,600,890 $ 41,677,722 $ 33,463,530
============ ============ ============
</TABLE>

65
<PAGE> 67
IRT PROPERTY COMPANY SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE December 31, 1995
<TABLE>
<CAPTION>
Principal
Amount of
Face Amount Loans Subject
Final Periodic and Carrying to Delinquent
Type of Type of Interest Maturity Payment Amount of Principal
Location of Property Loan Property Rate Date Terms Prior Liens Mortgages or Interest
- -------------------- ---- -------- ---- ---- ----- ----------- --------- -----------
(See Notes) (See Notes)
<S> <C> <C> <C> <C> <C> <C> <C>
Augusta, GA First Mortgage Shopping Center 10.25% August, 1998 (1) $ - $3,220,575 -

Lauderdale Lakes, FL First Mortgage Condominiums 10.00% May, 2009 (2) - 138,003 -

Nashville, TN First Mortgage Condominiums 8.63% - 2006-2007 (2) - 38,415 -
Participation 12.38%

Montgomery, AL Wrap-Around Apartments (3) September, 2001 (3) - 5,390,104 -
------- ----------

- 8,787,097
------- ----------
Less interest discounts and negative goodwill - (287,887)

$ - $8,499,210
======= ==========
</TABLE>

NOTES:

(1) Monthly payments of principal and interest at an annual rate of 10.25%,
with a balloon payment at maturity August 1, 1998.

(2) Monthly payments include principal and interest.

(3) Modified effective, December 1, 1994 to extend the term for 3 years to
September 1, 2001 and to reduce the cash interest rate from 10% to 9.5%
prospectively, requiring monthly payments of $45,382 of principal and
interest for the remaining term, with a balloon payment at maturity.
Additional interest at an annual rate of 1% accrues for the periods
September 1,1984 through August 31, 1989 and September 1,1991 through
August 31, 2001 and is payable at maturity or on sale of the property.
In addition, the Company funded additional principal of $260,000 under
this mortgage during 1995 to make certain capital improvements. This
wrap-around mortgage is subject to two first mortgages having an
aggregate balance of $917,598 as of December 31, 1995.

66
<PAGE> 68
IRT PROPERTY COMPANY SCHEDULE IV
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
December 31, 1995

Mortgage loan activity is summarized as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $8,292,143 $8,392,959 $12,528,542

New mortgage loans - - -

Additions to mortgage loans 260,000 - -

Amortization of interest discounts and negative
goodwill 45,193 7,076 93,801

Collections of principal (98,126) (107,892) (4,229,384)
---------- ---------- -----------

Balance at end of year $8,499,210 $8,292,143 $ 8,392,959
========== ========== ===========
</TABLE>

67
<PAGE> 69

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

Not applicable.

68
<PAGE> 70

PART III

The information called for by Part III (Items 10, 11, 12, and 13) is
incorporated herein by reference to the Company's definitive proxy statement to
be filed pursuant to Regulation 14A, pursuant to General Instruction G(3) to
the Report of Form 10-K.

69
<PAGE> 71

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

Financial Statements and Schedules. Included in Part II of this
Report are the following:

Report of Independent Public Accountants

Consolidated Balance Sheets at December 31, 1995 and 1994

Consolidated Statements of Earnings for the Years Ended December 31,
1995, 1994 and 1993

Consolidated Statements of Changes in Shareholders' Equity for the
Years Ended December 31, 1995, 1994 and 1993

Consolidated Statements of Cash Flows for the Years Ended December 31,
1995, 1994 and 1993

Notes to Consolidated Financial Statements

Schedule III - Real Estate and Accumulated Depreciation

Schedule IV - Mortgage Loans on Real Estate

Exhibits.

(3)(a) The Company's Articles of Incorporation, as amended, were
filed as Exhibit 4.1 to the Company's Registration Statement
on Form S-3 (No. 33-65604) dated July 6, 1993, to which
reference is hereby made.

(3)(b) The Company's By-Laws, as amended, were filed as Exhibit 3 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995, to which reference is hereby made.

(4)(a) The Indenture dated August 15, 1993 between the Company and
Trust Company Bank, as Trustee, relating to the 7.3%
Convertible Subordinated Debentures due August 15, 2003 was
filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1993, to which reference is hereby made.

(4)(b) The form of 7.3% Convertible Subordinated Debenture was
included in (4)(a) above.

(4)(c) The Indentures dated as of November 9, 1995 between the
Company and SunTrust Bank, Atlanta, as Trustee, relating to
Senior Debt Securities and Subordinated Debt Securities are
filed herewith.

70
<PAGE> 72

(10)(a) The Deferred Compensation Agreement between the Company and
Donald W. MacLeod was filed as an exhibit to the Company's
Registration Statement on Form S-2 (No. 2-88716) dated January
4, 1984, to which reference is hereby made.

(10)(b) The Company's 1989 Stock Option Plan was filed as an exhibit
to the Company's Form 8-K dated March 22, 1989, to which
reference is hereby made.

(10)(c) Amendment No. 1 to the Company's 1989 Stock Option Plan was
filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1993, to which reference is hereby made.

(10)(d) The Company's Key Employee Stock Option Plan was filed as an
exhibit to the Company's Registration Statement on Form S-2
(No. 2-88716) dated January 4, 1984, to which reference is
hereby made.

(10)(e) The Company's Deferred Compensation Plan for Outside Directors
dated December 22, 1995 is filed herewith.

(10)(f) Agreements between the Company and Donald W. MacLeod, Thomas
H. McAuley and Mary M. Thomas effective October 1, 1995 are
filed herewith.

(10)(g) The Company's amended and restated $50 million revolving term
loan agreement dated July 31, 1992 was filed as Exhibit
(10)(e) to the Company's Form 10-K for the year ended December
31, 1992, to which reference is hereby made. The Company's
revolving term loan agreement dated November 1, 1990 was filed
as Exhibit (10)(e) to the Company's Form 10-K for the year
ended December 31, 1990, to which reference is hereby made.

(10)(h) The Company's $100 million revolving term loan agreement dated
December 15, 1995 was filed as an exhibit to the Company's
Form 8-K dated January 2, 1996, to which reference is hereby
made.

(10)(i) The Real Property Purchase Agreement and first amendment
thereto dated June 23, 1992 relative to the Company's
acquisition of the ten Sofran Centers was filed as an exhibit
to the Company's report on Form 8-K dated August 12, 1992
(date of event reported, July 31, 1992), to which reference is
hereby made.

(10)(j) Form of Agreement for the Sale and Purchase of Property dated
October 30, 1992 and the letter amendment thereto dated
November 19, 1992 relative to the Company's acquisition of the
seven Dreyfus

71
<PAGE> 73

Centers was filed as an exhibit to the Company's report on
Form 8-K dated January 6, 1993 (date of event reported,
December 23, 1992), to which reference is hereby made.

(10)(k) The letter agreement dated December 23, 1992 between the IBM
Retirement Plan Trust Fund and its seven wholly-owned
subsidiaries and the Company was filed as an exhibit to the
Company's report on Form 8-K dated January 6, 1993 (date of
event reported, December 23, 1992), to which reference is
hereby made.

(10)(l) The letter agreement dated July 29, 1993 between the IBM
Retirement Plan Trust Fund and its seven wholly-owned
subsidiaries and the Company was filed as an exhibit to the
Company's Form 10-K for the year ended December 31, 1993, to
which reference is hereby made.

(21) The Company has two subsidiaries, IRT Management Company
("IRTMC") and VW Mall, Inc. ("VWM"), Georgia corporations
which are wholly owned by the Company. IRTMC was formed in
1990 and VWM in 1994.

(23) Consent of Arthur Andersen LLP to the incorporation of their
report included in this Form 10-K in the Company's previously
filed Registration Statements File Nos. 33-65604, 33-66780,
33-51238, 33-59938, 33-64628, 33-64741 and 33-63523.

(27) Financial Data Schedule (for S.E.C. use only)

Reports on Form 8-K . The Company filed a Current Report on Form 8-K
dated January 2, 1996 (date of event reported, December 15, 1995), reporting
under Items 5 and 7, the $100 million unsecured revolving term loan obtained
December 15, 1995, which Form 8-K is incorporated herein by reference.

72
<PAGE> 74

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

February 16, 1996 IRT PROPERTY COMPANY

By:/s/ Donald W. MacLeod
-----------------------------
Donald W. MacLeod
Chairman and President

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<S> <C> <C>
/s/ Donald W. MacLeod Chairman of the February 16, 1996
- ---------------------------- Board, and
Donald W. MacLeod Director (Principal
Executive Officer)

/s/ Thomas H. McAuley President, Chief February 16, 1996
- ---------------------------- Operating Officer and
Thomas H. McAuley Director

/s/ Mary M. Thomas Executive Vice February 16, 1996
- ---------------------------- President, Chief
Mary M. Thomas Financial Officer
and Director (Principal
Financial & Accounting
Officer)

/s/ Homer B. Gibbs, Jr. Director February 16, 1996
- ----------------------------
Homer B. Gibbs, Jr.

/s/ Samuel W. Kendrick Director February 16, 1996
- ----------------------------
Samuel W. Kendrick

/s/ Bruce A. Morrice Director February 16, 1996
- ----------------------------
Bruce A. Morrice

/s/ James H. Nobil Director February 16, 1996
- ----------------------------
James H. Nobil

/s/ Louis P. Wolfort Director February 16, 1996
- ----------------------------
Louis P. Wolfort
</TABLE>

<PAGE> 1
EXHIBIT (4)(c)

IRT PROPERTY COMPANY

SUNTRUST BANK, ATLANTA

Trustee
Indenture
Dated as of November 9, 1995

Senior Debt Securities
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

<S> <C> <C>
[SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Acquired Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
[CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3]
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request and Company Order . . . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
[Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4]
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dollar or $ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
[ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
[Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
[European Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
[European Monetary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indexed Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

</TABLE>

i
<PAGE> 3

<TABLE>
<S> <C> <C>
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Repayment Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security Register and Security Registrar . . . . . . . . . . . . . . . . . . . . 9
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
United States person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . 10
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . 11
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 105. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . 13
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 107. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . 14
SECTION 108. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 109. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 110. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 111. No Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE TWO

SECURITIES FORMS

SECTION 201. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . 15
SECTION 203. Securities Issuable in Global Form . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE THREE

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . 17
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 303. Execution, Authentication Delivery and Dating . . . . . . . . . . . . . . . . . 20
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . 29
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . 32
SECTION 402. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE FIVE

</TABLE>

ii
<PAGE> 4

<TABLE>
<S> <C> <C>
REMEDIES

SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 502. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities or Coupons . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium or Make-Whole Amount,
if any, Interest and Additional Amounts . . . . . . . . . . . . . . . . . . . . 39
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 512. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 514. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . 40
SECTION 515. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

ARTICLE SIX

THE TRUSTEE

SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 603. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 606. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 608. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 609. Acceptance of Appointment By Successor . . . . . . . . . . . . . . . . . . . . 45
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 611. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 46

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST

SECTION 701. Disclosure of Names and Addresses of Holders . . . . . . . . . . . . . . . . . 48
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 703. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 704. Company to Furnish Trustee Names and Addresses
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

SECTION 801. Consolidations and Mergers of
Company and Sales, Leases and
Conveyances Permitted Subject to
Certain Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 802. Rights and Duties of Successor Corporation . . . . . . . . . . . . . . . . . . 50
SECTION 803. Officers' Certificate and Opinion of Counsel . . . . . . . . . . . . . . . . . 50

ARTICLE NINE

</TABLE>

iii
<PAGE> 5

<TABLE>
<S> <C> <C>
SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 902. Supplemental Indentures With Consent of Holders . . . . . . . . . . . . . . . . 52
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 53
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 53

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium or
Make Whole Amount, if any, Interest
and Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1003. Money for Securities Payments to Be Held in
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 1004. (Omitted). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1007. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1008. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1009. Provision of Financial Information . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1010. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1011. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1012. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 60

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . 64

ARTICLE TWELVE

SINKING FUNDS

SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . 65

ARTICLE THIRTEEN

REPAYMENT AT THE OPTION OF HOLDERS

SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1302. Repayment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1304. When Securities Presented for
Repayment Become Due and Payable . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1305. Securities Repaid in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

</TABLE>

iv
<PAGE> 6

<TABLE>
<S> <C>
ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1401. Applicability of Article; Company's
Option to Effect Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1402. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1404. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . 69
SECTION 1405. Deposited Money and Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . 70

ARTICLE FIFTEEN

MEETINGS OF HOLDERS OF SECURITIES

SECTION 1501. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . 71
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1505. Determination of Voting Rights;
Conduct and Adjournment of Meetings . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1506. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . . . 74
SECTION 1507. Evidence of Action Taken by Holders . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1508. Proof of Execution of Instruments . . . . . . . . . . . . . . . . . . . . . . . 75
</TABLE>

TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGEMENTS
EXHIBIT A - FORMS OF CERTIFICATION

v
<PAGE> 7
IRT PROPERTY COMPANY

Reconciliation and tie between Trust Indenture Act of 1939, as
amended (the "1939 Act"), and Indenture, dated as of , 1995

<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section

<S> <C>
(Section)310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
(Section)312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
(Section)314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(Section)315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(Section)316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
(Section)317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(Section)318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
</TABLE>

- --------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.

Attention should also be directed to Section 318(c) of the 1939 Act,
which provides that the provisions of Sections 310 to and including
317 of the 1939 Act are a part of and govern every qualified
indenture, whether or not physically contained therein.

vi
<PAGE> 8

INDENTURE

INDENTURE, dated as of November 9, 1995, between IRT PROPERTY COMPANY, a
Georgia corporation (hereinafter called the "Company"), having its principal
office at 200 Galleria Parkway, Suite 1400, Atlanta, Georgia 30339, and
SunTrust Bank, Atlanta, a Georgia banking corporation, as Trustee hereunder
(hereinafter called the "Trustee"), having its Corporate Trust Office at 58
Edgewood Ave., Suite 400, Atlanta, Georgia 30303.

RECITALS OF THE COMPANY

The Company deems it necessary to issue from time to time for its
lawful purposes senior debt securities (hereinafter called the "Securities")
evidencing its unsecured and unsubordinated indebtedness, and has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to aggregate
principal amount, to bear interest at the rates or formulas, to mature at such
times and to have such other provisions as shall be fixed therefor as
hereinafter provided.

All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly
provided or the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper," as used in Trust Indenture Act Section 311, shall
have the meanings assigned to them in the rules of the Commission adopted under
the Trust Indenture Act;

(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and

(4) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

Certain terms, used principally in Article Three, Article Five,
Article Six and Article Ten, are defined in those Articles. In addition, the
following terms shall have the indicated respective meanings:

1
<PAGE> 9

"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary or
such acquisition. Acquired Debt shall be deemed to be incurred on the date of
the related acquisition of assets from any Person or the date the acquired
Person becomes a Subsidiary.

"Act" has the meaning specified in Section 104.

"Additional Amounts" means any additional amounts which are required
by a Security, under circumstances specified therein, to be paid by the Company
in respect of certain taxes imposed on certain Holders and which are owing to
such Holders.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.

"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.

"Bankruptcy Law" has the meaning specified in Section 501.

"Bearer Security" means a Security which is payable to bearer.

"Board of Directors" means either (i) the Board of Directors of the
Company, the executive committee or any other committee or director of that
board duly authorized to act for it in respect hereof, or (ii) one or more duly
authorized officers of the Company to whom the Board of Directors of the
Company or a committee thereof has delegated the authority to act with respect
to the matters contemplated by this Indenture.

"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or a committee thereof, and to be in full force and
effect on the date of such certification, and delivered to the Trustee or (ii)
a certificate signed by the authorized officer or officers of the Company to
whom the Board of Directors of the Company or a committee thereof has

2
<PAGE> 10

delegated its authority (as described in the definition of Board of Directors),
and in each case, delivered to the Trustee.

"Business Day," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.

"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interest, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.

["CEDEL" means Central de Livraison de Valeurs Mobilieres, S.A., or
its successor.]

"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.

"Common Depository" has the meaning specified in Section 304(b).

"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.

"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the President or a Vice
President of the Company, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.

"Conversion Event" means the cessation of use of (i) a Foreign
Currency (other than the ECU or other currency unit) 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.

"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 58 Edgewood Ave.,
Suite 400, Atlanta, Georgia 30303.

3
<PAGE> 11

"corporation" includes corporations, associations, companies and
business trusts.

"coupon" means any interest coupon appertaining to a Bearer
Security.

"Custodian" has the meaning set forth in Section 501.

"Debt" means the principal, premium, if any, unpaid interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding), fees, charges,
expenses, reimbursement and indemnification obligations, and all other amounts
payable under or in respect of the following indebtedness of the Company for
money borrowed, whether any such indebtedness exists as of the date of the
Indenture or is created, incurred, assumed or guaranteed after such date:

(i) any debt (a) for money borrowed, or (b) evidenced by a bond,
note, debenture, or similar instrument (including purchase
money obligations) given in connection with the acquisition of any
business, property or assets, whether by purchase, merger,
consolidation or otherwise, but shall not include any account payable
or other obligation created or assumed in the ordinary course of
business in connection with the obtaining of materials or services,
or (c) which is a direct or indirect obligation which arises as a
result of banker's acceptances or bank letters of credit issued to
secure obligations of the Company, or to secure the payment of
revenue bonds issued for the benefit of the Company, whether
contingent or otherwise;

(ii) any debt of others described in the preceding clause (i) which
the Company has guaranteed or for which it is otherwise liable;

(iii) the obligation of the Company, as lessee under any lease of
property which is reflected on the Company's balance sheet as a
capitalized lease; and

(iv) any deferral, amendment, renewal, extension, supplement or
refunding of any liability of the kind described in any of the
preceding clauses (i), (ii), and (iii);

provided, however, that, in computing indebtedness of the Company, there shall
be excluded any particular indebtedness if, upon or prior to the maturity
thereof, there shall have been deposited with a depository in trust money (or
evidence of indebtedness if permitted by the instrument creating such
indebtedness) in the necessary amount to pay, redeem or satisfy such
indebtedness as it becomes due, and the amount so deposited shall not be
included in any computation of the assets of the Company.

"Defaulted Interest" has the meaning specified in Section 307.

"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for payment of public and private debts.

"DTC" means The Depository Trust Company.

["ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.]

["Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.]

["European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.]

["European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Communities.]

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<PAGE> 12

"Event of Default" has the meaning specified in Section 501.

"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.

"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.

"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided that solely for purposes of any calculation required by the financial
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.

"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 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 Securities of such series are payable, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other 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.

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<PAGE> 13

"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case
of a Bearer Security, the bearer thereof and, when used with respect to any
coupon, shall mean the bearer thereof.

"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof and shall include the
terms of the or those particular series of Securities for which such Person is
Trustee established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person
had become such Trustee but to which such Person, as such Trustee, was not a
party.

"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.

"Interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security
which provides for the payment of Additional Amounts pursuant to Section 1011,
includes such Additional Amounts.

"Interest Payment Date" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security.

"Make-Whole Amount" means the amount, if any, in addition to principal
which is required by a Security, under the terms and conditions specified
therein or as otherwise specified as contemplated by Section 301, to be paid by
the Company to the Holder thereof in connection with any optional redemption or
accelerated payment of such Security.

"Maturity" means, when used with respect to any Security, the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment, repurchase or otherwise.

"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel satisfactory to the
Trustee.

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<PAGE> 14

"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.

"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;

(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been thereto fore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or other provision therefor satisfactory to the Trustee
has been made;

(iii) Securities, except solely to the extent provided in Sections
1402 or 1403, as applicable, with respect to which the Company has
effected defeasance and/or covenant defeasance as provided in Article
Fourteen;

(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and

(v) Securities converted into Capital Stock of the Company
pursuant to or in accordance with this Indenture if the terms of such
Securities provide for convertibility pursuant to Section 301;

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<PAGE> 15

making such determination or calculation and that shall be deemed outstanding
for such purpose shall be equal to the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Indexed Security pursuant to Section 301, and (iv) Securities owned by the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.

"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium or Make-Whole Amount, if any) or interest on any
Securities, or coupons on behalf of the Company, or if no such Person is
authorized, the Company.

"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.

"Place of Payment" means, when used with respect to the Securities of
or within any series, the place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest on such Securities are payable as
specified as contemplated by Sections 301 and 1002.

"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.

"Redemption Date" means, when used with respect to any security to be
redeemed in whole or in part, the date fixed for such redemption by or pursuant
to this Indenture.

"Redemption Price" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.

"Registered Security" means any Security which is registered in the
Security Register.

"Regular Record Date" for the installment of interest payable on any
Interest Payment Date on the Registered Securities of or within any series
means the date specified for that purpose as contemplated by Section 301,
whether or not a Business Day.

"Repayment Date" means, when used with respect to any Security to be
repaid or repurchased at the option of the Holder, the date fixed for such
repayment or repurchase by or pursuant to this Indenture.

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<PAGE> 16

"Repayment Price" means, when used with respect to any Security to be
repaid or purchased at the option of the Holder, the price at which it is to be
repaid or repurchased pursuant to this Indenture.

"Responsible Officer" means, when used with respect to the Trustee,
any officer of the Trustee assigned by the Trustee to administer its corporate
trust matters.

"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the Commission.

"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities
authenticated and delivered under this Indenture; provided, however, that if
at any time there is more than one Person acting as Trustee under this
Indenture, "Securities" with respect to the Indenture as to which such Person
is Trustee shall have the meaning stated in the first recital of this Indenture
and shall more particularly mean Securities authenticated and delivered under
this Indenture, exclusive, however, of Securities of or within any series as to
which such Person is not Trustee.

"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (within the meaning of Regulation S-X, promulgated under the
Securities Act) of the Company.

"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.

"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in
such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.

"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests of which are owned, directly
or indirectly, by such Person. For the purposes of this definition, "voting
equity securities" means equity securities having voting power for the election
of directors, whether at all times or only so long as no senior class of
security has such voting power by reason of any contingency.

"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.

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<PAGE> 17

Person who is then a Trustee hereunder; provided, however, that if at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of or within any series shall mean only the Trustee with respect to
the Securities of that series.

"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.

"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States of or any state
or the District of Columbia or an estate or trust the income of which is
subject to United States federal income taxation regardless of its source.

"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent
predetermination of interest on such Security) and as set forth in such
Security in accordance with generally accepted United States bond yield
computation principles.

SECTION 102. Compliance Certificates and Opinions.

Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including covenants, compliance with which
constitute conditions precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.

Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (excluding certificates
delivered pursuant to Section 1010) shall include:

(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant has
been complied with; and

(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

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<PAGE> 18

SECTION 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion as to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

SECTION 104. Acts of Holders.

(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of the Outstanding Securities of all series or one or more series,
as the case may be, may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agents
duly appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, whether in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments and
any such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments or so voting at any such meeting. Proof of execution
of any such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Security, shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1506.

(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a

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<PAGE> 19

witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other reasonable manner which the
Trustee deems sufficient.

(c) The ownership of Registered Securities shall be proved by the
Security Register or by a certificate of the Security Registrar.

(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depository, by any trust company, bank, banker or other depository, wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such person had on
deposit with such depository, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the Company may
assume that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, or (2) such Bearer Security is produced to the
Trustee by some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The ownership of Bearer Securities may also be proved in any
other manner which the Trustee deems sufficient.

(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do
so. Notwithstanding TIA Section 316(c), such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a date
not earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close
of business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on
such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.

(f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the

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<PAGE> 20

Company in reliance thereon, whether or not notation of such action is made
upon such Security.

SECTION 105. Notices, etc., the Trustee and Company.

Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to or filed with,

(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Department, or

(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this Indenture or at any other address previously furnished in
writing to the Trustee by the Company.

SECTION 106. Notice to Holders; Waiver.

Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Company or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice.

If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.

Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in The City
of New York and in such other city or cities as may be specified in such
Securities, and if the Securities of such series are listed on any stock
exchange outside the United States, in any place at which such Securities are
listed on a securities exchange to the extent that such securities exchange so
requires, on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.

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<PAGE> 21

If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above,
nor any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.

Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.

Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.

SECTION 107. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

SECTION 108. Successors and Assigns.

All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

SECTION 109. Separability Clause.

In case any provision in this Indenture or in any Security or coupon
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

SECTION 110. Benefits of Indenture.

Nothing in this Indenture or in the Securities or coupons appertaining
thereto, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.

SECTION 111. No Personal Liability.

No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, in any Security or coupon appertaining thereto, or
because of any indebtedness evidenced thereby, shall be had against any
promoter, as such, or against any past, present or future shareholder, officer
or director, as such, of the Company or of any successor, either directly or
through the Company or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of

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<PAGE> 22

the Securities by the Holders thereof and as part of the consideration for the
issue of the Securities.

SECTION 112. Governing Law.

This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of Georgia. This Indenture
is subject to the provisions of the TIA that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.

SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date,
Repayment Date, sinking fund payment date, Stated Maturity or Maturity of any
Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security or
coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium or Make-Whole
Amount, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
Repayment Date or sinking fund payment date, or at the Stated Maturity or
Maturity, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date,
Repayment Date, sinking fund payment date, Stated Maturity or Maturity, as the
case may be.

ARTICLE TWO

SECURITIES FORMS

SECTION 201. Forms of Securities.

The Registered Securities, if any, of each series and the Bearer
Securities, if any, and related coupons of each series, shall be in
substantially the forms as shall be established in or pursuant to one or more
indentures supplemental hereto or Board Resolutions, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.

Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.

The definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.

SECTION 202. Form of Trustee's Certificate of Authentication.

Subject to Section 611, the Trustee's certificate of

15
<PAGE> 23

authentication shall be in substantially the following form:

This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

SunTrust Bank, Atlanta, as Trustee

By:__________________________
Authorized Signatory

SECTION 203. Securities Issuable in Global Form.

If Securities of or within a series are issuable in global form, as
specified as contemplated by Section 301, then, notwithstanding clause (8) of
Section 301 and the provisions of Section 302, any such Security shall
represent such of the Outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of Outstanding Securities of such series from time to time endorsed thereon and
that the aggregate amount of Outstanding Securities of such series represented
thereby may from time to time be increased or decreased to reflect exchanges.
Any endorsement of a Security in global form to reflect the amount, or any
increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instruction given
by such Person or Persons as shall be specified therein or in the Company Order
to be delivered to the Trustee pursuant to Section 303 or 304. Subject to the
provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.

The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.

Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium or Make-Whole Amount and interest on any Security in permanent global
form shall be made to the Person or Persons specified therein.

Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.

ARTICLE THREE

16
<PAGE> 24

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, or indentures
supplemental hereto, prior to the issuance of Securities of any series, any or
all of the following, as applicable (each of which (except for the matters set
forth in clauses (1), (2) and (15) below), if so provided, may be determined
from time to time by the Company with respect to unissued Securities of or
within the series when issued from time to time):

(1) the title of the Securities of or within the series (which
shall distinguish the Securities of such series from all other series of
Securities);

(2) any limit upon the aggregate principal amount of the
Securities of or within the series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of or within the series pursuant to Section 304, 305, 306, 906,
1107, or 1305);

(3) the date or dates, or the method by which such date or dates
will be determined, on which the principal of the Securities of or within the
series shall be payable and the amount of principal payable thereon;

(4) the rate or rates (which may be fixed or variable) at which the
Securities of or within the series shall bear interest, if any, or the method
by which such rate or rates shall be determined, the date or dates from which
such interest shall accrue or the method by which such date or dates shall be
determined, the Interest Payment Dates on which such interest will be payable
and the Regular Record Date, if any, for the interest payable on any Registered
Security on any Interest Payment Date, or the method by which such date shall
be determined, and the basis upon which interest shall be calculated if other
than that of a 360-day year consisting of twelve 30-day months;

(5) the place or places, if any, other than or in addition to the
City of Atlanta, Georgia or the Borough of Manhattan, The City of New York,
where the principal of (and premium or Make-Whole Amount, if any), interest, if
any, on, and Additional Amounts, if any, payable in respect of, Securities of
or within the series shall be payable, any Registered Securities of or within
the series may be surrendered for registration of transfer, exchange or
conversion and notices or demands to or upon the Company in respect of the
Securities of or within the series and this Indenture may be served;

(6) the period or periods within which, the price or prices
(including the premium or Make-Whole Amount, if any) at which, the currency or
currencies, currency unit or units or composite currency or currencies in which
and other terms and conditions upon which Securities of or within the series
may be redeemed in whole or in part, at the option of the Company, if the
Company is to have the option;

17
<PAGE> 25

dates on which, the price or prices at which, the currency or currencies,
currency unit or units or composite currency or currencies in which, and other
terms and conditions upon which Securities of or within the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;

(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Registered Securities of or
within the series shall be issuable and, if other than the denomination of
$5,000, the denomination or denominations in which any Bearer Securities of or
within the series shall be issuable;

(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;

(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of or within the series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section
502 or, if applicable, the portion of the principal amount of Securities of or
within the series that is convertible in accordance with the provisions of this
Indenture, or the method by which such portion shall be determined;

(11) if other than Dollars, the Foreign Currency or Currencies in
which payment of the principal of (and premium or Make-Whole Amount, if any) or
interest or Additional Amounts, if any, on the Securities of or within the
series shall be payable or in which the Securities of or within the series
shall be denominated;

(12) whether the amount of payments of principal of (and premium or
Make-Whole Amount, if any) or interest, if any, on the Securities of or within
the series may be determined with reference to an index, formula or other
method (which index, formula or method may be based, without limitation, on one
or more currencies, currency units, composite currencies, commodities, equity
indices or other indices), and the manner in which such amounts shall be
determined;

(13) whether the principal of (and premium or Make Whole Amount, if
any) or interest or Additional Amounts, if any, on the Securities of or within
the series are to be payable, at the election of the Company or a Holder
thereof, in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such Securities are denominated
or stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time and manner of,
and identity of the exchange rate agent with responsibility for, determining
the exchange rate between the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are denominated or
stated to be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so payable;

(14) provisions, if any, granting special rights to the Holders of
Securities of or within the series upon the occurrence of such events as may be
specified;

(15) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to Securities of or
within the series, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;

(16) whether Securities of or within the series are to be

18
<PAGE> 26

issuable as Registered Securities, Bearer Securities (with or without coupons)
or both, any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of or within the series
may be exchanged for Registered Securities of or within the series and vice
versa (if permitted by applicable laws and regulations), whether any Securities
of or within the series are to be issuable initially in temporary global form
and whether any Securities of or within the series are to be issuable in
permanent global form (with or without coupons) and, if so, whether beneficial
owners of interests in any such permanent global Security may exchange such
interests for Securities of such series and of like tenor of any authorized form
and denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305, and, if Registered
Securities of or within the series are to be issuable as a global Security, the
identity of the depository for such series;

(17) the date as of which any Bearer Securities of or within the
series and any temporary global Security representing Outstanding Securities of
or within the series shall be dated if other than the date of original issuance
of the first Security of the series to be issued;

(18) the Person to whom any interest on any Registered Security of
the series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, the manner in which, or
the Person to whom, any interest on any Bearer Security of the series shall be
payable, if otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to which, or the
manner in which, any interest payable on a temporary global Security on an
Interest Payment Date will be paid if other than in the manner provided in
Section 304;

(19) the applicability, if any, of Sections 1402 and/or 1403 to the
Securities of or within the series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Article Fourteen;

(20) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or terms of
such certificates, documents or conditions;

(21) if the Securities of or within the series are to be issued
upon the exercise of debt warrants, the time, manner and place for such
Securities to be authenticated and delivered;

(22) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1011 on the Securities of or
within the series to any Holder who is not a United States person (including
any modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have the
option to redeem such Securities rather than pay such Additional Amounts (and
the terms of any such option);

19
<PAGE> 27

adjustment of the applicable conversion price or rate and any requirements
relative to the reservation of such shares for purposes of conversion);

(24) if convertible, any applicable limitations on the ownership or
transferability of the Capital Stock into which such Securities are
convertible; and

(25) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture except as permitted by
Section 905).

All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered or Bearer Securities issued in global form,
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution or in any indenture supplemental hereto. All Securities
of any 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, for
issuances of additional Securities of such series.

If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an
appropriate record of such action(s) shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order for authentication and delivery of such
Securities.

SECTION 302. Denominations.

The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 301. With respect to
Securities of any series denominated in Dollars, in the absence of any such
provisions with respect to the Securities of any series, the Registered
Securities of such series, other than Registered Securities issued in global
form (which may be of any denomination), shall be issuable in denominations of
$1,000 and any integral multiple thereof and the Bearer Securities of such
series other than Bearer Securities issued in global form (which may be of any
denomination), shall be issuable in denominations of $5,000.

SECTION 303. Execution, Authentication, Delivery and Dating.

The Securities and any coupons appertaining thereto shall be executed
on behalf of the Company by its President or a Vice President, under its
corporate seal reproduced thereon, and attested by its Secretary or an
Assistant Secretary. The signature of any of these officers on the Securities
and coupons may be manual or facsimile signatures of the present or any future
such authorized officer and may be imprinted or otherwise reproduced on the
Securities.

Securities or coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities or coupons.

At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed

<PAGE> 28

by the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities; provided, however, that, in connection with its original issuance,
no Bearer Security shall be mailed or otherwise delivered to any location in
the United States; and provided further that, unless otherwise specified with
respect to any series of Securities pursuant to Section 301 a Bearer Security
may be delivered in connection with its original issuance only if the Person
entitled to receive such Bearer Security shall have furnished a certificate to
Euroclear or CEDEL, as the case may be, in the form set forth in Exhibit A-1 to
this Indenture or such other certificate as may be specified with respect to
any series of Securities pursuant to Section 301, dated no earlier than 15 days
prior to the earlier of the date on which such Bearer Security is delivered and
the date on which any temporary Security first becomes exchangeable for such
Bearer Security in accordance with the terms of such temporary Security and
this Indenture. Except as permitted by Section 306, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and canceled.

If all of the Securities of any series are not to be issued at one
time and if the Board Resolution or supplemental indenture establishing such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula,
maturity date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall
be fully protected in relying upon:

(i) an Opinion of Counsel complying with Section 102 and stating
that:

(a) the form or forms of such Securities and any coupons
have been, or will have been upon compliance with such
procedures as may be specified therein, established in
conformity with the provisions of this Indenture;

(b) the terms of such Securities and any coupons have
been, or will have been upon compliance with such procedures
as may be specified therein, established in conformity with
the provisions of this Indenture; and

(c) such Securities, together with any coupons
appertaining thereto, when completed pursuant to such
procedures as may be specified therein, and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by
the Trustee in accordance with this Indenture and issued by
the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute legal,
valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of
creditors' rights generally and to general equitable
principles and to such other matters as may be specified
therein; and

<PAGE> 29

(ii) an Officers' Certificate complying with Section 102 and
stating that all conditions precedent provided for in this Indenture relating
to the issuance of such Securities have been, or will have been upon compliance
with such procedures as may be specified therein, complied with and that, to
the best of the knowledge of the signers of such certificate, no Event of
Default with respect to such Securities shall have occurred and be continuing.

Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver a Company Order, an Opinion of
Counsel or an Officers' Certificate otherwise required pursuant to the
preceding paragraph at the time of issuance of each Security of such series,
but such order, opinion and certificate, with appropriate modifications to
cover such future issuances, shall be delivered at or before the time of
issuance of the first Security of such series.

The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties, obligations or immunities under the Securities
and this Indenture or otherwise in a manner which is not reasonably acceptable
to the Trustee.

Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as
contemplated by Section 301.

No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security or the Security to which such coupon appertains
a certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence,and the only
evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309 together with a written statement (which need not comply with Section 102
and need not be accompanied by an Opinion of Counsel) stating that such
Security has never been issued or sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.

SECTION 304. Temporary Securities.

(a) Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued, in registered form, or, if authorized, in bearer form
with one or more coupons or without coupons, and with such appropriate
insertions, omissions, substitutions and other variations as the officers of
the Company executing such Securities may determine, as conclusively evidenced
by their execution of such Securities. In the case of Securities of any
series, such temporary Securities may be in global form.

Except in the case of temporary Securities in global form

<PAGE> 30

(which shall be exchanged in accordance with Section 304(b) or as otherwise
provided in or pursuant to a Board Resolution), if temporary Securities of any
series are issued, the Company will cause definitive Securities of that series
to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series of
authorized denominations; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and
provided further that a definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in Section 303. Until so exchanged, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.

(b) Unless otherwise provided as contemplated in Section 301, this
Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of DTC. If any such temporary
Security is issued in global form, then such temporary global Security shall,
unless otherwise provided therein, be delivered to the London office of a
depository or common depository (the "Common Depository"), for the benefit of
Euroclear and CEDEL.

Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in an aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depository to the Trustee, as the Company's agent for such purpose, to
be exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of or within the same series of authorized
denominations and of like tenor as the portion of such temporary global
Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 301,
and, if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that, unless otherwise specified in such
temporary global Security, upon such presentation by the Common Depository,
such temporary global Security is accompanied by a certificate dated the
Exchange Date or a subsequent date and signed by Euroclear as to the portion of
such temporary global Security, if any, held for its account then to be
exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL as to the portion of such temporary global Security, if any,
held for its account then to be exchanged, each in the form set forth in
Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary global Security
only in compliance

<PAGE> 31
with the requirements of Section 303.

Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may
be established pursuant to Section 301), dated no earlier than 15 days prior to
the Exchange Date, copies of which certificate shall be available from the
offices of Euroclear or CEDEL, the Trustee, any Authenticating Agent appointed
for such series of Securities and each Paying Agent. Unless otherwise
specified in such temporary global Security, any such exchange shall be made
free of charge to the beneficial owners of such temporary global Security,
except that a Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like unless such Person takes
delivery of such definitive Securities in person at the offices of Euroclear
or CEDEL. Definitive Securities in bearer form to be delivered in exchange for
any portion of a temporary global Security shall be delivered only outside the
United States.

Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary
global Security on an Interest Payment Date for Securities of such series
occurring prior to the applicable Exchange Date shall be payable to Euroclear
or CEDEL on such Interest Payment Date upon delivery by Euroclear or CEDEL to
the Trustee of a certificate or certificates in the form set forth in Exhibit
A-2 to this Indenture (or in such other forms as may be established pursuant to
Section 301), for credit without further interest on or after such Interest
Payment Date to the respective accounts of Persons who are the beneficial
owners of such temporary global Security on such Interest Payment Date and who
have each delivered to Euroclear or CEDEL, as the case may be, a certificate
dated no earlier than 15 days prior to the Interest Payment Date occurring
prior to such Exchange Date in the form set forth as Exhibit A-1 to this
Indenture (or in such other forms as may be established pursuant to Section
301). Notwithstanding anything to the contrary herein contained, the
certifications made pursuant to this paragraph shall satisfy the certification
requirements of the preceding two paragraphs of this Section 304(b) and of the
third paragraph of Section 303 of this Indenture and the interests of the
Persons who are the beneficial owners of the temporary global Security with
respect to which such certification was made will be exchanged for definitive
Securities of the same series and of like tenor on the Exchange Date or the
date of certification if such date occurs after the Exchange Date, without
further act or deed by such beneficial owners. Except as otherwise provided in
this paragraph, no payments of principal or interest owing with respect to a
beneficial interest in a temporary global Security will be made unless and
until such interest in such temporary global Security shall have been exchanged
for an interest in a definitive Security. Any interest so received by
Euroclear or CEDEL and not paid as herein provided shall be returned to the
Trustee prior to the expiration of two years after such Interest Payment Date
in order to be repaid to the Company.

SECTION 305. Registration, Registration of Transfer and Exchange.

<PAGE> 32

The Company shall cause to be kept at the Corporate Trust Office of
the Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it or the Security Registrar may
prescribe, the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. The Trustee, at its Corporate Trust
Office, is hereby initially appointed "Security Registrar" for the purpose of
registering Registered Securities and transfers of Registered Securities on
such Security Register as herein provided. In the event that the Trustee shall
cease to be Security Registrar, it shall have the right to examine the Security
Register at all reasonable times and to require that a copy of the Security
Register in written form be delivered to it from time to time as reasonably
requested.

Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.

Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive. Unless otherwise specified
with respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.

<PAGE> 33

surrender of those coupons at an office or agency located outside the
United States. Notwithstanding the foregoing, in case a Bearer Security of any
series is surrendered at any such office or agency in a permitted exchange for
a Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date for payment, as the case may be,
and interest or Defaulted Interest, as the case may be, will not be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the holder making the exchange
is entitled to receive.

Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the depository for any
permanent global Security is DTC, then, unless the terms of such global
Security expressly permit such global Security to be exchanged in whole or in
part for definitive Securities, a global Security may be transferred, in whole
but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to
a successor to DTC for such global Security selected or approved by the Company
or to a nominee of such successor to DTC. If at any time DTC notifies the
Company that it is unwilling or unable to continue as depository for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act if so required by applicable
law or regulation, the Company shall appoint a successor depository with
respect to such global Security or Securities. If (x) a successor depository
for such global Security or Securities is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of such
unwillingness, inability or ineligibility, (y) an Event of Default has occurred
and is continuing and the beneficial owners representing a majority in
principal amount of the applicable series of Securities represented by such
global Security or Securities advise DTC to cease acting as depository for such
global Security or Securities or (z) the Company, in its sole discretion,
determines at any time that all Outstanding Securities (but not less than all)
of any series issued or issuable in the form of one or more global Securities
shall no longer be represented by such global Security or Securities (provided,
however, the Company may not make such determination during the 40-day
restricted period provided by Regulation S under the Securities Act or during
any other similar period during which the Securities must be held in global
form as may be required by the Securities Act), then the Company shall execute,
and the Trustee shall authenticate and deliver definitive Securities of like
series, rank, tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such global Security or Securities. If
any beneficial owner of an interest in a permanent global Security is otherwise
entitled to exchange such an interest for Securities of such series and of like
tenor and principal amount of another authorized form and denomination, as
specified as contemplated by Section 301 and provided that any applicable
notice provided in the permanent global Security shall have been given, then
without unnecessary delay but in any event not later than the earliest date on
which

<PAGE> 34

such interest may be so exchanged, the Company shall execute, and the
Trustee shall authenticate and deliver definitive Securities in aggregate
principal amount equal to the principal amount of such beneficial owner's
interest in such permanent global Security. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered for exchange by DTC or such other depository as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those
selected for redemption; and provided further that no Bearer Security delivered
in exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date
for payment, as the case may be, only to the Person to whom interest in respect
of such portion of such permanent global Security is payable in accordance with
the provisions of this Indenture.

All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.

The Company or the Trustee, as applicable, shall not be required (i)
to issue, register the transfer of or exchange any Security if such Security
may be among those selected for redemption during a period beginning at the
opening of business 15 days before selection of the Securities to be redeemed
under Section 1103 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing
of the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities
and there is no publication, the mailing of the relevant notice of redemption,
or (ii) to register the transfer of or exchange any Registered Security so
selected for redemption in whole or in part, except, in

<PAGE> 35

the case of any Registered Security to be redeemed in part, the portion
thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series and like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption, or (iv)
to issue or to register the transfer or exchange of any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Company, together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical
terms and provisions and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to the
surrendered Security.

If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of actual notice to the Company or the Trustee that such Security or
coupon has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security or in exchange for the Security to
which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a new Security of the same series and
principal amount, containing identical terms and provisions and bearing a
number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen coupon appertains.

Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), any interest on and any Additional Amounts with
respect to Bearer Securities shall, except as otherwise provided in Section
1002, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.

Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or

<PAGE> 36

stolen Security, or in exchange for a Security to which a destroyed, lost or
stolen coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Security and its coupons, if any, or the destroyed, lost or stolen coupon shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series and their coupons, if any, duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided,
however, that each installment of interest on any Registered Security may at
the Company's option be paid by (i) mailing a check for such interest, payable
to or upon the written order of the Person entitled thereto pursuant to Section
308, to the address of such Person as it appears on the Security Register or
(ii) transfer to an account maintained by the payee located inside the United
States.

Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case
of a Bearer Security, by transfer to an account maintained by the payee with a
bank located outside the United States.

Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Euroclear or CEDEL, as the case may be, for the purpose of
permitting such party to credit the interest received by it in respect of such
permanent global Security to the accounts of the beneficial owners thereof.

In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next
succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.

Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith

<PAGE> 37

cease to be payable to the registered Holder thereof on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in clause
(1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Registered Security of such series and the date of the proposed payment
(which shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit with the Trustee an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities of such
series at his address as it appears in the Security Register not less than 10
days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
the Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause (2). In case a
Bearer Security of any series is surrendered at the office or agency in a Place
of Payment for such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment and
Defaulted Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.

(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company

<PAGE> 38

to the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 308. Persons Deemed Owners.

Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
(and premium or Make-Whole Amount, if any), and (subject to Sections 305 and
307) interest on, such Registered Security and for all other purposes
whatsoever, whether or not such Registered Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the Holder of any Bearer Security and the Holder of
any coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depository, as a Holder, with respect
to such global Security or impair, as between such depository and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depository (or its
nominee) as Holder of such global Security.

SECTION 309. Cancellation.

<PAGE> 39

shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or
in exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. Cancelled Securities and coupons held
by the Trustee shall be destroyed by the Trustee and, if required in writing by
the Company, the Trustee shall deliver a certificate of such destruction to the
Company, unless by a Company Order the Company directs their return to it.

SECTION 310. Computation of Interest.

Except as otherwise specified as contemplated by Section 301 with
respect to Securities of any series, interest on the Securities of each series
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

This Indenture shall upon Company Request cease to be of further
effect with respect to any series of Securities specified in such Company
Request (except as to any surviving rights of registration of transfer or
exchange of Securities of such series herein expressly provided for and any
right to receive Additional Amounts, as provided in Section 1011), and the
Trustee, upon receipt of a Company Order, and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture as to such series when

(1) either

(A) all Securities of such series theretofore
authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose surrender
is not required or has been waived as provided in Section 305,
(ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to
Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of
such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or

(B) all Securities of such series and, in the case of (i)
or (ii) below, any coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated
Maturity within one year, or

(iii) if redeemable at the option of the Company,
are to be called for redemption within one
year under arrangements

<PAGE> 40

satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the
name, and at the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose an
amount in the currency or currencies, currency unit or units
or composite currency or currencies in which the Securities of
such series are payable, sufficient to pay and discharge the
entire indebtedness on such Securities and such coupons not
theretofore delivered to the Trustee for cancellation, for
principal (and premium or Make-Whole Amount, if any) and
interest, and any Additional Amounts with respect thereto, to
the date of such deposit (in the case of Securities which have
become due and payable) or the Stated Maturity or Redemption
Date, as the case may be;

(2) The Company has paid or caused to be paid all or other sums
payable hereunder by the Company; and

(3) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture as to such series have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003, shall survive.

In the event that there are Securities of two or more series
outstanding hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to
do so with respect to Securities of a particular series as to which it is
Trustee and if the other conditions thereto are met.

SECTION 402. Application of Trust Fund.

Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium or Make-Whole Amount, if any), and any interest and Additional Amounts
for whose payment such money has been deposited with or received by the
Trustee, but such money need not be segregated from other funds except to the
extent required by law.

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default.

Subject to any modifications, additions or deletions relating to any
series of Securities as contemplated pursuant to Section 301, "Event of
Default," wherever used herein with respect to any

<PAGE> 41

particular series of Securities, means any one of the following events
(whatever the reason for such Event of Default and whether or not it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of or within that series or of any
coupon appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or

(2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of that series when it becomes due
and payable at its Maturity; or

(3) default in the deposit of any sinking fund payment, when and
as due by the terms of any Security of that series; or

(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or

(5) default under a bond, debenture, note, mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company (or by any
Subsidiary, the repayment of which the Company has guaranteed or for which the
Company is directly responsible or liable as obligor or guarantor), having a
principal amount outstanding in excess of $10,000,000 (other than indebtedness
which is non-recourse to the Company or the Subsidiaries), whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness being declared due and payable prior to the date
on which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been rescinded
or annulled, within a period of 30 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
and requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; or

(6) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against the Company or any of its Subsidiaries in
an aggregate amount (excluding amounts covered by insurance) in excess of
$10,000,000 and such judgments, orders or decrees remain undischarged, unstayed
and unsatisfied in an aggregate amount (excluding amounts covered by insurance)
in excess of $10,000,000 for a period of 60 consecutive days; or

(7) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:

(A) commences a voluntary case,

<PAGE> 42

(B) consents to the entry of an order for relief against
it in an involuntary case,

(D) makes a general assignment for the benefit of its
creditors; or

(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:

(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,

(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially
all of either of its property, or

and the order or decree remains unstayed and in effect for 90 days; or

(9) any other Event of Default provided with respect to Securities
of that series.

As used in this Section 501, the term "Bankruptcy Law" means Title 11,
U.S. Code or any similar Federal or state law for the relief of debtors and the
term "Custodian" means any receiver, trustee, assignee, liquidator or other
similar official under any Bankruptcy Law.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of, and the
Make-Whole Amount, if any, on, all the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by the Holders), and upon any such declaration such principal or
specified portion thereof shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:

(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in which
the Securities of such series is payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series):

(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all
Outstanding Securities of that series and any

<PAGE> 43

related coupons;

(B) the principal of (and premium or Make-Whole Amount,
if any, on) any Outstanding Securities of that series
which have become due otherwise than by such
declaration of acceleration and interest thereon at
the rate or rates borne by or provided for in such
Securities;

(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of
interest and any Additional Amounts at the rate or
rates borne by or provided for in such Securities;
and

(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel; and

(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of (or premium or Make-Whole
Amount, if any) or interest on Securities of that series which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.

No such rescission shall affect any subsequent default or impair any
right consequent thereon.

SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.

The Company covenants that if:

(1) default is made in the payment of any installment of interest
or Additional Amounts, if any, on any Security of any series and any related
coupon when such interest or Additional Amount becomes due and payable and such
default continues for a period of 30 days, or

(2) default is made in the payment of the principal of (or premium
or Make-Whole Amount, if any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make-Whole Amount, if any) and interest and Additional Amounts, with
interest upon any overdue principal (and premium or Make-Whole Amount, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installments of interest or Additional Amounts, if any, at the
rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities of such series, wherever

<PAGE> 44

situated.

If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.

SECTION 504. Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal, premium or
Make-Whole Amount, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of principal
(and premium or Make-Whole Amount, if any) and interest and Additional Amounts,
if any, owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and of the Holders allowed in such judicial proceeding, and

(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.

Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security or coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or coupons or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or coupon in any such proceeding.

SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons.

All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the

<PAGE> 45

Trustee without the possession of any of the Securities or coupons or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities and coupons in respect of which such judgment has been
recovered.

SECTION 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium
or Make-Whole Amount, if any) or interest and any Additional Amounts, upon
presentation of the Securities or coupons, or both, as the case may be, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606,

SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium or
Make-Whole Amount, if any) and interest and any Additional
Amounts payable, in respect of which or for the benefit of
which such money has been collected, ratably, without
preference or priority of any kind, according to the aggregate
amounts due and payable on such Securities and coupons for
principal (and premium or Make-Whole Amount, if any), interest
and Additional Amounts, respectively, and

THIRD: To the payment of the remainder, if any, to the Company.

SECTION 507. Limitation on Suits.

No Holder of any Security of any series or any related coupon shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:

(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;

(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and

(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders

<PAGE> 46

of a majority in principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, if any, Interest and
Additional Amounts.

Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium or Make-Whole Amount, if
any) and (subject to Sections 305 and 307) interest on, and any Additional
Amounts in respect of, such Security or payment of such coupon on the
respective due dates expressed in such Security or coupon (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.

SECTION 509. Restoration of Rights and Remedies.

If the Trustee or any Holder of a Security or coupon has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding has been instituted.

SECTION 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Security
or coupon to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or any acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders of Securities or coupons, as the case may be.

<PAGE> 47

SECTION 512. Control by Holders of Securities.

The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that

(1) such direction shall not be in conflict with any rule of law
or with this Indenture,

(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and

(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein (but the Trustee shall have no obligation as to
the determination of such undue prejudice).

SECTION 513. Waiver of Past Defaults.

The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons consent to the waiver of
any past default hereunder with respect to such series and its consequences,
except a default

(1) in the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on or Additional Amounts payable in respect of any
Security of such series or any related coupons, or

(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.

Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

SECTION 514. Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.

SECTION 515. Undertaking for Costs.

<PAGE> 48

in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium or Make-Whole Amount, if any) or interest on or
Additional Amounts payable with respect to any Security on or after the
respective Stated Maturities expressed in such Security (or in the case of
redemption, on or after the Redemption Date).

ARTICLE SIX

THE TRUSTEE

SECTION 601. Notice of Defaults.

Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium or Make-Whole Amount, if any) or interest on or
any Additional Amounts with respect to any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so
long as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any
default or breach of the character specified in Section 501(4) with respect to
the Securities and coupons of such series, no such notice to Holders shall be
given until at least 60 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to the
Securities of such series.

SECTION 602. Certain Rights of Trustee.

Subject to the provisions of TIA Section 315(a) through 315(d):

(1) the Trustee shall perform only such duties as are expressly
undertaken by it to perform under this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee;

(2) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;

(3) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to
the Trustee for authentication and delivery pursuant to Section 303 which shall
be sufficiently evidenced as provided therein) and any resolution of the Board
of Directors may be sufficiently evidenced by a Board Resolution;

(4) whenever in the administration of this Indenture the

<PAGE> 49

Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;

(5) the Trustee may consult with counsel and as a condition to the
taking, suffering or omission of any action hereunder may demand an Opinion of
Counsel, and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;

(6) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

(7) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;

(8) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and

(9) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture. The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

SECTION 603. Not Responsible for Recitals or Issuance of
Securities.

The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

<PAGE> 50

SECTION 604. May Hold Securities.

The Trustee, any Paying Agent, Security Registrar, Authenticating
Agent or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and,
subject to TIA Sections 310(b) and 311, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Paying Agent, Security
Registrar, Authenticating Agent or such other agent.

SECTION 605. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on, or investment of, any money received by it
hereunder.

SECTION 606. Compensation and Reimbursement.

The Company agrees:

(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder, including extraordinary
services rendered in connection with or during the continuation of a default
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse
each of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except to the extent any such expense, disbursement or advance may be
attributable to its gross negligence or bad faith; and

(3) to indemnify each of the Trustee and any predecessor Trustee
and each of their respective directors, officers, agents and employees for, and
to hold each of them harmless against, any loss, liability or expense, arising
out of or in connection with the acceptance or administration of the trust or
trusts or the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder except to
the extent any such loss, liability or expense may be attributable to its own
gross negligence or bad faith.

As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium or Make-Whole Amount,
if any) or interest on particular Securities or any coupons.

The provisions of this Section shall survive the termination of this
Indenture or the resignation or removal of the Trustee.

SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests.

<PAGE> 51

hereunder. If such Trustee or Person publishes reports of condition at least
annually, pursuant to law or the requirements of Federal, State, Territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Trustee or Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.

SECTION 608. Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.

(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Trustee
and to the Company.

(d) If at any time:

(1) the Trustee shall fail to comply with the provisions
of TIA Section 310(b) after written request therefor
by the Company or by any Holder of a Security who has
been a bona fide Holder of a Security for at least
six months, or

(2) the Trustee shall cease to be eligible under Section
607 and shall fail to resign after written request
therefor by the Company or by any Holder of a
Security who has been a bona fide Holder of a
Security for at least six months, or

(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or
any public officer shall take charge or control of
the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or
liquidation,

then, in any such case, (i) the Company by or pursuant to a Board Resolution
may remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of

<PAGE> 52

Trustee for any cause with respect to the Securities of one or more series, the
Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series). If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders of Securities and accepted
appointment in the manner hereinafter provided, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to Securities of such series.

(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

SECTION 609. Acceptance of Appointment By Successor.

(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee,
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 606.

<PAGE> 53

powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.

(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.

(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

SECTION 610. Merger, Conversion, Consolidation or Succession to
Business.

Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.

SECTION 611. Appointment of Authenticating Agent.

<PAGE> 54

redemption or repayment thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Any such appointment shall be evidenced by an instrument in
writing signed by a Responsible Officer of the Trustee, a copy of which
instrument shall be promptly furnished to the Company. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and, except as may otherwise be provided pursuant to
Section 301, shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $25,000,000 and subject to supervision or examination by
Federal or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further
act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of or within the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its

<PAGE> 55

reasonable expenses for its services under this Section.

If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:

This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

SunTrust Bank, Atlanta, as Trustee

By:
-------------------------------------------
as Authenticating Agent

By:
-------------------------------------------
Authorized Officer

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Disclosure of Names and Addresses of Holders.

Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any Authenticating Agent nor any Paying Agent nor any Security
Registrar nor any director, officer, agent or employee of any of them shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities or coupons in accordance with TIA
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under TIA Section 312(b).

SECTION 702. Reports by Trustee.

Within 60 days after March 15 of each year commencing with the first
March 15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in TIA
Section 313(c) a brief report dated as of such March 15 if and to the extent
required by TIA Section 313(a).

SECTION 703. Reports by Company.

The Company will:

(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Company is not required to file information, documents or reports pursuant
to either of such Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to

<PAGE> 56

time in such rules and regulations;

(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and

(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs (1) or
(2) of this Section as may be required by rules and regulations prescribed from
time to time by the Commission.

SECTION 704. Company to Furnish Trustee Names and Addresses of
Holders.

The Company will furnish or cause to be furnished to the Trustee:

(a) semi-annually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if
there is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and

(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,

provided, however, that, so long as the Trustee is the Security Registrar, no
such lists shall be required to be furnished.

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain
Conditions.

The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other Person,
provided that in any such case, (i) either the Company shall be the continuing
entity, or the successor (if other than the Company) entity shall be a Person
organized and existing under the laws of the United States or a State thereof
and such successor entity shall expressly assume the due and punctual payment
of the principal of (and premium or Make-Whole Amount, if any) and any interest
(including all Additional Amounts, if any, payable pursuant to Section 1011) on
all of the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company by supplemental indenture, complying
with Article Nine hereof, satisfactory to the Trustee, executed and delivered
to the Trustee by such Person and (ii) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Company or any Subsidiary as a

<PAGE> 57

result thereof as having been incurred by the Company or such Subsidiary at the
time of such transaction, no Event of Default, and no event which, after notice
or the lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing.

SECTION 802. Rights and Duties of Successor Corporation.

In case of any such consolidation, merger, sale, lease or conveyance
and upon any such assumption by the successor entity, such successor entity
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein as the party of the first part, and the predecessor
entity, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor entity
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor entity, instead of the Company,
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities which such
successor entity thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.

In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.

SECTION 803. Officers' Certificate and Opinion of Counsel.

Any consolidation, merger, sale, lease or conveyance permitted under
Section 801 is also subject to the condition that the Trustee receive an
Officers' Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor entity, complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:

(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or

(2) to add to the covenants of the Company for the benefit of

<PAGE> 58

the Holders of all or any series of Securities (and, if such covenants are to
be for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such series)
or to surrender any right or power herein conferred upon the Company; or

(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default are
to be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of such
series); provided, however, that in respect of any such additional Events of
Default such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default or may limit the right of the Holders of a majority in aggregate
principal amount of that or those series of Securities to which such additional
Events of Default apply to waive such default; or

(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any premium,
Make-Whole Amount or Interest on Bearer Securities, to permit Bearer Securities
to be issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely affect
the interests of the Holders of Securities of any series or any related coupons
in any material respect; or

(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of any series of Securities, provided that any such
addition, change or elimination shall (i) neither (A) apply to any Security of
any series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision, nor (B) modify the rights of the
Holder of any such Security with respect to such provision; or (ii) become
effective only when there is no Security Outstanding; or

(6) to secure the Securities; or

(7) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 201 and 301, including the
provisions and procedures relating to Securities convertible into Capital
Stock; or

(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or

(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of
this Indenture or to make any other changes, provided that in each case, such
provisions shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or

<PAGE> 59

(10) to close this Indenture with respect to the authentication and
delivery of additional series of Securities or to qualify, or maintain
qualification of, this Indenture under the TIA; or

(11) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402 and 1403;
provided in each case that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related coupons or
any other series of Securities in any material respect.

SECTION 902. Supplemental Indentures with Consent of Holders.

With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities and any related coupons under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby:

(1) change the Stated Maturity of the principal of (or premium or
Make-Whole Amount, if any, on) or any installment of principal of or interest
on, any Security; or reduce the principal amount thereof or the rate or amount
of interest thereon or any Additional Amounts payable in respect thereof, or
any premium or Make-Whole Amount payable upon the redemption thereof, or change
any obligation of the Company to pay Additional Amounts pursuant to Section
1011 (except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue Discount
Security or Make-Whole Amount, if any, that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the amount thereof provable in bankruptcy pursuant to Section 504, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, the principal of any
Security or any premium or Make-Whole Amount or any Additional Amounts payable
in respect thereof or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption or repayment at the option of
the Holder, on or after the Redemption Date or the Repayment Date, as the case
may be); or

(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to such series (or compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or reduce the requirements of Section 1504 for quorum or
voting; or

(3) modify any of the provisions of this Section, Section 513 or
Section 1012, except to increase the required percentage to effect such action
or to provide that certain other provisions of

<PAGE> 60

this Indenture cannot be modified or waived without the consent of the Holder
of each Outstanding Security affected thereby.

It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.

SECTION 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture and that all conditions precedent to the execution of such
supplemental indenture have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder and of any coupon appertaining thereto shall be bound thereby.

SECTION 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

SECTION 906. Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.

SECTION 907. Notice of Supplemental Indentures.

Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such

<PAGE> 61

supplemental indenture.

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium or Make-Whole Amount,
if any, Interest and Additional Amounts.

The Company covenants and agrees for the benefit of the Holders of
each series of Securities that it will duly and punctually pay the principal of
(and premium or Make-Whole Amount, if any) and interest on and any Additional
Amounts payable in respect of the Securities of that series in accordance with
the terms of such series of Securities, any coupons appertaining thereto and
this Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1011 in respect
of principal of (or premium or Make-Whole Amount, if any, on) such a Security,
shall be payable only upon presentation and surrender of the several coupons
for such interest installments as are evidenced thereby as they severally
mature. Unless otherwise specified with respect to Securities of any series
pursuant to Section 301, at the option of the Company, all payments of
principal may be paid by check to the registered Holder of the Registered
Security or other person entitled thereto against surrender of such Security.

SECTION 1002. Maintenance of Office or Agency.

<PAGE> 62

series located outside the United States an office or agency where any
Securities of that series may be surrendered for registration of transfer,
where Securities of that series may be surrendered for exchange and where
notices and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of each
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 1011) at the offices
specified in the Security, in London, England, and the Company hereby appoints
the same as its agent to receive such respective presentations, surrenders,
notices and demands, and the Company hereby appoints the Trustee its agent to
receive all such presentations, surrenders, notices and demands.

Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium, Make-Whole Amount or interest on
or Additional Amounts in respect of Bearer Securities shall be made at any
office or agency of the Company in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a
bank located in the United States; provided, however, that, if the Securities
of a series are payable in Dollars, payment of principal of and any premium and
interest on any Bearer Security (including any Additional Amounts or Make-Whole
Amount payable on Securities of such series pursuant to Section 1011) shall be
made at the office of the Company's Paying Agent in the City of Atlanta,
Georgia or the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium, interest,
Additional Amounts or Make-Whole Amount, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company in
accordance with this Indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.

The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series and related coupons, if
any, may be presented or surrendered for any or all of such purposes, and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in accordance with the requirements
set forth above for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.

Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so
required, at least one exchange rate agent.

SECTION 1003. Money for Securities Payments to Be Held in Trust.

If the Company shall at any time act as its own Paying Agent with
respect to any series of any Securities and any related

<PAGE> 63

coupons, it will, on or before each due date of the principal of (and premium or
Make-Whole Amount, if any), or interest on or Additional Amounts in respect of,
any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant
to Section 301 for the Securities of such series) sufficient to pay the
principal (and premium or Make-Whole Amount, if any) or interest or Additional
Amounts so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, on or before each due
date of the principal of (and premium or Make-Whole Amount, if any), or
interest on or Additional Amounts in respect of, any Securities of that series,
deposit with a Paying Agent a sum (in the currency or currencies, currency unit
or units or composite currency or currencies described in the preceding
paragraph) sufficient to pay the principal (and premium or Make-Whole Amount,
if any) or interest or Additional Amounts, so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium,
Make-Whole Amount or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.

The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:

(1) hold all sums held by it for the payment of principal of (and
premium or Make-Whole Amount, if any) or interest on Securities or Additional
Amounts in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium or Make-Whole Amount, if any) or interest or Additional
Amounts; and

(3) at any time during the continuance of any such default upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.

The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such sums.

<PAGE> 64

Amounts has become due and payable shall be paid to the Company upon Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment of such principal of (and
premium or Make-Whole Amount, if any) or interest on, or any Additional Amounts
in respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in an Authorized Newspaper, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.

SECTION 1004. (Omitted)

<PAGE> 65

SECTION 1005. Existence.

Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence,
rights (charter and statutory) and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to
preserve any right or franchise if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries as a whole and that the loss thereof is not
disadvantageous in any material respect to the Holders of Securities of any
series.

SECTION 1006. Maintenance of Properties.

The Company will cause all of its 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 nothing in this Section shall prevent the Company or any
Subsidiary from selling or otherwise disposing of its properties in the
ordinary course of its 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 financially sound and reputable insurance
companies.

SECTION 1008. Payment of Taxes and Other Claims.

<PAGE> 66

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.

SECTION 1009. Provision of Financial Information.

Whether or not the Company is subject to Section 13 or 15(d) of the
Exchange Act, 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) (the "Financial Statements") if
the Company were so subject, 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 will also in any event (x) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, without cost to such Holders, copies
of the annual reports and quarterly reports which the Company would have been
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections, and (ii) file with
the Trustee copies of annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections, 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. Statement as to Compliance.

The Company will deliver to the Trustee within 120 days after the end
of each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and, in the event of any noncompliance, specifying such
noncompliance and the nature and status thereof. For purposes of this Section
1010, such compliance shall be determined without regard to any period of grace
or requirement of notice under this Indenture.

SECTION 1011. Additional Amounts.

If any Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto Additional Amounts as may be specified as
contemplated by Section 301. Whenever in this Indenture there is mentioned, in
any context except in the case of Section 502(1), the payment of the principal
of or any premium, Make-Whole Amount or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts
provided by the terms of such series established pursuant to Section 301 to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in

<PAGE> 67

those provisions hereof where such express mention is not made.

Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or Make-Whole Amount or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company will furnish the Trustee and the Company's principal Paying Agent
or Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are not United States persons without withholding for or on account
of any tax, assessment or other governmental charge described in the Securities
of or within the series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities of that series or
related coupons and the Company will pay to the Trustee or such Paying Agent
the Additional Amounts, if any, required by the terms of such Securities. In
the event that the Trustee or any Paying Agent, as the case may be, shall not
so receive the abovementioned certificate, then the Trustee or such Paying
Agent shall be entitled (i) to assume that no such withholding or deduction is
required with respect to any payment of principal or interest with respect to
any Securities of a series or related coupons until it shall have received a
certificate advising otherwise and (ii) to make all payments of principal and
interest with respect to the Securities of a series or related coupons without
withholding or deductions until otherwise advised. The Company covenants to
indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without gross
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.

SECTION 1012. Waiver of Certain Covenants.

The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1004 to 1009, inclusive, and
with any other term, provision or condition with respect to the Securities of
any series specified in accordance with Section 301 (except any such term,
provision or condition which could not be amended without the consent of all
Holders of Securities of such series pursuant to Section 902), if before or
after the time for such compliance the Holders of at least a majority in
principal amount of all outstanding Securities of such series, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

<PAGE> 68

SECTION 1101. Applicability of Article.

Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.

SECTION 1102. Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company of less than all of the Securities of any series,
the Company shall, at least 45 days prior to the giving of the notice of
redemption in Section 1104 (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date and of the principal
amount of Securities of such series to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.

SECTION 1103. Selection by Trustee of Securities to Be Redeemed.

If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities of such series issued on such
date with the same terms not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.

The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.

SECTION 1104. Notice of Redemption.

Notice of redemption shall be given in the manner provided in Section
106, not less than 30 days nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified by the terms of such series established
pursuant to Section 301, to each Holder of Securities to be redeemed, but
failure to give such notice in the manner herein provided to the Holder of any
Security designated for redemption as a whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other such Security or portion thereof.

Any notice that is mailed to the Holders of Registered

<PAGE> 69

Securities in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice.

All notices of redemption shall state:

(1) the Redemption Date;

(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if any;

(3) if less than all Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed;

(4) in case any Security is to be redeemed in part only, that on
and after the Redemption Date, upon surrender of such Security, the holder will
receive, without a charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed;

(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if any,
will become due and payable upon each such Security, or the portion thereof, to
be redeemed and, if applicable, that interest thereon shall cease to accrue on
and after said date;

(6) the Place or Places of Payment where such Securities, together
in the case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any, or for conversion;

(7) that the redemption is for a sinking fund, if such is the case;

(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for redemption
or the amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company, the
Trustee for such series and any Paying Agent is furnished;

(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to the
redemption on this Redemption Date pursuant to Section 305 or otherwise, the
last date, as determined by the Company, on which such exchanges may be made;

(10) the CUSIP number of such Security, if any, provided that
neither the Company nor the Trustee shall have any responsibility for any such
CUSIP number; and

(11) if applicable, that a Holder of Securities who desires to
convert Securities to be redeemed must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or rate and
the date and time when the option to convert shall expire.

Notice of redemption of Securities to be redeemed shall be given by
the Company or, at the Company's request, by the Trustee in

<PAGE> 70

the name and at the expense of the Company.

SECTION 1105. Deposit of Redemption Price.

On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
Twelve, segregate and hold in trust as provided in Section 1003) an amount of
money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay on the Redemption Date the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.

SECTION 1106. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender of
any such Security for redemption in accordance with said notice, together with
all coupons, if any, appertaining thereto maturing after the Redemption Date,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section
1002) and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
that except as otherwise provided with respect to Securities convertible into
Capital Stock, installments of interest on Registered Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such
at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.

If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in

<PAGE> 71

Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons. If any Security called
for redemption shall not be so paid upon surrender thereof for redemption, the
principal, (and premium or Make-Whole Amount, if any) shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.

SECTION 1107. Securities Redeemed in Part.

Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article or of Article Twelve) shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge
a new Security or Securities of the same series, of any authorized denomination
as requested by such Holder in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.

ARTICLE TWELVE

SINKING FUNDS

SECTION 1201. Applicability of Article.

The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of any Securities
of any series, the cash amount of any mandatory sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.

SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.

The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (1) deliver
Outstanding Securities of such series (other than any previously called for
redemption) together in the case of any Bearer Securities of such series with
all unmatured coupons appertaining thereto and (2) apply as a credit Securities
of such series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, as provided for by the terms of such Securities, or which have
otherwise been acquired by the Company; provided that such Securities so
delivered or applied as a credit have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the applicable Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such mandatory sinking
fund payment shall be reduced accordingly.

<PAGE> 72

SECTION 1203. Redemption of Securities for Sinking Fund.

Not less than 60 days prior to each sinking fund payment date for
Securities of any series, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1202, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment,
and will also deliver to the Trustee any Securities to be so delivered and
credited. If such Officers' Certificate shall specify an optional amount to be
added in cash to the next ensuing mandatory sinking fund payment, the Company
shall thereupon be obligated to pay the amount therein specified. Not less than
30 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section
1106 and 1107.

ARTICLE THIRTEEN

REPAYMENT AT THE OPTION OF HOLDERS

SECTION 1301. Applicability of Article.

Repayment of Securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the terms of
such Securities, if any, and (except as otherwise specified by the terms of
such series established pursuant to Section 301) in accordance with this
Article.

SECTION 1302. Repayment of Securities.

Securities of any series subject to repayment in whole or in part at
the option of the Holders thereof will, unless otherwise provided in the terms
of such Securities, be repaid at a price equal to the principal amount thereon,
together with interest, if any, thereof accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Company covenants that on
or before the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay
the principal (or, if so provided by the terms of the Securities of any series,
a percentage of the principal) of, and (except if the Repayment Date shall be
an Interest Payment Date) accrued interest on, all the Securities or portion
thereof, as the case may be, to be repaid on such date.

SECTION 1303. Exercise of Option.

Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the
reverse of such Securities. In order for any Security

<PAGE> 73

to be repaid at the option of the Holder, the Trustee must receive at the Place
of Payment therefor specified in the terms of such Security (or at such other
place or places of which the Company shall from time to time notify the Holders
of such Securities) not earlier than 60 days nor later than 30 days prior to
the Repayment Date (1) the Security so providing for such repayment together
with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder' attorney duly authorized in writing)
or (2) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities
Dealers, Inc. ("NASD"), or a commercial bank or trust company in the United
States setting forth the name of the Holder of the Security, the principal
amount of the Security, the principal amount of the Security to be repaid, the
CUSIP number, if any, or a description of the tenor and terms of the Security,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, 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, however, that
such telegram, telex, facsimile transmission or letter shall only be effective
if such Security and form duly completed are received by the Trustee by such
fifth Business Day. If less than the entire principal amount of such Security
is to be repaid in accordance with the terms of such Security, the principal
amount of such Security to be repaid, in increments of the minimum denomination
for Securities of such series, and the denomination or denominations of the
Security or Securities to be issued to the Holder for the portion of the
principal amount of such Security surrendered that is not to be repaid, must be
specified. The principal amount of any Security providing for repayment at the
option of the Holder thereof may not be repaid in part if, following such
repayment, the unpaid principal amount of such Security would be less than the
minimum authorized denomination of Securities of or within the series of which
such Security to be repaid is a part. Except as otherwise may be provided by
the terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Company.

SECTION 1304. When Securities Presented for Repayment
Become Due and Payable.

If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such security so to be repaid shall be paid by
the Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further

<PAGE> 74

that, in the case of Registered Securities, installments of interest, if any,
whose Stated Maturity is on or prior to the Repayment Date shall be payable
(but without interest thereon, unless the Company shall default in the payment
thereof) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.

If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payment therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by
the Company and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made as provided in the preceding sentence, such
Holder shall be entitled to receive the amount so deducted; provided, however,
that interest represented by coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons. If the principal amount
of any Security surrendered for repayment shall not be so repaid upon surrender
thereof, such principal amount (together with interest, if any, thereon accrued
to such Repayment Date) shall, until paid, bear interest from the Repayment
Date at the rate of interest or Yield to Maturity (in the case of Original
Issue Discount Securities) set forth in such Security.

SECTION 1305. Securities Repaid in Part.

Upon surrender of any Registered Security which is to be repaid in
part only, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge and at the
expense of the Company, a new Registered Security or Securities of the same
series, of any authorized denomination specified by the Holder, in an aggregate
principal amount equal to and in exchange for the portion of the principal of
such Security so surrendered which is not to be repaid.

ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1401. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance.

If, pursuant to Section 301, provision is made for either or both of
(a) defeasance of the Securities of or within a series under Section 1402 or
(b) covenant defeasance of the Securities of or within a series under Section
1403 to be applicable to the Securities of any series, then the provisions of
such Section or Sections, as the case may be, together with the other
provisions of this Article (with such modifications thereto as may be specified
pursuant to Section 301 with respect to any Securities), shall be applicable to
such Securities and any coupons appertaining thereto, and the Company may at
its option by Board Resolution at any time, with respect to such Securities and
any coupons appertaining thereto, elect to defease such Outstanding Securities
and any coupons appertaining thereto pursuant to Section 1402 (if applicable)
or Section 1403 (if applicable) upon compliance with the conditions set forth
below in this Article.

<PAGE> 75

SECTION 1402. Defeasance and Discharge.

Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any coupons appertaining thereto on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by such
Outstanding Securities and any coupons appertaining thereto, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Section 1405
and the other Sections of this Indenture referred to in clauses (A) and (B)
below, and to have satisfied all of its other obligations under such Securities
and any coupons appertaining thereto and this Indenture insofar as such
Securities and any coupons appertaining thereto are concerned (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (A) the rights of Holders of such
Outstanding Securities and any coupons appertaining thereto to receive, solely
from the trust fund described in Section 1404 and as more fully set forth in
such Section, payments in respect of the principal of (and premium or
Make-Whole Amount, if any) and interest, if any, on such Securities and any
coupons appertaining thereto when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 305, 306, 1002 and
1003 and with respect to the payment of Additional Amounts, if any, on such
Securities as contemplated by Section 1011, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (D) this Article. Subject
to compliance with this Article Fourteen, the Company may exercise its option
under this Section notwithstanding the prior exercise of its option under
Section 1403 with respect to such Securities and any coupons appertaining
thereto.

SECTION 1403. Covenant Defeasance.

Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be released from its obligations under Sections 1005 to 1009, inclusive, and,
if specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining
thereto on and after the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "covenant defeasance"), and such Securities and any
coupons appertaining thereto shall thereafter be deemed to be not "Outstanding"
for the purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with Sections 1005
to 1009, inclusive, or such other covenant, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to such Outstanding Securities and
any coupons appertaining thereto, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or such other covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or such other
covenant or by reason of reference in any such Section or such other covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a default or an Event of Default under Section
501(4) or 501(9) or otherwise, as the case may be, but, except as specified
above, the remainder of this Indenture and such Securities and any coupons
appertaining thereto shall be unaffected thereby.

<PAGE> 76

SECTION 1404. Conditions to Defeasance or Covenant Defeasance.

The following shall be the conditions to application of Section 1402 or
Section 1403 to any Outstanding Securities of or within a series and any
coupons appertaining thereto:

(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities and any coupons
appertaining thereto, (1) an amount in such currency, currencies or currency
unit in which such Securities and any coupons appertaining thereto are then
specified as payable at Stated Maturity, or (2) Government Obligations
applicable to such Securities and coupons appertaining thereto (determined on
the basis of the currency, currencies or currency unit in which such Securities
and coupons appertaining thereto are then specified as payable at Stated
Maturity) which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment of principal of (and premium or
Make-Whole Amount, if any) and interest, if any, on such Securities and any
coupons appertaining thereto, money in an amount, or (3) a combination thereof
in an amount, sufficient, without consideration of any reinvestment of such
principal and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of (and premium or Make-Whole Amount, if any) and interest, if any,
on such Outstanding Securities and any coupons appertaining thereto on the
Stated Maturity of such principal or installment of principal or interest and
(ii) any mandatory sinking fund payments or analogous payments applicable to
such Outstanding Securities and any coupons appertaining thereto on the day on
which such payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any coupons appertaining thereto;
provided, that the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such Government Obligations to said payments with
respect to such Securities. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 1102 hereof, a notice of its election to
redeem all or any portion of such Outstanding Securities at a future date in
accordance with the terms of the Securities of such series and Article Eleven
hereof, which notice shall be irrevocable. Such irrevocable redemption notice,
if given, shall be given effect in applying the foregoing.

(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound (and shall not cause the Trustee to have a conflicting
interest pursuant to Section 310(b) of the TIA with respect to any Security of
the Company).

(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 501(7) and 501(8) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied

<PAGE> 77

until the expiration of such period).

(d) In the case of an election under Section 1402, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such 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 had not occurred.

(e) In the case of an election under Section 1403, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that
the Holders of such Outstanding Securities and any coupons appertaining thereto
will not recognize income, gain or loss for Federal income tax purposes as a
result of such 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 covenant defeasance had not occurred.

(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 1402 or Section 1403 (as the case may be) registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.

(g) After the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.

(h) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.

SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions.

Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of any Outstanding Securities of
any series and any coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities
and any coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due

<PAGE> 78

thereon in respect of principal (and premium or Make-Whole Amount, if any) and
interest and Additional Amounts, if any, but such money need not be segregated
from other funds except to the extent required by law.

Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable market exchange rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.

The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.

Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in Section 1404 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect a defeasance or
covenant defeasance, as applicable, in accordance with this Article.

ARTICLE FIFTEEN

MEETINGS OF HOLDERS OF SECURITIES

SECTION 1501. Purposes for Which Meetings May Be Called.

A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.

SECTION 1502. Call, Notice and Place of Meetings.

(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place in the City of Atlanta, Georgia or the Borough of

<PAGE> 79

Manhattan, The City of New York, or in London as the Trustee shall determine.
Notice of every meeting of Holders of Securities of any series, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given, in the manner provided in Section
106, not less than 21 nor more than 180 days prior to the date fixed for the
meeting.

(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified
in Section 1501, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have made
the first publication of the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Securities of
such series in the amount above specified, as the case may be, may determine the
time and the place in the City of Atlanta, Georgia or the Borough of Manhattan,
The City of New York, or in London for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in subsection (a) of
this Section.

SECTION 1503. Persons Entitled to Vote at Meetings.

To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by
such Holder or Holders. The only Persons who shall be entitled to be present
or to speak at any meeting of Holders of Securities of any series shall be the
Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company and its
counsel.

SECTION 1504. Quorum; Action.

The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes after the time appointed for any
such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such adjourned meeting. Notice of
the reconvening of any adjourned meeting shall be given as provided in Section
1502(a), except that such notice need be given only once not less than five (5)
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of any adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum. Except as limited
by the proviso to Section 902, any resolution presented to a meeting

<PAGE> 80

or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Securities of that series; provided,
however, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides 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 Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.

Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related
coupons, whether or not present or represented at the meeting.

Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage in principal amount of
all Outstanding Securities affected thereby, or of 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 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
this Indenture.

SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings.

(a) Notwithstanding any provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 104 and the appointment of any proxy shall be proved in the manner
specified in Section 104 or by having the signature of the Person executing the
proxy witnessed or guaranteed by any trust company, bank or banker authorized
by Section 104 to certify to the holding of Bearer Securities. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.

(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in
which case the Company or the Holders of

<PAGE> 81

Securities of or within the series calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting.

(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to
vote, except as a Holder of a Security of such series or proxy.

(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.

SECTION 1506. Counting Votes and Recording Action of Meetings.

The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

SECTION 1507. Evidence of Action Taken by Holders.

Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Holders of any or all series may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Article Six) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Article.

<PAGE> 82

SECTION 1508. Proof of Execution of Instruments.

Subject to Article Six, the execution of any instrument by a Holder or
his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.

This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers hereunto duly authorized, all as
of the day and year first above written.

<TABLE>
<S> <C>
IRT PROPERTY COMPANY

By: /s/ Lee A. Harris
----------------------
Name: Lee A. Harris
Title: Senior Vice President

SUNTRUST BANK, ATLANTA, as Trustee

By: /s/ T. J. Donaldson
----------------------
Name: T. J. Donaldson
Title: Group Vice President

</TABLE>

75
<PAGE> 83

EXHIBIT A

FORM OF CERTIFICATION
EXHIBIT A-1

FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE

[Insert title or sufficient description of Securities to be delivered]

This is to certify that, as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions
(financial institutions, as defined in United States Treasury Regulations
Section 1.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
United States financial institution hereby agrees, on its own behalf or through
its agent, that you may advise__________________ or its agent that such
financial institution will provide a certificate within a reasonable time
stating that it agrees to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) are owned by a financial institution for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.1635(c)(2)(i)(D)(7)), and, such financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), certifies that it has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.

As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.

We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date. This certificate excepts and does not
relate to [U.S.$] of such interest in the above-captioned Securities in
respect of which we are not able to certify and as to which we understand an
exchange for an interest in a permanent global Security or an exchange for and
delivery of definitive Securities (or, if relevant, collection of any interest)
cannot be made until we do so certify.

We understand that this certificate may be required in connection with
certain tax legislation in the United States. If
<PAGE> 84

administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate or a copy thereof to any interested party in
such proceedings.

Dated:_________________, 19____ [To be dated no earlier than the 15th
day prior to the earlier of (i) the Exchange Date or (ii) the relevant Interest
Payment Date occurring prior to the Exchange Date, as applicable]

[Name of Person Making
Certification]

(Authorized Signator)
Name:
Title:
<PAGE> 85

EXHIBIT A-2

FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE

[Insert title or sufficient description of Securities to be delivered]

This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion
of the principal amount set forth below (our "Member Organizations")
substantially in the form attached hereto, as of the date hereof, (U.S.$)
principal amount of the above-captioned Securities (i) is owned by persons(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v) are
herein referred to as "financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such financial institution
has agreed, on its own behalf or through its agent, that we may
advise_________________________ or its agent that such financial institution
will provide a certificate within a reasonable time stating that it agrees to
comply with the requirements of Section 165(j)(3)(A), (B), or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) is owned by a financial institution for purposes of resale during the
restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and that such financial institutions described in
clause (iii) above (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.

We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.

We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we
<PAGE> 86

irrevocably authorize you to produce this certificate or a copy thereof to any
interested party in such proceedings.

Dated:_________________________ , 19____

[To be dated no earlier than the earlier of the Exchange Date or the relevant
Interest Payment Date occurring prior to the Exchange Date, as applicable]

,
as

By:
<PAGE> 87
EXHIBIT (4)(c)

IRT PROPERTY COMPANY

SUNTRUST BANK, ATLANTA

Trustee
Indenture
Dated as of November 9, 1995

Subordinated Debt Securities
<PAGE> 88

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Acquired Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
[CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3]
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request and Company Order . . . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Dollar or $ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
[ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3]
[Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3]
[European Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3]
[European Monetary System . . . . . . . . . . . . . . . . . . . . . . . . . . . 3]
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indexed Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repayment Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

</TABLE>
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Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Register and Security Registrar . . . . . . . . . . . . . . . . . . . . 7
Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
United States person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . 9
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 105. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . 11
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 107. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . 12
SECTION 108. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 109. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 110. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 111. No Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE TWO

SECURITIES FORMS

SECTION 201. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . 14
SECTION 203. Securities Issuable in Global Form . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE THREE

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . 15
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . 18
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . 25
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . 26
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . 29
SECTION 402. Application of Company Funds . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . 31
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

</TABLE>
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SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts . . . . . . . . . . . . . . . . . . . . . 35
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 512. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 514. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . 36
SECTION 515. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE SIX

THE TRUSTEE

SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 603. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 606. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 608. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . 39
SECTION 609. Acceptance of Appointment By Successor . . . . . . . . . . . . . . . . . . . . 41
SECTION 610. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 611. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 42

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST

SECTION 701. Disclosure of Names and Addresses of Holders . . . . . . . . . . . . . . . . . 43
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 703. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 704. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

SECTION 801. Consolidations and Mergers of Company and
Sales, Leases and Conveyances Permitted
Subject to Certain Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 802. Rights and Duties of Successor Corporation . . . . . . . . . . . . . . . . . . 45
SECTION 803. Officers' Certificate and Opinion of Counsel . . . . . . . . . . . . . . . . . 45

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . 45
SECTION 902. Supplemental Indentures With Consent of Holders . . . . . . . . . . . . . . . . 47
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 48
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . 48
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 48

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ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium or Make Whole
Amount, if any, Interest and Additional
Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . 50
SECTION 1004. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1007. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1008. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1009. Provision of Financial Information . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1010. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1011. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 1012. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 53

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . 54
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . 56

ARTICLE TWELVE

SINKING FUNDS

SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . 57

ARTICLE THIRTEEN

REPAYMENT AT THE OPTION OF HOLDERS

SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1302. Repayment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1304. When Securities Presented for Repayment
Become Due and Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1305. Securities Repaid in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1401. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . 60
SECTION 1402. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 1403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1404. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . 61
SECTION 1405. Deposited Money and Government Obligations to
Be Held in Trust; Other Miscellaneous
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

ARTICLE FIFTEEN

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MEETINGS OF HOLDERS OF SECURITIES

SECTION 1501. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . 63
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1506. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . . . 66
SECTION 1507. Evidence of Action Taken by Holders . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1508. Proof of Execution of Instruments . . . . . . . . . . . . . . . . . . . . . . . 66

ARTICLE SIXTEEN

SUBORDINATION

SECTION 1601. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1602. Liquidation; Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1603. Default on Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1604. Acceleration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1605. When Distribution Must Be Paid Over . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1606. Notice by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1607. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1608. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1609 Subordination May Not Be Impaired by Company . . . . . . . . . . . . . . . . . 68
SECTION 1610. Distribution or Notice to Representative . . . . . . . . . . . . . . . . . . . 68
SECTION 1611. Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . . . . . . . . 68

TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGEMENTS
EXHIBIT A - FORMS OF CERTIFICATION
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IRT PROPERTY COMPANY

Reconciliation and tie between Trust Indenture Act of 1939, as
amended (the "1939 Act"), and Indenture, dated as of ____________,
1995

<TABLE>
<S> <C>
Trust Indenture Act Section Indenture Section

(Section)310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
(Section)312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
(Section)314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(Section)315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(Section)316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
(Section)317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(Section)318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
</TABLE>

- --------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.

vi
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INDENTURE

INDENTURE, dated as of November 9, 1995, between IRT PROPERTY COMPANY,
a Georgia corporation (hereinafter called the "Company"), having its principal
office at 200 Galleria Parkway, Suite 1400, Atlanta, Georgia 30339, and
SunTrust Bank, Atlanta, a Georgia banking corporation, as Trustee hereunder
(hereinafter called the "Trustee"), having its Corporate Trust Office
at 58 Edgewood Ave., Suite 400, Atlanta, Georgia 30303.

RECITALS OF THE COMPANY

The Company deems it necessary to issue from time to time for its
lawful purposes subordinated debt securities (hereinafter called the
"Securities") evidencing its unsecured indebtedness, and has duly authorized
the execution and delivery of this Indenture to provide for the issuance from
time to time of the Securities, unlimited as to aggregate principal amount, to
bear interest at the rates or formulas, to mature at such times and to have
such other provisions as shall be fixed therefor as hereinafter provided.

All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly
provided or the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;

(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and

(4) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection with the

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acquisition of assets from such Person, in each case, other than Debt incurred
in connection with, or in contemplation of, such Person becoming a Subsidiary
or such acquisition. Acquired Debt shall be deemed to be incurred on the date
of the related acquisition of assets from any Person or the date the acquired
Person becomes a Subsidiary.

"Act" has the meaning specified in Section 104.

"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.

"Bankruptcy Law" has the meaning specified in Section 501.

"Bearer Security" means a Security which is payable to bearer.

"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights

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(other than debt securities convertible into or exchangeable for corporate
stock), warrants or options to purchase any thereof.

["CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or
its successor.]

"Common Depositary" has the meaning specified in Section 304(b).

"corporation" includes corporations, associations, companies and
business trusts.

"coupon" means any interest coupon appertaining to a Bearer Security.

"Custodian" has the meaning set forth in Section 501.

"Defaulted Interest" has the meaning specified in Section 307.

"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for payment of public and private debts.

"DTC" means The Depository Trust Company.

["ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.]

["Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.]

["European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.]

["European Monetary System" means the European Monetary System

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established by the Resolution of December 5, 1978 of the Council of the
European Communities.]

"Event of Default" has the meaning specified in Section 501.

"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.

"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided, that solely for purposes of any calculation required by the financial
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.

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"Interest Payment Date" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security.

"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel satisfactory to the
Trustee.

"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;

(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or other provision therefor satisfactory to the
Trustee has been made;

(iii) Securities, except solely to the extent provided in Sections
1402 and 1403, as applicable, with respect to which the Company has
effected defeasance and/or covenant defeasance as provided in Article
Fourteen;

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a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and

(v) Securities converted into Capital Stock of the Company
pursuant to or in accordance with this Indenture if the terms of such
Securities provide for convertibility pursuant to Section 301;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by Trust Indenture Act Section 313, (i) the principal
amount of an Original Issue Discount Security that may be counted in making
such determination or calculation and that shall be deemed to be Outstanding
for such purpose shall be equal to the amount of principal thereof that would
be (or shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be
equal to the Dollar equivalent, determined pursuant to Section 301 as of the
date such Security is originally issued by the Company, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent as of such date of original issuance of the amount determined as
provided in clause (i) above) of such Security, (iii) the principal amount of
any Indexed Security that may be counted in making such determination or
calculation and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided with respect to such Indexed Security
pursuant to Section 301, and (iv) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation
or in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of
such other obligor.

"Place of Payment" means, when used with respect to the Securities of
or within any series, the place or places where the principal of (and premium
or Make-Whole Amount, if any) and interest on such Securities are payable as
specified as contemplated by Sections 301 and 1002.

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stolen Security or the Security to which the mutilated, destroyed, lost or
stolen coupon appertains.

"Redemption Date" means, when used with respect to any Security to be
redeemed in whole or in part, the date fixed for such redemption by or pursuant
to this Indenture.

"Redemption Price" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.

"Registration Security" means any Security which is registered in the
Security Register.

"Repayment Price" means, when used with respect to any Security to be
repaid or purchased at the option of the Holder, the price at which it is to be
repaid or repurchased pursuant to this Indenture.

"Representative" means the indenture trustee or other trustee, agent
or representative for an issue of Senior Debt.

"Responsible Officer" means, when used with respect to the Trustee,
any officer of the Trustee assigned by the Trustee to administer its corporate
trust matters.

"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the Commission.

"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

"Senior Debt" means the principal, premium, if any, unpaid interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding), fees, charges,
expenses, reimbursement and indemnification obligations, and all other amounts
payable under or in respect of the following indebtedness of the Company for
money borrowed, whether any such indebtedness exists as of the date of the
Indenture or is created, incurred, assumed or guaranteed after such date:

(i) any debt (a) for money borrowed, or (b) evidenced by a
bond, note, debenture, or similar instrument (including purchase money
obligations) given in connection with the acquisition of any business,
property or assets, whether by purchase, merger, consolidation or
otherwise, but shall not include any account payable or other
obligation created or assumed in the ordinary course of business in
connection with the obtaining of materials or services, or (c) which is
a direct or indirect obligation which arises as a result of banker's
acceptances or bank letters of credit issued to secure obligations of
the Company, or to secure the payment of revenue bonds issued for the
benefit of the Company whether contingent or otherwise;

(ii) any debt of others described in the preceding clause
(i) which the Company has guaranteed or for which it is otherwise
liable;

(iii) the obligation of the Company as lessee under any lease
of property which is reflected on the Company's balance sheet as a
capitalized lease; and

(iv) any deferral, amendment, renewal, extension, supplement
or refunding of any liability of the kind described in any of the
preceding clauses (i), (ii), and (iii);

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(1) any such indebtedness, obligation or liability referred to in clauses (i)
through (iv) above as to which, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
indebtedness, obligation or liability is not superior in right of payment to
the Securities, or ranks pari passu with the Securities, (2) any such
indebtedness, obligation or liability which is subordinated to indebtedness of
the Company to substantially the same extent as or to a greater extent than the
Securities are subordinated and (3) the Securities. There is no limit on the
amount of Senior Debt that the Company may incur.

"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (within the meaning of Regulation S-X, promulgated under the
Securities Act) of the Company.

"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.

"Stated Maturity" means, when used with respect to any Security or
any installment of principal thereof or interest thereon, the date specified in
such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.

"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.

"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee
hereunder; provided, however, that if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of or within any
series shall mean only the Trustee with respect to the Securities of that
series.

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source.

"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent
predetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.

SECTION 102. Compliance Certificates and Opinions.

Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (excluding certificates
delivered pursuant to Section 1010) shall include:

(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;

(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

SECTION 103. Form of Documents Delivered to Trustee.

Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificates or
opinion or representations as to such matters are erroneous.

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or

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other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

SECTION 104. Acts of Holders.

(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of the Outstanding Securities of all series or one or more series,
as the case may be, may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agents
duly appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, whether in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or
record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and conclusive
in favor of the Trustee and the Company and any agent of the Trustee or the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.

(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.

(c) The ownership of Registered Securities shall be proved by the
Security Register or by a certificate of the Security Registrar.

(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depository, by any trust company, bank, banker or other depository, wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depository, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the Company may
assume that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, or (2) such Bearer Security is produced to the
Trustee by some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The ownership of Bearer Securities may also be proved in any other
manner which the Trustee deems sufficient.

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(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do
so. Notwithstanding TIA Section 316(c), such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a date
not earlier than the date 30 days prior to the first solicitation of
Holders generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.

SECTION 105. Notices, etc., to Trustee and Company

Any request, demand, authorization, direction, notice, consent,
waiver, or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to or filed with,

SECTION 106. Notice to Holders; Waiver.

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<PAGE> 105

have been received by such Holder, whether or not such Holder actually receives
such notice.

SECTION 107. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

SECTION 108. Successors and Assigns.

All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

SECTION 109. Separability Clause.

SECTION 110. Benefits of Indenture.

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SECTION 111. No Personal Liability.

No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, in any Security or coupon appertaining thereto, or
because of any indebtedness evidenced thereby, shall be had against any
promoter, as such or, against any past, present or future shareholder, officer
or director, as such, of the Company or of any successor, either directly or
through the Company or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders thereof
and as part of the consideration for the issue of the Securities.

SECTION 112. Governing Law.

SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
Amounts or principal (and premium or Make-Whole Amount, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repayment Date or
sinking fund payment date, or at the Stated Maturity or Maturity, provided that
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date, sinking fund
payment date, Stated Maturity or Maturity, as the case may be.

ARTICLE TWO

SECURITIES FORMS

SECTION 201. Forms of Securities.

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<PAGE> 107

to conform to usage.

Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.

SECTION 202. Form of Trustee's Certificate of Authentication.

Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form:

This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

SunTrust Bank, Atlanta, as Trustee

By: _________________________________________________
Authorized Signatory

SECTION 203. Securities Issuable in Global Form.

If Securities of or within a series are issuable in global form, as
specified as contemplated by Section 301, then, notwithstanding clause (8) of
Section 301 and the provisions of Section 302, any such Security shall
represent such of the Outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of Outstanding Securities of such series from time to time endorsed thereon and
that the aggregate amount of Outstanding Securities of such series represented
thereby may from time to time be increased or decreased to reflect exchanges.
Any endorsement of a Security in global form to reflect the amount, or any
increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instructions given
by such Person or Persons as shall be specified therein or in the Company Order
to be delivered to the Trustee pursuant to Section 303 or 304. Subject to the
provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.

Notwithstanding the provisions of Section 308 and except as provided

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<PAGE> 108

in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global security in registered form, or (ii) in the case of a
permanent global Security in bearer form, Euroclear or CEDEL.

ARTICLE THREE

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, or indentures
supplemental hereto, prior to the issuance of Securities of any series, any or
all of the following, as applicable, each of which (except for the matters set
forth in clauses (1), (2) and (15) below), if so provided, may be determined
from time to time by the Company with respect to unissued Securities of or
within the series when issued from time to time):

(1) the title of the Securities of or within the series (which
shall distinguish the Securities of such series from all other series of
Securities);

(4) the rate or rates (which may be fixed or variable) at which
the Securities of or within the series shall bear interest, if any, or the
method by which such rate or rates shall be determined, the date or dates from
which such interest shall accrue or the method by which such date or dates
shall be determined, the Interest Payment Dates on which such interest will be
payable and the Regular Record Date, if any, for the interest payable on any
Registered Security on any Interest Payment Date, or the method by which such
date shall be determined, and the basis upon which interest shall be calculated
if other than that of a 360-day year consisting of twelve 30-day months;

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(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of or within the series 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 or dates on which, the price or prices at
which, the currency or currencies, currency unit or units or composite currency
or currencies in which, and other terms and conditions upon which Securities of
or within the series shall be redeemed, repaid or purchased, in whole or in
part, pursuant to such obligation;

(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;

(13) whether the principal of (and premium or Make-Whole Amount, if
any) or interest or Additional Amounts, if any, on the Securities of or within
the series are to be payable, at the election of the Company or a Holder
thereof, in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such Securities are denominated
or stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time and manner of,
and identity of the exchange rate agent with responsibility for, determining
the exchange rate between the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are denominated or
stated to be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so payable;

(14) provisions, if any, granting special rights to the Holders of
Securities of or within the series upon the occurrence of such events as may be
specified;

(16) whether Securities of or within the series are to be issuable
as Registered Securities, Bearer Securities (with or without coupons) or both,
any restrictions applicable to the offer, sale or delivery of Bearer

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Securities and the terms upon which Bearer Securities of or within the series
may be exchanged for Registered Securities of or within the series and vice
versa (if permitted by applicable laws and regulations), whether any Securities
of or within the series are to be issuable initially in temporary global form
and whether any Securities of or within the series are to be issuable in
permanent global form (with or without coupons) and, if so, whether beneficial
owners of interests in any such permanent global Security may exchange such
interests for Securities of such series and of like tenor of any authorized
form and denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305, and, if Registered
Securities of or within the series are to be issuable as a global Security, the
identity of the depository for such series;

(19) the applicability, if any, of sections 1402 and/or 1403 to the
Securities of or within the series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Article Fourteen;

(21) if the Securities of or within the series are to be issued
upon the exercise of debt warrants, the time, manner and place for such
Securities to be authenticated and delivered;

(23) the obligation, if any, of the Company to permit the
conversion of the Securities of such series into shares of Capital Stock of the
Company and the terms and conditions upon which such conversion shall be
effected (including, without limitation, the initial conversion price or rate,
the conversion period, any adjustment of the applicable conversion price or
rate and any requirements relative to the reservation of such shares for
purposes of conversion);

(24) if convertible, any applicable limitations on the ownership or
transferability of the Capital Stock into which such Securities are
convertible; and

(25) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by

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Section 905).

All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered or Bearer Securities issued in global form,
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution or in any such indenture supplemental hereto. All
Securities of any 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, for issuances of additional Securities of such series.

SECTION 302. Denominations.

SECTION 303. Execution, Authentication, Delivery and Dating.

At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301 a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any

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<PAGE> 112

temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture.
Except as permitted by Section 306, the Trustee shall not authenticate and
deliver any Bearer Security unless all appurtenant coupons for interest then
matured have been detached and canceled.

(i) an Opinion of Counsel complying with Section 102 and stating
that:

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<PAGE> 113

modifications to cover such future issuances, shall be delivered at or before
the time of issuance of the first Security of such series.

The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties, obligations or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.

Each registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as
contemplated by Section 301.

No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security or the Security to which such coupon appertains
a certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309 together with a written statement (which need not comply with Section 102
and need not be accompanied by an Opinion of Counsel) stating that such
Security has never been issued or sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.

Section 304. Temporary Securities.

Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series of
authorized denominations; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and
provided further that a definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in Section 303. Until so exchanged, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.

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<PAGE> 114

shall, unless otherwise provided therein, be delivered to the London office of
a depository or common depository (the "Common Depository"), for the benefit of
Euroclear and CEDEL.

Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in an aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depository to the Trustee, as the Company's agent for such purpose, to
be exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of or within the same series of authorized
denominations and of like tenor as the portion of such temporary global
Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 301,
and, if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that, unless otherwise specified in such
temporary global Security, upon such presentation by the Common Depository,
such temporary global Security is accompanied by a certificate dated
the Exchange Date or a subsequent date and signed by Euroclear as to the
portion of such temporary global Security, if any, held for its account then to
be exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL as to the portion of such temporary global Security, if any,
held for its account then to be exchanged, each in the form set forth in
Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary global Security
only in compliance with the requirements of Section 303.

Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may
be established pursuant to Section 301), dated no earlier than 15 days prior to
the Exchange Date, copies of which certificate shall be available from the
offices of Euroclear or CEDEL, the Trustee, any Authenticating Agent appointed
for such series of Securities and each Paying Agent. Unless otherwise
specified in such temporary global Security, any such exchange shall be made
free of charge to the beneficial owners of such temporary global Security,
except that a Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like unless such Person takes
delivery of such definitive Securities in person at the offices of Euroclear or
CEDEL. Definitive Securities in bearer form to be delivered in exchange for
any portion of a temporary global Security shall be delivered only outside
the United States.

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the form set forth in Exhibit A-2 to this Indenture (or in such other forms
as may be established pursuant to Section 301), for credit without further
interest on or after such Interest Payment Date to the respective accounts of
Persons who are the beneficial owners of such temporary global Security on such
Interest Payment Date and who have each delivered to Euroclear or CEDEL, as the
case may be, a certificate dated no earlier than 15 days prior to the Interest
Payment Date occurring prior to such Exchange Date in the form set forth as
Exhibit A-1 to this Indenture (or in such other forms as may be established
pursuant to Section 301). Notwithstanding anything to the contrary herein
contained, the certifications made pursuant to this paragraph shall satisfy the
certification requirements of the preceding two paragraphs of this Section
304(b) and of the third paragraph of Section 303 of this Indenture and the
interests of the Persons who are the beneficial owners of the temporary global
Security with respect to which such certification was made will be exchanged
for definitive Securities of the same series and of like tenor on the Exchange
Date or the date of certification if such date occurs after the Exchange Date,
without further act or deed by such beneficial owners. Except as otherwise
provided in this paragraph, no payments of principal or interest owing with
respect to a beneficial interest in a temporary global Security will be made
unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear or CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such
Interest Payment Date in order to be repaid to the Company.

SECTION 305. Registration, Registration of Transfer and Exchange.

Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by

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<PAGE> 116

Section 301, Bearer Securities may not be issued in exchange for Registered
Securities.

If (but only if) permitted as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
1002, interest represented by coupons shall be payable only upon presentation
and surrender of those coupons at an office or agency located outside the
United States. Notwithstanding the foregoing, in case a Bearer Security of any
series is surrendered at any such office or agency in a permitted exchange for
a Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date for payment, as the case may be,
and interest or Defaulted Interest, as the case may be, will not be payable on
such Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the holder making the exchange
is entitled to receive.

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represented by such global Security or Securities (provided, however, the
Company may not make such determination during the 40-day restricted period
provided by Regulation S under the Securities Act or during any other similar
period during which the Securities must be held in global form as may be
required by the Securities Act), then the Company shall execute, and the
Trustee shall authenticate and deliver definitive Securities of like series,
rank, tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such global Security or Securities. If any
beneficial owner of an interest in a permanent global Security is otherwise
entitled to exchange such an interest for Securities of such series and of
like tenor and principal amount of another authorized form and denomination,
as specified as contemplated by Section 301 and provided that any applicable
notice provided in the permanent global Security shall have been given, then
without unnecessary delay but in any event not later than the earliest date on
which such interest may be so exchanged, the Company shall execute, and the
Trustee shall authenticate and deliver definitive Securities in aggregate
principal amount equal to the principal amount of such beneficial owner's
interest in such permanent global Security. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered for exchange by DTC or such other depository as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges
may occur during a period beginning at the opening of business 15 days before
any selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those
selected for redemption; and provided further that no Bearer Security delivered
in exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such
Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent global Security is
payable in accordance with the provisions of this Indenture.

No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.

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business on (A) if such Securities are issuable only as Registered Securities,
the day of the mailing of the relevant notice of redemption and (B) if such
Securities are issuable as Bearer Securities, the day of the first publication
of the relevant notice of redemption or, if such Securities are also issuable
as Registered Securities and there is no publication, the mailing of the
relevant notice of redemption, or (ii) to register the transfer of or exchange
any Registered Security so selected for redemption in whole or in part, except,
in the case of any Registered Security to be redeemed in part, the portion
thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series and like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption, or (iv)
to issue or to register the transfer or exchange of any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of actual notice to the Company or the Trustee that such Security
or coupon has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security or in exchange for the Security to
which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a new Security of the same series and
principal amount, containing identical terms and provisions and bearing a
number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen coupon appertains.

Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), any interest on and any Additional Amounts with
respect to Bearer Securities shall, except as otherwise provided in Section
1002, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.

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Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest

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<PAGE> 120

to the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Registered Security of such series and the date of the proposed payment
(which shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit with the Trustee an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities of such
series at his address as it appears in the Security Register not less than 10
days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
the Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause (2). In case a
Bearer Security of any series is surrendered at the office or agency in a Place
of Payment for such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment and
Defaulted Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.

SECTION 308. Persons Deemed Owners.

Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the

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Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Security for the purpose of receiving payment
of principal of (and premium or Make-Whole Amount, if any), and (subject to
Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

SECTION 309. Cancellation.

All Securities and coupons surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and any such Securities
and coupons and Securities and coupons surrendered directly to the Trustee for
any such purpose shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. If the Company shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. Canceled Securities and coupons held by the Trustee shall be
destroyed by the Trustee and, if required in writing by the Company the
Trustee shall deliver a certificate of such destruction to the Company, unless
by a Company Order the Company directs their return to it.

SECTION 310. Computation of Interest.

ARTICLE FOUR

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SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

(1) either

(B) all Securities of such series and, in the case of (i)
or (ii) below, any coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated
Maturity within one year, or

(iii) if redeemable at the option of the Company,
are to be called for redemption within one
year under arrangements satisfactory to the
Trustee for the giving of notice of
redemption by the Trustee in the name, and at
the expense, of the Company,

(2) The Company has paid or caused to be paid all other sums
payable hereunder by the Company; and

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<PAGE> 123

In the event there are Securities of two or more series outstanding
hereunder, the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Securities of a particular series as to which it is Trustee and if
the other conditions thereto are met.

SECTION 402. Application of Company Funds.

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default.

Subject to any modifications, additions or deletions relating to any
series of Securities as contemplated pursuant to Section 301, "Event of
Default," wherever used herein with respect to any particular series of
Securities, means any one of the following events (whatever the reason for such
Event of Default and whether or not it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):

(2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of that series when it becomes due
and payable at its Maturity; or

(3) default in the deposit of any sinking fund payment, when and
as due by the terms of any Security of that series; or

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