UNITED DOMINION REALTY TRUST INC, S-3, 1994-03-07

UNITED DOMINION REALTY TRUST INC
S-3, 1994-03-07
REAL ESTATE INVESTMENT TRUSTS

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PAGE 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 1994

REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

UNITED DOMINION REALTY TRUST, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

VIRGINIA 54-0857512
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)

10 SOUTH 6TH STREET, SUITE 203
RICHMOND, VIRGINIA 23219-3802
(804) 780-2691
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

JOHN P. MCCANN
PRESIDENT AND CHIEF EXECUTIVE OFFICER

UNITED DOMINION REALTY TRUST, INC.
10 SOUTH 6TH STREET, SUITE 203
RICHMOND, VIRGINIA 23219-3802
(804) 780-2691
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPY TO:

JAMES W. FEATHERSTONE, III HOWARD G. GODWIN, JR.
HUNTON & WILLIAMS BROWN & WOOD
RIVERFRONT PLAZA, EAST TOWER ONE WORLD TRADE CENTER
951 EAST BYRD STREET NEW YORK, NEW YORK 10048
RICHMOND, VIRGINIA 23219-4074 (212) 839-5381
(804) 788-8267

Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ( )
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. ( )

CALCULATION OF REGISTRATION FEE
<TABLE>

PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
% Notes due
March 1, 2006............... $75,000,000 100% $75,000,000 $25,862.07
</TABLE>

(1) Estimated for purposes of computation of the registration fee. Does not
include accrued interest, if any.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
<PAGE>
PAGE 1

SUBJECT TO COMPLETION, DATED MARCH 7, 1994
$75,000,000

UNITED DOMINION
REALTY TRUST

% NOTES DUE MARCH 1, 2006

Interest on the Notes is payable semi-annually on March 1 and September
1, commencing September 1, 1994. Principal installments on the Notes will
commence on March 1, , in the amounts described herein. See Description
of Notes -- Principal and Interest. The Notes may be redeemed at any time at
the option of the Trust, in whole or in part, at a redemption price equal to
the sum of (i) the principal amount of the Notes being redeemed plus accrued
interest thereon to the redemption date and (ii) the Make-Whole Amount (as
defined herein), if any. See Description of Notes -- Optional Redemption.

The Notes will be represented by a single Global Note (as defined herein)
registered in the name of The Depository Trust Company (DTC) or its nominee.
Interests in the Global Note will be shown on, and transfers thereof will be
effected only through, records maintained by DTC and its participants. Except
as described in Description of Notes -- Book-Entry System, Notes in definitive
form will not be issued. The Notes will trade in DTC's Same-Day Funds
Settlement System until maturity, and secondary market trading activity in the
Notes will therefore settle in immediately available funds. All payments of
principal and interest will be made by the Trust in immediately available
funds. See Description of Notes -- Same-Day Settlement and Payment.

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

THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON
OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.

INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) TRUST (1)(3)
------------------ ------------ ------------
Per Note................. % % %
Total.................... $ $ $

(1) Plus accrued interest, if any, from March , 1994.

(2) The Trust has agreed to indemnify Goldman, Sachs & Co. against certain
liabilities under the Securities Act of 1933. See Underwriting.

(3) Before deducting expenses payable by the Trust estimated at $200,000.

The Notes are offered by Goldman, Sachs & Co., subject to receipt and
acceptance by them and subject to their right to reject any order in whole or
in part. It is expected that delivery of the Notes will be made through the
facilities of DTC in New York, New York on or about March , 1994, against
payment therefor in immediately available funds.

GOLDMAN, SACHS & CO.

The date of this Prospectus is March , 1994.

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

<PAGE>
PAGE 2

AVAILABLE INFORMATION

The Trust is subject to the informational requirements of the Securities
Exchange Act of 1934 (the Exchange Act) and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
Commission). Reports, proxy statements and other information filed by the
Trust can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and at its Regional Offices located at 500 West Madison Street (Suite
1400), Chicago, Illinois 60661, and 7 World Trade Center, New York, New York
10048, and can also be inspected and copied at the offices of the New York
Stock Exchange at 20 Broad Street, New York, New York 10005. Copies of such
material can be obtained from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of the
prescribed fees.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Trust with the Commission under the
Exchange Act are hereby incorporated by reference in this Prospectus: (i) the
Trust's annual report on Form 10-K for the year ended December 31, 1992; (ii)
the Trust's Quarterly Reports on Form 10-Q for the quarters ended March 31,
June 30, and September 30, 1993; and (iii) the Trust's current reports on Form
8-K dated May 20, September 28, December 22 and December 31, 1993, each as
amended. All documents filed by the Trust pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act prior to the termination of the offering made
hereby shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such documents.

Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document, as the case may
be, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

The Trust will provide on request and without charge to each person to
whom this Prospectus is delivered a copy (without exhibits) of any or all
documents incorporated by reference into this Prospectus. Requests for such
copies should be directed to United Dominion Realty Trust, Inc., 10 South 6th
Street, Suite 203, Richmond, Virginia 23219-3802, Attention: Secretary
(telephone 804/780-2691).

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>
PAGE 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus or incorporated herein by
reference.

THE TRUST

United Dominion Realty Trust, Inc. (the Trust), founded in 1972, is a
self-administered equity real estate investment trust that owns and operates
primarily apartments in the Southeast from Baltimore/Washington to Florida. It
is a fully integrated real estate company that acquires, improves, operates,
manages and selectively sells properties with the primary goal of maximizing
its funds from operations, while increasing the value of its real estate
through capital improvements and intensive management.

The Trust's 94 properties include 75 apartment communities, 15 shopping
centers, two warehouse/industrial properties and two office properties. The
apartment properties consist of 18,216 apartment units, providing
approximately 90% of the Trust's rental income. Commercial properties consist
of approximately 2.0 million square feet of rentable space, providing
approximately 10% of rental income. All of the Trust's properties are located
in the Southeast. Management believes that the Trust has benefitted from the
population and job growth within this region and that this region will
continue to provide attractive demographic and economic patterns conducive to
real estate investment in the 1990's.

The Trust seeks to employ leverage conservatively using primarily
corporate debt, which is considered more flexible and less costly than
mortgage debt on individual properties. At December 31, 1993, approximately
$430 million, or 74%, of the Trust's real estate owned at cost was
unencumbered by mortgage debt.

THE OFFERING

Securities Offered............ $75,000,000 aggregate principal amount of %
Notes due March 1, 2006.
Interest Payment Dates........ March 1 and September 1, commencing September

1, 1994.
Principal Payments............ Principal payments on the Notes will commence
March 1, .
Ranking....................... The Notes will be senior unsecured obligations
of the Trust and will rank equally with the
Trust's other unsecured and unsubordinated
indebtedness.
Optional Redemption........... The Notes are redeemable at any time at the
option of the Trust, in whole or in part, at
a redemption price equal to the sum of (i) the
principal amount of the Notes being redeemed
plus accrued interest thereon to the
redemption date and (ii) the Make-Whole
Amount, if any. See Description of Notes --
Optional Redemption.
Use of Proceeds............... To repay amounts outstanding under the Trust's
bank lines of credit, and to acquire additional
apartment properties. See Use of Proceeds.
Limitations on
Incurrence of Debt.......... Neither the Trust nor any Subsidiary (as defined
herein) may incur any Debt (as defined herein)
if, after giving effect thereto, the aggregate
principal amount of all outstanding Debt of the
Trust and its Subsidiaries on a consolidated
basis is greater than 60% of the sum of (i)
the Trust's Total Assets (as defined herein) as
of the end of the most recent calendar quarter
and (ii) the purchase price of any real estate
assets or mortgages receivable acquired, and
the amount of any securities offering proceeds
received (to the extent that such proceeds were
not used to acquire real estate assets or
mortgages receivable or used to reduce Debt),
by the Trust or any Subsidiary since the
end of such calendar quarter, including those
proceeds obtained in connection with the
incurrence of such additional Debt.
Neither the Trust nor any Subsidiary may incur
any Debt secured by any mortgage or other lien
upon any of the property of the Trust or any
Subsidiary if, after giving effect thereto, the
aggregate principal amount of all outstanding
Debt of the Trust and its Subsidiaries on a
consolidated basis which is secured by any
mortgage or other lien

3
<PAGE>
PAGE 4

on the property of the Trust or any Subsidiary
is greater than 40% of the Trust's Total Assets.
Neither the Trust nor any Subsidiary may incur
any Debt if, after giving effect thereto, the
ratio of Consolidated Income Available for

Debt Service (as defined herein) to the
Annual Service Charge (as defined herein) for
the four consecutive fiscal quarters most
recently ended prior to the date on which such
additional Debt is to be incurred shall have
been less than 1.5, on a pro forma basis giving
effect to certain assumptions.

For a more complete description of the terms of and definitions used in
the foregoing limitations, see Description of Notes -- Certain Covenants.

4
<PAGE>
PAGE 5

THE TRUST

The Trust, founded in 1972, is a self-administered equity real estate
investment trust that owns and operates primarily apartments in the Southeast
from Baltimore/Washington to Florida. It is a fully integrated real estate
company that acquires, improves, operates, manages and selectively sells
properties with the primary goal of maximizing its funds from operations,
while increasing the value of its real estate through capital improvements and
intensive management. The Trust operates in a manner intended to qualify it as
a real estate investment trust (a REIT) under the Internal Revenue Code of
1986, as amended (the Code).

The Trust's investment policy has been to acquire primarily apartment
properties presenting the opportunity for higher occupancy, increased rents
and enhanced property values through a program of renovation, refurbishment
and intensive property management. Beginning in 1991, the Trust embarked on a
major expansion of its apartment portfolio involving (i) the acquisition of
apartment properties having high occupancy levels and not requiring
substantial renovation, and (ii) entry into new markets, most recently the
Baltimore/Washington area and central Florida. The properties have been
acquired generally at significant discounts from replacement cost and at
attractive current yields. The sellers were primarily financially distressed
real estate limited partnerships, the RTC, the FDIC, lenders who had
foreclosed and insurance companies seeking to reduce their real estate
exposure. Since 1991, the Trust has acquired 37 apartment properties
containing 9,539 units at a total cost of approximately $265 million.

The Trust, a Virginia corporation, has its principal office at 10 South
6th Street, Suite 203, Richmond, Virginia 23219-3802, and its telephone number

is (804) 780-2691. Unless the context indicates otherwise, the term Trust, as
used herein, includes the Trust and its subsidiary.

RECENT DEVELOPMENTS

1994 ACQUISITIONS

On March 4, 1994, the Trust acquired one apartment community, The Shires
(302 units), in Raleigh, North Carolina at a cash purchase price of $13.7
million, excluding closing costs.

The Trust also has four other apartment properties containing 1,190 units
under contract in separate transactions at a cash purchase price totalling
$38.9 million, excluding closing costs. Two of these properties are located in
Tampa, Florida (360 units and 346 units, respectively), one in Orlando,
Florida (244 units) and one in Macon, Georgia (240 units). The Trust intends
to refinance one property with approximately $12 million of tax-exempt housing
bonds.

The Trust is also actively negotiating to purchase a portfolio of 31
properties (6,713 units) located primarily in the Southeast at a purchase
price estimated to exceed $200 million. The Trust has not entered into a
formal agreement; however, if a formal agreement is reached, numerous
contingencies will remain permitting the Trust to abandon the purchase without
penalty.

There is no assurance that any of these proposed acquisitions will be
consummated.

FINANCING

During 1993, the Trust completed (i) a private placement of $52 million
of senior unsecured notes with three insurance companies, (ii) a public
offering of 6,095,000 shares of Common Stock at $13.50 per share, and (iii) a
public offering of $13.8 million of tax-exempt housing bonds. The Trust
anticipates that it will continue to finance its acquisition program using a
combination of debt, equity and equity hybrids.

5
<PAGE>
PAGE 6

USE OF PROCEEDS

The net proceeds to the Trust from the sale of the Notes are estimated at
$74.3 million. The Trust presently intends to use approximately $47.3 million
of the net proceeds to repay notes payable, representing amounts outstanding
under the Trust's bank lines of credit, having a current weighted average
interest rate of 4.0%, which are payable on demand. This debt has been
incurred since December, 1993 primarily for the acquisition of apartment
properties. The remaining net proceeds will be applied to the acquisition of
additional properties as described above in Recent Developments. Pending such
use, the Trust will invest the net proceeds in short-term money market
instruments.

CAPITALIZATION

The following table sets forth the capitalization of the Trust at
December 31, 1993, and as adjusted to give effect to an increase in notes
payable of approximately $18.65 million since December 31, 1993, the issuance
and sale of the Notes offered hereby and the application of a portion of the
proceeds thereof. The table should be read in conjunction with the Trust's
financial statements included elsewhere herein.

<TABLE>
DECEMBER 31, 1993
------------------------
HISTORICAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Debt:
Mortgage notes payable.............................. $ 72,862 $ 72,862
% Notes due March 1, 2006........................ -- 75,000
Notes payable....................................... 156,558 127,908
----------- -----------
Total debt....................................... $ 229,420 $ 275,770

Shareholders' Equity:
Common Stock, $1 par value;
60,000,000 shares authorized
41,653,097 shares issued and outstanding......... 41,653 41,653
Additional paid-in capital.......................... 302,486 302,486
Notes receivable from officer shareholders.......... (4,384) (4,384)
Distributions in excess of net income............... (79,792) (79,792)
----------- -----------
Total shareholders' equity....................... $ 259,963 $ 259,963
----------- -----------
Total capitalization........................... $ 489,383 $ 535,733
=========== ===========
</TABLE>

6
<PAGE>
PAGE 7

SELECTED FINANCIAL DATA

The following table sets forth selected financial data for the Trust and
should be read in conjunction with the financial statements of the Trust and
related notes appearing elsewhere herein and incorporated herein by reference.
All share and per share data have been adjusted to reflect a 2 for 1 stock
split effective May 5, 1993 on shares outstanding on April 19, 1993.

<TABLE>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1989 1990 1991 1992 1993
---------- ---------- ---------- ---------- ----------

(IN THOUSANDS, EXCEPT RATIO INFORMATION AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Income:
Income from property operations:
Rental income..................................... $ 37,173 $ 44,042 $ 51,250 $ 63,202 $ 89,084
Property operating expenses....................... 14,214 17,969 20,956 26,503 37,859
Depreciation of real estate owned................. 8,762 10,464 12,845 15,732 19,764
---------- ---------- ---------- ---------- ----------
$ 14,197 $ 15,609 $ 17,449 $ 20,967 $ 31,461
Interest and other income........................... 1,552 273 79 1,402 708
---------- ---------- ---------- ---------- ----------
$ 15,749 $ 15,882 $ 17,528 $ 22,369 $ 32,169
Expenses:
Interest............................................ 9,934 9,435 11,859 11,697 16,938
General and administrative.......................... 1,475 1,718 1,872 2,231 3,349
Other depreciation and amortization................. 201 173 219 300 596
---------- ---------- ---------- ---------- ----------
$ 11,610 $ 11,326 $ 13,950 $ 14,228 $ 20,883
---------- ---------- ---------- ---------- ----------
Income before gains (losses) on investments and
extraordinary item.................................. 4,139 4,556 3,578 8,141 11,286
Gains (losses) on sales of investments................ 1,433 417 26 -- (89)
Provision for possible investment losses.............. -- -- -- (1,564) --
---------- ---------- ---------- ---------- -----------
Income before extraordinary item...................... $ 5,572 $ 4,973 $ 3,604 $ 6,577 $ 11,197
Extraordinary item -- early
extinguishment of debt.............................. (98) (103) (35) (242) --
---------- ---------- ---------- ---------- ----------
Net income............................................ $ 5,474 $ 4,870 $ 3,569 $ 6,335 $ 11,197
========== ========== ========== ========== ==========
Net income per share:
Before extraordinary item........................... $ .29 $ .21 $ .14 $ .19 $ .29
Extraordinary item.................................. (.01) -- -- (.01) --
---------- ---------- ---------- ---------- ----------
$ .28 $ .21 $ .14 $ .18 $ .29
========== ========== ========== ========== ==========
Weighted average number of shares outstanding......... 19,329 23,238 24,642 34,604 38,202
Distributions declared................................ $ 12,156 $ 14,402 $ 15,872 $ 23,271 $ 27,988
Distributions declared per share...................... .61 .62 .63 .66 .70

OTHER DATA
Funds from operations(1).............................. $ 12,865 $ 15,231 $ 17,158 $ 24,185 $ 31,658
Ratio of earnings to fixed charges(2)(3).............. 1.45x 1.43x 1.27x 1.54x 1.64x
Ratio of funds from operations to fixed
charges(1)(3)....................................... 2.08x 2.43x 2.32x 3.00x 2.80x

DECEMBER 31,
----------------------------------------------------------
1989 1990 1991 1992 1993
---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA
Real estate owned, at cost............................ $ 251,051 $ 294,205 $ 361,503 $ 454,115 $ 582,213
Total assets.......................................... 231,537 259,532 314,473 390,365 505,840
Mortgage and other notes payable...................... 80,896 117,703 168,346 181,121 229,420

Convertible subordinated debentures................... 15,808 14,987 -- -- --
Shareholders' equity.................................. 127,764 118,154 136,152 197,677 259,963

</TABLE>

(1) Funds from operations is defined as income before gains (losses) on
investments and extraordinary items adjusted for certain non-cash items,
primarily real estate depreciation. The Trust considers funds from
operations in evaluating property acquisitions and its operating
performance, and believes that funds from operations should be considered
along with, but not as an alternative to, net income and cash flows as a
measure of the Trust's operating performance and liquidity. 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.

(2) For purposes of computing this ratio, earnings consist of income before
extraordinary item plus fixed charges other than capitalized interest.

(3) Fixed charges consist of interest on borrowed funds (including capitalized
interest) and amortization of debt discount and expense.

7
<PAGE>
PAGE 8

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND OPERATIONS

RESULTS OF OPERATIONS

Funds from operations is defined as income before gains (losses) on
investments and extraordinary items adjusted for certain non-cash items,
primarily real estate depreciation. The Trust considers funds from operations
in evaluating property acquisitions and its operating performance, and
believes that funds from operations should be considered along with, but not
as an alternative to, net income and cash flows as a measure of the Trust's
operating performance and liquidity. 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.

YEAR ENDED DECEMBER 31, 1993

For 1993, the Trust reported significant increases over 1992 in rental
income, income from property operations, income before gains (losses) on
investments and extraordinary item, net income, and funds from operations.
These increases are attributable primarily to the significant portfolio
expansion that has occurred since the beginning of 1992. The performance of
the Trust's mature group of 10,924 apartment units (46 apartment communities)
contributed to the increases. The Trust considers an apartment community to be
mature after it has been owned for a full calendar (fiscal) year.

For the year, the Trust's mature apartment properties provided 60% of the
Trust's rental income. These units had average economic occupancy of 91.2%

during 1993 compared to 90.6% for 1992, an increase of 0.6%. Average rents at
these properties grew 2.6% (to $440 per month) and rental expenses increased
5.3% resulting in an increase in the operating expense ratio (the ratio of
rental expenses to rental income) of 0.8% to 47.9%. Net operating income
(rental income minus operating expenses) from these apartment units was up
approximately $500,000 or 1.8%. For the remaining 6,990 apartment units
acquired by the Trust since the beginning of 1992, occupancy averaged 92.1%
and the operating expense ratio was 43.3% for the current year. For the 17,914
apartments in the 74 communities owned on December 31, 1993, occupancy
averaged 91.5% and the expense ratio was 46.4% for the full year. In 1992, the
13,832 units then owned had occupancy of 90.7% and an expense ratio of 46.5%.

For 1993, net operating income from commercial properties increased
$288,000 or 4.0%, primarily reflecting additional small tenant leases.

For 1993, depreciation expense increased $4.0 million with substantially
all of the increase attributable to the portfolio expansion that has occurred
during the past year.

For 1993, interest income was $708,000 compared to $1.4 million in 1992.
During each year, the Trust completed a public offering of Common Stock and
invested the proceeds temporarily in short-term money market investments.
During 1992, the Trust had such temporary investments throughout much of the
year at higher rates than in 1993 when the average amount invested in the
money markets was significantly lower. Consequently, interest income declined.

Interest expense increased approximately $5.2 million reflecting the fact
that the Trust used less equity relative to debt to finance its 1993
acquisitions than it did in 1992. While interest expense increased $.105 per
share in 1993, as a percent of rental income it was virtually unchanged.

In November, 1992, SFAS No. 112, Employers' Accounting for Postemployment
Benefits, was issued establishing accounting standards for employers who
provide benefits to former or inactive employees after employment but before
retirement. Employers are required to recognize the obligation to provide such
benefits for fiscal years beginning after December 15, 1993. The adoption of
SFAS No. 112 will not have a material impact on the Trust's financial position
or results of operations.

YEAR ENDED DECEMBER 31, 1992

For 1992, the Trust reported significant increases over 1991 in rental
income, income from property operations, income before gains (losses) on
investments and extraordinary item, net income, and funds from operations.
These increases resulted primarily from the contributions of properties
acquired since the beginning of 1991.

8
<PAGE>
PAGE 9

Results from properties owned throughout both years were down slightly,
reflecting the recessionary economy that characterized the Trust's region
during 1992.

For 1992, the Trust's core group of mature apartments (8,677 units in 39
complexes) provided 63% of the Trust's rental income. These units had
occupancy of 90.5% in 1992 versus 89.3% for 1991. The improvement would have
been more modest except for the decrease in occupancy in 1991 caused by the
troop deployment to the Persian Gulf. Average rent at these properties grew by
2.3% and operating expenses increased approximately 8.1%, increasing the
operating expense ratio by 2% to 48.4%. As a result, net operating income
declined by 0.4% or $78,000. The increase in operating expenses related
primarily to higher repairs and maintenance expense reflecting, in part, the
expensing of certain replacement and refixturing items that had been
capitalized in prior years.

From the beginning of 1991 through the end of 1992, the Trust acquired 19
apartment properties containing 5,155 units. For 1992, these properties
provided approximately 22% of the Trust's rental income. In addition, they
provided approximately $10.6 million of the total increase in rental income
and all of the increase in income from property operations over 1991. For
1992, these apartment units had average occupancy of 91.5% and an average
expense ratio of 40.9%.

Overall, the Trust's entire apartment portfolio which provided 85% of the
Trust's rental income for 1992, had occupancy of 90.7% and an operating
expense ratio of 46.5%. The Trust has managed its apartment properties
directly rather than through outside management companies, since the beginning
of 1991. During 1992, self-management resulted in savings estimated at $1
million when compared to the fees typically charged by property management
companies within the Trust's region.

For 1992, the Trust's commercial property results continued to be
negatively affected both by the recession and overbuilt markets. For the year,
occupancy for commercial properties decreased 1% to 84% and, as a result,
rental income declined slightly and net operating income declined by
approximately $103,000 or 1.4%.

For 1992, depreciation of real estate owned increased approximately $2.9
million over 1991 with the increase resulting almost entirely from the
additional properties in service during 1992.

Proceeds from the sale of Common Stock in January, 1992 resulted in the
Trust having significant temporary investments in interest-bearing securities
until mid-December, 1992 when they were fully invested in real estate. As a
result, the Trust reported interest income of $1.4 million for 1992 versus
only $79,000 for 1991. While interest expense decreased less than $200,000 in
the aggregate during the year, on a per share basis it declined by
approximately $.14 in 1992, reflecting the fact that a large part of the
Trust's growth during 1992 was equity financed. While the Trust incurred some
additional debt during 1992, other debt was retired with a portion of the
proceeds from the stock offering. Additionally, certain bank lines and
mortgage debt were replaced during 1992 by intermediate term debt at somewhat
higher interest rates. Finally, in December, 1992 approximately $14 million of
9% convertible subordinated debentures outstanding for 11 months of 1991 was
converted into Common Stock. During 1992, the Trust recognized extraordinary
charges totaling $242,000 representing prepayment premiums and the write-off
of previously unamortized financing costs relating to the debt retired.

While management believes that the net realizable value of the Trust's
portfolio, taken as whole, substantially exceeds its current carrying value as
reflected on the Trust's balance sheet, during 1992 a provision for possible
investment losses of $1.56 million was established based upon management's
estimate of net realizable value of each investment property in comparison to
its individual carrying value. In determining estimated net realizable value,
many factors were considered including estimated income to be earned from each
property, estimated cost to hold the property to a hypothetical time of sale,
estimated selling price each property would bring, estimated cost of improving
the property to the condition contemplated in determining the selling price,
the estimated cost of disposing of the property and prevailing economic
conditions, including availability of credit. Management believes that the
provision adequately reflects the extent of the estimated impairment in net
realizable value of certain assets in the Trust's portfolio at December 31,
1992.

LIQUIDITY AND CAPITAL RESOURCES

As a qualified REIT, the Trust distributes a substantial portion of its
cash flow to its shareholders in the form of dividends. Over the past several
years, these distributions have exceeded 80% of the Trust's cash flow from
operating activities and its funds from operations. While the Trust seeks to
retain sufficient cash to cover its normal

9
<PAGE>
PAGE 10

operating needs, including routine replacements, its dividend payout ratio
requires that portfolio growth, property improvements and balloon debt
payments be financed through a variety of primarily external sources. The
Trust has frequently utilized its bank lines of credit to temporarily finance
these expenditures and has subsequently replaced this short-term bank debt
with longer term debt or equity.

For 1993, the Trust's cash flow from operating activities increased
substantially as a result of the expansion of the Trust's portfolio as
discussed below and under Results of Operations.

At the beginning of 1993, the Trust had $1.1 million of cash and cash
equivalents and $22.5 million of available and unused bank lines of credit. On
February 24, 1993, the Trust privately placed $52 million of senior unsecured
notes with three insurance companies at an interest rate of 7.98%. The notes
are due in equal annual principal installments of $7.4 million in 1997 through
2003. The proceeds of the debt placement were utilized to repay $50 million of
short term bank debt that had been incurred in connection with certain
apartment acquisitions completed since mid-December, 1992. In early July,
1993, the Trust sold 6,095,000 shares of Common Stock in a public offering at
$13.50 per share. The net proceeds of the offering approximated $78 million of
which $35 million was used to repay, in full, then outstanding short term bank
debt. The remaining proceeds were invested primarily in additional apartment
acquisitions during the second half of the year. Also at the beginning of
July, the Trust completed the refunding of $13.8 million of tax-exempt housing
bonds encumbering two Maryland apartment communities that had been acquired at
the end of 1992. The bonds were sold in a public offering, mature in 30 years

and have a weighted average life of 22.3 years. The bonds bear interest at a
weighted average interest rate of 5.91%.

During the second quarter of 1993, the Trust expanded its bank lines of
credit to $61 million, an increase of $10 million. At December 31, 1993, the
Trust had $32.4 million of credit available under these lines. The Trust
anticipates increasing its bank lines of credit to as much as $100 million
during 1994. Historically, the Trust has utilized its lines only as an interim
source of funds to make new acquisitions and has subsequently replaced any
such bank borrowings with longer-term debt or equity capital when market
conditions allow.

During 1993, the Trust acquired 17 apartment communities containing 4,082
units at an aggregate cost of $118 million, including closing costs. The Trust
also made $10.4 million of capital improvements to its portfolio during the
year. This amount includes approximately $3.5 million of improvements at the
Trust's 10,924 mature apartment units that have been owned since the beginning
of 1992. Excluding English Hills (acquired December, 1991) which was still
undergoing rehabilitation in 1993, the remaining 10,348 mature units averaged
$270 per unit in capital expenditures.

The Trust's goal is to acquire 6,000 or more apartment units during 1994
at an average cost of approximately $30,000 per unit. Assuming a sufficient
level of acquisition activity, it will be necessary for the Trust to raise
additional equity capital and possibly convertible debt or equity later in the
year. In connection with two of its 1993 acquisitions, the Trust received
regulatory approval for the issuance of approximately $11 million of
tax-exempt housing bonds. It is anticipated that these bonds will be sold
during the second quarter of 1994.

The Trust's liquidity and capital resources are believed to be more than
adequate to meet its cash requirements for the foreseeable future.

INFLATION

Management believes that the direct effects of inflation on the Trust's
operations have been inconsequential.

10
<PAGE>
PAGE 11

BUSINESS

The Trust's principal objective is to maximize its funds from operations.
To meet this objective, the Trust has emphasized the acquisition of properties
that can be acquired at attractive initial yields and immediately enhance
funds from operations. Before 1991, the Trust sought properties that would
benefit from capital improvements and effective property management, providing
the opportunity for rent increases, occupancy gains and significant
appreciation. In addition, the Trust had opportunities to acquire properties
at prices below replacement cost, even after allowing for renovation and
marketing expenditures. More recently, changed economic conditions and the
Trust's financial strength have enabled the Trust to acquire more stable
properties also at below replacement cost from financially distressed sellers,

particularly those requiring an all cash purchase, and to expand its
geographic market. These properties are newer and/or better maintained, with
high occupancy levels and no need for significant capital improvements. Since
1991, the Trust has acquired 37 apartment properties containing 9,539 units at
a total cost of approximately $265 million.

The Trust seeks to employ leverage conservatively using primarily
corporate debt, which is considered to be more flexible and less costly than
mortgage debt on individual properties. At December 31, 1993, approximately
$430 million, or 74%, of the Trust's real estate owned at cost was
unencumbered by mortgage debt. The Trust also uses tax-exempt housing bonds to
finance eligible properties.

The Trust considers apartments to be its principal business and plans to
commit substantially all of its investment portfolio and all of its new
acquisitions to apartments. Over the long term, management believes that
apartments will outperform other areas of investment real estate because:

There has been a significant decline in apartment construction in
the Trust's target markets beginning in 1990 which has continued
through 1993.

Only about two million apartments are projected to be built in the
1990's. There were 600,000 completed in 1986 alone.

Approximately 12 million new households are expected to be formed
in the 1990's.

Approximately 36% of all households were renters at the start of
the decade. Despite historically low mortgage interest rates, the
proportion of renters has declined only slightly over the past
three years.

During this same period, approximately 85% of all residential
construction permits have been single family.

There are estimates that a significant majority of today's renter
households cannot afford to buy a moderately priced home in their
region because of credit problems, the lack of a down payment or a
monthly payment that is too high.

Other demographic characteristics favor apartment demand including
an increase in single person and single parent households, higher
growth rates among minorities, additional immigrant households and
low consumer confidence in the economy and the outlook for jobs.

Management also believes that demand for apartments within the Southeast will
grow faster than the national average for several reasons including both
population and job growth rates that are projected to be approximately 50%
greater than the national average and expected high growth in young household
formation. In several of the markets where the Trust owns properties, the
population and job growth rates for the decade are projected to be more than
double that of the national average.

<PAGE>
PAGE 12

The following chart shows the geographic distribution of the Trust's
apartment properties as of December 31, 1993. The chart excludes an apartment
property in Raleigh, North Carolina, acquired on March 4, 1994. See Recent
Developments.

<TABLE>
NUMBER OF PERCENTAGE OF
APARTMENT NUMBER OF APARTMENT
PROPERTIES UNITS PROPERTIES AT COST
---------- --------- ------------------
<S> <C> <C> <C>
Richmond, Virginia................................ 12 3,170 16%
Baltimore/Washington.............................. 6 1,535 11
Charlotte, North Carolina......................... 8 1,700 10
Raleigh, North Carolina........................... 6 1,562 9
Columbia, South Carolina.......................... 6 1,500 8
Tampa/Clearwater, Florida......................... 5 1,409 8
Atlanta, Georgia.................................. 4 1,123 7
Tidewater, Virginia (1)........................... 5 1,140 7
Nashville, Tennessee.............................. 3 842 4
Wilmington, North Carolina........................ 3 661 3
Greenville/Spartanburg, South Carolina............ 3 587 3
Orlando, Florida.................................. 2 461 3
Other North Carolina.............................. 6 1,288 7
Other Virginia.................................... 3 456 2
Other Florida..................................... 1 312 1
Other South Carolina.............................. 1 168 1
-- ------ ---
Total........................................... 74 17,914 100%
== ====== ===
</TABLE>

(1) The Norfolk/Virginia Beach/Newport News/Hampton area.

APARTMENTS

The Trust's apartments consist of a mix of lower to upper income
properties with a majority being middle to moderate income. A substantial
majority of the tenants are family households. The apartments are typically
suburban, garden or townhouse style units with one, two and three bedrooms.
The units are generally individually heated and cooled, with all appliances
and wall-to-wall carpet. Amenities normally include swimming pools, tennis
courts, clubhouses and, in many cases, playgrounds. The average cost for the
Trust's apartments, including all renovations and refurbishment costs, was
approximately $28,100 per unit at December 31, 1993. During 1993, apartment
occupancy averaged 91.5% overall and 91.2% for the 10,924 units which were
acquired prior to 1992 and are classified as mature.

12
<PAGE>
PAGE 13

The following table presents information concerning the Trust's apartment
properties.

<TABLE>

AVERAGE
MONTHLY
DATE NO. OF MORTGAGE RENT PER
NAME LOCATION ACQUIRED UNITS COST(1) DEBT(2) UNIT(3)
---- -------- -------- ------ ------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Azalea Richmond, VA 12-31-84 156 $ 3.9 $ -- $483
Bay Cove Clearwater, FL 12-16-92 336 9.8 -- 528
Bayberry Commons Portsmouth, VA 4-7-88 192 4.9 -- 410
Beechwood (5) Greensboro, NC 12-22-93 208 7.5 -- 523
Braeland Commons Columbia, MD 12-29-92 172 8.8 5.1 640
Bramblewood Goldsboro, NC 12-31-84 188 4.4 0.7 396
Brynn Marr Jacksonville, NC 12-31-84 196 5.1 -- 434
Canterbury Woods Charlotte, NC 12-18-85 207 7.0 -- 430
Cedar Point Raleigh, NC 12-18-85 168 7.3 -- 482
Cinnamon Ridge Raleigh, NC 12-1-89 365 8.2 7.0 398
Colonial Villa Columbia, SC 9-16-92 296 6.9 -- 417
Colony of Stone Mountain Atlanta, GA 6-12-90 404 11.3 -- 495
Colony Village New Bern, NC 12-31-84 171 4.2 -- 380
Country Walk Columbia, SC 12-19-91 208 4.6 -- 458
Courthouse Green Richmond, VA 12-31-84 266 6.5 -- 452
Courtney Square Raleigh, NC 7-8-93 200 6.4 -- 512
Cove at Lake Lynn Raleigh, NC 12-1-92 225 7.2 -- 530
Craig Manor Salem, VA 11-6-87 108 3.2 -- 437
The Creek Wilmington, NC 6-30-92 198 3.5 1.4 411
Crescent Square Atlanta, GA 3-22-89 360 12.0 -- 434
Dover Village Orlando, FL 3-31-93 296 10.0 -- 574
Eastwind Virginia Beach, VA 4-4-88 200 6.7 -- 510
Eden Commons Columbia, MD 12-29-92 232 12.0 8.7 657
Emerald Bay Charlotte, NC 2-6-90 250 7.2 -- 469
English Hills Richmond, VA 12-6-91 576 15.9 -- 513
Forest Hills Wilmington, NC 6-30-92 279 6.8 3.2 522
Forestbrook Columbia, SC 7-1-93 180 3.6 -- 417
Foxcroft Tampa, FL 1-28-93 192 5.0 -- 488
Gable Hill Columbia, SC 12-4-89 180 6.8 -- 526
Gatewater Landing Glen Burnie, MD 12-16-92 264 8.5 -- 588
Grand Oaks Charlotte, NC 5-1-84 243 7.0 -- 429
Hampton Court Alexandria, VA 2-19-93 308 12.3 -- 711
Harbour Town (5) Nashville, TN 12-10-93 185 4.1 -- 417
Heather Lake Hampton, VA 3-1-80 252 5.9 -- 515
Heatherwood Greenville, SC 9-30-93 152 3.6 -- 426
Heritage Trace Newport News, VA 6-30-89 200 4.7 3.9 376
Highlands Charlotte, NC 1-17-84 176 4.6 -- 457
Key Pines Spartanburg, SC 9-25-92 241 4.9 -- 414
The Lakes Nashville, TN 9-15-93 256 7.3 -- 494
Lake Washington Downs Melbourne, FL 9-24-93 312 6.4 -- 424
Laurel Ridge Roanoke, VA 5-17-88 216 4.0 3.0 315
Laurel Village Richmond, VA 9-6-91 159 4.2 -- 543

The Ledges Winston-Salem, NC 8-13-86 239 6.6 -- 305
Liberty Crossing Jacksonville, NC 11-30-90 286 6.0 1.8 393
Meadow Run Richmond, VA 12-31-84 204 5.1 -- 440
Meadowdale Lakes Richmond, VA 12-31-84 516 10.9 1.4 413
The Melrose Dumfries, VA 12-11-85 370 8.2 5.3 434
Mill Creek Atlanta, GA 11-11-88 224 7.8 -- 467
Mill Creek Wilmington, NC 9-30-91 184 5.8 -- 532
Northview Salem, VA 9-29-78 132 1.9 -- 400
Olde West Village Richmond, VA 12-31-84 502 15.6 4.0 505
and 8-27-91
Orange Orlando Orlando, FL 1-28-93 165 4.2 -- 472
Park Green Raleigh, NC 9-27-91 200 5.6 -- 500
Parkwood Court Alexandria, VA 6-30-93 189 6.6 -- 633
Patriot Place Florence, SC 10-23-85 168 6.2 2.2 306
Peppertree (5) Charlotte, NC 12-14-93 292 9.3 -- 509
Pinebrook Clearwater, FL 9-28-93 209 4.3 -- 477
Plum Chase Columbia, SC 1-4-91 300 8.2 7.0 448
River Road Terrace Petersburg, VA 8-31-81 128 2.6 -- 404

</TABLE>
<TABLE>
AVERAGE
NAME OCCUPANCY(4)
---- -----------
<S> <C>
Azalea 92%
Bay Cove 92
Bayberry Commons 93
Beechwood (5) 91
Braeland Commons 98
Bramblewood 99
Brynn Marr 98
Canterbury Woods 77
Cedar Point 98
Cinnamon Ridge 98
Colonial Villa 96
Colony of Stone Mountain 74
Colony Village 94
Country Walk 84
Courthouse Green 94
Courtney Square 97
Cove at Lake Lynn 98
Craig Manor 98
The Creek 100
Crescent Square 87
Dover Village 90
Eastwind 97
Eden Commons 93
Emerald Bay 91
English Hills 93
Forest Hills 99
Forestbrook 82
Foxcroft 91
Gable Hill 89
Gatewater Landing 80

Grand Oaks 90
Hampton Court 92
Harbour Town (5) 98
Heather Lake 98
Heatherwood 88
Heritage Trace 91
Highlands 80
Key Pines 95
The Lakes 91
Lake Washington Downs 93
Laurel Ridge 93
Laurel Village 87
The Ledges 77
Liberty Crossing 95
Meadow Run 93
Meadowdale Lakes 94
The Melrose 95
Mill Creek 93
Mill Creek 99
Northview 97
Olde West Village 86
Orange Orlando 88
Park Green 100
Parkwood Court 88
Patriot Place 98
Peppertree (5) 96
Pinebrook 82
Plum Chase 93
River Road Terrace 98
</TABLE>
13
<PAGE>
PAGE 14
<TABLE>
AVERAGE
MONTHLY
DATE NO. OF MORTGAGE RENT PER
NAME LOCATION ACQUIRED UNITS COST(1) DEBT(2) UNIT(3)
---- -------- -------- ------ ------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Riverwind (5) Spartanburg, SC 12-31-93 194 $ 7.2 $ -- $573
Rollingwood Richmond, VA 12-31-84 278 7.6 2.7 440
St. Andrews Commons Columbia, SC 5-20-93 336 10.9 -- 513
The Shires (6) Raleigh, NC 3-4-94 302 13.7 -- --
Spring Forest Raleigh, NC 5-21-91 404 11.3 -- 480
Stanford Village Atlanta, GA 9-26-89 135 4.1 2.1 496
Summit West Tampa, FL 12-16-92 264 7.5 -- 493
Summit on Park Charlotte, NC 1-17-84 80 2.1 -- 475
Timbercreek Richmond, VA 8-31-83 160 3.5 -- 412
Towne Square Hopewell, VA 8-27-85 76 1.8 1.3 383
2131 Apartments Nashville, TN 12-16-92 401 10.2 -- 479
Twin Rivers Hopewell, VA 1-6-82 149 2.1 -- 373
Village at Old
Tampa Bay (5) Oldsmar, FL 12-8-93 408 12.5 -- 544

Windsor Harbor Charlotte, NC 1-13-89 200 6.2 -- 445
Woodland Hollow Charlotte, NC 11-3-86 252 7.4 3.4 422
Woodscape Newport News, VA 12-29-87 296 9.7 -- 464
------ ------ -----
Total 18,216 $516.9 $64.2
====== ====== =====
</TABLE>
<TABLE>
AVERAGE
NAME OCCUPANCY(4)
---- -----------
<S> <C>
Riverwind (5) 92%
Rollingwood 88
St. Andrews Commons 96
The Shires (6) --
Spring Forest 99
Stanford Village 97
Summit West 96
Summit on Park 84
Timbercreek 84
Towne Square 89
2131 Apartments 97
Twin Rivers 92
Village at Old Tampa Bay(5) 73
Windsor Harbor 80
Woodland Hollow 78
Woodscape 90
Total
</TABLE>

(1) Represents at December 31, 1993 the sum of the total acquisition cost of
the property plus the capitalized cost of improvements made subsequent to
acquisition, less allowance for possible investment losses.

(2) Represents at December 31, 1993 the outstanding principal balances of the
mortgage loans, exclusive of discounts.

(3) Represents the weighted average of rent charged during the quarter ended
December 31, 1993 for occupied apartments and rent asked for unoccupied
apartments at 100% occupancy.

(4) Represents occupancy during the quarter ended December 31, 1993 expressed
as the ratio of actual rent collected to potential rent collectible at final
occupancy.

(5) These properties were acquired during December, 1993. Average rent and
occupancy data are for the month of January, 1994.

(6) This property was acquired on March 4, 1994. Average rent and occupancy
data for a full month under Trust management are not available.

14
<PAGE>
PAGE 15

SHOPPING CENTERS AND OTHER PROPERTIES

The Trust owns approximately two million square feet of commercial
property space including 15 neighborhood and community shopping centers and
four other commercial properties. Commercial properties provide approximately
11% of the Trust's rental income. Near the end of 1992, management of the
Trust determined that the Trust should devote substantially all of its
resources to the apartment business. Consequently, the Trust has decided not
to acquire any additional commercial properties. The Trust plans to dispose of
most or all of its commercial properties over the next few years. Although no
formal plans for the divestiture of these properties have been made, the Trust
expects them to be sold or otherwise disposed of at gains. Effective April 1,
1993, the Trust engaged independent fee management companies to manage all but
three of its commercial properties. The use of outside commercial property
management has not resulted in any significant changes in operating costs.
During 1993, net operating income from the Trust's commercial properties was
$7.4 million which was $288,000 or 4% higher than in 1992.

MANAGEMENT

The officers and directors of the Trust are:

NAME AGE OFFICE
John P. McCann 49 President and Chief Executive Officer;
Director
James Dolphin 44 Senior Vice President and Chief
Financial Officer; Director
Barry M. Kornblau 44 Senior Vice President and Director of
Apartment Operations; Director
Curtis W. Carter 37 Vice President, Apartment Property
Management
Richard B. Chess 40 Vice President and Director of
Acquisitions
Jerry A. Davis 31 Vice President, Controller-Corporate
Accounting and Assistant Secretary
Richard A. Giannotti 38 Vice President and Director of
Construction
Katheryn E. Surface 35 Vice President, Secretary and General
Counsel
Jeff C. Bane 63 Director; President, Blake & Bane Inc.,
Richmond, Virginia, real estate brokers
Robert P. Buford 67 Director; Senior Counsel, Hunton &
Williams, Richmond, Virginia, attorneys
R. Toms Dalton, Jr. 60 Director; Partner, Allen & Carwile,
Waynesboro, Virginia, attorneys
John C. Lanford 62 Director; President of Adams
Construction Co., Roanoke, Virginia,
general contractors
H. Franklin Minor 60 Director; Attorney-at-law and Real
Estate Broker
C. Harmon Williams, Jr. 61 Chairman of the Board of Directors; Real
Estate Broker

DESCRIPTION OF NOTES

The Notes are to be issued under an Indenture, dated as of March 1, 1994,
(the Indenture), between the Trust and NationsBank of Virginia, N.A. (the
Trustee). The Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part and is available for inspection
at the corporate trust office of the Trustee in Atlanta, Georgia, or as
described under Available Information. The Indenture is subject to, and
governed by, the Trust Indenture Act of 1939, as amended (the TIA). The
statements made hereunder relating to the Indenture and the Notes are
summaries of certain provisions thereof, do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all
provisions of the Indenture and the Notes. All section references appearing
herein are to sections of the Indenture, and capitalized terms used but not
defined herein have the respective meanings set forth in the Indenture and the
Notes.

GENERAL

The Notes will be direct, unsecured obligations of the Trust, limited to
an aggregate principal amount of $75,000,000, ranking equally with all other
unsecured and unsubordinated indebtedness of the Trust from time to time
outstanding. The Notes are effectively subordinated to mortgage indebtedness
of the Trust aggregating approximately $72.9 million at December 31, 1993. At
December 31, 1993, on a pro forma basis giving effect to issuance of the Notes
and application of a portion of the proceeds thereof, the total outstanding
indebtedness of the Trust would be approximately $275.8 million. The Trust may
incur additional indebtedness, subject to restrictions contained in the
instruments governing the rights of holders of its outstanding indebtedness,
including the

15
<PAGE>
PAGE 16

restrictions described in Certain Covenants -- Limitations on Incurrence of
Debt. Such additional indebtedness may consist of, but is not limited to,
indebtedness issued under the Indenture.

The Notes will only be issued in fully registered book-entry form without
coupons in denominations of $1,000 and integral multiples thereof, except
under the limited circumstances described below in Book-Entry System.

PRINCIPAL AND INTEREST

The Notes will bear interest at % per annum and will mature on
March 1, 2006. The Notes will bear interest from March , 1994 or from the
immediately preceding Interest Payment Date (as defined below) to which
interest has been paid, payable semi-annually in arrears on March 1 and
September 1 of each year, commencing on September 1, 1994 (each, an Interest
Payment Date), to the persons in whose names the applicable Notes are
registered in the Note Register on the preceding February 15 or August 15
(whether or not a Business Day, as defined below), as the case may be (each, a
Regular Record Date). Interest on the Notes will be computed on the basis of a
360-day year of twelve 30-day months.

Installments of principal of $ will be paid on each $1,000 original
principal amount of the Notes annually on each March 1 (a Principal Payment
Date), commencing on March 1, . Principal on the Notes will be payable to
the persons in whose names the applicable Notes are registered in the Note
Register on the preceding February 15 (whether or not a Business Day).

The weighted average life of the Notes (as to all distributions of
principal) will be years. The weighted average life of the Notes, for this
purpose, equals the number of years obtained by (i) multiplying the amount of
each payment of principal of the Notes by the number of years which will
elapse between the date of issuance and such payment, (ii) adding the products
obtained under clause (i), and (iii) dividing such sum by $75,000,000.

If any Interest Payment Date, Principal Payment Date or the Maturity Date
falls on a day that is not a Business Day, the required payment shall be made
on the next Business Day as if it were made on the date such payment was due
and no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Principal Payment Date or the Maturity Date,
as the case may be. Business Day means any day, other than a Saturday or
Sunday, on which banks in The City of New York are not required or authorized
by law or executive order to close.

OPTIONAL REDEMPTION

The Notes may be redeemed at any time at the option of the Trust, in
whole or in part, at a redemption price equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
redemption date and (ii) the Make-Whole Amount, if any, with respect to such
Notes (the Redemption Price).

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

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

If less than all the Notes are to be redeemed at the option of the Trust,
the Trust will notify the Trustee at least 45 days prior to the redemption
date (or such shorter period as satisfactory to the Trustee) of the aggregate
principal amount of Notes to be redeemed and the redemption date. The Trustee
shall select, in such manner as it shall deem fair and appropriate, Notes to
be redeemed in whole or in part. Notes may be redeemed in part in the minimum
authorized denomination for Notes or in any integral multiple thereof.

Make-Whole Amount means, in connection with any optional redemption or
accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest

(exclusive of any interest accrued to the date of redemption or accelerated
payment) that would have been payable in respect of such dollar if such
redemption or accelerated payment had not been made, determined by
discounting, on a semiannual basis,

16
<PAGE>
PAGE 17

such principal and interest at the Reinvestment Rate (determined on the third
Business Day preceding the date such notice of redemption is given or
declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or
accelerated payment had not been made, over (ii) the aggregate principal
amount of the Notes being redeemed or paid.

Reinvestment Rate means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings This Week and Last
Week published in the Statistical Release under the caption Treasury Constant
Maturities for the maturity (rounded to the nearest month) corresponding to
the remaining life to maturity, as of the payment date of the principal being
redeemed or paid. If no maturity exactly corresponds to such maturity, yields
for the two published maturities most closely corresponding to such maturity
shall be calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding in each of such relevant periods to the nearest
month. For the purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.

Statistical Release means the statistical release designated H.15(519) or
any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under the Indenture,
then such other reasonably comparable index which shall be designated by the
Trust.

MERGER, CONSOLIDATION OR SALE

The Trust may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other entity,
provided that (a) either the Trust shall be the continuing entity, or the
successor entity (if other than the Trust) formed by or resulting from any
such consolidation or merger or which shall have received the transfer of such
assets is a Person organized and existing under the laws of the United States
or any State thereof and shall expressly assume payment of the principal of
(and Make-Whole Amount, if any) and interest on all of the Notes and the due
and punctual performance and observance of all of the covenants and conditions
contained in the Indenture; (b) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Trust or any Subsidiary as a result thereof as having been incurred by the
Trust or such Subsidiary at the time of such transaction, no Event of Default
under the Indenture, and no event which, after notice or the lapse of time, or
both, would become such an Event of Default, shall have occurred and be

continuing; and (c) an Officers' Certificate and legal opinion covering such
conditions shall be delivered to the Trustee (Sections 801 and 803).

CERTAIN COVENANTS

Limitations on Incurrence of Debt. The Trust will not, and will not
permit any Subsidiary to, incur any Debt (as defined below) if, immediately
after giving effect to the incurrence of such Debt and the application of the
proceeds thereof, the aggregate principal amount of all outstanding Debt of
the Trust and its Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles is greater than 60%
of the sum of (without duplication) (i) the Trust's Total Assets as of the end
of the calendar quarter covered in the Trust's Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, most recently filed with
the Commission (or, if such filing is not permitted under the Exchange Act,
with the Trustee) prior to the incurrence of such additional Debt and (ii) the
purchase price of any real estate assets or mortgages receivable acquired, and
the amount of any securities offering proceeds received (to the extent such
proceeds were not used to acquire real estate assets or mortgages receivable
or used to reduce Debt), by the Trust or any Subsidiary since the end of such
calendar quarter, including those proceeds obtained in connection with the
incurrence of such additional Debt (Section 1004).

In addition to the foregoing limitation on the incurrence of Debt, the
Trust will not, and will not permit any Subsidiary to, incur any Debt secured
by any mortgage, lien, charge, pledge, encumbrance or security interest of any
kind upon any of the property of the Trust or any Subsidiary if, immediately
after giving effect to the incurrence of such Debt and the application of the
proceeds thereof, the aggregate principal amount of all outstanding Debt of
the Trust and its Subsidiaries on a consolidated basis which is secured by any
mortgage, lien, charge, pledge, encumbrance or security interest on property
of the Trust or any Subsidiary is greater than 40% of the Trust's Total Assets
(Section 1004).

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In addition to the foregoing limitations on the incurrence of Debt, the
Trust will not, and will not permit any Subsidiary to, incur any Debt if the
ratio of Consolidated Income Available for Debt Service (as defined below) to
the Annual Service Charge (as defined below) for the four consecutive fiscal
quarters most recently ended prior to the date on which such additional Debt
is to be incurred shall have been less than 1.5, on a pro forma basis after
giving effect thereto and to the application of the proceeds therefrom, and
calculated on the assumption that (i) such Debt and any other Debt incurred by
the Trust and its Subsidiaries since the first day of such four-quarter period
and the application of the proceeds therefrom, including to refinance other
Debt, had occurred at the beginning of such period; (ii) the repayment or
retirement of any other Debt by the Trust and its Subsidiaries since the first
day of such four-quarter period had been incurred, repaid or retired at the
beginning of such period (except that, in making such computation, the amount
of Debt under any revolving credit facility shall be computed based upon the
average daily balance of such Debt during such period); (iii) in the case of
Acquired Debt (as defined below) or Debt incurred in connection with any

acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition being included in
such pro forma calculation; and (iv) in the case of any acquisition or
disposition by the Trust or its Subsidiaries of any asset or group of assets
since the first day of such four-quarter period, whether by merger, stock
purchase or sale, or asset purchase or sale, such acquisition or disposition
or any related repayment of Debt had occurred as of the first day of such
period with the appropriate adjustments with respect to such acquisition or
disposition being included in such pro forma calculation (Section 1004).

Except as described above, the Indenture does not contain any provisions
that would limit the ability of the Trust to incur indebtedness or that would
afford Holders of the Notes protection in the event of a highly leveraged or
similar transaction involving the Trust or in the event of a change of
control. However, the Articles of Incorporation of the Trust include
provisions for mandatory redemption and stopping transfer of its Common Stock
designed to preserve the Trust's status as a REIT. The Code provides that
concentration of more than 50% in value of direct or indirect ownership of
Common Stock in five or fewer individual shareholders during the last six
months of any year will result in disqualification of the Trust as a REIT.
Enforcement of the provisions of the Trust's Articles of Incorporation would
prevent such concentration and, therefore, prevent or hinder a change of
control.

Existence. Except as described above under Merger, Consolidation or Sale,
the Trust will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights (charter and statutory)
and franchises; provided, however, that the Trust shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of its business and that the loss
thereof is not disadvantageous in any material respect to the Holders of the
Notes (Section 1005).

Maintenance of Properties. The Trust 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 Trust may be necessary so that the
business carried on in connection may be properly and advantageously conducted
at all times; provided, however, that the Trust and its Subsidiaries shall not
be prevented from selling or otherwise disposing for value its properties in
the ordinary course of business (Section 1006).

Insurance. The Trust will, and will cause each of its Subsidiaries to,
keep all of its insurable properties against loss or damage at least equal to
their then full insurable value with financially sound and reputable insurance
companies (Section 1007).

Payment of Taxes and Other Claims. The Trust will pay or discharge or
cause to be paid or discharged, before the same become delinquent, (i) all
taxes, assessments and government charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Trust or any
Subsidiary, and (ii) all lawful claims for labor, materials and supplies

which, if unpaid, might by law become a lien upon the property of the Trust or
any Subsidiary; provided, however, that the Trust 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 1008).

Provision of Financial Information. Whether or not the Trust is subject
to Section 13 or 15(d) of the Exchange Act, the Trust will, to the extent
permitted under the Exchange Act, file with the Commission the annual reports,
quarterly reports and other documents which the Trust would have been required
to file with the Commission pursuant to such Section 13 and 15(d) (the
Financial Statements) if the Trust were so subject, such documents to be

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filed with the Commission on or prior to the respective dates (the Required
Filing Dates) by which the Trust would have been required so to file such
documents if the Trust were so subject. The Trust will also in any event (x)
within 15 days of each Required Filing Date (i) transmit by mail to all
Holders of Notes, as their names and addresses appear in the Note Register,
without cost to such Holders, copies of the annual reports and quarterly
reports which the Trust would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if the Trust were subject
to such Sections and (ii) file with the Trustee copies of the annual reports,
quarterly reports and other documents which the Trust would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act if the Trust were subject to such Sections and (y) if filing such
documents by the Trust 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 1009).

As used herein,

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.

Annual Service Charge as of any date means the maximum amount which is
payable in any period for interest on, and original issue discount of, Debt of
the Trust and its Subsidiaries and the amount of dividends which are payable
in respect of any Disqualified Stock (as defined below).

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 (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.

Consolidated Income Available for Debt Service for any period means Funds
from Operations (as defined below) of the Trust and its Subsidiaries plus
amounts which have been deducted for interest on Debt of the Trust and its
Subsidiaries.

Debt of the Trust or any Subsidiary means any indebtedness of the Trust,
or any Subsidiary, whether or not contingent, in respect of (without
duplication) (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance or any security interest existing on property owned by the
Trust or any Subsidiary, (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Trust or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock or (v) any lease of
property by the Trust or any Subsidiary as lessee which is reflected on the
Trust's consolidated balance sheet as a capitalized lease in accordance with
generally accepted accounting principles to the extent, in the case of items
of indebtedness under (i) through (iii) above, that any such items (other than
letter of credit) would appear as a liability on the Trust's consolidated
balance sheet in accordance with generally accepted accounting principles, and
also includes, to the extent not otherwise included, any obligation of or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
Debt of another Person (other than the Trust or any Subsidiary) (it being
understood that Debt shall be deemed to be incurred by the Trust or any
Subsidiary whenever the Trust or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).

Disqualified Stock means, with respect to any Person, any Capital Stock
of such Person which by the terms of such Capital Stock (or by the terms of
any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
(ii) is convertible into or exchangeable or exercisable for Debt or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to the Stated Maturity of the
Notes.

Funds from Operations for any period means income before gains (losses)
on investments and extraordinary items plus amounts which have been deducted,
and minus amounts which have been added, for the following non-

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cash items (without duplication): (a) provision for federal income taxes of
the Trust and its Subsidiaries, (b) amortization of debt discount, (c)
provision for property depreciation and amortization, (d) the effect of any
noncash charge resulting from a change in accounting principles in determining
income before gains (losses) on investments and extraordinary items for such

period and (e) amortization of deferred charges, as reflected in the financial
statements of the Trust and its Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting
principles.

Total Assets as of any date means the sum of (i) the Trust's
Undepreciated Real Estate Assets and (ii) all other assets of the Trust
determined in accordance with generally accepted accounting principles (but
excluding intangibles).

Undepreciated Real Estate Assets as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Trust and its
Subsidiaries on such date, before depreciation and amortization determined on
a consolidated basis in accordance with generally accepted accounting
principles.

EVENTS OF DEFAULT, NOTICE AND WAIVER

The Indenture provides that the following events are Events of Default
with respect to the Notes: (a) default for 30 days in the payment of any
installment of interest on any Note; (b) default in the payment of the
principal of (or Make-Whole Amount, if any, on) any Note at its Maturity; (c)
default in the performance of any other covenant of the Trust contained in the
Indenture, continued for 60 days after written notice as provided in the
Indenture; (d) default under any 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 Trust (or by any
Subsidiary, the repayment of which the Trust has guaranteed or for which the
Trust is directly responsible or liable as obligor or guarantor) having an
aggregate principal amount outstanding of at least $10,000,000, 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
acceleration having been rescinded or annulled within 10 days after written
notice as provided in the Indenture; (e) the entry by a court of competent
jurisdiction of one or more judgments, orders or decrees against the Trust or
any Subsidiary in an aggregate amount (excluding amounts fully 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 fully covered by insurance) in excess of $10,000,000 for a
period of 30 consecutive days; and (f) certain events of bankruptcy,
insolvency or reorganization, or court appointment of a receiver, liquidator
or trustee of the Trust or any Significant Subsidiary or for all or
substantially all of either of its property (Section 501). The term
Significant Subsidiary means each significant subsidiary (as defined in
Regulation S-X promulgated under the Securities Act) of the Trust.

If an Event of Default under the Indenture occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Notes may declare the principal amount of, and Make-
Whole Amount, if any, on, all of the Notes to be due and payable immediately
by written notice thereof to the Trust (and to the Trustee if given by the
Holders). However, at any time after such declaration of acceleration has been
made, but before a judgment or decree for payment of the money due has been
obtained by the Trustee, the Holders of not less than a majority in principal

amount of the Outstanding Notes may rescind and annul such declaration and its
consequences if (a) the Trust shall have deposited with the Trustee all
required payments of the principal of (and Make-Whole Amount, if any) and
interest on the Notes, plus certain fees, expenses, disbursements and advances
of the Trustee and (b) all Events of Default, other than the nonpayment of
accelerated principal (or specified portion thereof and the Make-Whole Amount,
if any) or interest, with respect to the Notes have been cured or waived as
provided in the Indenture (Section 502). The Indenture also provides that the
Holders of not less than a majority in principal amount of the Outstanding
Notes may waive any past default with respect to such series and its
consequences, except a default (x) in the payment of the principal of (or
Make-Whole Amount, if any) or interest on any Note or (y) in respect of a
covenant or provision contained in the Indenture that cannot be modified or
amended without the consent of the Holder of each Outstanding Note (Section
513).

The Trustee is required to give notice to the Holders of the Notes within
90 days of a default under the Indenture; provided, however, that the Trustee
may withhold such notice (except a default in the payment of the principal of
(or Make-Whole Amount, if any) or interest on any Note if the Responsible
Officers of the Trustee consider such withholding to be in the interest of
such Holders (Section 601).

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

MODIFICATION OF THE INDENTURE

Modifications and amendments of the Indenture may be made with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Notes which are affected by such modification or amendment;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each such Note affected thereby, (a) change the
Stated Maturity of the principal of (or Make-Whole Amount, if any), or any
installment of principal of or interest on, any such Note; (b) reduce the
principal amount of, or the rate or amount of interest on, or any Make-Whole
Amount payable on redemption of, any such Note; (c) change the Place of
Payment, or the coin or currency, for payment of principal of (and Make-Whole
Amount, if any), or interest on, any such Note; (d) impair the right to
institute suit for the enforcement of any payment on or with respect to any
such Note; (e) reduce the percentage of Outstanding Notes necessary to modify
or amend the Indenture, to waive compliance with certain provisions thereof or
certain defaults and consequences thereunder or to reduce the quorum or voting

requirements set forth in the Indenture; or (f) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Note (Section
902).

The Holders of not less than a majority in principal amount of
Outstanding Notes have the right to waive compliance by the Trust with certain
covenants in the Indenture (Section 1012).

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

The Trust may discharge certain obligations to Holders of Notes that have
not already been delivered to the Trustee for cancellation and that either
have become due and payable or will become due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
Trustee, in trust, funds in an amount sufficient to pay the entire
indebtedness on such Notes in respect of principal (and Make-Whole Amount, if
any) and interest to the date of such deposit (if such Notes have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be
(Section 401).

The Indenture provides that the Trust may elect either (a) to defease and
be discharged from any and all obligations with respect to the Notes (except
for the obligations to register the transfer or exchange of the Notes, to
replace temporary or mutilated, destroyed, lost or stolen Notes, to maintain
an office or agency in respect of the Notes and to hold moneys for payment in
trust (defeasance) (Section 1402) or (b) to be released from its obligations
with respect to the Notes under provisions of the Indenture described under
Certain Covenants, and its obligations with respect to any other covenant, and
any omission to comply with such obligations shall not constitute a default or
an Event or Default with respect to the Notes (covenant defeasance) (Section
1403), in either case upon the irrevocable deposit by the Trust with the
Trustee, in trust, of cash or Government Obligations (as defined below), or
both, which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and Make-Whole Amount, if any) and interest on the Notes on
the scheduled due dates therefor.

Such a trust may only be established if, among other things, the Trust
has delivered to the Trustee an Opinion of Counsel (as specified in the
Indenture) to the effect that the Holders of the Notes will not recognize
income, gain or loss for United States federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to United States
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance
had not occurred, and such Opinion of Counsel, in the case of defeasance, must
refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable United States federal income tax laws occurring after the
date of the Indenture (Section 1404).

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Government Obligations means securities which are (i) direct obligations
of the United States of America 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 the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian
with respect to any such Government Obligation or a specific payment of
interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the
Government Obligation evidenced by such depository receipt (Section 101).

In the event the Trust effects covenant defeasance and the Notes are
declared due and payable because of the occurrence of any Event of Default
other than an Event of Default with respect to provisions of the Indenture
which as a result of such covenant defeasance would no longer be applicable to
the Notes, the cash and Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Notes at the time of their Stated
Maturity but may not be sufficient to pay amounts due on the Notes at the time
of the acceleration resulting from such Event of Default. However, the Trust
would remain liable to make payment of such amounts due at the time of
acceleration.

BOOK-ENTRY SYSTEM

The Notes will be issued in the form of a global note (the Global Note)
which will be deposited with, or on behalf of DTC, as Depository, and
registered in the name of DTC's Cede & Co. nominee. The Global Note will be
issued in fully registered form and may be issued in either temporary or
definitive form. Unless and until it is exchanged in whole or in part for the
individual Notes represented thereby under the circumstances described below,
the Global Note may not be transferred except as a whole by DTC to a nominee
of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or
any nominee of DTC to a successor Depository or any nominee of such successor.

Upon the issuance of the Global Note, the Depository or its nominee will
credit on its book-entry registration and transfer system the respective
principal amounts of the individual Notes represented by the Global Note to
the accounts of persons that have accounts with such Depository
(Participants). Such accounts shall be designated by the Underwriter (as
defined below) or dealers with respect to the Notes. Ownership of beneficial
interests in the Global Note will be limited to Participants or persons that
may hold interests through Participants. Ownership of beneficial interests in
the Global Note will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depository or its nominee
(with respect to beneficial interests of Participants) and records of
Participants (with respect to beneficial interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such

limits and laws may impair the ability to own, pledge or transfer beneficial
interest in the Global Note.

So long as the Depository or its nominee is the registered owner of the
Global Note, such Depository or such nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by the Global
Note for all purposes under the Indenture. Except as described below, owners
of beneficial interest in the Global Note will not be entitled to have any of
the individual Notes represented by the Global Note registered in their names,
will not receive or be entitled to receive physical delivery of any such Notes
in definitive form and will not be considered the owners or holders thereof
under the Indenture.

Payments of principal of, any Make-Whole Amount and any interest on
individual Notes represented by the Global Note registered in the name of a
Depository or its nominee will be made to the Depository or its nominee, as
the case may be, as the registered owner of the Global Note. None of the
Trust, the Trustee, any Paying Agent or the Note Registrar for the Notes will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Note or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.

The Trust expects that the Depository or its nominee, upon receipt of any
payment of principal, Make-Whole Amount or interest in respect of the Global
Note will immediately credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of the Global Note as shown

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on the records of such Depository or its nominee. The Trust also expects that
payments by Participants to owners of beneficial interests in the Global Note
held through such Participants will be governed by standing instructions and
customary practices, as is the case with securities held for the amount of
customers in bearer form or registered in street name. Such payments will be
the responsibility of such Participants.

If the Depository is at any time unwilling, unable or ineligible to
continue as depository and a successor depository is not appointed by the
Trust within 90 days, the Trust will issue individual Notes in exchange for
the Global Note. Individual Notes so issued will be issued in denominations of
$1,000 and integral multiples thereof.

The following is based on information furnished by DTC:

DTC is a limited-purpose trust company organized under the New York
Banking Law, a banking organization within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a clearing corporation within the
meaning of the New York Uniform Commercial Code, and a clearing agency
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the settlement among Participants of

securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct Participants include securities brokers and dealers
(including the Underwriter), banks, trust companies, clearing corporations,
and certain other organizations (Direct Participants). DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either
directly or indirectly. The rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission.

SAME-DAY SETTLEMENT AND PAYMENT

Settlement for the Notes will be made by the Underwriter in immediately
available funds. All payments of principal and interest in respect of the
Notes will be made by the Trust in immediately available funds.

Secondary trading in long term notes and debentures of corporate issuers
is generally settled in clearing house or next-day funds. In contrast, the
Notes will trade in DTC's Same-Day Funds Settlement System until maturity or
until individual Notes are issued, and secondary market trading activity in
the Notes will therefore be required by DTC to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Notes.

TRUSTEE

NationsBank of Virginia, N.A., participates in the Trust's revolving
credit and line of credit facilities and its affiliates from time to time
perform other services for the Trust in the normal course of business.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting
Agreement, the Trust has agreed to sell to Goldman, Sachs & Co. (Goldman Sachs
or the Underwriter), and Goldman Sachs have agreed to purchase, the entire
principal amount of the Notes.

Under the terms and conditions of the Underwriting Agreement, Goldman
Sachs are committed to take and pay for all of the Notes, if any are taken.

Goldman Sachs propose to offer the Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus and in part to certain securities dealers at such price less a
concession of % of the principal amount of the Notes. Goldman Sachs may
allow, and such dealers may reallow, a concession not to exceed % of the
principal amount of the Notes to certain brokers and dealers. After the Notes
are released for sale to the public, the offering price and other selling
terms may from time to time be varied by Goldman Sachs.

The Notes are a new issue of securities with no established trading
market. The Trust has been advised by Goldman Sachs that they intend to make a

market in the Notes but are not obligated to do so and may discontinue

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market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.

The Trust has agreed to indemnify Goldman Sachs against certain
liabilities, including liabilities under the Securities Act of 1933.

LEGAL MATTERS

The legality of the Notes offered hereby is being passed upon for the
Trust by Hunton & Williams, Richmond, Virginia. Certain legal matters in
connection with the offering of the Notes will be passed upon for Goldman
Sachs by Brown & Wood, New York, New York.

EXPERTS

The financial statements of the Trust at December 31, 1992 and 1993 and
for each of the three years in the period ended December 31, 1993 appearing in
this Prospectus have been audited by Ernst & Young, independent auditors, as
set forth in their report appearing elsewhere herein and are included herein
in reliance upon such report given upon the authority of such firm as experts
in accounting and auditing.

The statement of rental operations of Riverwind Apartments, included in
the Trust's Current Report on Form 8-K, dated December 31, 1993, incorporated
by reference herein, has been incorporated herein in reliance upon the report
dated February 14, 1994, of L. P. Martin & Company, independent auditors, also
incorporated by reference herein, and upon the authority of such firm as
experts in accounting and auditing. The statement of rental operations of The
Village at Old Tampa Bay Apartments, included in the Trust's Current Report on
Form 8-K, dated December 22, 1993, incorporated by reference herein, has been
incorporated herein in reliance upon the report dated February 14, 1994 of
Ahearn, Jasco & Company, independent auditors, also incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing. The statement of rental operations of Peppertree Apartments,
included in the Trust's Current Report on Form 8-K, dated December 22, 1993,
incorporated by reference herein, has been incorporated herein in reliance
upon the report dated January 25, 1994, of L. P. Martin & Company, independent
auditors, also incorporated by reference herein, and upon the authority of
such firm as experts in accounting and auditing. The statement of rental
operations of Beechwood Apartments, included in the Trust's Current Report on
Form 8-K, dated December 22, 1993, incorporated by reference herein, has been
incorporated herein in reliance upon the report dated January 27, 1994, of L.
P. Martin & Company, independent auditors, also incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing. The statement of rental operations of The Lakes Apartments, included
in the Trust's Current Report on Form 8-K, dated September 28, 1993,
incorporated by reference herein, has been incorporated herein in reliance
upon the report dated October 19, 1993, of L. P. Martin & Company, independent
auditors, also incorporated by reference herein, and upon the authority of

such firm as experts in accounting and auditing. The statement of rental
operations of Lake Washington Downs Apartments, included in the Trust's
Current Report on Form 8-K, dated September 28, 1993, incorporated by
reference herein, has been incorporated herein in reliance upon the report
dated November 3, 1993, of L. P. Martin & Company, independent auditors, also
incorporated by reference herein, and upon the authority of such firm as
experts in accounting and auditing. The statement of rental operations of
Heatherwood Apartments, included in the Trust's Current Report on Form 8-K,
dated September 28, 1993, incorporated by reference herein, has been
incorporated herein in reliance upon the report dated October 29, 1993, of L.
P. Martin & Company, independent auditors, also incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing. The combined historical summary of gross income and direct operating
expenses of Orange Orlando and Foxcroft Properties, included in the Trust's
Current Report on Form 8-K, dated May 20, 1993, incorporated by reference
herein, has been incorporated herein in reliance upon the report dated May 18,
1993, of Ernst & Young, independent auditors, also incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing. The statement of rental operations of Dover Village Apartments,
included in the Trust's Current Report on Form 8-K, dated May 20, 1993,
incorporated by reference herein, has been incorporated herein in reliance
upon the report dated July 9, 1993, of L. P. Martin & Company, independent
auditors, also incorporated by reference herein, and upon the authority of
such firm as experts in accounting and auditing. The statement of rental
operations of St. Andrews Commons Apartments, included in the Trust's Current
Report on Form 8-K, dated May 20, 1993, incorporated by reference herein, has
been incorporated herein in reliance upon the report dated July 8, 1993, of L.
P. Martin & Company, independent auditors, also incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing.

24
<PAGE>
PAGE 1

INDEX TO FINANCIAL STATEMENTS

PAGE

Report of Ernst & Young, Independent Auditors. ..................... F-2

Balance Sheets -- December 31, 1992 and 1993........................ F-3

Statements of Operations -- Years ended
December 31, 1991, 1992 and 1993... .......................... F-4

Statements of Cash Flows -- Years ended
December 31, 1991, 1992 and 1993. .............................. F-5

Statements of Shareholders' Equity --
Years Ended December 31, 1991, 1992 and 1993....................... F-6

Notes to Financial Statements -- December 31, 1993.................. F-7

F-1
<PAGE>
PAGE 2

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
United Dominion Realty Trust, Inc.

We have audited the accompanying balance sheets of United Dominion Realty
Trust, Inc. as of December 31, 1993 and 1992, and the related statements of
operations, shareholders' equity, and cash flows for each of the three years
in the period ended December 31, 1993. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements 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 United Dominion Realty Trust,
Inc. at December 31, 1993 and 1992, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1993,
in conformity with generally accepted accounting principles.

Richmond, Virginia
March 3, 1994

F-2
<PAGE>
PAGE 3

UNITED DOMINION REALTY TRUST, INC.

BALANCE SHEETS

DECEMBER 31, 1992 AND 1993

In thousands, except share data

<TABLE>

1992 1993
---- ----
<S> <C> <C>
ASSETS
Real estate owned (Notes 1 and 2):
Apartments........................................................................................ $ 374,712 $ 503,226

Shopping centers.................................................................................. 74,414 74,404
Office and industrial buildings................................................................... 4,989 4,583
----------- -----------
454,115 582,213
Less accumulated depreciation..................................................................... 71,806 91,444
----------- -----------
382,309 490,769
Cash and cash equivalents........................................................................... 1,105 5,773
Other assets........................................................................................ 6,951 9,298
----------- -----------
$ 390,365 $ 505,840
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable (Notes 2, 3 and 5)........................................................... $ 76,516 $ 72,862
Notes payable (Notes 4 and 5)....................................................................... 104,605 156,558
Accounts payable, accrued expenses and other liabilities............................................ 3,620 6,070
Tenants' deposits and rents paid in advance......................................................... 2,124 3,099
Distributions payable to shareholders............................................................... 5,823 7,288
----------- -----------
192,688 245,877
Shareholders' equity (Notes 9 and 10):
Common stock, $1 par value; 60,000,000 shares authorized
41,653,097 shares issued and outstanding (35,284,718 in 1992).................................. 35,285 41,653
Additional paid-in capital........................................................................ 227,935 302,486
Notes receivable from officer shareholders........................................................ (2,542) (4,384)
Distributions in excess of net income............................................................. (63,001) (79,792)
----------- -----------
Total shareholders' equity..................................................................... 197,677 259,963
----------- -----------
$ 390,365 $ 505,840
=========== ===========

See accompanying notes.
</TABLE>
F-3
<PAGE>
PAGE 4

UNITED DOMINION REALTY TRUST, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993

In thousands, except per share data
<TABLE>
1991 1992 1993
---- ---- ----
<S> <C> <C> <C>
INCOME
Property operations:
Rental income........................................................................... $51,250 $ 63,202 $ 89,084
Property expenses:
Utilities............................................................................ 4,262 5,367 7,838

Repairs and maintenance.............................................................. 6,966 9,635 13,950
Real estate taxes.................................................................... 3,471 4,147 5,777
Property management.................................................................. 1,915 2,064 2,782
Other operating expenses............................................................. 4,342 5,290 7,512
Depreciation of real estate owned.................................................... 12,845 15,732 19,764
------- ---------- ----------
33,801 42,235 57,623
------- ---------- ----------
Income from property operations........................................................... 17,449 20,967 31,461
Interest and other income................................................................. 79 1,402 708
------- ---------- ----------
17,528 22,369 32,169

EXPENSES
Interest................................................................................ 11,859 11,697 16,938
General and administrative.............................................................. 1,872 2,231 3,349
Other depreciation and amortization..................................................... 219 300 596
------- ---------- ----------
13,950 14,228 20,883
------- ---------- ----------
Income before gains (losses) on investments and extraordinary item........................ 3,578 8,141 11,286
Gains (losses) on sales of investments (Note 7)........................................... 26 -- (89)
Provision for possible investment losses (Note 2)......................................... -- (1,564) --
------- ---------- ----------
Income before extraordinary item.......................................................... 3,604 6,577 11,197
Extraordinary item -- early extinguishment of debt (Note 8)............................... (35) (242) --
------- ---------- ----------
Net income................................................................................ $ 3,569 $ 6,335 $ 11,197
======= ========== ==========
Net income per share:
Before extraordinary item............................................................... $ .14 $ .19 $ .29
Extraordinary item...................................................................... -- (.01) --
------- ---------- ----------
$ .14 $ .18 $ .29
======= ========== ==========
Weighted average number of shares outstanding............................................. 24,642 34,604 38,202

See accompanying notes.
</TABLE>
F-4
<PAGE>
PAGE 5

UNITED DOMINION REALTY TRUST, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993

In thousands
<TABLE>
1991 1992 1993
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES

Net Income........................................................................ $ 3,569 $ 6,335 $ 11,197
Adjustments to reconcile net income to net cash provided by operating activities:
(Gains) losses on sales of investments......................................... (26) -- 89
Provision for possible investment losses....................................... -- 1,564 --
Extraordinary item............................................................. 35 242 --
Depreciation and amortization.................................................. 13,064 16,032 20,360
Imputed interest............................................................... 516 12 12
Changes in operating assets and liabilities:
Increase in accounts payable, tenant deposits and other liabilities.......... 371 667 3,413
(Increase) decrease in rents and other receivables........................... (223) 54 127
(Increase) decrease in prepaid expenses and other assets..................... (692) 234 (570)
------------- ---------- ----------
Net cash provided by operating activities........................................... 16,614 25,140 34,628

INVESTING ACTIVITIES
Acquisitions of real estate, net of debt assumed.................................. (50,723) (68,729) (117,886)
Capital expenditures.............................................................. (16,624) (13,161) (11,060)
Net proceeds from sales of investments............................................ 26 -- 69
Purchase of mortgage note receivable.............................................. -- -- (1,907)
Other............................................................................. -- (15) 31
------------- ---------- ----------
Net cash used in investing activities............................................... (67,321) (81,905) (130,753)

FINANCING ACTIVITIES
Net proceeds from issuance of mortgages and notes payable......................... 60,657 31,208 65,800
Net proceeds from issuance of shares.............................................. 15,375 78,461 79,077
Net short-term bank borrowings (repayments)....................................... 12,100 (10,400) 150
Mortgage financing proceeds released from trust................................... 1,641 1,394 --
Payments on notes and non-scheduled mortgage principal payments................... (22,596) (21,292) (16,905)
Cash distributions paid to shareholders........................................... (15,122) (21,791) (26,523)
Scheduled mortgage principal payments............................................. (1,094) (767) (806)
Other............................................................................. (146) (36) --
------------- ---------- ----------
Net cash provided by financing activities........................................... 50,815 56,777 100,793
------------- ---------- ----------
Net increase in cash and cash equivalents........................................... 108 12 4,668
Cash and cash equivalents, beginning of year........................................ 985 1,093 1,105
------------- ---------- ----------
Cash and cash equivalents, end of year.............................................. $ 1,093 $ 1,105 $ 5,773
============= =========== ===========
See accompanying notes.

F-5
<PAGE>
PAGE 6

UNITED DOMINION REALTY TRUST, INC.

STATEMENTS OF SHAREHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993

In thousands, except per share data

NOTES

COMMON STOCK $1 PAR ADDITIONAL RECEIVABLE DISTRIBUTIONS TOTAL
NUMBER VALUE PAID-IN FROM OFFICER IN EXCESS OF SHAREHOLDERS'
OF SHARES AMOUNT CAPITAL SHAREHOLDERS NET INCOME EQUITY
----------- ---------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1990, as adjusted
(Note 9)............................... 23,176,982 $ 23,177 $ 128,739 $ -- $ (33,762) $ 118,154
Shares issued in private placement....... 1,800,000 1,800 13,575 -- -- 15,375
Conversions of subordinated debentures... 1,910,726 1,911 13,015 -- -- 14,926
Shares purchased by officers............. 245,000 245 2,037 (2,282) -- --
Net income for the year.................. -- -- -- -- 3,569 3,569
Distributions declared ($.63 per
share)................................. -- -- -- -- (15,872) (15,872)
---------- ---------- ----------- ------------ ---------- -----------
Balance at December 31, 1991............. 27,132,708 27,133 157,366 (2,282) (46,065) 136,152

Shares issued in public offering......... 8,050,000 8,050 69,755 -- -- 77,805
Exercise of share options................ 58,600 59 395 -- -- 454
Shares purchased by officers, net of
repayments............................. 25,000 25 235 (260) -- --
Shares issued through the dividend
reinvestment plan...................... 18,410 18 184 -- -- 202
Net income for the year.................. -- -- -- -- 6,335 6,335
Distributions declared ($.66 per
share)................................. -- -- -- -- (23,271) (23,271)
---------- ---------- ----------- ------------ ---------- -----------
Balance at December 31, 1992............. 35,284,718 35,285 227,935 (2,542) (63,001) 197,677

Shares issued in public offering......... 6,095,000 6,095 71,573 -- -- 77,668
Exercise of share options................ 98,900 99 741 -- -- 840
Shares purchased by officers, net of
repayments............................. 135,500 135 1,712 (1,842) 5
Shares issued through the dividend
reinvestment plan...................... 38,979 39 525 -- -- 564
Net income for the year.................. -- -- -- -- 11,197 11,197
Distributions declared ($.70 per share) -- -- -- -- (27,988) (27,988)
---------- ---------- ----------- ------------ ---------- -----------
Balance at December 31, 1993............. 41,653,097 $ 41,653 $ 302,486 $ (4,384) $ (79,792) $ 259,963
========== ========== =========== ============ ========== ===========
See accompanying notes.
</TABLE>

F-6
<PAGE>
PAGE 7

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 1993

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS United Dominion Realty Trust, Inc. (the Trust), a Virginia

corporation, is an equity investor in income producing real estate properties.

FEDERAL INCOME TAXES The Trust is operated as and annually elects to be
taxed as a real estate investment trust under the Internal Revenue Code of
1986, as amended (the Code). Generally, a real estate investment trust which
complies with the provisions of the Code and distributes at least 95% of its
taxable income to its shareholders does not pay federal income taxes on its
distributed income. Accordingly, no provision has been made for federal income
taxes.

CASH AND CASH EQUIVALENTS The Trust considers all highly liquid
investments with maturities of three months or less when purchased to be cash
equivalents.

REAL ESTATE Real estate investments are carried at the lower of cost or
estimated net realizable value. In determining estimated net realizable value,
consideration is given to many factors, such as income to be earned from the
investment, the cost to hold the property to the hypothetical time of sale,
the selling price a property would bring at such a time, the cost of improving
the property to the condition contemplated in determining the selling price,
the cost of disposing of the property and prevailing economic conditions
including availability of credit.

Repairs and maintenance costs are expensed as incurred while significant
improvements, renovations, and replacements are capitalized. Certain costs,
principally payroll, directly related to real estate acquisitions and
redevelopment, are capitalized. Depreciation is computed on a straight-line
basis over the estimated useful lives of the related assets which range from
25 to 40 years for properties, 10 to 35 years for major improvements, and 3 to
15 years for fixtures, equipment and other assets. Improvements for tenants
are amortized over the lives of the related leases.

INTEREST Interest is capitalized on accumulated expenditures relating to
the acquisition and development of certain qualifying properties. During 1991,
1992 and 1993, total interest paid by the Trust was $12,748,000, $11,641,000,
and $14,927,000, respectively, which includes $291,000 and $73,000, which was
capitalized in 1991 and 1992, respectively. No interest was capitalized in
1993. The Trust has entered into certain interest rate swap agreements with
the objective of managing its interest expense and reducing its exposure to
interest rate fluctuations. These agreements generally involve the exchange of
fixed and variable rate interest payment obligations without the exchange of
the underlying principal amounts. Net amounts paid or received under these
agreements are reflected as adjustments to interest expense. During 1993,
interest rate swap contracts with a notional amount of $10,000,000 matured.
The Trust did not terminate or enter into any new interest rate swap contracts
during 1993. Interest rate swap contracts did not have a material impact on
interest expense or results of operations.

INCOME PER SHARE Primary net income per share is calculated using the
weighted average number of shares outstanding during each year. Options
outstanding are not included since their inclusion would not be materially
dilutive. For 1991, the assumed conversion of debentures as of the beginning
of that year would have been anti-dilutive.

POSTEMPLOYMENT BENEFITS In November, 1992, SFAS No. 112, Employers'

Accounting for Postemployment Benefits, was issued establishing accounting
standards for employers who provide benefits to former or inactive employees
after employment but before retirement. Employers are required to recognize
the obligation to provide such benefits for fiscal years beginning after
December 15, 1993. The adoption of SFAS No. 112 will not have a material
impact on the Trust's financial position or results of operations.

F-7
<PAGE>
PAGE 8

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. REAL ESTATE OWNED

The following is a summary of real estate owned at December 31, 1993 (in
thousands, except number of properties):

<TABLE>
INITIAL
NUMBER OF ACQUISITION ACCUMULATED
PROPERTIES COST COST DEPRECIATION ENCUMBRANCES(A)
---------- ----------- ---- ------------ ---------------
<S> <C> <C> <C> <C> <C>
APARTMENTS
Virginia................................... 23 $ 119,097 $ 147,765 $ 34,774 $ 21,552
North Carolina............................. 23 116,658 146,750 27,182 17,524
South Carolina............................. 10 50,817 62,888 5,082 9,200
Florida.................................... 8 56,952 59,694 972 --
Georgia.................................... 4 24,942 35,150 6,060 2,082
Maryland................................... 3 28,480 29,332 866 13,800
Tennessee.................................. 3 21,386 21,646 403 --

SHOPPING CENTERS
Virginia................................... 10 28,076 48,232 10,557 8,725
South Carolina............................. 2 12,565 14,628 2,019 --
North Carolina............................. 3 8,198 11,545 2,249 --

OFFICE AND INDUSTRIAL BUILDINGS
Tennessee.................................. 1 1,176 2,438 578 --
Virginia................................... 3 1,607 2,145 702 --
-- ----------- ----------- ----------- ----------
93 $ 469,954 $ 582,213 $ 91,444 $ 72,883
== =========== =========== =========== ==========
</TABLE>
(a) Exclusive of discounts aggregating $21.

The following is a reconciliation of the carrying amount of real estate
owned (in thousands):
<TABLE>
1991 1992 1993
---- ---- ----
<S> <C> <C> <C>

Balance at January 1......................... $ 294,205 $ 361,503 $ 454,115
Real estate purchased*....................... 50,898 81,788 118,265
Improvements................................. 16,400 12,388 10,380
Real estate sold............................. -- -- (547)
Provision for possible investment losses..... -- (1,564) --
----------- ----------- -----------
Balance at December 31....................... $ 361,503 $ 454,115 $ 582,213
=========== =========== ===========
</TABLE>

* In connection with the purchase of certain properties in 1992, the Trust
assumed approximately $13.8 million of mortgage debt encumbering the
properties acquired.

The following is a reconciliation of accumulated depreciation (in
thousands):

1991 1992 1993
---------- ---------- ----------
Balance at January 1..................... $ 43,229 $ 56,074 $ 71,806
Depreciation expense for the year........ 12,845 15,732 19,764
Real estate sold......................... -- -- (126)
---------- ---------- ----------
Balance at December 31................... $ 56,074 $ 71,806 $ 91,444
========== ========== ==========
F-8
<PAGE>
PAGE 9

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. REAL ESTATE OWNED -- Continued
During 1992, the Trust established an allowance for possible investment
losses in the amount of $1,564,000 based upon management's estimate of net
realizable value as compared to the carrying value of each investment.

The aggregate cost of real estate owned for federal income tax purposes
was approximately $435 million at December 31, 1992 and $563 million at
December 31, 1993.

The Trust's properties are leased to others under operating leases.
Certain shopping center leases provide for additional rents based on a
percentage of the tenant's revenues above a predetermined level. Such
percentage rents amounted to $617,000 in 1991, $524,000 in 1992 and $525,000
in 1993. In addition, substantially all commercial property leases provide
that tenants share certain operating costs such as real estate taxes,
insurance, and maintenance by reimbursement to the Trust. Such reimbursements
amounted to $971,000 in 1991, $895,000 in 1992 and $936,000 in 1993. The Trust
has no material net lease arrangements.

Minimum annual fixed rentals to be received, principally from commercial
property tenants, under all noncancelable leases greater than one year
subsequent to December 31, 1993 were as follows (in thousands): 1994 --

$7,791, 1995 -- $6,560, 1996 -- $5,476, 1997 -- $4,355, 1998 -- $3,452,
thereafter -- $17,509.

3. MORTGAGE NOTES PAYABLE

At December 31, 1993, certain of the Trust's properties were encumbered
by one or more mortgage notes payable which are due in installments over
various terms extending to 2023 with interest rates ranging from 5.91% to
12.5% (weighted average rate of 7.62% at December 31, 1993). While each note
is secured by the particular property mortgaged, certain notes extend
liability to the Trust if the security is not sufficient to satisfy the
mortgage note payable.

Principal payments due on mortgage notes payable during the five years
subsequent to December 31, 1993 are as follows: 1994 -- $3,123,300,
1995 -- $3,728,745, 1996 -- $1,193,114, 1997 -- $5,928,606, 1998 --
$1,586,495. These payments include special principal curtailments and balloon
payments of $2,070,000 in 1994, $2,441,000 in 1995 and $4,650,000 in 1997.

F-9
<PAGE>
PAGE 10

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. NOTES PAYABLE

A summary of notes payable at December 31, 1992 and 1993 is as follows
(in thousands):

<TABLE>

1992 1993
---- ----
<S> <C> <C>
Commercial Banks
Borrowings outstanding under revolving credit facilities.......................................... $ 22,000 $ 28,650
Borrowings outstanding under bank lines of credit................................................. 6,500 --
Variable rate note due November, 1994 (a)......................................................... 10,000 10,000

Insurance Companies -- Senior Unsecured
Notes
7.98% due March, 1997-2003 (b).................................................................... -- 52,000
9.57% due July, 1996.............................................................................. 35,000 35,000
7.89% due March, 1996............................................................................. 10,000 10,000
7.57% due March, 1995............................................................................. 10,000 10,000
8.72% due November, 1994-1998 (c)................................................................. 10,000 10,000

Other............................................................................................... 1,105 908
----------- -----------
$ 104,605 $ 156,558
=========== ===========
</TABLE>

(a) The note bears interest at three month LIBOR plus 100 basis points. In
November, 1991, the Trust entered into an interest rate swap agreement
with a bank which has the effect of fixing the interest rate at 7.57%.

(b) Payable in seven equal principal installments of $7.4 million.

Certain of the loan agreements contain covenants which require the Trust,
among other things, to maintain minimum tangible net worth, as defined, and to
maintain certain financial ratios.

In December 1992 the Trust entered into revolving credit agreements with
three commercial banks for a total of $40 million which was subsequently
increased to $45 million in July, 1993. These credit facilities currently
expire in June, 1994, but are renewable annually by mutual agreement between
the Trust and each bank. Borrowings bear interest from LIBOR + 5/8% to the
respective bank's prime rate, depending on the level of the Trust's debt, as
defined. At December 31, 1993, there were borrowings of $28.65 million under
these credit facilities.

At December 31, 1993, the Trust had lines of credit with three commercial
banks for a total of $16 million. At December 31, 1993, there were no
borrowings outstanding under these lines of credit. Each line is subject to
periodic bank review and requires the Trust to maintain a depository
relationship with the respective bank. Borrowings bear interest at or below
the respective bank's prime rate.

Information concerning short-term bank borrowings is summarized in the
table that follows (dollars in thousands):

<TABLE>

1991 1992 1993
---- ---- ----
<S> <C> <C> <C>
Total revolving credit facilities and lines of credit at December 31...................... $ 39,500 $ 51,000 $ 61,000
Borrowings outstanding at December 31..................................................... 38,900 28,500 28,650
Weighted average daily borrowings during the year......................................... 31,156 4,059 11,313
Maximum daily borrowings during the year.................................................. 44,920 38,900 43,200
Weighted average daily interest rate during the year...................................... 7.2% 5.4% 4.0%
</TABLE>

F-10
<PAGE>
PAGE 11

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair value of the Trust's financial

instruments at December 31, 1993 were as follows (in thousands):

<TABLE>

CARRYING AMOUNT FAIR VALUE
--------------- ----------
<S> <C> <C>
Cash and cash equivalents..................................................................... $ 5,773 $ 5,773
Mortgage notes payable........................................................................ 72,862 78,600
Notes payable................................................................................. 156,558 165,020
Interest rate swap agreements................................................................. -- (228)
</TABLE>

The following methods and assumptions were used by the Trust in
estimating the fair values set forth above.

Cash and cash equivalents The carrying amount reported in the balance
sheet for cash and cash equivalents approximates its fair value.

Notes payable and mortgage notes payable The carrying amounts of the
Trust's borrowings under its short term revolving credit agreements and lines
of credit approximate their fair value. The fair values of the Trust's fixed
rate term debt and fixed rate mortgage notes are estimated using discounted
cash flow analysis, based on the Trust's current incremental borrowing rates
for similar types of borrowing arrangements.

Interest rate swap agreements Fair value for the Trust's interest rate
swap agreements represents the estimated amount that the Trust would receive
or (pay) to terminate the swaps, taking into account current interest rates
and the credit worthiness of the swap counterparties.

6. INCOME TAXES

The differences between net income for financial reporting purposes and
taxable income before dividend deductions relate primarily to timing
differences, depreciation adjustments resulting from book-tax basis
differences of certain properties and the deferral for tax purposes of certain
gains on property sales. Since 1980, certain property dispositions have been
structured as like-kind exchanges pursuant to Section 1031 of the Code so
that, for tax purposes, recognition of a substantial portion of the related
gains has been deferred. Deferred income taxes associated with these deferred
gains have not been provided since the Trust intends to ultimately distribute
such gains as they are recognized for federal income tax purposes. The Trust
has approximately $628,000 of net operating loss carry forwards, expiring
through 1998, available to offset future REIT taxable income, if any.

For income tax purposes, distributions paid to shareholders consist of
ordinary income, capital gains, return of capital or a combination thereof.
For the three years ended December 31, 1993, distributions paid per share were
as follows:

1991 1992 1993
---- ---- ----
Ordinary income............................... $ .368 $ .418 $ .500

Capital gains................................. -- -- --
Return of capital............................. .257 .237 .200
--------- --------- ---------
$ .625 $ .655 $ .700

7. REALIZED GAINS (LOSSES) ON SALES OF INVESTMENTS

All realized gains (losses) on sales of investments are distributed to
shareholders if and when recognized for income tax purposes. Since 1980, gains
aggregating approximately $7.6 million have been deferred for income tax
purposes and are undistributed at December 31, 1993.

F-11
<PAGE>
PAGE 12

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. REALIZED GAINS (LOSSES) ON SALES OF INVESTMENTS -- Continued
The following is a summary of realized gains (losses) on sales of
investments for the three years ended December 31, 1993 (in thousands):

1991 1992 1993
---- ---- ----
Proceeds from sales of investments............... $ 26 $ -- $ 458
Carrying value of investments................. -- -- 547
------ ------ ------
Realized gains (losses) on sales of investments.. $ 26 $ -- $ (89)
====== ====== ======

8. EXTRAORDINARY ITEM -- EARLY EXTINGUISHMENT OF DEBT

During 1991 and 1992, the Trust repaid certain debt prior to maturity and
recognized extraordinary losses of $35,000 and $242,000 respectively. These
losses represent prepayment fees and, in certain cases, unamortized financing
costs relating to the debt retired.

9. COMMON STOCK

On April 2, 1993, the Trust's Board of Directors declared a two-for-one
split of the Trust's common stock, effective May 5, 1993 to shareholders of
record as of April 19, 1993. All share and per share information in the
financial statements have been adjusted to retroactively reflect the stock
split. Stock options, and all other agreements payable in shares of the
Trust's common stock were amended to provide for issuance of two shares of
common stock for every one share issuable prior to declaration of the stock
split. An amount equal to the par value of the common shares issued was
transferred from additional paid-in capital to the common stock account. This
transfer has been reflected in the statement of shareholders' equity at
December 31, 1990.

In July, 1993, the Trust completed a public offering of 6,095,000 shares
at $13.50 per share. Net proceeds of the offering after deducting underwriting

commissions and direct offering costs, aggregated approximately $78 million of
which approximately $35 million was used to curtail existing bank debt. The
remaining net proceeds were invested in short term money market instruments
and were used primarily for the acquisition of additional properties. Pro
forma net income per share for 1993, which assumes the issuance of 2,738,333
shares and the retirement of $35 million of debt at the beginning of the year
would have been $.29.

In January, 1992, the Trust completed a public offering of 8,050,000
shares at $10.25 per share. Net proceeds of the offering after deducting
underwriting commissions and direct offering costs, aggregated approximately
$78 million of which approximately $38 million was used to curtail then
existing bank debt and approximately $14.5 million was used to retire certain
mortgage debt. The remaining net proceeds were temporarily invested in short
term money market instruments and were used primarily for the acquisition of
additional properties. Pro forma net income per share for 1992, which assumes
the issuance of 5,433,692 shares and the retirement of $52.5 million of debt
at the beginning of the year, would have been $.21.

In May, 1991, the Trust completed a 1,800,000 share private placement of
common stock to a limited number of institutional investors at $8.875 per
share. Net proceeds of $15.4 million were used to retire then outstanding
short term bank debt. Pro forma net income per share for 1991, which assumes
the issuance of 3,710,726 shares, the conversion of $14.8 million of
subordinated debentures, and the retirement of $15.4 million of debt at the
beginning of the year, would have been $.22 per share.

In 1991, 1992 and 1993, the Trust entered into stock purchase agreements
whereby certain officers purchased common stock at the then current market
price. The Trust provides 100% financing for the purchase of the shares with
interest payable quarterly at rates escalating from 7% to 8 1/2%. The
underlying notes mature beginning in November, 1998. At December 31, 1993,
shares outstanding under stock purchase agreements aggregated 405,500. Shares
available for future issuance under this plan total 194,500.

F-12
<PAGE>
PAGE 13

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. COMMON STOCK -- Continued
During 1990, the Trust implemented a dividend reinvestment plan. Shares
in the amount of 942,611 are reserved for future issuance under this plan.

10. SHARE OPTIONS

In May, 1986, the shareholders of the Trust approved, and in 1989 and
1992 amended, the 1985 share option plan effective December 31, 1985, whereby
a maximum of 2,400,000 options could be granted, at the discretion of the
Board, to certain officers, directors and key employees of the Trust, through
1997. On December 14, 1993, the Board granted 67,100 incentive stock options
(ISOs) to key employees of the Trust at $13.63 per share which expire on or

before December 31, 1998.

Of the options outstanding at December, 1991, 1992, and 1993, 187,018
options, 603,436 options, and 438,380 options, respectively, were not then
exercisable under the provisions of the plan.

The plan generally provides, among other things, that options be granted
at exercise prices not lower than the market value of the shares on the date
of grant. The optionee generally has up to five years from the date on which
the options first become exercisable during which to exercise the options.
Activity in the Trust's share option plan during the three years ended
December 31, 1993 is summarized below (in thousands, except share and per
share amounts):

<TABLE>

SHARES OUTIONS OUTSTANDING
AVAILABLE -----------------------------------
FOR FUTURE PRICE PER AGGREGATE
OPTION GRANT SHARES SHARE VALUE
------------ ------ ---------- ---------
<S> <C> <C> <C> <C>
Balance, December 31, 1990...................... 499,000 301,000 $ 7.44-$9.06 $ 2,339
Options cancelled or expired.................... 45,000 (45,000) $ 8.57-$9.06 (403)
Options granted................................. (170,000) 170,000 $ 7.44-$9.19 1,492
--------- ------- ---------
Balance, December 31, 1991...................... 374,000 426,000 $ 7.44-$9.19 3,428
Authorization of additional options............. 1,600,000 -- -- --
Options granted................................. (615,000) 615,000 $ 11.56 7,111
Options exercised............................... -- (58,600) $ 7.44-$9.19 (458)
Options expired................................. 12,000 (12,000) $ 8.31-$9.06 (105)
--------- ------- ---------
Balance, December 31, 1992...................... 1,371,000 970,400 $ 7.44-$11.56 9,976
Options granted................................. (67,100) 67,100 $ 13.63 914
Options exercised............................... -- (98,900) $ 7.44-$11.56 (840)
Options expired................................. 4,000 (4,000) $ 9.09-$11.56 (55)
--------- ------- ---------
Balance, December 31, 1993...................... 1,307,900 934,600 $ 7.44-$13.63 $ 9,995
========= ======= =========
</TABLE> F-13

<PAGE>
PAGE 14

UNITED DOMINION REALTY TRUST, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of quarterly results of operations for 1992
and 1993 (in thousands, except per share data):

<TABLE>

FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
1992:
Rental income................................................................. $ 14,868 $ 15,171 $ 16,095 $ 17,067
Income from property operations............................................... 5,140 4,805 5,052 5,970
Income before extraordinary item.............................................. 1,962 1,758 1,891 966(a)
Net income.................................................................... 1,991 1,758 1,891 695(a)

Per share:
Income before extraordinary item............................................ $ .06 $ .05 $ .05 $ .03(a)
Net income.................................................................. .06 .05 .05 .02(a)

(a) Includes provision for possible investment losses of $1,564 ($.04 per
share)
</TABLE>

<TABLE>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
1993:
Rental income................................................................. $ 20,182 $ 21,736 $ 22,683 $ 24,483
Income from property operations............................................... 7,400 7,790 7,829 8,442
Income before extraordinary item.............................................. 2,589 2,250 2,933 3,425
Net income.................................................................... 2,589 2,250 2,933 3,425

Per share:
Income before extraordinary item............................................ $ .07 $ .06 $ .07 $ .08
Net income.................................................................. .07 .06 .07 .08
</TABLE>

12. SUBSEQUENT EVENTS

At December 31, 1993, the Trust had a commitment to purchase an apartment
complex for a cost of $14 million. Subsequent to December 31, 1993, the Trust
entered into additional contracts to purchase four apartment complexes for $39
million.

The Trust is in the process of preparing a Registration Statement for the
purpose of selling $75 million of Notes. The proceeds will be used to curtail
bank debt and fund acquisition of additional properties.

F-14
<PAGE>
PAGE 1

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN

THIS PROSPECTUS AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE TRUST
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE OF SUCH
INFORMATION.

TABLE OF CONTENTS

PAGE
Available Information............................ 2
Incorporation of Certain Documents by
Reference...................................... 2
Prospectus Summary............................... 3
The Trust........................................ 5
Recent Developments.............................. 5
Use of Proceeds.................................. 6
Capitalization................................... 6
Selected Financial Data.......................... 7
Management's Discussion and Analysis of Financial
Condition and Operations....................... 8
Business......................................... 11
Management....................................... 15
Description of Notes............................. 15
Underwriting..................................... 23
Legal Matters.................................... 24
Experts.......................................... 24
Index to Financial Statements.................... F-1

$75,000,000

UNITED DOMINION
REALTY TRUST

% NOTES DUE
MARCH 1, 2006

PROSPECTUS

GOLDMAN, SACHS & CO.
<PAGE>
PAGE 1

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses in connection with the offering are as follows:

Securities and Exchange Commission registration fee $ 25,862
Rating agency fees 75,000
Accounting fees and expenses 25,000
Blue Sky fees and expenses 15,000
Legal fees and expenses 30,000
Trustee's fees and expenses 5,000
Printing 20,000
Miscellaneous 4,138
-----------
TOTAL $ 200,000
===========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Directors and officers of the Trust may be indemnified against
liabilities, fines, penalties, and claims imposed upon or asserted against
them as provided in the Virginia Stock Corporation Act and the Articles of
Incorporation. Such indemnification covers all costs and expenses reasonably
incurred by a director or officer. The Board of Directors, by a majority vote
of a quorum of disinterested directors or, under certain circumstances,
independent counsel appointed by the Board of Directors, must determine that
the director or officer seeking indemnification was not guilty of willful
misconduct or a knowing violation of the criminal law. In addition, the
Virginia Stock Corporation Act and the Trust's Articles of Incorporation may
under certain circumstances eliminate the liability of directors and officers
in a shareholder or derivative proceeding.

If the person involved is not a director or officer of the Trust, the
Board of Directors may cause the Trust to indemnify to the same extent allowed
for directors and officers of the Trust such person who was or is a party to a
proceeding, by reason of the fact that he is or was an employee or agent of
the Trust, or is or was serving at the request of the Trust as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise.

ITEM 16. EXHIBITS

1- Form of Underwriting Agreement
4(d)(i)- Indenture dated as of March 1, 1994, between the Trust and
NationsBank of Virginia, N.A., as Trustee
4(d)(ii)- Form of Note
5 - Opinion of Hunton & Williams
12- Computation of ratios of earnings to fixed charges
23(i)- Consent of Hunton & Williams (included in Exhibit 5)
23(ii) Consent of Ernst & Young
23(iii)- Consent of L. P. Martin & Company
23(iv) Consent of Ahearn, Jasco & Company
24- Power of Attorney (located on the signature page of this
registration statement)
25- Statement of Eligibility and Qualification on Form T-1 of
NationsBank of Virginia, N.A., as the Trustee, under the
Trust Indenture Act of 1939

ITEM 17. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes that, for purposes of

determining any liability under the Securities Act of 1933, as amended (the
Securities Act), each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the Exchange Act) (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the

II-1
<PAGE>
PAGE 2

Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(b) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of the
registration statement in reliance upon Rule 430A and contained in the form of
propectus filed by the registrant pursuant to 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed part of the registration statement as of
the time it was declared effective.

(c) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at such time shall be deemed the
initial bona fide offering thereof.

(d) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions of the Virginia Code, the
Articles of Incorporation or By-laws of the registrant or resolutions of the
Board of Directors of the registrant adopted pursuant thereto, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

II-2
<PAGE>
PAGE 3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets

all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Richmond, Commonwealth of Virginia,
on March 7, 1994.

UNITED DOMINION REALTY TRUST, INC.

By: John P. McCann
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on March 7, 1994. Each of the undersigned officers and
directors of the registrant hereby constitutes John P. McCann and James
Dolphin, either of whom may act, his true and lawful attorneys-in-fact with
full power to sign for him and in his name in the capacities indicated below
and to file any and all amendments to the registration statement filed
herewith, making such changes in the registration statement as the registrant
deems appropriate, and generally to do all such things in his name and behalf
in his capacity as an officer and director to enable the registrant to comply
with the provisions of the Securities Act of 1933 and all requirements of the
Securities and Exchange Commission.

<TABLE>
SIGNATURE TITLE AND CAPACITY
<S> <C>
John P. McCann President, Chief Executive Officer (Principal Executive Officer)
and Director

James Dolphin Senior Vice President, Chief Financial Officer (Principal
Financial and Accounting Officer) and Director

Robert P. Buford Director

Barry M. Kornblau Director

C. Harmon Williams, Jr. Director
</TABLE>

II-3
<PAGE>
PAGE 4

EXHIBIT INDEX

EXHIBIT DOCUMENT

1- Form of Underwriting Agreement
4(d)(i)- Indenture dated as of March 1, 1994, between the
Trust and NationsBank of Virginia, N.A., as Trustee
4(d)(ii) Form of Note
5 - Opinion of Hunton & Williams
12- Computation of ratios of earnings to fixed charges

23(i)- Consent of Hunton & Williams (included in Exhibit 5)
23(ii)- Consent of Ernst & Young
23(iii)- Consent of L. P. Martin & Company
23(iv)- Consent of Ahearn, Jasco & Company
24- Power of Attorney (located on the signature page of this
registration statement)
25- Statement of Eligibility and Qualification on Form T-1 of
NationsBank of Virginia, N.A., as the Trustee, under the
Trust Indenture Act of 1939

<PAGE>

Draft: 3/2/94

UNITED DOMINION REALTY TRUST, INC.

___% Notes Due ________

Underwriting Agreement

Goldman, Sachs & Co.
85 Broad Street March __, 1994
New York, New York 10004

Dear Sirs:

United Dominion Realty Trust, Inc., a Virginia corporation
(the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to you an aggregate of
$75,000,000 principal amount of the Notes specified above (the
"Securities").

1. The Company represents and warrants to, and agrees
with, you that:

(a) A registration statement in respect of the
Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and
any post-effective amendment thereto, each in the form heretofore
delivered to you, have been declared effective by the Commission
in such form; no other document with respect to such registration
statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order
suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been initiated
or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the

Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended
(the "Act"), being hereinafter called a "Preliminary Prospectus";
the various parts of such registration statement, including all
exhibits thereto but excluding Form T-1 and including (i) the
information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the registration statement at
the time it was declared effective and (ii) the documents
incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration
statement became effective, each as amended at the time such part
of the registration statement became effective, being hereinafter
called the "Registration Statement"; such final prospectus, in
the form first filed pursuant to Rule 424(b) under the Act, being
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer
to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Registration Statement that is incorporated by
reference in the Registration Statement);

(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by you expressly for use therein;

(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue

statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company by you expressly
for use therein;

(d) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company by you expressly
for use therein;

(e) Neither the Company nor its subsidiary has
sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in
the capital stock or long-term debt of the Company or its
subsidiary or any material adverse change, or any development
involving a prospective material adverse change, in or affecting
the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and
its subsidiary, otherwise than as set forth or contemplated in
the Prospectus;

(f) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with full power and authority to own,

lease and operate its properties and conduct its business as
described in the Prospectus; and the Company is duly qualified to
transact business in all jurisdictions in which the conduct of
its business requires such qualification except where the failure
to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company;

(g) The Company has one subsidiary, The Commons of
Columbia, Inc., a limited purpose corporation, which has been
duly organized and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Virginia; all of
the issued and outstanding capital stock of such subsidiary has
been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity;

(h) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;

(i) The Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement, will have been
duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the indenture to be dated as
of March 1, 1994 (the "Indenture") between the Company and
________________, as Trustee (the "Trustee"), under which they
are to be issued, which will be substantially in the form filed
as an exhibit to the Registration Statement; the Indenture has
been duly authorized and duly qualified under the Trust Indenture
Act and, when executed and delivered by the Company and the
Trustee, the Indenture will constitute a valid and legally
binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles; and the Securities and the Indenture will conform to
the descriptions thereof in the Prospectus;

(j) The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture and this Agreement and the consummation
of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or its subsidiary is
a party or by which the Company or its subsidiary is bound or to
which any of the property or assets of the Company or its
subsidiary is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation
or By-laws of the Company or any statute or any order, rule or

regulation of any court or governmental agency or body having
jurisdiction over the Company or its subsidiary or any of their
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture
except the registration under the Act of the Securities, such as
have been obtained under the Trust Indenture Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Securities by you;

(k) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which the
Company or its subsidiary is a party or of which any property of
the Company or its subsidiary is the subject which, if determined
adversely to the Company or its subsidiary, would individually or
in the aggregate have a material adverse effect on the
consolidated financial position, shareholders' equity or results
of operations of the Company and its subsidiary; and, to the best
of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;

(l) The financial statements of the Company together
with related notes and schedules as set forth or incorporated by
reference in the Registration Statement present fairly the
financial position and the results of operations of the Company
at the indicated dates and for the indicated periods. Such
financial statements have been prepared in accordance with
generally accepted principles of accounting, consistently applied
throughout the periods involved, and all adjustments necessary
for a fair presentation of results for such periods have been
made. The summary financial and statistical data included in the
Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with the financial statements
presented therein;

(m) The Company and its subsidiary have good and
marketable title to, or valid and enforceable leasehold estates
in, all items of real and personal property referred to in the
Prospectus as owned or leased by the Company and its subsidiary,
in each case free and clear of all liens, encumbrances, claims,
security interests and defects, other than those referred to in
the Prospectus or which are not material in amount. Each lease
of real property by the Company as lessor requiring annual lease
payments in excess of $100,000 is the legal, valid and binding
obligation of the lessee in accordance with its terms (except
that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding
therefor may be brought and to the Bankruptcy Act) and the rents
which at present have remained due and unpaid for more than 30
days are not payable under leases such that, were no further

rental payments to be received under such leases, the financial
condition or results of operations of the Company would be
materially adversely affected thereby. The Company has no reason
to believe that the lessee under any lease (excluding leases for
which rent payments due for the remainder of such lease are less
than $500,000) calling for annual lease payments in excess of
$500,000 is not financially capable of performing its obligations
thereunder;

(n) The Company has filed all Federal, local and
foreign income tax returns which have been required to be filed
and has paid all taxes indicated by said returns and all
assessments received by it to the extent that such taxes have
become due and are not being contested in good faith;

(o) The Company and its subsidiary hold all material
licenses, certificates and permits from governmental authorities
which are necessary to the conduct of their business; and neither
the Company nor its subsidiary has infringed any patents, patent
rights, trade names, trademarks or copyrights, which infringement
is material to the business of the Company or its subsidiary;

(p) Ernst & Young, who have certified the financial
statements filed with the Commission as part of, or incorporated
by reference in, the Registration Statement and Prospectus, are
independent public accountants as required by the 1933 Act and
the 1933 Act Regulations;

(q) With respect to all tax periods regarding which
the Internal Revenue Service is or will be entitled to assert any
claim, the Company has met the requirements for qualification as
a real estate investment trust under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended, and the Company's
present and contemplated operations, assets and income continue
to meet such requirements; and the Company is not an "investment
company" within the meaning of the Investment Company Act of
1940, as amended;

(r) The conditions for use of registration statements
on Form S-3 set forth in the General Instructions on Form S-3
have been satisfied and the Company is entitled to use such form
for the transaction contemplated herein;

(s) The Company has no knowledge of (a) the unlawful
presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous
Materials") on any of the properties owned by it, or of (b) any
unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring off such
properties as a result of any construction on or operation and
use of such properties which presence or occurrence would
materially adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company or its subsidiary. In connection with
the construction on or operation and use of the properties owned

by the Company or its subsidiary, the Company represents that, as
of the date of this Agreement, it has no knowledge of any
material failure to comply with all applicable local, state and
federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, reuse, sale, storage, handling, transport and disposal
of any Hazardous Materials.

2. Subject to the terms and conditions herein set forth,
the Company agrees to issue and sell to you, and you agree to
purchase from the Company, at a purchase price of ___% of the
principal amount thereof, plus accrued interest from March __,
1994 to the Time of Delivery hereunder, the entire aggregate
principal amount of the Securities.

3. Upon the authorization by you of the release of the
Securities, you propose to offer the Securities for sale upon the
terms and conditions set forth in the Prospectus.

4. Payment for the Securities shall be made by you by
certified or official bank check or checks, payable to the order
of the Company in [New York] Clearing House funds, all at the
office of Brown & Wood, One World Trade Center, New York, New
York 10048 at 9:30 a.m., New York City time on March __, 1994 or
at such other time and date as you and the Company may agree upon
in writing, such time and date being herein called the "Time of
Delivery." Such payment will be made upon delivery to The
Depository Trust Company of the Global Note (as defined in the
Prospectus) representing the Securities registered in the name of
The Depository Trust Company's nominee, Cede & Co.

5. The Company agrees with you:

(a) To prepare the Prospectus in a form approved by
you and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the
second business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or
Prospectus prior to the Time of Delivery which shall be
disapproved by you promptly after reasonable notice thereof; to
advise you, promptly after it receives notice thereof, of the
time when the Registration Statement, or any amendment thereto,
has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and
all definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of
the Securities; to advise you promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary

Prospectus or prospectus, of the suspension of the qualification
of the Securities for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of
any Preliminary Prospectus or prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;

(b) Promptly from time to time to take such action as
you may reasonably request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions as you
may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;

(c) To furnish you with copies of the Prospectus in
such quantities as you may from time to time reasonably request,
and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to
amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to you and to
any dealer in securities as many copies as you may from time to
time reasonably request of an amended Prospectus or a supplement
to the Prospectus which will correct such statement or omission
or effect such compliance; and in case you are required to
deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of
issue of the Prospectus, upon your request but at your expense,
to prepare and deliver to you as many copies as you may request
of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;

(d) To make generally available to its securityholders
as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement (as
defined in Rule 158(c)), an earning statement of the Company and
its subsidiary (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission

thereunder (including at the option of the Company Rule 158);

(e) During the period beginning from the date hereof
and continuing to and including the earlier of (i) the
termination of trading restrictions on the Securities, as
notified to the Company by you, and (ii) the Time of Delivery,
not to offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company which mature more than one year
after the Time of Delivery and which are substantially similar to
the Securities, without your prior written consent;

(f) To furnish to the holders of the Securities as
soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income,
shareholders' equity and cash flow of the Company and its
consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial
information of the Company and its subsidiaries for such quarter
in reasonable detail;

(g) During a period of five years from the effective
date of the Registration Statement, to furnish to you copies of
all reports or other communications (financial or other)
furnished to shareholders, and deliver to you (i) as soon as they
are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national
securities exchange on which the Securities or any class of
securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated
in reports furnished to its shareholders generally or to the
Commission);

(h) To use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus
under the caption "Use of Proceeds"; and

(i) To continue to elect to qualify as a "real estate
investment trust" under the Internal Revenue Code of 1986, as
amended, and to use its best efforts to continue to meet the
requirements to qualify as a "real estate investment trust".

6. The Company covenants and agrees with you that the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Securities
under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement,
any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies

thereof to the dealers; (ii) the cost of printing or producing
this Agreement, the Indenture, the Blue Sky and Legal Investment
Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iii)
all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and
disbursements of your counsel in connection with such
qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating
services for rating the Securities; (v) the filing fees incident
to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vi)
the cost of preparing the Securities; (vii) the fees and expenses
of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; and (viii) all other costs and
expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in
this Section, Section 8 and Section 10 hereof, you will pay all
of your own costs and expenses, including the fees of your
counsel, transfer taxes on resale of any of the Securities by
you, and any advertising expenses connected with any offers you
may make.

7. Your obligations hereunder shall be subject, in your
discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and
as of the Time of Delivery, true and correct, the condition that
the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional
conditions:

(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations
under the Act and in accordance with Section 5(a) hereof; no stop
order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your
reasonable satisfaction;

(b) Brown & Wood, your counsel, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with
respect to the organization of the Company, this Agreement, the
validity of the Indenture, the Securities, the Registration
Statement, the Prospectus, and other related matters as you may
reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable
them to pass upon such matters;

have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the
effect that:

(i) The Company has been duly organized and is
validly existing as a corporation in good standing
under the laws of the Commonwealth of Virginia, with
corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
the Company is duly qualified to transact business in
all jurisdictions in which the conduct of its business
requires such qualification, or in which the failure to
qualify would have a materially adverse effect upon the
business of the Company; to the best of such counsel's
knowledge, the Company has one subsidiary, The Commons
of Columbia, Inc., a limited purpose corporation, which
has been duly organized and is validly existing as a
corporation in good standing under the laws of the
Commonwealth of Virginia; all of the issued and
outstanding capital stock of such subsidiary has been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;

(ii) The Company has an authorized capitalization
as set forth in the Prospectus, and all of the issued
shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid
and non-assessable;

(iii) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the
Company or its subsidiary is a party or of which any
property of the Company or its subsidiary is the
subject which, if determined adversely to the Company
or its subsidiary, would individually or in the
aggregate have a material adverse effect on the
consolidated financial position, shareholders' equity
or results of operations of the Company and its
subsidiary; and, to the best of such counsel's
knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened
by others;

(iv) This Agreement has been duly authorized,
executed and delivered by the Company;

(v) The Securities have been duly authorized,
executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the
Indenture; and the Securities and the Indenture conform
to the descriptions thereof in the Prospectus;

(vi) The Indenture has been duly authorized,
executed and delivered by the parties thereto and
constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to
general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;

(vii) The issue and sale of the Securities and the
compliance by the Company with all of the provisions of
the Securities, the Indenture and this Agreement and
the consummation of the transactions herein and therein
contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which
the Company or its subsidiary is a party or by which
the Company or its subsidiary is bound or to which any
of the property or assets of the Company or its
subsidiary is subject, nor will such actions result in
any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute
or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over
the Company or its subsidiary or any of their
properties;

(viii) No consent, approval, authorization, order,
registration or qualification of or with any such
court or governmental agency or body is required for
the issue and sale of the Securities or the
consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except
such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Securities by you;

(ix) The statements under the caption "Description
of Notes" in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein
or matters of law are accurate summaries and fairly and
correctly present the information called for with
respect to such documents and matters;

(x) The documents incorporated by reference in
the Prospectus or any further amendment or supplement
thereto made by the Company prior to the Time of
Delivery (other than the financial statements and

related schedules therein, as to which such counsel
need express no opinion), when they became effective or
were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to
believe that any of such documents, when such documents
became effective or were so filed, as the case may be,
contained, in the case of a registration statement
which became effective under the Act, an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, or, in the case of other documents which
were filed under the Act or the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to
make the statements therein, in light of the
circumstances under which they were made when such
documents were so filed, not misleading; and

(xi) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made
by the Company prior to the Time of Delivery (other
than the financial statements and related schedules
therein, as to which such counsel need express no
opinion) comply as to form in all material respects
with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder;
they have no reason to believe that, as of its
effective date, the Registration Statement or any
further amendment thereto made by the Company prior to
the Time of Delivery (other than the financial
statements and related schedules therein, as to which
such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state
a material fact required to be stated therein or
necessary to make the statements therein not misleading
or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which
such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state
a material fact necessary to make the statements
therein, in light of the circumstances in which they
were made, not misleading or that, as of the Time of
Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement
thereto made by the Company prior to the Time of
Delivery (other than the financial statements and
related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement
of a material fact or omits to state a material fact

necessary to make the statements therein, in light of
the circumstances in which they were made, not
misleading; and they do not know of any amendment to
the Registration Statement required to be filed or of
any contracts or other documents of a character
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference
into the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not
filed or incorporated by reference or described as
required.

(d) Hunton & Williams, counsel for the Company, shall
have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory you, to the effect
that the Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended, for its fiscal years
ended December 31, 1988 through December 31, 1993, and the
Company's organization and contemplated method of operation are
such as to enable it to continue to so qualify for its fiscal
year ended December 31, 1994, and in the future. In rendering
this opinion, Hunton & Williams may rely, as to factual
determinations and conclusions necessary for such opinion, on
representations of the Company.

(e) At 10:00 a.m., New York City time, on the
effective date of the Registration Statement and the effective
date of the most recently filed post-effective amendment to the
Registration Statement and also at the Time of Delivery, Ernst &
Young shall have furnished to you a letter or letters, dated the
respective date of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto;

(f) (i) Neither the Company nor its subsidiary shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective
dates as of which information is given in the Prospectus there
shall not have been any change in the capital stock or long-term
debt of the Company or its subsidiary or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders'
equity or results of operations of the Company and its
subsidiary, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in
Clause (i) or (ii), is in your judgment so material and adverse
as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms
and in the manner contemplated in the Prospectus;

(g) On or after the date hereof (i) no downgrading
shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;

(h) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York
Stock Exchange; (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York
authorities; or (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United
States of a national emergency or war if the effect of any such
event specified in this Clause (iii) in your judgment makes it
impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus; and

(i) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers
of the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of
such Time of Delivery, as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections
(a) and (f) of this Section and as to such other matters as you
may reasonably request.

8. (a) The Company will indemnify you and hold you
harmless against any losses, claims, damages or liabilities to
which you may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse you for any legal or other
expenses reasonably incurred by you in connection with
investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to the Company by you expressly for use
therein.

(b) You will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or labilities (or actions in
respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by you
expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or
claim as such expenses are incurred.

(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement
of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party
under such subsection, notify the indemnifying party in writing
of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation.

(d) If the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above in respect to
any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities

(or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and you on the other from the offering of
the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law
or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and you
on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party
failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and you on the
other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and you on the other shall be deemed to
be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by
you, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company on the one hand or you on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and you agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined
by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to
above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d),
you shall not be required to contribute any amount in excess of
the amount by which the total price at which the Securities
underwritten by you and distributed to the public were offered to
the public exceeds the amount of any damages which you have
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.

(e) The obligations of the Company under this Section
8 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls you within the
meaning of the Act; and your obligations under this Section 8
shall be in addition to any liability which the you may otherwise
have and shall extend, upon the same terms and conditions, to
each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.

9. The respective indemnities, agreements,
representations, warranties and other statements of the Company
and you, as set forth in this Agreement shall remain in full
force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of you
or any person controlling you, or the Company, or any officer or
director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.

10. If the Securities are not delivered by or on behalf of
the Company as provided herein, the Company will reimburse you
for all out-of-pocket expenses approved in writing by you,
including fees and disbursements of counsel, reasonably incurred
by you in making preparations for the purchase, sale and delivery
of the Securities, but the Company shall then be under no further
liability to you except as provided in Section 6 and Section 8
hereof.

All statements, requests, notices, and agreements hereunder
shall be in writing, and if to you shall be delivered or sent by
mail, telex or facsimile transmission to you at 85 Broad Street,
New York, New York 10004, Attention: Registration Department;
and if to the Company shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary. Any such
statements, requests, notices or agreements shall take effect
upon receipt thereof.

11. This Agreement shall be binding upon, and inure solely
to the benefit of, you, the Company and, to the extent provided
in Section 8 and Section 9 hereof, the officers and directors of
the Company and each person who controls the Company or you, and
their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the
Securities from you shall be deemed a successor or assign by
reason merely of such purchase.

12. Time shall be of the essence of this Agreement. As
used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.

13. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

14. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same
instrument.

<PAGE>

If the foregoing is in accordance with your understanding,
please sign and return to us four counterparts hereof, and upon
the acceptance hereof by you, this letter and such acceptance
hereof shall constitute a binding agreement between you and the
Company.

Very truly yours,

UNITED DOMINION REALTY TRUST, INC.

By:______________________________
Name:____________________________
Title:___________________________

ACCEPTED AS OF THE DATE HEREOF:

GOLDMAN, SACHS & CO.

By:____________________________
(Goldman, Sachs & Co.)

<PAGE>
ANNEX I

Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to you to the effect that:

(i) They are independent certified public accountants
with respect to the Company and its subsidiary within the
meaning of the Act and the applicable published rules and
regulations thereunder;

(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited

(and, if applicable, prospective financial statements and/or
pro forma financial information) examined by them and
included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all
material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable,
and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance
with standards established by the American Institute of
Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma
financial information, prospective financial statements
and/or condensed financial statements derived from audited
financial statements of the Company for the periods
specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to you;

(iii) The unaudited selected financial information with
respect to the consolidated results of operations and
financial position of the Company for the five most recent
fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees
with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements
for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;

(iv) On the basis of limited procedures, not
constituting an examination in accordance with generally
accepted auditing standards, consisting of a reading of the
unaudited financial statements and other information
referred to below, a reading of the latest available interim
financial statements of the Company, inspection of the
minute books of the Company and its subsidiary since the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of
officials of the Company responsible for financial and
accounting matters and such other inquiries and procedures
as may be specified in such letter, nothing came to their
attention that caused them to believe that:

(A) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or
incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of
the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations thereunder or
are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated

statements of income, consolidated balance sheets and
consolidated statements of cash flows included or
incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;

(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not
agree with the corresponding items in the unaudited
consolidated financial statements from which such data
and items were derived, and any such unaudited data and
items were not determined on a basis substantially
consistent with the basis for the corresponding amounts
in the audited consolidated financial statements
included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal
year;

(C) the unaudited financial statements which were
not included in the Prospectus but from which were
derived the unaudited condensed financial statements
referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;

(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by
reference in the Prospectus do not comply as to form in
all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments
have not been properly applied to the historical
amounts in the compilation of those statements;

(E) as of a specified date not more than five days
prior to the date of such letter, there have been any
changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible
securities, in each case which were outstanding on the
date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the
Company and its subsidiary, or any decreases in
consolidated net current assets or net assets or other
items specified by you, or any increases in any items
specified by you, in each case as compared with amounts
shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or

which are described in such letter; and

(F) for the period from the date of the latest
financial statements included or incorporated by
reference in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in
revenue, or in income before gain on sale of real
estate and extraordinary items or the total or per
share amounts of consolidated net income or other items
specified by you, or any increases in any items
specified by you, in each case as compared with the
comparable period of the preceding year and with any
other period of corresponding length specified by you,
except in each case for increases or decreases which
the Prospectus discloses have occurred or may occur or
which are described in such letter; and

(v) In addition to the audit referred to in their
reports included or incorporated by reference in the
Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial
information specified by you which are derived from the
general accounting records of the Company and its
subsidiary, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in
exhibits and schedules to, the Registration Statement
specified by you or in documents incorporated by reference
in the Prospectus specified by you, and have compared
certain of such amounts, percentages and financial
information with the accounting records of the Company and
its subsidiary and have found them to be in agreement.

UNITED DOMINION REALTY TRUST, INC.

TO
NATIONSBANK OF VIRGINIA, N.A.
Trustee

Indenture
Dated as of March 1, 1994

Senior Debt Securities

<PAGE>
TABLE OF CONTENTS

Page

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . 1
Acquired Debt . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts. . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Annual Service Charge . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . 2
Authorized Newspaper. . . . . . . . . . . . . . . . 2
Bankruptcy Law. . . . . . . . . . . . . . . . . . . 2
Bearer Security . . . . . . . . . . . . . . . . . . 3
Board of Directors. . . . . . . . . . . . . . . . . 3
Board Resolution. . . . . . . . . . . . . . . . . . 3
Business Day. . . . . . . . . . . . . . . . . . . . 3
Capital Stock . . . . . . . . . . . . . . . . . . . 3
CEDEL . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . 3
Consolidated Income Available for Debt Service. . . 3
Conversion Event. . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
coupon. . . . . . . . . . . . . . . . . . . . . . . 4
Custodian . . . . . . . . . . . . . . . . . . . . . 4
Debt. . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest. . . . . . . . . . . . . . . . . 4
Disqualified Stock. . . . . . . . . . . . . . . . . 4
Dollar or $ . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . 4
ECU . . . . . . . . . . . . . . . . . . . . . . . . 4
Euroclear . . . . . . . . . . . . . . . . . . . . . 4
European Communities. . . . . . . . . . . . . . . . 5
European Monetary System. . . . . . . . . . . . . . 5
Event of Default. . . . . . . . . . . . . . . . . . 5
Exchange Act. . . . . . . . . . . . . . . . . . . . 5
Foreign Currency. . . . . . . . . . . . . . . . . . 5
Funds from Operations . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . 7
Opinion of Counsel. . . . . . . . . . . . . . . . . 7
Original Issue Discount Security. . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . 7
Paying Agent. . . . . . . . . . . . . . . . . . . . 8
Person. . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment. . . . . . . . . . . . . . . . . . 8
Predecessor Security. . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . 9
Redemption Price. . . . . . . . . . . . . . . . . . 9
Registered Security . . . . . . . . . . . . . . . . 9
Regular Record Date . . . . . . . . . . . . . . . . 9
Repayment Date. . . . . . . . . . . . . . . . . . . 9
Repayment Price . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . 9
Securities Act. . . . . . . . . . . . . . . . . . . 9
Security. . . . . . . . . . . . . . . . . . . . . . 9
Security Register and Security Registrar. . . . . . 9
Significant Subsidiary. . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . 10
Stated Maturity . . . . . . . . . . . . . . . . . . 10
Subsidiary. . . . . . . . . . . . . . . . . . . . . 10
Total Assets. . . . . . . . . . . . . . . . . . . . 10
Trust . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Indenture Act or TIA. . . . . . . . . . . . . 10
Trust Request and Trust Order . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . 10
Undepreciated Real Estate Assets. . . . . . . . . . 10
United States . . . . . . . . . . . . . . . . . . . 11
United States person. . . . . . . . . . . . . . . . 11
Yield to Maturity . . . . . . . . . . . . . . . . . 11
SECTION 102. Compliance Certificates and Opinions . . . . . . . . 11
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . 12
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . . 12
SECTION 105. Notices, etc., to Trustee and Trust. . . . . . . . . 14
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . 14
SECTION 107. Effect of Headings and Table of Contents . . . . . . 15
SECTION 108. Successors and Assigns . . . . . . . . . . . . . . . 16
SECTION 109. Separability Clause. . . . . . . . . . . . . . . . . 16
SECTION 110. Benefits of Indenture. . . . . . . . . . . . . . . . 16
SECTION 111. No Personal Liability. . . . . . . . . . . . . . . . 16
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . 16
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . 16

ARTICLE TWO

SECURITIES FORMS

SECTION 201. Forms of Securities. . . . . . . . . . . . . . . . . 17

SECTION 202. Form of Trustee's Certificate of Authentication. . . 17
SECTION 203. Securities Issuable in Global Form . . . . . . . . . 18

ARTICLE THREE

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . 19
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . 23
SECTION 303. Execution, Authentication Delivery and Dating. . . . 23
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . 25
SECTION 305. Registration, Registration of Transfer and
Exchange. . . . . . . . . . . . . . . . . . . . . . 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . 31
SECTION 307. Payment of Interest; Interest Rights Preserved . . . 32
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . 34
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . 35
SECTION 310. Computation of Interest. . . . . . . . . . . . . . . 36

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . 36
SECTION 402. Application of Trust Funds . . . . . . . . . . . . . 37

<PAGE>

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . 38
SECTION 502. Acceleration of Maturity; Rescission and Annulment . 40
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . . . 41
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . 42
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons . . . . . . . . . . . . . . . 43
SECTION 506. Application of Money Collected . . . . . . . . . . . 43
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . 43
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium or Make-Whole Amount, if any,
Interest and Additional Amounts . . . . . . . . . . 44
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . 44
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . 45
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . 45
SECTION 512. Control by Holders of Securities . . . . . . . . . . 45
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . 45
SECTION 514. Waiver of Usury, Stay or Extension Laws. . . . . . . 46
SECTION 515. Undertaking for Costs. . . . . . . . . . . . . . . . 46

ARTICLE SIX

THE TRUSTEE

SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . . . 47
SECTION 602. Certain Rights of Trustee. . . . . . . . . . . . . . 47
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. . . . . . . . . . . . . . . . . . . . . 48
SECTION 604. May Hold Securities. . . . . . . . . . . . . . . . . 49
SECTION 605. Money Held in Trust. . . . . . . . . . . . . . . . . 49
SECTION 606. Compensation and Reimbursement . . . . . . . . . . . 49
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests . . . . . . . . . . . . . . . 50
SECTION 608. Resignation and Removal; Appointment of Successor. . 50
SECTION 609. Acceptance of Appointment By Successor . . . . . . . 52
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . 53
SECTION 611. Appointment of Authenticating Agent. . . . . . . . . 53

<PAGE>
ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST

SECTION 701. Disclosure of Names and Addresses of Holders . . . . 55
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . . . 55
SECTION 703. Reports by Trust . . . . . . . . . . . . . . . . . . 55
SECTION 704. Trust to Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . 56

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

SECTION 801. Consolidations and Mergers of Trust and Sales,
Leases and Conveyances Permitted Subject to
Certain Conditions. . . . . . . . . . . . . . . . . 57
SECTION 802. Rights and Duties of Successor Corporation . . . . . 57
SECTION 803. Officers' Certificate and Opinion of Counsel . . . . 58

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders . 58
SECTION 902. Supplemental Indentures with Consent of Holders. . . 60
SECTION 903. Execution of Supplemental Indentures . . . . . . . . 61
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . 61
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . 61
SECTION 906. Reference in Securities to Supplemental Indentures . 61
SECTION 907. Notice of Supplemental Indentures. . . . . . . . . . 62

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium or Make-Whole Amount,
if any, Interest and Additional Amounts . . . . . . 62
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . 62
SECTION 1003. Money for Securities Payments to Be Held in Trust. . 64
SECTION 1004. Limitations on Incurrence of Debt. . . . . . . . . . 65
SECTION 1005. Existence. . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1006. Maintenance of Properties. . . . . . . . . . . . . . 67
SECTION 1007. Insurance. . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1008. Payment of Taxes and Other Claims. . . . . . . . . . 67
SECTION 1009. Provision of Financial Information . . . . . . . . . 67
SECTION 1010. Statement as to Compliance . . . . . . . . . . . . . 68
SECTION 1011. Additional Amounts . . . . . . . . . . . . . . . . . 68
SECTION 1012. Waiver of Certain Covenants. . . . . . . . . . . . . 69

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article . . . . . . . . . . . . . . 69
SECTION 1102. Election to Redeem; Notice to Trustee. . . . . . . . 70
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. . 70
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . 70
SECTION 1105. Deposit of Redemption Price. . . . . . . . . . . . . 72
SECTION 1106. Securities Payable on Redemption Date. . . . . . . . 72
SECTION 1107. Securities Redeemed in Part. . . . . . . . . . . . . 73

ARTICLE TWELVE

SINKING FUNDS

SECTION 1201. Applicability of Article . . . . . . . . . . . . . . 73
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. . . . . . . . . . . . . . . . . . . . . 74
SECTION 1203. Redemption of Securities for Sinking Fund. . . . . . 74

ARTICLE THIRTEEN

REPAYMENT AT THE OPTION OF HOLDERS

SECTION 1301. Applicability of Article . . . . . . . . . . . . . . 75
SECTION 1302. Repayment of Securities. . . . . . . . . . . . . . . 75
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . . . 75
SECTION 1304. When Securities Presented for Repayment Become Due
and Payable . . . . . . . . . . . . . . . . . . . . 76
SECTION 1305. Securities Repaid in Part. . . . . . . . . . . . . . 77

<PAGE>

ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1401. Applicability of Article; Trust's Option to Effect
Defeasance or Covenant Defeasance . . . . . . . . . 77
SECTION 1402 Defeasance and Discharge . . . . . . . . . . . . . . 78
SECTION 1403. Covenant Defeasance. . . . . . . . . . . . . . . . . 78
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. . . 79
SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions . . . 81

ARTICLE FIFTEEN

MEETINGS OF HOLDERS OF SECURITIES

SECTION 1501. Purposes for Which Meetings May Be Called. . . . . . 82
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . . . 82
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . . . 83
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . . . 83
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings . . . . . . . . . . . . . . 84
SECTION 1506. Counting Votes and Recording Action of Meetings. . . 85
SECTION 1507. Evidence of Action Taken by Holders. . . . . . . . . 85
SECTION 1508. Proof of Execution of Instruments. . . . . . . . . . 86

TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A -- FORMS OF CERTIFICATION

<PAGE>
UNITED DOMINION REALTY TRUST, INC.

Reconciliation and tie between Trust Indenture Act of 1939, as amended (the
"1939 Act"), and Indenture, dated as of March 1, 1994

Trust Indenture Act Section Indenture Section

310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . .607(a)
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .607(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 607(b), 608
312 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1011
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
315 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
316 (a) (last sentence) . . . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . .502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
317 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

__________________________

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.

<PAGE>
INDENTURE, dated as of March 1, 1994, between UNITED DOMINION REALTY
TRUST, INC., a Virginia corporation (hereinafter called the "Trust"), having
its principal office at 10 South Sixth Street, Suite 203, Richmond, Virginia
23219-3802, and NATIONSBANK OF VIRGINIA, N.A., a national banking
association, as Trustee hereunder (hereinafter called the "Trustee"), having
its Corporate Trust Office at 715 Peachtree Street, N.E., Midtown Center, 7th
Floor, Atlanta, Georgia 30348-1297.

RECITALS OF THE TRUST

The Trust 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
Trust, 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 TIA,
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 TIA Section 311, shall have the meanings assigned to
them in the rules of the Commission adopted under the TIA;

(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; 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:

"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 Trust 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.

"Annual Service Charge" as of any date means the maximum amount which is
payable in any period for interest on, and original issue discount of, Debt
of the Trust and its Subsidiaries and the amount of dividends which are
payable in respect of any Disqualified Stock.

"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 ease 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 the Board of Directors of the Trust, the
executive committee or any other committee of that board duly authorized to
act for it in respect hereof.

"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Trust to have been duly adopted by
the Board of Directors, and to be in full force and effect on the date of
such certification, and 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, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible 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.

"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.

"Consolidated Income Available for Debt Service" for any period means
Funds from Operations of the Trust and its Subsidiaries plus amounts which
have been deducted for interest on Debt of the Trust and its Subsidiaries.

"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 715 Peachtree
Street, N.E., Midtown Center, 7th Floor, Atlanta, Georgia 30308-1297.

"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" of the Trust or any Subsidiary means any indebtedness of the
Trust or any Subsidiary, whether or not contingent, in respect of (without
duplication) (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance or any security interest existing on property owned by
the Trust or any Subsidiary, (iii) the reimbursement obligations, contingent
or otherwise, in connection with any letters of credit actually issued or
amounts representing the balance deferred and unpaid of the purchase price of
any property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Trust or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock or (v) any lease of
property by the Trust or any Subsidiary as lessee which is reflected on the
Trust's consolidated balance sheet as a capitalized lease in accordance with
GAAP to the extent, in the case of items of indebtedness under (i) through
(iii) above, that any such items (other than letters of credit) would appear
as a liability on the Trust's consolidated balance sheet in accordance with
GAAP, and also includes, to the extent not otherwise included, any obligation
by the Trust or any Subsidiary to be liable for, or to pay, as obligor,
guarantor or otherwise (other than for purposes of collection in the ordinary
course of business), Debt of another Person (other than the Trust or any
Subsidiary).

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

"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise
(i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, (ii) is convertible into or exchangeable or
exercisable for Debt or Disqualified Stock or (iii) is redeemable at the
option of the holder thereof, in whole or in part, in each case on or prior
to the Stated Maturity of the series of Debt Securities.

"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.

"Event of Default" has the meaning specified in Article Five.

"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.

"Funds from Operations" for any period means income before gains
(losses) on investments and extraordinary items plus amounts which have been
deducted, and minus amounts which have been added, for the following (without
duplication): (a) provision for federal income taxes of the Trust and its
Subsidiaries, (b) amortization of debt discount, (c) provision for property
depreciation and amortization, (d) the effect of any noncash charge resulting
from a change in accounting principles in determining income before gains
(losses) on investments and extraordinary items for such period and (e)
amortization of deferred charges, as reflected in the financial statements of
the Trust and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.

"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.

"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 Trust 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 become
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
of an Assistant Secretary, of the Trust, and delivered to the Trustee.

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

"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 cancelled 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 Trust) in trust or set aside and segregated
in trust by the Trust (if the Trust 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 Trust
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 Trust; and

(v) Securities converted into Capital Stock of the Trust
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 TIA 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 Trust,
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
Trust or any other obligor upon the Securities or any Affiliate of the Trust
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 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 Trust or any other obligor upon the Securities or any Affiliate of the
Trust or of such other obligor.

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

"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.

"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 by or 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 Trust.

"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 (a) the voting power of the voting equity
securities or (b) 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.

"Total Assets" as of any date means the sum of (i) the Trust's
Undepreciated Real Estate Assets and (ii) all other assets of the Trust
determined in accordance with GAAP (but excluding intangibles).

"Trust" means the Person named as the "Trust" 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 "Trust" shall
mean such successor corporation.

"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.

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

"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.

"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Trust
and its Subsidiaries on such date, before depreciation and amortization
determined on a consolidated basis in accordance with GAAP.

"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 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 redetermination
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 Trust to the Trustee to take any
action under any provision of this Indenture, the Trust 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.

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 Trust 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 Trust stating that the information as to such factual matters
is in the possession of the Trust, 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 instruments or record or
both are delivered to the Trustee and, where it is hereby expressly
required, to the Trust. Such instrument or instrument 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 Trust and any agent of the Trustee or the Trust, 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.

Security Register.

(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary,
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 depositary, 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 Trust 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 Trust shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Trust 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
Trust 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 Trust in reliance thereon,
whether or not notation of such action is made upon such Security.

SECTION 105. Notices, etc., to Trustee and Trust.

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 Trust 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 Operations, or

(2) The Trust 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 Trust
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 Trust.

SECTION 106. Notice to Holders; Waiver.

Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Trust 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 qualified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such
notices 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.

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 Trust 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 Trust or of any successor, either

directly or through the Trust 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.

This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the State of Virginia. 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 Trust 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 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 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.
NATIONSBANK OF VIRGINIA, N.A., as Trustee

By _____________________________
Authorized Officer

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 Trust Order to be delivered to the Trustee pursuant to
Section 303 or 304. Subject to the provisions of Section 303 and, if
applicable, 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 Trust Order. If a Trust Order
pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any
instructions by the Trust 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 Trust and the Trust 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 Trust, the Trustee and any agent of the Trust
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.

<PAGE>

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 Trust 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 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 comprised of
twelve 30-day months;

(5) the place or places, if any, other than or in addition to 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 or
exchange and notices or demands to or upon the Trust 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 Trust, if the Trust is to have the option;

(7) the obligation, if any, of the Trust 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;

(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 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 Trust 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 Trust 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 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 depositary 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 modifications
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 Trust 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
Trust will have the option to redeem such Securities rather than pay
such Additional Amounts (and the terms of any such option);

(23) the obligation, if any, of the Trust to permit the conversion
of the Securities of such series into shares of Capital Stock of the
Trust 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; and

(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).

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.

If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions or supplemental
indentures, a copy of an appropriate record of such action(s) shall be
certified by the Secretary or an Assistant Secretary of the Trust and
delivered to the Trustee at or prior to the delivery of the Trust 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 Trust 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 Trust shall bind the Trust, 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 Trust may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Trust to the Trustee for
authentication, together with a Trust Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Trust
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 received
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 cancelled.

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 Trust 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 Trust 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 Trust in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute
legal, valid and binding obligations of the Trust, 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

(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.

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.

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 Trust 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.

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 Trust, and the Trust
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 Trust, 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 Trust may execute, and upon Trust 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 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 (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 Trust 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 Trust 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 Trust
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 depositary or common depositary (the "Common
Depositary"), 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 Trust 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 Trust.
On or after the Exchange Date, such temporary global Security shall be
surrendered by the Common Depositary to the Trustee, as the Trust'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 Depositary, 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 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 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 and 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 and CEDEL on such Interest Payment Date upon delivery by Euroclear
and 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 and 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 Trust.

SECTION 305. Registration, Registration of Transfer and Exchange.

The Trust shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency of the Trust 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 Trust in a Place of Payment
being herein sometimes referred to collectively as the "Security Register")
in which, subject to such reasonable regulations as it may prescribe, the
Trust 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.

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 Trust in a Place of Payment for that series, the
Trust 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, being 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 Trust 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.

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 Trust 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 Trust 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
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 Trust 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 depositary 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 and approved
by the Trust or to a nominee of such successor to DTC. If at any time DTC
notifies the Trust that it is unwilling or unable to continue as depositary
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 Trust shall appoint a successor depositary
with respect to such global Security or Securities. If (x) a successor
depositary for such global Security or Securities is not appointed by the
Trust within 90 days after the Trust 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 depositary
for such global Security or Securities or (z) the Trust, in its sole
discretion, determines at any time that all Outstanding Securities (but not
less than all) Securities 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 Trust 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 Trust 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 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 Trust 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 depositary as shall be
specified in the Trust Order with respect thereto to the Trustee, as the
Trust'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 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 Trust, 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 Trust or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trust and 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 Trust 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 Trust 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 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, register the transfer of or exchange 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 Trust, together with,
in proper cases, such security or indemnity as may be required by the Trust
or the Trustee to save each of them or any agent of either of them harmless,
the Trust 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 Trust 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 notice to the Trust or the Trustee that such Security or coupon
has been acquired by a bona fide purchaser, the Trust 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 Trust 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.

Upon the issuance of any new Security under this Section, the Trust 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 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 Trust, 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 Trust maintained for such purpose pursuant to Section 1002; provided,
however, that each installment of interest on any Registered Security may at
the Trust'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 Cede & Co. or the Common Depositary, 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 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 Trust, at its election
in each case, as provided in clause (1) or (2) below:

(1) The Trust 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 Trust 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 Trust
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 Trust of
such Special Record Date and, in the name and at the expense of the
Trust, 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. The Trustee may, in its
discretion, in the name and at the expense of the Trust, cause a similar
notice to be published at least once in an Authorized Newspaper in each
place of payment, but such publications shall not be a condition
precedent to the establishment of 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 Trust 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 Trust 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 Trust, the Trustee and any agent of the Trust 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 Trust, the Trustee nor any agent of the Trust 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 Trust, the Trustee and any agent of the Trust 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 Trust, the Trustee nor any agent of the Trust or the Trustee shall be
affected by notice to the contrary.

None of the Trust, 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 Trust, the Trustee, or any agent of the
Trust or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect
to such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.

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 find 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 cancelled by it. The Trust
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Trust 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 Trust has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee.
If the Trust 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 cancelled 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 the Trustee shall deliver a certificate of such destruction
to the Trust, unless by a Trust Order the Trust directs their return to it.

<PAGE>
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 Trust Request cease to be of further effect
with respect to any series of Securities specified in such Trust 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 Trust Order, and at the expense of the Trust, 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 Trust and thereafter
repaid to the Trust for discharge 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) and
(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 Trust, 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 Trust,

and the Trust, 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 Trust has paid or caused to be paid all other sums payable
hereunder by the Trust; and

(3) The Trust 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 Trust to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Trust 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.

SECTION 402. Application of Trust Funds.

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 Trust 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.

<PAGE>

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):

(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 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 Trust 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 Trust by the Trustee or to the Trust 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 any bond, debenture, note, mortgage, indenture
or instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness of the Trust for money borrowed by
the Trust (or by any Subsidiary, the repayment of which the Trust has
guaranteed or for which the Trust is directly responsible or liable as
obligor or guarantor), having an aggregate principal amount outstanding
of at least $10,000,000, 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 10 days after there shall have
been given, by registered or certified mail, to the Trust by the Trustee
or to the Trust and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default and requiring the Trust 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 Trust 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 30 consecutive days; or

(7) the Trust or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:

(A) commences a voluntary case,

(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 Trust or any Significant
Subsidiary in an involuntary case,

(B) appoints a Custodian of the Trust 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 Trust (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 Trust and the
Trustee, may rescind and annul such declaration and its consequences if:

(1) The Trust 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 are 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 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
consequence thereon.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.

The Trust 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 Trust 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 Amount, 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 Trust 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 Trust 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 Trust or any other obligor upon
such Securities of such series, wherever 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 Trust or any other obligor upon the
Securities or the property of the Trust 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 Trust 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 allotted 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.

<PAGE>
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 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 Trust.

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 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 Trust, 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 had been instituted.

<PAGE>
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 an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised
front 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.

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 waive 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 Usury, Stay or Extension Laws.

The Trust 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 usury, stay or extension law
wherever enacted, nor or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Trust (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.

All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of any undertaking to pay the costs of such suit, and that such
court may 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).

<PAGE>

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;

(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 Trust mentioned herein shall
be sufficiently evidenced by a Trust Request or Trust 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 Trustee
shall deem it desirable that a matter be proved or established prior to
taxing, 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 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 reasonable security or indemnity 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
Trust, 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 Trust, 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
Trust of Securities or the proceeds thereof.

SECTION 604. May Hold Securities.

The Trustee, any Paying Agent, Security Registrar, Authenticating Agent
or any other agent of the Trust, 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 Trust 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 rust 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 except as otherwise agreed with and for the sole benefit of the
Trust.

SECTION 606. Compensation and Reimbursement.

The Trust agrees:

(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it 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 negligence or bad faith; and

(3) to indemnify each of the Trustee and any predecessor Trustee
for, and to hold it 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 negligence or bad
faith.

As security for the performance of the obligations of the Trust 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.

SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests.

There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation 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 corporation 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
Trust. 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 Trust.

(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 Trust 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(a) and shall fail to resign after written request therefor by
the Trust 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 in solvent 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 Trust 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 Trustee for any
cause with respect to the Securities of one or more series, the Trust,
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 Trust 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 Trust. If no successor Trustee with respect to the Securities of
any series shall have been so appointed by the Trust 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 Trust 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.

<PAGE>
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 Trust 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 Trust 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.

(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Trust, the retiring Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an
indenture supplemental hereto, pursuant to Article Nine hereof, wherein
each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee 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, (2) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, 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 Trust 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 Trust 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.

At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon exchange,
registration of transfer or partial redemption or repayment thereof, 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 Trust.
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
Trust 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 $50,000,000 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 Trust. 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 Trust. 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 Trust 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 Trust agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its 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.

NATIONSBANK OF VIRGINIA, N.A.,
as Trustee

By: ___________________________
as Authenticating Agent

By: ___________________________
Authorized Officer

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST

SECTION 701. Disclosure of Names and Addresses of Holders.

Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Trust and the Trustee that neither the Trust nor the
Trustee nor any Authenticating Agent nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders of Securities 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 1 of each year commencing with the first
March 1 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 1 if required by
TIA Section 313(a).

SECTION 703. Reports by Trust.

The Trust will:

(1) file with the Trustee, within 15 days after the Trust 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 Trust may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Trust 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 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 Trust 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 Trust
pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission.

SECTION 704. Trust to Furnish Trustee Names and Addresses of Holders.

The Trust 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 Trust 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 list shall be required to be furnished.

<PAGE>

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

SECTION 801. Consolidations and Mergers of Trust and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions.

The Trust 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 Trust shall be the continuing
entity, or the successor (if other than the Trust) 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 Trust 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 Trust or any Subsidiary as a result thereof as
having been incurred by the Trust 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 Trust, 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 Trust, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Trust and delivered to the
Trustee; and, upon the order of such successor entity, instead of the Trust,
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
Trust 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 Trust,
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 Trust and
the assumption by any such successor of the covenants of the Trust
herein and in the Securities contained; or

(2) to add to the covenants of the Trust for the benefit of 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 Trust; 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 change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; 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; 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

(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.

<PAGE>
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 Trust and the Trustee, the Trust,
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 Trust 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 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. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustees 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 Trust

shall so determine, new Securities of any series so modified as to conform,
in the opinion of the Trustee and the Trust, to any such supplemental
indenture may be prepared and executed by the Trust and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such
series.

<PAGE>
SECTION 907. Notice of Supplemental Indentures.

Promptly after the execution by the Trust and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Trust
shall give notice thereof to the Holders of each Outstanding Security
affected, in the manner provided for in Section 106, selling forth in general
terms the substance of such supplemental indenture.

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts.

The Trust 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 Trust, 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.

If Securities of a series are issuable only as Registered Securities,
the Trust shall maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trust in respect of the Securities of that series and
this Indenture may be served. If Securities of a series are issuable as
Bearer Securities, the Trust will maintain: (A) in the Borough of Manhattan,
The City of New York, an office or agency where any Registered Securities of
that series may be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for exchange, where notices and
demands to or upon the Trust in respect of the Securities of that series and
this Indenture may be served and where Bearer Securities of that series and

related coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise); (B)
subject to any laws or regulations applicable thereto, in a Place of Payment
for that series which is located outside the United States, an office or
agency where Securities of that series and related coupons may be presented
and surrendered for payment (including payment of any Additional Amounts
payable on Securities of that series pursuant to Section 1011); provided,
however, that if the Securities of that series are listed on the Luxembourg
Stock Exchange, The International Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require,
the Trust will maintain a Paying Agent for the Securities of that series in
Luxembourg, London or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are
listed in such exchange; and (C) subject to any laws or regulations
applicable thereto, in a Place of Payment for that 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
Trust in respect of the Securities of that series and this Indenture may be
served. The Trust 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 Trust 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 Trust hereby appoints the same as its
agent to receive such respective presentations, surrenders, notices and
demands, and the Trust hereby appoints 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 Trust 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 Trust's Paying Agent in 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 Trust in accordance with this
Indenture, is illegal or effectively precluded by exchange controls or other
similar restrictions.

The Trust 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 Trust 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 Trust 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 with respect to a series of Securities, the Trust
hereby designates as a Place of Payment for each series of Securities the
office or agency of Midwest Clearing Corporation at 40 Broad Street, 22d
Floor, New York, New York 10004, in the Borough of Manhattan, The City of
New York, and initially appoints Midwest Clearing Corporation as Paying Agent
in such city and as its agent to receive all such presentations, surrenders,
notices and demands.

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 Trust 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 Trust shall at any time act as its own Paying Agent with respect
to any series of any 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 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 Trust 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 premiums or Make-Whole Amount, if any), or interest on
or Additional Amounts in respect of, any Securities of that series, deposit
with a Payment 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 Trust will promptly notify the Trustee of
its action or failure so to act.

The Trust 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 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 Trust (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; 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 Trust may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Trust
Order direct any Paying Agent to pay, to the Trustee all sums held in trust
by the Trust 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 Trust 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.

Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Trust, in
trust for the payment of the principal of (and premium or Make-Whole Amount,
if any) or interest on, or any Additional Amounts in respect of, any Security
of any series and remaining unclaimed for two years after such principal (and
premiums or Make-Whole Amount, if any), interest or Additional Amounts has
become due and payable shall be paid to the Trust upon Trust Request or (if
then held by the Trust) shall be discharged from such trust; and the Holder
of such Security shall thereafter, as an unsecured general creditor, look
only to the Trust 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 Trust
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 Trust 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 Trust.

SECTION 1004. Limitations on Incurrence of Debt.

(a) The Trust will not, and will not permit any Subsidiary to,
incur any Debt if, immediately after giving effect to the incurrence of
such additional Debt and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Debt of the Trust and its
Subsidiaries on a consolidated basis determined in accordance with GAAP
is greater than 60% of the sum of (without duplication) (i) the Trust's
Total Assets as of the end of the calendar quarter covered in the
Trust's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as
the case may be, most recently filed with the Commission (or, if such
filing is not permitted under the Exchange Act, with the Trustee) prior
to the incurrence of such additional Debt and (ii) the purchase price of

any real estate assets or mortgages receivable acquired, and the amount
of any securities offering proceeds received (to the extent such
proceeds were not used to acquire real estate assets or mortgages
receivable or used to reduce Debt), by the Trust or any Subsidiary since
the end of such calendar quarter, including those proceeds obtained in
connection with the incurrence of such additional Debt;

(b) In addition to the limitations set forth in subsection (a) of
this Section 1004, the Trust will not, and will not permit any
Subsidiary to, incur any Debt if the ratio of Consolidated Income
Available for Debt Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended prior the date on which
such additional Debt is to be incurred shall have been less than 1.5, on
a pro forma basis after giving effect thereto and to the application of
the proceeds therefrom, and calculated on the assumption that (i) such
Debt and any other Debt incurred by the Trust and its Subsidiaries since
the first day of such four-quarter period and the application of the
proceeds therefrom, including to refinance other Debt, had occurred at
the beginning of such period; (ii) the repayment or retirement of any
other Debt by the Trust and its Subsidiaries since the first day of such
four-quarter period had been incurred, repaid or retired at the
beginning of such period (except that, in making such computation, the
amount of Debt under any revolving credit facility shall be computed
based upon the average daily balance of such Debt during such period);
(iii) in the case of Acquired Debt or Debt incurred in connection with
any acquisition since the first day of such four-quarter period, the
related acquisition had occurred as of the first day of such period with
the appropriate adjustments with respect to such acquisition being
included in such pro forma calculation; and (iv) in the case of any
acquisition or disposition by the Trust or its Subsidiaries of any asset
or group of assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset purchase or sale,
such acquisition or disposition or any related repayment of Debt had
occurred as of the first day of such period with the appropriate
adjustments with respect to such acquisition or disposition being
included in such pro forma calculation.

(c) In addition to the limitation set forth in subsections (a) and
(b) of this Section 1004, the Trust will not, and will not permit any
Subsidiary to, incur any Debt secured by any mortgage, lien, charge,
pledge, encumbrance or security interest of any kind upon any of the
property of the Trust or any Subsidiary, whether owned at the date
hereof or hereafter acquired, if, immediately after giving effect to the
incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the
Trust and its Subsidiaries on a consolidated basis which is secured by
any mortgage, lien, charge, pledge, encumbrance or security interest on
property of the Trust or any Subsidiary is greater than 40% of the
Trust's Total Assets.

(d) For purposes of this Section 1004 Debt shall be deemed to be
"incurred" by the Trust or a Subsidiary whenever the Trust or such
Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof.

SECTION 1005. Existence.

Subject to Article Eight, the Trust 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 Trust and its
Subsidiaries; provided, however, that the Trust 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 Trust 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 Trust 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 Trust 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 Trust or
any Subsidiary from selling or otherwise disposing for value its properties
in the ordinary course of its business.

SECTION 1007. Insurance.

The Trust 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.

The Trust will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Trust or any Subsidiary, and (2) all
lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Trust or any Subsidiary; provided,
however, that the Trust 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 Trust is subject to Section 13 or 15(d) of the
Exchange Act, the Trust will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents which the Trust would have been required to file with the
Commission pursuant to such Section 13 or 15(d) (the "Financial Statements")
if the Trust 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 Trust would have been required so to file such documents if the Trust

were so subject.

The Trust 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 Trust would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act if the Trust were subject to such Sections, and (ii) file with the
Trustee copies of annual reports, quarterly reports and other documents which
the Trust would have been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Trust were subject to such
Sections and (y) if filing such documents by the Trust 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 Trust 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 Trust'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 Trust will pay to the Holder or 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 or of 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
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 Trust will furnish the Trustee and the Trust'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 Trust
will pay to the Trustee or such Paying Agent the Additional Amounts 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 above-mentioned
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 Trust covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any
loss, liability or expense reasonably incurred without negligence or bad
faith on their part arising out of or in connection with actions taken or
omitted by any of them or in reliance on any Officers' Certificate furnished
pursuant to this Section or in reliance on the Trusts not furnishing such an
Officers' Certificate.

SECTION 1012. Waiver of Certain Covenants.

The Trust 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
Trust 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

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.

<PAGE>

SECTION 1102. Election to Redeem; Notice to Trustee.

The election of the Trust to redeem any Securities shall be evidenced by
or pursuant to a Board of Resolution. In case of any redemption at the
election of the Trust of less than all of the Securities of any series, the
Trust 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 Trust 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 Trust 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 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;

(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 Trust, 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 Trust, on which such
exchanges may be made; and

(10) the CUSIP number of such Security, if any, provided that
neither the Trust or the Trustee shall have any responsibility for any
such CUSIP number.

Notice of redemption of Securities to be redeemed shall be given by the
Trust or, at the Trusts request, by the Trustee in the name and at the
expense of the Trust.

SECTION 1105. Deposit of Redemption Price.

On or prior to any Redemption Date, the Trust shall deposit with the
Trustee or with a Paying Agent (or, if the Trust 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 Trust
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 Trust 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, 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 Trust 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 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 Trust or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to
the Trust and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing) and the Trust 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
"option 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 Trust may, in satisfaction of all or any part of any mandatory
sinking fund 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 matured coupons appertaining thereto and (2) apply as a credit Securities
of such series which have been redeemed either at the election of the Trust
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 Trust; 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.

SECTION 1203. Redemption of Securities for Sinking Fund.

Not less than 60 days prior to each sinking payment date for Securities
of any series, the Trust 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 Trust 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 Trust 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 Sections 1106 and 1107.

<PAGE>

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 thereof,
together with interest, if any, thereof accrued to the Repayment Date
specified in or pursuant to the terms of such Securities. The Trust
covenants that on or before the Repayment Date it will deposit with the
Trustee or with a Paying Agent (or, if the Trust 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 portions 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 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 Trust 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's 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 prepayment
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 Trust.

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 Trust on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Trust 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 Trust, 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 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 Trust 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 payable 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 Trust 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 Trust shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge and at the expense of
the Trust, 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; Trust'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
Trust 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>
SECTION 1402 Defeasance and Discharge.

Upon the Trust's exercise of the above option applicable to this Section
with respect to any Securities of or within a series, the Trust 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 Trust 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 Trust, 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 Trust'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 Trust 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 Trust's exercise of the above option applicable to this Section
with respect to any Securities of or within a series, the Trust shall be
released from its obligations under Sections 1004 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 1004 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 Trust 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(8) 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.

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 Trust 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 Trust 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 Trust 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 Trust).

(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(6)
and 501(7) 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 until the expiration of such
period).

(d) In the case of an election under Section 1402, the Trust shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Trust 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 Trust 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 Trust 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 Trust'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 Trust, 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 Trust 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 Trust 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 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 Trust 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 Trust from time to time upon Trust 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 Borough of 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 Trust, 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 Trust 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 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
Trust 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 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 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 Trust or by Holders of Securities as provided in Section
1502(b), in which case the Trust or the Holders of 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 series 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 Trust 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 Trust, if made in the manner provided in this
Article.

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.

<PAGE>
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.

UNITED DOMINION REALTY TRUST, INC.

By: ___________________________
Name:_____________________

Title:__________________________________

NATIONSBANK OF VIRGINIA, N.A.

By: ____________________________
Name:______________________
Title: ____________________

<PAGE>
EXHIBIT A

FORMS 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 Property
Trust of America 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 1.163-5(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 related 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 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>
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 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) 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 Property Trust of America 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 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]

[Morgan Guaranty Trust
Company of New York,
Brussels Office,] as
Operator of the
Euroclear System
[Cedel S.A.]

By: _______________________

REGISTERED PRINCIPAL AMOUNT
No.: $

CUSIP No.:

UNITED DOMINION REALTY TRUST, INC.
___% NOTE DUE MARCH 1, 2006

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (hereinafter
called the "Trust," which term shall include any successor corporation under
the Indenture hereinafter referred to), for value received, hereby promises
to pay to CEDE & CO., or registered assigns, upon presentation, the principal
sum of DOLLARS on March 1, 2006 (less all previously
paid installments of principal which are due and payable as set forth below,
commencing on March 1, ) and to pay interest on the outstanding principal
amount thereon from , 1994, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-
annually in arrears on March 1 and September 1 in each year, commencing
September 1, 1994, at the rate of % per annum, until the entire
principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest which shall be the
February 15 or August 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to
the Holder on such Regular Record Date, and may either be paid to the Person
in whose name this Note (or one or more Predecessor Notes) is registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given
to Holders of Notes of this series not more than 15 days and not less than 10
days prior to such Special Record Date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of, Make-Whole Amount, if any, on, and interest on
this Note will be made at the office or agency of the Trust maintained for
that purpose in the City of Richmond, State of Virginia, or elsewhere as
provided in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Trust payment of
interest may be made by (i) check mailed to the address of the Person
entitled thereto as such address shall appear in the Note Register or (ii)
transfer to an account of the Person entitled thereto located inside the
United States.

This Note is one of a duly authorized issue of securities of the Trust
(herein called the "Notes"), issued and to be issued in one or more series
under an Indenture, dated as of March 1, 1994 (herein called the

"Indenture"), between the Trust and NationsBank of Virginia, N.A. (herein
called the "Trustee," which term includes any successor trustee under the
Indenture with respect to the Notes), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Trust, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note
is one of the series designated as the " % Notes due March 1, 2006,"
limited in aggregate principal amount to $75,000,000.

Installments of principal of $ will be paid on each $1,000 original
principal amount of the Notes annually on each March 1 (a "Principal Payment
Date"), commencing on March 1, . In each case, principal on this Note
will be payable to the Person in whose name this Note is registered in the
Security Register kept for the Notes pursuant to Section 305 of thne
Indenture (the "Note Register") on the preceding February 15 (whether or not
a Business Day).

The Notes may be redeemed at any time at the option of the Trust, in
whole or in part, upon notice of not more than 60 nor less than 30 days prior
to the Redemption Date, at a redemption price equal to the sum of (i) the
principal amount of the Notes being redeemed plus accrued interest thereon to
the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such Notes.

The following definitions apply with respect to any redemption of the
Notes of this series at the option of the Trust:

"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of
each dollar of principal being redeemed or paid and the amount of interest
(exclusive of any interest accrued to the date of redemption or accelerated
payment) that would have been payable in respect of such dollar if such
redemption or accelerated payment had not been made, determined by
discounting, on a semiannual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date
such notice of redemption is given or declaration of acceleration is made)
from the respective dates on which such principal and interest would have
been payable if such redemption or accelerated payment had not been made,
over (ii) the aggregate principal amount of the Notes being redeemed or paid.

"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of
the principal being redeemed or paid. If no maturity exactly corresponds to
such maturity, yields for the two published maturities most closely
corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount

shall be used.

"Statistical Release" means the statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded United States
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under the
Indenture, then such other reasonably comparable index which shall be
designated by the Trust.

The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Trust on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Trust, in each case, upon compliance by the Trust with certain conditions set
forth in the Indenture, which provisions apply to this Note.

If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of, and the Make-Whole Amount, if any, on, the
Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.

As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with
respect to the Notes, the Holders of not less than 25% in principal amount of
the Notes at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity and the Trustee shall
not have received from the Holders of a majority in principal amount of the
Notes at the time Outstanding a direction inconsistent with such request, and
shall have failed to institute any such proceeding, for 60 days after receipt
of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Note for the enforcement
of any payment of principal hereof or any interest on or after the respective
due dates expressed herein.

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Notes under the Indenture at any
time by the Trust and the Trustee with the consent of the Holders of not less
than a majority in principal amount of the Outstanding Notes. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Notes at the time Outstanding, on behalf of the
Holders of all Notes, to waive compliance by the Trust with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or wavier by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Trust, which is

absolute and unconditional, to pay the principal of, Make-Whole Amount, if
any, on, and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register,
upon surrender of this Note for registration of transfer at the office or
agency of the Trust in any Place of Payment where the principal of, Make-
Whole Amount, if any, on, and interest on this Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trust and the Security Registrar for the Notes (the "Note
Registrar") duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Notes of this series are exchangeable for a like aggregate principal
amount of Notes of this series of a different authorized denomination, as
requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or
exchange, but the Trust may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the
Trust, the Trustee and any agent of the Trust or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Trust, the
Trustee nor any such agent shall be affected by notice to the contrary.

No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Note, 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
Trust or of any successor, either directly or through the Trust 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 this Note by the Holder thereof and as part of the
consideration for the issue of the Notes.

All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF VIRGINIA.

Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Trust has caused "CUSIP" numbers to
be printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the correctness or accuracy of such CUSIP
numbers as printed on the Notes, and reliance may be placed only on the other

identification numbers printed hereon.

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Trust has caused this instrument to be duly
executed under its corporate seal this day of March, 1994.

UNITED DOMINION REALTY TRUST, INC.

By:_______________________
Name:________________
Title:_______________

Attest:

By:_______________________
Name:________________
Title:_______________

[SEAL]

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

This is one of the Notes of the series designated " % Notes due March
1, 2006" pursuant to the within-mentioned Indenture.

NATIONSBANK OF VIRGINIA, N.A.,
as Trustee

By:________________________
Authorized Officer

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto

PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
the within Note of United Dominion Realty Trust and __________ hereby does
irrevocably constitute and appoint

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Attorney to transfer said Note on the books of the within-named Trust with
full power of substitution in the premises.

Dated: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.

HUNTON & WILLIAMS
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074

File No.: 27789.199
Direct Dial: (804) 788-8267

March 7, 1994

Board of Directors
United Dominion Realty Trust, Inc.

10 South Sixth Street
Richmond, Virginia 23219

Registration Statement on Form S-3
% Notes due March 1, 2006

Gentlemen:

We are acting as counsel for United Dominion Realty Trust,
Inc. (the "Company") in connection with the registration under
the Securities Act of 1933 of $75,000,000 principal amount of its
% Notes due March 1, 2006 (the "Notes"). The Notes are
described in the Registration Statement on Form S-3 of the
Company (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") on March 4,
1994. In connection with the filing of the Registration
Statement you have requested our opinion concerning certain
corporate matters.

We are of the opinion that:

1. The Company is a corporation duly organized and validly
existing under the laws of the Commonwealth of Virginia.

2. When the Notes have been sold to Goldman, Sachs & Co.as
described in the Registration Statement, the Notes will be
legally issued, fully paid and nonassessable and will be binding
obligations of the Company.

We consent to the filing of this opinion with the Commission
as an exhibit to the Registration Statement and to the reference
to us in the Prospectus included therein.

Very truly yours,

/s/ Hunton & Williams

33/33

<TABLE>
EXHIBIT 12

UNITED DOMINION REALTY TRUST, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1989 1990 1991 1992 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Income before extraordinary item.............. $ 5,572 $ 4,973 $ 3,604 $ 6,577 $ 11,197

Add:
Portion of rents representative of the
interest factor.......................... 37 47 103 126 143
Interest on indebtedness.................... 9,934 9,435 11,859 11,697 16,938
Amortization of debt expense 51 80 59 122 321
------------ ------------ ------------ ------------ ------------
Income as adjusted....................... $ 15,594 $ 14,535 $ 15,625 $ 18,522 $ 28,599
============ ============ ============ ============ ============
Fixed charges --
Interest on indebtedness.................... $ 9,934 $ 9,435 $ 11,859 $ 11,697 $ 16,938
Amortization of debt expense................ 51 80 59 122 321
Capitalized interest........................ 717 597 291 73 0
Portion of rents representative of the
interest factor.......................... 37 47 103 126 143
------------ ------------ ------------ ------------ ------------
Fixed Charges............................ $ 10,739 $ 10,159 $ 12,312 $ 12,018 $ 17,402
============ ============ ============ ============ ============
Ratio of earnings to fixed charges............ 1.45 1.43 1.27 1.54 1.64
============ ============ =========== ============ ============
</TABLE>

EXHIBIT
23(ii)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated March 3, 1994, in the Registration Statement
(Form S-3) and related Prospectus of United Dominion Realty Trust, Inc. for
the registration of $75,000,000 of Notes and to the incorporation by
reference therein of our report dated February 24, 1993, with respect to the
financial statements and schedules of United Dominion Realty Trust, Inc.
included and incorporated by reference in its Annual Report (Form 10-K) for
the year ended December 31, 1992, filed with the Securities and Exchange
Commission.

We further consent to the incorporation by reference of our report dated May
18, 1993, with respect to the Combined Historical Summary of Gross Income and
Direct Operating Expenses of Orange Orlando and Foxcroft Properties for the
year ended December 31, 1992, filed with the Securities and Exchange
Commission on Form 8-K/A dated May 20, 1993.

/s/ Ernst & Young

Richmond, Virginia
March 3, 1994

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
United Dominion Realty Trust, Inc.:

We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference of our reports (a) dated July 8, 1993, with
respect to the Statement of Rental Operations of St. Andrews Commons
Apartments for the year ended December 31, 1992, filed with the Securities
and Exchange Commission on Form 8-K/A dated July 29, 1993, (b) dated July 9,
1993, with respect to the Statement of Rental Operations of Dover Village
Apartments for the year ended December 31, 1992, filed with the Securities
and Exchange Commission on Form 8-K/A dated July 29, 1993, (c) dated October
19, 1993, with respect to the Statement of Rental Operations of The Lakes
Apartments for the year ended December 31, 1992, filed with the Securities

and Exchange Commission on Form 8-K/A dated December 2, 1993, (d) dated
October 29, 1993, with respect to the Statement of Rental Operations of
Heatherwood Apartments for the year ended December 31, 1992, filed with the
Securities and Exchange Commission on Form 8-K/A dated December 2, 1993, (e)
dated November 3, 1993, with respect to the Statement of Rental Operations of
Lake Washington Downs Apartments for the year ended December 31, 1992, filed
with the Securities and Exchange Commission on Form 8-K/A dated December 2,
1993, (f) dated January 25, 1994, with respect to the Statement of Rental
Operations of Peppertree Apartments for the year ended December 31, 1992,
filed with the Securities and Exchange Commission on Form 8-K/A dated
February 18, 1994 (g) dated January 27, 1994, with respect to the Statement
of Rental Operations of Beechwood Apartments for the year ended December 31,
1992, filed with the Securities and Exchange Commission on Form 8-K/A dated
February 18, 1994, and (h) dated February 14, 1994 with respect to the
Statement of Rental Operations of Riverwind Apartments for the year ended
December 31, 1992, filed with the Securities and Exchange Commission on Form
8-K/A dated March 3, 1994 in the Registration Statement (Form S-3) and
related Prospectus of United Dominion Realty Trust, Inc. for the Registration
of $75,000,000 of Notes.

/s/ L. P. Martin & Company, P.C.

L. P. Martin & Company, P.C.
Certified Public Accountants
March 4, 1994

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
United Dominion Realty Trust, Inc.

We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference of our report dated January 11, 1994, with respect
to the Statement of Rental Operations of The Village At Old Tampa Bay Apartments
for the year ended December 31, 1992, filed with the Securities and Exchange
Commission on Form 8-K/A dated February 18, 1994, in the Registration Statement
(Form S-3) and related Prospectus of United Dominion Realty Trust, Inc. for the
registration of $75 million of senior notes.

/s/ AHEARN, JASCO + COMPANY
____________________________________
AHEARN, JASCO + COMPANY
Certified Public Accountants

March 1, 1994

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

FORM T-1

STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____
________

NATIONSBANK OF VIRGINIA, N.A.
(Exact name of trustee as specified in its charter)

NationsBank Center 54-0314875
12th and Main Streets (I.R.S. employer
Richmond, Virginia identification no.)

(Address of trustee's principal 23219
executive offices) (Zip Code)
________

Mr. L. Stephen Miles
NationsBank of Virginia, N.A.
Corporate Trust Department
600 East Main Street
Suite 1700
Richmond, Virginia 23219
(804) 344-1310
(Name, address and telephone number of agent for service)
________

UNITED DOMINION REALTY TRUST, INC.
(Exact name of obligor as specified in its charter)

Virginia 54-0857512
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)

10 South Sixth Street, Suite 203

Richmond, Virginia 23219
(Address of principal executive offices) (Zip Code)

________

SENIOR DEBT SECURITIES
(Title of the indenture securities)

<PAGE>

Item General Information.

Furnish the following information as to the trustee:

Name and address of each examining or supervising
authority to which it is subject.

Board of Governors of the Federal Reserve System
Washington, D.C.

Comptroller of the Currency
Washington, D.C.

Federal Deposit Insurance Corporation
Washington, D.C.

Whether it is authorized to exercise corporate trust
powers.

The trustee is authorized to exercise corporate trust powers.

Item Affiliations with the Obligor.

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

The obligor is not an affiliate of the trustee.

NOTE: In accordance with General Instruction B to Form T-1, no
response is provided to Items 3 through 15 of Form T-1, because
the obligor is not in default under an indenture for which the
trustee acts as trustee.

Item 16. List of Exhibits.

List below all exhibits filed as a part of this statement of
eligibility.

A copy of the articles of association of the trustee as
now in effect. (Incorporated by reference from
Exhibit 1 to Registration No. 22-24410, which is Exhibit
26 to Registration No. 33-62926).

A copy of the certificate of authority of the trustee to
commence business, if not contained in the articles of

association. (Contained in Articles of Association).

A copy of the authorization of the trustee to exercise
corporate trust powers, if such authorization is not
contained in the documents specified in paragraph (1) or
(2) above. (Incorporated by reference from Exhibit 3 to
Registration No. 22-24410, which is Exhibit 26 to
Registration No. 33-62926).

<PAGE>
A copy of the bylaws of the trustee. (Filed herewith).

A copy of each indenture referred to in Item 4, if the
obligor is in default. (Not applicable).

Consent of the trustee required by section 321(b) of the
Act. (Filed herewith).

A copy of the latest report of condition of the trustee
published pursuant to the requirements of its
supervising or examining authority. (Filed herewith).

A copy of any order pursuant to which the foreign
trustee is authorized to act as sole trustee under
indentures qualified or to be qualified under the Act.
(Not applicable.)

Foreign trustees are required to furnish a consent to
service of process. (Not applicable.)

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, NationsBank of Virginia, N.A., a national
banking association organized and existing under the laws of the
United States of America, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Richmond, and the
Commonwealth of Virginia, on the 4th day of March, 1994.

NATIONSBANK OF VIRGINIA, N.A..
as Trustee

By: /s/ L. Stephen Miles
L. Stephen Miles
Senior Vice President

<PAGE>

EXHIBIT 6

THE CONSENT OF THE
TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT

March 4, 1994

Securities and Exchange Commission
Washington, D.C. 20549

Ladies and Gentlemen:

In connection with the qualification of an indenture between
United Dominion Realty Trust, Inc. (the "Company") and NationsBank
of Virginia, N.A., as Trustee, securing the Company's Senior Debt
Securities the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, hereby consents that reports of
examinations of the undersigned, made by Federal or State
authorities authorized to make such examination, may be furnished
by such authorities to the Securities and Exchange Commission upon
its request therefor.

Very truly yours,

NATIONSBANK OF VIRGINIA, N.A.,
as Trustee

By: /s/ L. Stephen Miles
L. Stephen Miles
Senior Vice President

<PAGE>

BYLAWS

NATIONSBANK OF VIRGINIA, NATIONAL ASSOCIATION

A Wholly Owned Subsidiary, Directly or Indirectly,
of NationsBank Corporation

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

<PAGE>

ARTICLE I

SHAREHOLDERS

Section 1.1. Annual Meeting. The regular annual meeting of the
shareholders of this Association for the election of directors and the
transaction of whatever other business may properly come before the meeting
shall be held at the main banking office of NationsBank of Virginia, National
Association (the "Association") or any other convenient place the Board of
Directors may designate, on such date as may be designated by the Board of
Directors.

Section 1.2. Informal Action By Shareholders. Except as otherwise
required by applicable laws and regulations, any action that may be taken at
a meeting of the shareholders may also be taken without a meeting if a
written consent to the action is signed by all of the persons who would be
entitled to vote thereon and is filed with the Secretary of the Association
as part of the corporate records.

ARTICLE II

DIRECTORS

Section 2.1. General Powers. The business and affairs of the
Association shall be managed and administered under the direction of its
Board of Directors.

Section 2.2. Number. The Board shall consist of not less than five nor
more than twenty-five shareholders of the Association or of any company which
has control over the Association, the exact number within such minimum and
maximum limits to be determined from time to time by resolution of a majority
of the full Board or by resolution of the shareholders.

Section 2.3. Qualifications. Each director of this Association,unless
otherwise permitted under the laws of the United States, must be a citizen of
the United States during the director's entire term of service.At least two-
thirds of the directors must have resided in the state or District in which
the Association is located, or within 100 miles of the Main Office of this
Association for at least one year immediately preceding their election and
must reside within that same area during their continuance in office. Each
director must own in the director's own right and throughout the term of
office, capital stock in this Association or in a company which has control
of this Association, in such amounts as required by applicable statute or
regulation.

Section 2.4. Nominations. Nominations for election to the Board of
Directors may be made by the Board of Directors or by any shareholder of any
outstanding class of capital stock of this Association entitled to vote for
the election of directors.

Section 2.5. Oath and Tenure. Each person appointed or elected a
Director of this Association must take the oath of such office in the form
prescribed by the Comptroller of the Currency. No person elected or
appointed a Director of this Association shall exercise the functions of such
office until that person has taken such oath. The Directors of this
Association shall hold office for one year and until their successors are
elected and qualified.

Section 2.6. Regular Meetings. As soon after each annual election by
the shareholders as practicable, the Directors shall meet for the purposes of
taking their oath of office, organizing the new Board, appointing officers
and transacting such other business as may come before the meeting. The
Board of Directors may hold regular meetings at such time and place as the
Board may from time to time determine. Regular meetings may be held without
notice.

Section 2.7. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, any Vice Chairman, the
President, or any three (3) or more directors. Unless waived, each member of
the Board of Directors shall be given notice by telephone or in person, or in
writing by telegram, facsimile transmission, hand delivery,courier service,
first-class mail, certified mail, or express mail, stating the time and place
of each special meeting.

Section 2.8. Quorum. A majority of the members of the Board of
Directors shall constitute a quorum for the transaction of business. If at
the time fixed for the meeting, including the meeting to organize the new
Board following the Annual Meeting of Shareholders, a quorum is not
present,the directors in attendance may adjourn the meeting from time to time
until a quorum is obtained. Except as otherwise provided herein, a majority
of those directors present and voting at any meeting of the Board of
Directors shall decide each matter considered.

Section 2.9. Vacancies. Any vacancy occurring on the Board of
Directors, including a vacancy resulting from an increase in the number of
directors may be filled by action of the sole shareholder or by the
affirmative vote of a majority of the remaining directors, and any director
so appointed shall hold office until the next election.

Section 2.10. Informal Action By Directors. Except as otherwise
required by applicable laws and regulations, any action that may be taken at
a meeting of the Board of Directors may also be taken without a meeting if a
written consent to the action is signed by all the Directors and is filed
with the Secretary of the Association as part of the corporate records.

ARTICLE III

COMMITTEES OF THE BOARD

Section 3.1. Committees. Except for those duties which by law or
regulation must be performed by at least a majority of the full Board, the
performance of such duties as the Board of Directors deems appropriate may be
assigned to one or more committees. Each committee shall have the authority
of the Board of Directors to the full extent provided in these Bylaws or in
such other instrument used from time to time by the Board to establish the
committee. Membership of each committee shall be established from time to
time by the Board of Directors and may include in whole or in part
individuals who are not members of this Board and individuals who are not
employees of this Association.

Section 3.2. Notice. Unless a committee shall provide otherwise, it
shall not be necessary to give notice of any of its regular meetings.
Special meetings may be held on call of the Chairman of the Board, the

President, or the chairman of the committee in such manner as provided in
these Bylaws for calling special meetings of the Board of Directors.

Section 3.3. Executive Committee. There shall be a standing committee
of the Association to be known as the Executive Committee, consisting of the
President, and such other directors as may be appointed by the Board of
Directors. During such time as the Board of Directors may not be in session,
the Executive Committee, consisting of the President, and such other
directors as may be appointed by the Board of Directors. During such time as
the Board of Directors may not be in session, the Executive Committee shall
possess and exercise all the powers of the Board of Directors in the
management of the business and affairs of the Association, except as limited
by applicable law.The Executive Committee shall keep minutes of all its
meetings and shall report its action at the next regular meeting of the Board
of Directors.

Section 3.4. Compensation and Management Compensation Committees.The
Compensation Committee and the Management Compensation Committee of
NationsBank Corporation shall be the Compensation Committee and the
Management Compensation Committee of this Association and each shall have
full and complete authority to act for and on behalf of this association in
the exercise of the authority granted to it by the Bylaws and the Board of
Directors of NationsBank Corporation.

Section 3.5. Examining Committee. There shall be a standing committee
of the Association to be known as the Examining Committee. No member of the
Examining Committee shall be an active officer of the Association. The
Examining Committee shall review at least semi-annually the work of the audit
staff and credit review staff and shall require appropriate reports to be
prepared. Such reports shall set forth in detail the scope of the audits
performed by the audit staff and the work performed by the credit review
staff,and the Examining Committee shall require that the programs and work
performed be of sufficient scope and detail to protect against improper and
unsound practices and to furnish adequate protection of all Association
assets and records. The Examining Committee is also authorized to review and
sign regulatory reports on behalf of the Board. The results of such reviews
shall be reported to the Board.

The audit program shall include a suitable examination of the Trust
Department. The Committee shall cause suitable audits to be made of the
Trust Department by the auditors responsible only to the Board at least once
during each calendar year and within fifteen months of the last audit. The
Auditors shall also during their examination ascertain whether the department
has been administered in accordance with applicable regulations of the
Comptroller of the Currency.

The audit and credit review programs of the Association shall give
credence to all other requirements applicable under Federal regulations and
such programs shall be broad enough in scope to enable the Examining
Committee to ascertain that the Association is in a sound and solvent
condition.

Section 3.6. Asset Quality Review Committee. There shall be a standing
committee of the Association to be known as the Asset Quality Review
Committee. The Committee's duties shall be as prescribed from time to time

by the Board of Directors. It shall report to the Board of Directors at each
regular meeting.

Section 3.7. Trust Committee. There shall be a standing committee of
the Association to be known as the Trust Committee. All matters pertinent to
the proper exercise of fiduciary powers by this Association are assigned to
the Trust Committee, including the determination of policies, the investment
and disposition of property held in a fiduciary capacity, and the direction
and review of the actions of officers, employees and subcommittees and
subcommittees utilized by the Trust Committee in the exercise of its
fiduciary powers. No fiduciary account shall be accepted without the prior
approval of the Trust Committee and a written record must be made of such
acceptances and of the relinquishment or closing out of all fiduciary
accounts. Upon the acceptance of an account for which this Association has
investment responsibility, a prompt review of the assets shall be made and
the Trust Committee shall ensure that at least every calendar year
thereafter, and within fifteen months of the last review, all the assets held
in or for each fiduciary account, where this Association has investment
responsibilities, are reviewed to determine the advisability of retaining or
disposing of such assets. The Trust Committee is authorized to establish
such subcommittees as it deems advisable and to assign to such subcommittees
the administration of such of the Trust Committee's assigned fiduciary powers
as it may consider proper. The subcommittees shall be responsible to the
Trust Committee, shall keep minutes, which minutes will be subject to review
by the Trust Committee, and shall make such reports as the Trust Committee
may require. The Trust Committee shall keep minutes of all its meetings
showing the disposition of all matters considered and passed upon by the
Committee.

Section 3.8. Other Committees. The Board of Directors may appoint,
from time to time, other committees, for such purposes and with such powers
as the Board of Directors may determine.

Section 3.9. Informal Action By Committees. Except as otherwise
required by applicable laws and regulations, any action that may be taken at
a meeting of a committee of the Board of Directors may also be taken without
a meeting in accordance with the procedures applicable to actions taken by
the full Board of Directors.

ARTICLE IV

OFFICERS AND EMPLOYEES

Section 4.1. Number. The officers of this Association may include a
Chairman of the Board, President, one or more Vice Chairmen, Chief Financial
Officer, one or more Vice Presidents (which may include one or more corporate
Executive Vice Presidents, Group Executive Vice Presidents, Executive Vice
Presidents, and Senior Vice Presidents), a Secretary, and such other officers
as the Board of Directors may elect, or provide for the appointment of, in
order to conduct the business and affairs of the Association. All officers
shall serve at the pleasure of the Board.

Section 4.2. Election of Officers. The officers of this Association
shall be elected or appointed annually at the first meeting of the Board of
Directors held after each annual meeting of the shareholders in accordance

with Section 2.6 of Article II of these Bylaws, or as soon thereafter as is
practicable. In addition, other elections or appointment of officers may
beheld at such other times as may be appropriate by or under authority of the
Board of Directors including that authority vested under Section 3.4 of
Article III of the Bylaws.

Section 4.3. Chairman of the Board. The Board of Directors shall
designate one of its members to be Chairman of the Board. Such person shall
supervise the carrying out of the policies adopted or approved by the Board
of Directors and shall have general executive powers, as well as the specific
powers conferred by these Bylaws, and shall perform such other duties as may
be conferred or assigned by the Board. The Chairman of the Board shall
preside at meetings of the Board of Directors.

Section 4.4. President. The President, who shall be a member of the
Board of Directors, shall have general executive powers and shall have and
may exercise any and all other powers and duties pertaining by law,regulation
or practice to the office of President, or imposed by these Bylaws. The
President shall also have and may exercise such further powers and duties as
from time to time may be conferred or assigned by the Board of Directors. In
the absence of the Chairman of the Board, the President shall preside at
meetings of the Board of the Board of Directors.

Section 4.5. Secretary. The Secretary of the Association shall be
Secretary of the Board of Directors and shall be responsible for the minute
books of the Association. The Secretary shall be custodian of the corporate
seal, records, documents, and papers of the Association; shall provide for
the keeping of reports of the Board of Directors and committees of the
Association; may exercise any and all other powers and duties pertaining by
law, regulation or practice to the office of Cashier, or imposed by these
Bylaws; and shall also perform such other duties as may be conferred or
assigned from time to time by the Board of Directors.

Section 4.6. Trust Officers. There shall be one or more Trust Officers
of this Association whose duties shall be to manage, supervise, and direct
all the activities of the Trust Department. They shall do and perform all
acts and things necessary or proper to be done or performed in carrying on
the business of the Trust Department in accordance with provisions of law and
applicable regulations; and shall act pursuant to opinion of counsel where
such opinion is deemed necessary. Opinions of counsel shall be retained on
file in connection with all important matters pertaining to trusts, both
individual and corporate. The Trust Officers shall be responsible for all
assets and documents held by the Association in connection with trust
matters.

Section 4.7. Other Officers. Each officer of this Association shall
have such powers and duties as may be conferred or assigned from time to time
by the Board of Directors, the Compensation Committee, the Management
Compensation Committee, the Chairman of the Board, or the President, or
officers authorized by any one of them.

Section 4.8. Salaries. The salaries of the officers shall be fixed
from time to time in accordance with Section 3.4 of these Bylaws and no
officer shall be prevented from receiving such salary by reason of the fact
that the officer is also a director of the Association.

Section 4.9. Term. The Board of Directors may remove any officer at
any time with or without cause. Any officer, if appointed by the
Compensation Committee, the Management Compensation Committee, or by another
officer, may likewise be removed at any time by such Committee or officer
with ratification by the Board of Directors.

Section 4.10. Employees Other than Officers. Subject to the authority
of the Board of Directors, the Compensation Committee and the Management
Compensation Committee, or any Association officer authorized by either of
such Committees, may employ such agents and employees other than officers as
such Committee or officer may deem advisable for the prompt and orderly
transaction of the business of the Association, define their duties, fix
their compensation and dismiss them.

ARTICLE V

TRUST DEPARTMENT

Section 5.1. Trust Department. There shall be a department of the
Association known as the Trust Department that shall perform the fiduciary
responsibilities of the Association.

Section 5.2. Trust Department Files. There shall be maintained in the
Trust Department files all fiduciary records necessary to assure that its
fiduciary duties have been properly undertaken and discharged.

Section 5.3. Trust Investments. Funds held in a fiduciary capacity
including investments pursuant to court order shall be invested according to
the instrument establishing the fiduciary relationship and local law. Where
such instrument does not specify the character and class of investments to be
made and does not vest in the Association a discretion in the matter, funds
held pursuant to such instrument shall be invested in investments in which
corporate fiduciaries may invest under local law.

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.1. Fiscal Year. The fiscal year of the Association shall be
the calendar year.

Section 6.2. Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, contracts, checks, notes, drafts,
loan documents, letters of credit, master agreements, swap agreements,
guarantees of signatures, certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds. undertakings, proxies and other instruments or documents
may be signed, executed, acknowledged, verified, attested, delivered or
accepted on behalf of the Association by the Chairman of the Board, any Vice
Chairman of the Board, the President, any Vice President, and Assistant Vice
President, or any individual who is listed on the Association's Officer's
payroll file in a position equal to any of the aforementioned officer
positions, or such other officers, employees or agents as the Board of
Directors or any of such designated officers or individuals may direct,or, if

in connection with the exercise of fiduciary powers of the Association, by
any of those officers or by any Trust Officer. The provisions of this
Section 6.2 are supplementary to any other provision of these Bylaws and
shall not be construed to authorize execution of instruments otherwise
dictated by law.

Section 6.3. Shares of Other Corporations. The Chairman of the Board,
any Vice Chairman of the Board, the President, the Chief Financial Officer,
the Secretary, or such other officers, employees or agents as the Board of
Directors or such designated officers may direct, are authorized to vote,
represent, and exercise on behalf of the Association all rights incident to
any and all shares of any other corporations or associations standing in the
name of the Association. The authority herein granted to vote or represent
on behalf of the Association any and all shares held by the Association in
any other corporations or associations may be exercised by proxy or power of
attorney.

Section 6.4. Electronic Meetings. Subject to the provisions required
or permitted by these Bylaws or the Articles of Association for notice of
meetings, shareholders, members of the Board of Directors, or members of any
committee designated by such Board, may participate in and hold a meeting of
such shareholders, Board of Directors, or committee by means of conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear or otherwise communicate with each
other. Participation in such a meeting shall constitute presence in person
at such meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.

Section 6.5. Waiver of Notice. Waiver of Notice. Unless otherwise
provided by the laws of the United States, any meeting of the shareholders,
Directors, or any committee designated by the Board may be held at any time
and without notice if the shareholders, Directors, or committee members shall
waive notice of the time, place and purpose of any such meeting.

Section 6.6. Seal. Any person authorized to execute instruments in
accordance with Section 6.2 shall have the authority to affix the corporate
seal to any document requiring the said seal and to attest the same.

ARTICLE VII

BYLAWS

Section 7.1. Inspection. A copy of the Bylaws, with all amendments
thereto, shall at all times be kept in a convenient place at the main office
of the Association and shall be open for inspection during banking hours to
all shareholders.

Section 7.2. Amendments. These Bylaws may be amended upon vote of a
majority of the entire Board of Directors at any meeting of the Board or vote
of the Association's shareholders. No amendment may be made unless the
Bylaw, as amended, is consistent with the requirement of the laws of the
United States and of the Articles of Association.

ARTICLE VIII

CAPITAL STOCK

Section 8.1. Shares. Shares of stock of this Association may but need
not be represented by certificates. When shares are represented by
certificates, the certificates shall be signed by, or shall bear the
facsimile signature of, the Chairman of the Board or the President, and the
Secretary or an Assistant Secretary of the Association.

Section 8.2. Transfers. The Association shall keep a set of records
containing the number and class of series of shares held by all shareholders.

Adopted May 5, 1993

<PAGE>

[LETTERHEAD OF BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM]

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

(LOGO OF BOARD OF Please refer to page i, 1
GOVERNORS OF THE Table of Contents, for
FEDERAL RESERVE the required disclosure
SYSTEM APPEARS HERE) of estimated burden.

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

Consolidated Reports of Condition and Income for
A Bank With Domestic and Foreign Offices--FFIEC 031

Report at the close of business December 31, 1993

(931231)
- -----------
(RCRI 9999)

This report is required by law: 12 U.S.C. (S)324 (State member banks);
12 U.S.C.
(S)1817 (State nonmember banks); and 12 U.S.C. (S)161 (National Banks).

This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.

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

NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National Banks.

I, Joe L. Price, Senior Vice-President
---------------------------------------------------
Name and Title of Officer Authorized to Sign Report

of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and are true
to the best of my knowledge and belief.

/s/ Joe L. Price, Senior Vice-President
- ----------------------------------------------
Signature of Officer Authorized to Sign Report

1/24/94
- ----------------------------------------------
Date of Signature

The reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions. NOTE: These instructions may in some

cases differ from generally accepted accounting principals.

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

/s/ James W. Thompson
- ----------------------------------------------
Director (Trustee)

/s/ Randolph W. McElroy
- ----------------------------------------------
Director (Trustee)

/s/ Hugh R. Stallard
- ----------------------------------------------

Director (Trustee)

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

For Banks Submitting Hard Copy Report Forms:

State Member Banks: Return the original and one copy to the appropriate Federal
Reserve District Bank.

State Nonmember Banks: Return the original only in the special return address
envelope provided. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2139 Espey Court, Crofton, MD 21114.

National Banks: Return the original only in the special return address envelope
provided. If express mail is used in lieu of the special return address
envelope, return the original only to the FDIC, c/o Quality Data Systems, 2139
Espey Court, Crofton, MD 21114.

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

FDIC Certificate Number 06886
-----

CALL NO. 186 31 12-31-93

CERT: 06886 00610 STBK 51-1985

NationsBank of Virginia, National Assoc.
Reg. Rel. Grp. - 5th Flr - 600 Peach
Atlanta, GA 30308

Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency
<PAGE>

Consolidated Reports of Condition and Income for
A Bank With Domestic and Foreign Offices
- ----------------------------------------------------------------------------

Table of Contents

<TABLE>
<S> <C>
Signature Page Cover

Report of Income

Schedule RI--Income Statement........................................RI-1,2,3

Schedule RI-A--Changes in Equity Capital.............................RI-3

Schedule RI-B--Charge-offs and Recoveries and Changes in
Allowance for Loan and Lease Losses..............................RI-4,5

Schedule RI-C--Applicable Income Taxes by Taxing Authority...........RI-5

Schedule RI-D--Income from International Operations..................RI-6

Schedule RI-E--Explanations........................................RI-7,8

Report of Condition

Schedule RC--Balance Sheet.........................................RC-1,2

Schedule RC-A--Cash and Balances Due From Depository
Institutions.......................................................RC-3

Schedule RC-B--Securities..........................................RC-4,5

Schedule RC-C--Loans and Lease Financing
Receivables:
Part I. Loans and Leases.......................................RC-6,7
Part II. Loans to Small Businesses and Small Farms
(included in the forms for June 30 only)..................RC-7a,7b

Schedule RC-D--Assets Held in Trading Accounts in Domestic
Offices Only (to be completed only by banks with $1
billion or more in total assets)...................................RC-8

Schedule RC-E--Deposit Liabilities................................RC-9,10

Schedule RC-F--Other Assets.........................................RC-11

Schedule RC-G--Other Liabilities....................................RC-11

Schedule RC-H--Selected Balance Sheet Items for Domestic
Offices...........................................................RC-12

Schedule RC-I--Selected Assets and Liabilities of IBFs..............RC-12

Schedule RC-K--Quarterly Average....................................RC-13

Schedule RC-L--Off-Balance Sheet Items...........................RC-14,15

Schedule RC-M--Memoranda.........................................RC-16,17

Schedule RC-N--Past Due and Nonaccrual Loans,
Leases, and Other Assets.......................................RC-18,19

Schedule RC-O--Other Data for Deposit Insurance
Assessments....................................................RC-19,20

Schedule RC-R--Risk-Based Capital................................RC-21,22

Optional Narrative Statement Concerning the
Amounts Reported in the Reports of Condition
and Income........................................................RC-23

Special Report (to be completed by all banks)

Schedule RC-J--Repricing Opportunities (sent only to
and to be completed only by savings banks)
</TABLE>

Disclosure of Estimated Burden

The estimated average burden associated with this information collection is
29.2
hours per respondent and is estimated to vary from 14.6 to 150 hours per
response, depending on individual circumstances. Burden estimates include the
time for reviewing instructions, gathering and maintaining data in the required
form, and completing the information collection, but exclude the time for
compiling and maintaining business records in the normal course of a
respondent's activities. Comments concerning the accuracy of this burden
estimate and suggestions for reducing this burden should be directed to the
Office of Information and Regulatory Affairs, Office of Management and Budget,
Washington, D.C. 20503, and to one of the following:

Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551

Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219

Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429

For information or assistance, national and state nonmember banks should
contact
the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington, D.C.
20429, toll free on (800) 688-FDIC (3342), Monday through Friday between 8:00
a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District bank.

<PAGE>

Legal Title of Bank: NationsBank of
Virginia, N.A. Call Date: 12/31/93
Address: 1111 East Main Street ST-BK: 51-1985 FFIEC 031
City, State Zip: Richmond, VA 23261 Vendor ID: D Page RI-1
Transit No: 71000036 Cert: 06866

Consolidated Report of Income
for the period January 1, 1993 - December 31, 1993

All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.

Schedule RI--Income Statement

<TABLE>
<CAPTION> --------
I480
------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest income: //////////////////
a. Interest and fee income on loans: //////////////////
(1) In domestic offices: //////////////////
(a) Loans secured by real estate.................................................. 4011 165,334 1.a.(1)(a)
(b) Loans to depository institutions.............................................. 4019 244 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to //////////////////
farmers....................................................................... 4024 1,812 1.a.(1)(c)

(d) Commercial and industrial loans............................................... 4012 188,201 1.a.(1)(d)
(e) Acceptances of other banks.................................................... 4026 0 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures: //////////////////
(1) Credit cards and related plans............................................ 4054 8,576 1.a.(1)(f)(1)
(2) Other..................................................................... 4055 99,731 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions........................ 4056 27 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and //////////////////
political subdivisions in the U.S.: //////////////////
(1) Taxable obligations....................................................... 4503 0 1.a.(1)(h)(1)
(2) Tax-exempt obligations.................................................... 4504 15,858 1.a.(1)(h)(2)
(i) All other loans in domestic offices........................................... 4058 11,884 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs..................... 4059 0 1.a.(2)
b. Income from lease financing receivables: //////////////////
(1) Taxable leases.................................................................... 4505 3,690 1.b.(1)
(2) Tax-exempt leases................................................................. 4307 0 1.b.(2)
c. Interest income on balances due from depository institutions:(1) //////////////////
(1) In domestic offices............................................................... 4105 0 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs..................... 4106 0 1.c.(2)
d. Interest and dividend income on securities: //////////////////
(1) U.S. Treasury securities and U.S. Government agency and corporation //////////////////
obligations....................................................................... 4027 79,323 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.: //////////////////
(a) Taxable securities............................................................ 4506 0 1.d.(2)(a)

(b) Tax-exempt securities......................................................... 4507 5,671 1.d.(2)(b)
(3) Other domestic debt securities.................................................... 3657 5,242 1.d.(3)
(4) Foreign debt securities........................................................... 3658 50 1.d.(4)
(5) Equity securities (including investments in mutual funds)......................... 3659 454 1.d.(5)
e. Interest income from assets held in trading accounts.................................. 4069 1,144 1.e.
--------------------
</TABLE>

- --------------
(1) Includes interest income on time certificates of deposit not held in trading
accounts.

<PAGE>

Legal Title of Bank: NationsBank of
Virginia, N.A. Call Date: 12/31/93
Address: 1111 East Main Street ST-BK: 51-1985 FFIEC 031
City, State Zip: Richmond, VA 23261 Vendor ID: D Page RI-2

Transit No: 71000036 Cert: 06866

Schedule RI--Continued

<TABLE>
<CAPTION>
------------------
Dollar Amounts in Thousands Year-to-date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Interest income (continued) RIAD Bil Mil Thou
f. Interest income on federal funds sold and securities purchased //////////////////////
under agreements to resell in domestic offices of the bank and of //////////////////////
its Edge and Agreement subsidiaries, and in IBFs........................ 4020 57,551 1.f.
g. Total interest income (sum of items 1.a through 1.f).................... 4107 644,792 1.g.
2. Interest expense: //////////////////////
a. Interest on deposits //////////////////////
(1) Interest on deposits in domestic offices: //////////////////////
(a) Transaction accounts (NOW accounts, ATS accounts, and //////////////////////
telephone and preauthorized transfer accounts).................. 4508 34,329 2.a.(1)(a)
(b) Nontransaction accounts: //////////////////////
(1) Money market deposit accounts (MMDAs)....................... 4509 32,577 2.a.(1)(b)(1)
(2) Other savings deposits...................................... 4511 24,671 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more............ 4174 52,849 2.a.(1)(b)(3)
(4) All other time deposits..................................... 4512 87,600 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement //////////////////////
subsidiaries, and IBFs.............................................. 4172 37 2.a.(2)
b. Expense of federal funds purchased and securities sold under //////////////////////
agreements to repurchase in domestic offices of the bank and of //////////////////////
its Edge Agreement subsidiaries, and in IBFs............................ 4180 32,392 2.b.
c. Interest on demand notes issued to the U.S. Treasury and on other //////////////////////
borrowed money.......................................................... 4185 2,335 2.c.
d. Interest on mortgage indebtedness and obligations under capitalized //////////////////////
leases.................................................................. 4072 207 2.d.
e. Interest on subordinated notes and debentures........................... 4200 942 2.e.
f. Total interest expense (sum of items 2.a through 2.e)................... 4073 267,939 2.f.
---------------------
3. Net interest income (item 1.g minus 2.f)................................... ////////////////////// RIAD 4074 376,853 3.
---------------------
4. Provisions: //////////////////////
---------------------
a. Provision for loan and lease losses..................................... ////////////////////// RIAD 4230 29,790
4.a.
b. Provision for allocated transfer risk................................... ////////////////////// RIAD 4243 0
4.b.

---------------------
5. Noninterest income: //////////////////////
a. Income from fiduciary activities........................................ 4070 50,728 5.a.
b. Service charges on deposit accounts in domestic offices................. 4080 76,090 5.b.
c. Trading gains (losses) and fees from foreign exchange transactions...... 4075 90 5.c.
d. Other foreign transaction gains (losses)................................ 4076 0 5.d.
e. Gains (losses) and fees from assets held in trading accounts............ 4077 1,224 5.e.
f. Other noninterest income: //////////////////////

(1) Other fee income.................................................... 5407 122,716 5.f.(1)
(2) All other noninterest income*....................................... 5408 15,894 5.f.(2)
----------------------
g. Total noninterest income (sum of itmes 5.a through 5.f)................. ////////////////////// RIAD 4079 266,742
5.g.
6. Gains (losses) on securities not held in trading accounts.................. ////////////////////// RIAD 4091 4,312 6.
----------------------
7. Noninterest expense: //////////////////////
a. Salaries and employee benefits.......................................... 4135 195,817 7.a.
b. Expenses of premises and fixed assets (net of rental income) //////////////////////
(excluding salaries and employee benefits and mortgage interest)........ 4217 83,775 7.b.
c. Other noninterest expense*.............................................. 4092 276,685 7.c.
----------------------
d. Total noninterest expense (sum of items 7.a through 7.c)................ ////////////////////// RIAD 4093 556,277
7.d.
----------------------
8. Income (loss) before income taxes and extraordinary items and other //////////////////////
----------------------
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6, and 7.d)......... ////////////////////// RIAD 4301 61,840 8.
9. Applicable income taxes (on item 8)........................................ ////////////////////// RIAD 4302 12,286 9.
----------------------
10. Income (loss) before extraordinary items and other adjustments //////////////////////
----------------------
(item 8 minus 9)........................................................... ////////////////////// RIAD 4300 49,554 10.
---------------------------------------------
</TABLE>

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

*Describe on Schedule RI-E--Explanations.

4
<PAGE>

-----

Schedule RI--Continued
<TABLE>
<CAPTION>
--------------------
Year-to-date
--------------------

Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
11. Extraordinary items and other adjustments: /////////////////
a. Extraordinary items and other adjustments, gross of income taxes* . 4310 0 11.a.
b. Applicable income taxes (on item 11.a)* ........................... 4315 0 11.b.
c. Extraordinary items and other adjustments, net of income taxes ///////////////// --------------------------
(item 11.a minus 11.b) ............................................ ///////////////// RIAD 4320 0 11.c.
12. Net income (loss) (sum of items 10 and 11.c) ......................... ///////////////// RIAD 4340 49,554 12.
---------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

Memoranda Year-to-date
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after ///////////////////
August 7, 1986, that is not deductible for federal income tax purposes ........................ 4513 122 M.1.
2. Not applicable ................................................................................ ///////////////////
3. Estimated foreign tax credit included in applicable income taxes, items 9 and 11.b above ....... 4309 0 M.3.
4. To be completed only by banks with $1 billion or more in total assets: ///////////////////
Taxable equivalent adjustment to "Income (loss) before income taxes and extraordinary ///////////////////
items and other adjustments" (item 8 above) ................................................... 1244 12,014 M.4.
5. Number of full-time equivalent employees on payroll at end of current period (round to //// Number
nearest whole number) ......................................................................... 4150 5,910 M.5.
---------------------
</TABLE>

Schedule RI-A--Changes in Equity Capital

<TABLE>
<CAPTION>
Indicate decreases and losses in parentheses.
----------
I483
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total equity capital originally reported in the December 31, 1992, Reports of Condition ///////////////////
and Income ..................................................................................... 3215 845,715 1.

2. Equity capital adjustments from amended Reports of Income, net* ................................ 3216 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) ........................... 3217 845,713 3.
4. Net income (loss) (must equal Schedule RI, item 12) ............................................ 4340 49,554 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net ............................. 4346 0 5.
6. Changes incident to business combinations, net ................................................. 4356 0 6.
7. LESS: Cash dividends declared on preferred stock ............................................... 4470 0 7.
8. LESS: Cash dividends declared on common stock .................................................. 4460 0 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions ///////////////////
for this schedule) ............................................................................. 4411 0 9.

10. Corrections of material accounting errors from prior years* (see instructions for this schedule) 4412 0 10.
11. Change in net unrealized loss on marketable equity securities .................................. 4413 3,069 11.
12. Foreign currency translation adjustments ....................................................... 4414 0 12.
13. Other transactions with parent holding company* (not included in items 5, 7, or 8 above) ....... 4415 0 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal Schedule RC, ///////////////////
item 28) ....................................................................................... 3210 898,336 14.
--------------------
</TABLE>
- -----------
*Describe on Schedule RI-E--Explanations.

5
<PAGE>

Schedule RI-B--Charge-offs and Recoveries and Changes
in Allowance for Loan Lease Losses

Part I. Charge-offs and Recoveries on Loans and Leases

Part I excludes charge-offs and recoveries through
the allocated transfer risk reserve.

<TABLE>
<CAPTION>
--------
I486
--------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
--------------------------------------------
calendar year-to-date
--------------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate: //////////////////// /////////////////////
a. To U.S. addressees (domicile)........................................ 4651 13,918 4661 9,929 1.a.
b. To non-U.S. addresees (domicile)..................................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of other banks: //////////////////// /////////////////////
a. To U.S. banks and other U.S. depository institutions................. 4653 0 4663 0 2.a.
b. To foreign banks..................................................... 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other loans to farmers..... 4655 6 4665 60 3.
4. Commercial and industrial loans: //////////////////// /////////////////////
a. To U.S. addressees (domicile)........................................ 4645 17,661 4617 6,697 4.a.
b. To non-U.S. addressees (domicile).................................... 4646 0 4618 0 4.b.
5. Loans to individuals for household, family, and other personal
expenditures: //////////////////// /////////////////////

a. Credit cards and related plans....................................... 4656 1,951 4666 0 5.a.
b. Other (includes single payment, installment, and all student loans).. 4657 16,913 4667 8,649 5.b.
6. Loans to foreign governments and official institutions.................. 4643 0 4627 0 6.
7. All other loans......................................................... 4644 8,111 4628 1,360 7.
8. Leases financing receivables: //////////////////// /////////////////////
a. Of U.S. addressees (domicile)........................................ 4658 10 4668 0 8.a.
b. Of non-U.S. addressees (domicle)......................................4659 0 4669 0 8.b.
9. Total (sum of items 1 through 8)........................................ 4635 58,570 4605 26,695 9.
--------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------
Cumulative Cumulative
Charge-offs Recoveries
Jan. 1, 1986 Jan. 1, 1986
Memoranda through through
Dollar Amounts in Thousands Dec. 31, 1989 Report Date
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
To be completed by national banks only. RIAD Bil Mil Thou RIAD Bil Mil Thou
--------------------- ----------------------
1. Charge-offs and recoveries of Special-Category Loans, as defined for //////////////////// //////////////////////
this Call Report by the Comptroller of the Currency.................... //////////////////// 4784 1,094 M.1.
--------------------- ----------------------
---------------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
--------------------- ----------------------
calendar year-to-date
Memorandum items 2 and 3 are to be completed by all banks. ---------------------------------------------
2. Loans to finance commercial real estate, construction, and land RIAD Bil Mil Thou RIAD Bil Mil Thou
development activities (not secured by real estate) included in --------------------- ----------------------
Schedule RI-B, part I, items 4 and 7, above............................. 5409 3,794 5410 69 M.2.
3. Loans secured by real estate in domestic offices (included in Schedule
RI-B, part 1, item 1, above): //////////////////// /////////////////////
a. Construction and land development.................................... 3582 3,096 3583 5,106 M.3.a.
b. Secured by farmland.................................................. 3584 6 3585 0 M.3.b.
c. Secured by 1-4 family residential properties: //////////////////// /////////////////////
(1) Revolving, open-end loans secured by 1-4 family residential //////////////////// /////////////////////
properties and extended under lines of credit.................... 5411 0 5412 0 M.3.c.(1)
(2) All other loans secured by 1-4 family residential properties..... 5413 403 5414 153 M.3.c.(2)
d. Secured by mutlifamily (5 or more) residential properties............ 3588 152 3589 842 M.3.d.
e. Secured by nonfarm nonresidential properties......................... 3590 10,261 3591 3,828 M.3.e.
---------------------------------------------
</TABLE>

6
<PAGE>

Schedule RI-B--Continued

Part II. Changes in Allowance for Loan and Lease Losses and in Allocated
Transfer Risk Reserve

<TABLE>
<CAPTION>
-------------------------------------
(Column A) (Column B)
Allowance for Allocated
Loan and Lease Transfer Risk
Losses Reserve
-------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Balance originally reported in the December 31, 1992, Reports of ///////////////// /////////////////
Condition and Income........................................................ 3124 242,200 3131 0 1.
2. Recoveries (column A must equal part I, item 9, column B above)............. 4605 26,695 3132 0 2.
3. LESS: Charge-offs (column A must equal part I, item 9, column A above)...... 4635 58,570 3133 0 3.
4. Provision (column A must equal Schedule RI, item 4.a; column B must equal ///////////////// /////////////////
Schedule RI, item 4.b)...................................................... 4230 29,790 4243 0 4.
5. Adjustments* (see instructions for this schedule)........................... 4815 0 3134 0 5.
6. Balance end of current period (sum of items 1 through 5) (column A must equal ///////////////// /////////////////
Schedule RC, item 4.b; column B must equal Schedule RC, item 4.c)............ 3123 240,115 3128 0 6.
-------------------------------------
</TABLE>
__________
*Describe on Schedule RI-E--Explanations.

Schedule RI-C--Applicable Income Taxes by Taxing Authority

Schedule RI-C is to be reported with the December Report of Income.

<TABLE>
<CAPTION>
----
I489
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Federal..................................................................... 4780 13,680 1.
2. State and local............................................................. 4790 ( 1,394) 2.
3. Foreign..................................................................... 4795 0 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and /////////////////////
11.b)....................................................................... 4770 12,286 4.
5. Deferred portion of item 4................................ RIAD 4772 (2,513) ///////////////////// 5.
---------------------

</TABLE>

<PAGE>

Schedule RI-D--Income from International Operations

For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs
where international operations account for more than 10 percent of total
revenues, total assets, or net income.

Part I. Estimated Income from International Operations

<TABLE>
<CAPTION>
--------
I492
------------
Year-to-date
------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement //////////////////
subsidiaries, and IBFs: //////////////////
a. Interest income booked................................................ 4837 N/A 1.a.
b. Interest expense booked............................................... 4838 N/A 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement //////////////////
subsidiaries, and IBFs (item 1.a minus 1.b)............................ 4839 N/A 1.c.
2. Adjustments for booking location of international operations: //////////////////
a. Net interest income attributable to international operations booked at //////////////////
domestic offices........................................................ 4840 N/A 2.a.
b. Net interest income attributable to domestic business booked at foreign //////////////////
offices................................................................. 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b).................... 4842 N/A 2.c.
3. Noninterest income and expense attributable to international operations: //////////////////
a. Noninterest income attributable to international operations............. 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international //////////////////
operations.............................................................. 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations...... 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international operations //////////////////
(item 3.a minus 3.b and 3.c)............................................. 4843 N/A 3.d.
4. Estimated pretax income attributable to international operations before //////////////////
capital allocation adjustment (sum of items 1.c, 2.c, and 3.d).............. 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international //////////////////
operations to reflect the effects of equity capital on overall bank funding //////////////////

costs....................................................................... 4845 N/A 5.
6. Estimated pretax income attributable to international operations after //////////////////
capital allocation adjustment (sum of items 4 and 5)........................ 4846 N/A 6.
7. Income taxes attributable to income from international operations as //////////////////
estimated in item 6......................................................... 4797 N/A 7.
8. Estimated net income attributable to international operations (item 6 minus //////////////////
7).......................................................................... 4341 N/A 8.
-------------------
</TABLE>
<TABLE>
<CAPTION>

Memoranda
------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Intracompany interest income included in item 1.a above..................... 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b above.................... 4848 N/A M.2.
------------------
</TABLE>

Part II. Supplementary Details on Income from International Operations Required
by the Departments of Commerce and Treasury for Purposes of the U.S.
International Accounts and the U.S. National Income and Product Accounts

<TABLE>
<CAPTION>
--------------
Year-to-date
------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income booked at IBFs............................................... 4849 N/A 1.
2. Interest expense booked at IBFs.............................................. 4850 N/A 2.
3. Noninterest income attributable to international operations booked at /////////////////
domestic offices (excluding IBFs): /////////////////
a. Gains (losses) and extraordinary items.................................... 5491 N/A 3.a.
b. Fees and other noninterest income......................................... 5492 N/A 3.b.
4. Provision for loan and lease losses attributable to international operations /////////////////
booked at domestic offices (excluding IBFs).................................. 4852 N/A 4.
5. Other noninterest expense attributable to international operations booked at /////////////////
domestic offices (excluding IBFs)............................................ 4853 N/A 5.
------------------
</TABLE>

8
<PAGE>

Schedule RI-E-Explanations

Schedule RI-E is to be completed each quarter on a calendar year-to-date basis.

Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other noninterest
income and other noninterest expense in Schedule RI. (See instructions for
details.)

<TABLE>
<CAPTION>
------
I495
------------
Year-to-date
-----------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- --------------------------------------------------------------------
<S> <C> <C> <C>
1. All other noninterest income (from Schedule /////////////////
RI, item 5.f.(2)) /////////////////
Report amounts that exceed 10% of Schedule /////////////////
RI, item 5.f.(2): /////////////////
a. Net gains on other real estate owned.........5415 N/A 1.a.
b. Net gains on sales of loans..................5416 N/A 1.b.
c. Net gains on sales of premises and
fixed assets.................................5417 N/A 1.c.
Itemize and describe the three largest other /////////////////
amounts that exceed 10% of Schedule RI, /////////////////
item 5.f.(2): /////////////////
d. TEXT 4461 Service Fees charged to affiliates 4461 4,416 1.d.
--------------------------------------------
e. TEXT 4462 4462 1,648 1.e.
--------------------------------------------
f. TEXT 4463 4463 7,722 1.f.
--------------------------------------------
2. Other noninterest expense (from Schedule RI, /////////////////
item 7.c): /////////////////
a. Amortization expense of intangible assets....4531 0 2.a.
Report amounts that exceed 10% of Schedule /////////////////
RI, item 7.c: /////////////////
b. Net losses on other real estate owned........5418 N/A 2.b.
c. Net losses on sales of loans.................5419 N/A 2.c.
d. Net losses on sales of premises /////////////////
and fixed assets................................5420 N/A 2.d.

Itemize and describe the three largest other /////////////////
amounts that exceed 10% of Schedule RI, /////////////////
item 7.c: /////////////////
e. TEXT 4464 Service Fees Paid to Affiliates 4464 81,343 2.e.
--------------------------------------------
f. TEXT 4467 FDIC Insurance and OCC /////////////////
Examination Fees 4467 N/A 2.f.
--------------------------------------------
g. TEXT 4468 4468 N/A 2.g.

--------------------------------------------
3. Extraordinary items and other adjustments (from /////////////////
Schedule RI, item 11.a) and applicable income /////////////////
tax effect (from Schedule RI, item 11.b) /////////////////
(itemize and describe all extraordinary items /////////////////
and other adjustments): /////////////////
a. (1) TEXT 6640: Effect of adopting FASB //////////////////
No. 109, "Accounting for Income Taxes" 6440 0 3.a.(1)
----------------------------------------
(2) Applicable income tax effect RIAD 4486 0 3.a.(2)
-----------
b. (1) TEXT 4487 4487 0 3.b.(1)
----------------------------------------
(2) Applicable income tax effect RIAD 4488 0 3.b.(2)
-----------
c. (1) TEXT 4489 4889 0 3.c.(1)
----------------------------------------
(2) Applicable income tax effect RIAD 4491 0 3.c.(2)
---------
4. Equity capital adjustments from amended Reports /////////////////
of Income (from Schedule RI-A, item 2) /////////////////
(itemize and describe all adjustments): /////////////////
a. TEXT 4492 4492 N/A 4.a.
---------------------------------------------
b. TEXT 4493 4493 N/A 4.b.
---------------------------------------------
5. Cumulative effect of changes in accounting /////////////////
principles from prior years (from Schedule /////////////////
RI-A, item 9) (itemize and describe all changes /////////////////
in accounting principles): /////////////////
a. TEXT 4494 4494 N/A 5.a.
---------------------------------------------
b. TEXT 4495 4495 N/A 5.b.
---------------------------------------------
6. Corrections of material accounting errors from /////////////////
prior years (from Schedule RI-A, item 10) /////////////////
(itemize and describe all corrections): /////////////////
a. TEXT 4496 4496 N/A 6.a.
---------------------------------------------
b. TEXT 4497 4497 N/A 6.b.
----------------------------------------------------------------------
</TABLE>

<PAGE>

---------

Schedule RI-E--Continued
<TABLE>
<CAPTION>

Year-to-date
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7. Other transactions with parent holding company /////////////////////
(from Schedule RI-A,item 13) (itemize and describe /////////////////////
all such transactions): /////////////////////
a. TEXT 4498 Capital Contribution from parent company 4498 N/A 7.a.
-------------------------------------------------------------------
b. TEXT 4499 4499 N/A 7.b.
-------------------------------------------------------------------
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, /////////////////////
part II, item 5) (itemize and describe all adjustments): /////////////////////
a. TEXT 4521 4521 N/A 8.a.
--------------------------------------------------------------------
b. TEXT 4522 4522 N/A 8.b.
-----------------------------------------------------------------------------------------------------------------------
9. Other explanations (the space below is provided for the bank to briefly
describe, at its option, any other significant items affecting the Report of
Income): 1489 1499 -
--------------------
No comment X (RIAD 4769)
--
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>

10
<PAGE>

Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for December 31, 1993

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.

Schedule RC--Balance Sheet

<TABLE>
<CAPTION>
C400
----
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------------
- --
<S> <C> <C> <C>
ASSETS /////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): /////////////////

a. Noninterest-bearing balances /////////////////
and currency and coin(1).................................................. 0081 897,883 1.a.
b. Interest-bearing balances(2).............................................. 0071 0 1.b.
2. Securities (from Schedule RC-B).............................................. 0390 2,105,316 2.
3. Federal funds sold and securities /////////////////
purchased under agreements to resell in /////////////////
domestic offices of the bank and of its /////////////////
Edge and Agreement subsidiaries, and in /////////////////
IBFs: /////////////////
a. Federal funds sold........................................................ 0276 51,400 3.a.
b. Securities purchased under agreements to resell........................... 0277 0 3.b.
4. Loans and lease financing receivables: /////////////////
a. Loans and leases, net of unearned income ----------------------
(from Schedule RC-C) RCFD 2122 8,207,781 ///////////////// 4.a.
b. LESS: Allowance for loan and lease losses.............................. RCFD 3123 240,115 ///////////////// 4.b.
c. LESS: Allocated transfer risk reserve.................................. RCFD 3128 0 ///////////////// 4.c.
---------------------- /////////////////
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)...................................... 2125 7,967,666 4.d.
5. Assets held in trading accounts.............................................. 2146 9,378 5.
6. Premises and fixed assets (including capitalized leases)..................... 2145 280,284 6.
7. Other real estate owned (from Schedule RC-M)................................. 2150 116,390 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M)......................................................... 2130 0 8.
9. Customers' liability to this bank on acceptance outstanding.................. 2155 9,775 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 0 10.
11. Other assets (from Schedule RC-F)........................................... 2160 239,878 11.
12. Total assets (sum of items 1 through 11).................................... 2170 11,677,970 12.
</TABLE>
- ----------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.

11
<PAGE>
Legal Title of Bank: NationsBank of
Virginia, N.A. Call Date: 12/31/93
Address: 1111 East Main Street ST-BK: 51-1985 FFIEC 031
City, State Zip: Richmond, VA 23261 Vendor ID: D Page RC-2
Transit No: 71000036 Cert: 06866

Schedule RC -- Continued

-----------------------------
Dollar Amounts in Thousands ////////////// Bil Mil Thou
- ------------------------------------------------------------------------------------------ -----------------------------
<S> <C> <C> <C>
LIABILITIES ////////////////////////////
13. Deposits ////////////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I).. RCON 2200 9,379,965 13.a
----------------------------
(1) Noninterest-bearing(1)............................ RCON 6631 2,389,203 //////////////////////////// 13.a.(1)
(2) Interest-bearing................................... RCON 6636 6,990,762 //////////////////////////// 13.a.(2)
----------------------------
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, ////////////////////////////
part II)........................................................................... RCFN 2200 0 13.b
----------------------------
(1) Noninterest-bearing................................ RCFN 6631 0 //////////////////////////// 13.b.(1)
(2) Interest-bearing................................... RCFN 6636 0 //////////////////////////// 13.b.(2)
----------------------------
14. Federal funds purchased and securities sold under agreements to repurchase in domestic ////////////////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: ////////////////////////////
a. Federal funds purchased .......................................................... RCFD 0278 758,201 14.a.
b. Securities sold under agreements to repurchase.................................... RCFD 0279 445,586 14.b.
15. Demand notes issued to the U.S. Treasury.............................................. RCON 2840 50,000 15.
16. Other borrowed money.................................................................. RCFD 2850 49,225 16.
17. Mortgage indebtedness and obligations under capitalized leases........................ RCFD 2910 815 17.
18. Bank's liability on acceptances executed and outstanding.............................. RCFD 2920 9,775 18.
19. Subordinated notes and debentures..................................................... RCFD 3200 0 19.
20. Other liabilities (from Schedule RC-G)................................................ RCFD 2930 86,067 20.
21. Total liabilities (sum of items 13 through 20)........................................ RCFD 2948 10,779,634 21.
////////////////////////////
22. Limited-life preferred stock and related surplus...................................... RCFD 3282 0 22.
EQUITY CAPITAL ////////////////////////////
23. Perpetual preferred stock and related surplus........................................ RCFD 3838 0 23.
24. Common stock.......................................................................... RCFD 3230 21,501 24.
25. Surplus (exclude all surplus related to preferred stock).............................. RCFD 3839 229,536 25.
26. a. Undivided profits and capital reserves............................................. RCFD 3632 644,230 26.a.
b. LESS: Net unrealized loss on marketable equity securities.......................... RCFD 0297 ( 3,069) 26.b.
27. Cumulative foreign currency translation adjustments................................... RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27)..................................... RCFD 3210 898,336 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, ////////////////////////////

22, and 28)........................................................................... RCFD 3300 11,677,970 29.
-----------------------------
</TABLE>

Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the
statement below that best describes the most
comprehensive level of auditing work performed for Number
the bank by independent external auditors as of any --------------
date during 1992....................................... RCFD 6724 N/A M.1.
--------------

1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work

- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.

12
<PAGE>

Schedule RC-A--Cash and Balances Due From Depository Institutions

Exclude assets held in trading accounts.
<TABLE>
<CAPTION>
C405
---------------------------------------------

(Column A) (Column B)
Consolidated Domestic
Bank Offices
--------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and /////////////////// //////////////////////
coin..................................................................... 0022 583,277 ////////////////////// 1.
a. Cash items in process of collection and unposted debits............... ////////////////// 0020 426,350 1.a.
b. Currency and coin..................................................... ////////////////// 0080 156,927 1.b.
2. Balances due from depository institutions in the U.S..................... ////////////////// 0082 55,932 2.
a. U.S. branches and agencies of foreign banks (including their
IBFs)................................................................. 0083 0 ////////////////////// 2.a.
b. Other commercial banks in the U.S. and other depository institutions ////////////////// //////////////////////
in the U.S. (including their IBFs).................................... 0085 55,932 ////////////////////// 2.b.
3. Balances due from banks in foreign countries and foreign central banks... /////////////////// 0070 0 3.
a. Foreign branches of other U.S. banks.................................. 0073 0 ////////////////////// 3.a.
b. Other banks in foreign countries and foreign central banks............ 0074 0 ////////////////////// 3.b.
4. Balances due from Federal Reserve Banks.................................. 0090 258,674 0090 258,674 4.
5. Total (sum of items 1 through 4) (total of column A must equal Schedule /////////////////// //////////////////////
RC, item 1).............................................................. 0010 897,883 0010 897,883 5.
</TABLE>
<TABLE>
<CAPTION>
Memorandum Dollar Amounts in Thousands RCON Bil Mil Thou
---------------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
1. Noninterest-bearing balances due from commercial banks in the U.S. //////////////////////
(included in item 2, column B above)..................................... 0050 55,932 M.1
</TABLE>
13

<TABLE>
<CAPTION>
C410
----
Domestic Offices
------------------
(Column C)
Book value
-----------------
RCON Bil Mil Thou
-----------------
<S> <C> <C> <C>
1. U.S. Treasury securities.................................................... 0400 1,988,549 1.
2. U.S. Government agency and corporation obligations: /////////////////
a. All holdings of U.S. Government-issued or -guaranteed certificates of /////////////////
participation in pools of residential mortgages: /////////////////
(1) Issued by FNMA and FHLMC............................................. 3760 0 2.a.(1)
(2) Guaranteed by GNMA (exclude FNMA and FHLMC issues)................... 3762 0 2.a.(2)
b. All other................................................................ ///////////////// 2.b.
(1) Collateralized mortgage obligations issued by FNMA and FHLMC (include /////////////////
REMICs).............................................................. 3764 2,374 2.b.(1)
(2) All other U.S. Government-sponsored agency obligations(2)............ 3765 5,000 2.b.(2)

(3) All other U.S. Government agency obligations(3)...................... 3766 0 2.b.(3)
3. Securities issued by states and political subdivisions in the U.S. ......... ///////////////// 3.
a. General obligations...................................................... 3767 22,004 3.a.
b. Revenue obligations...................................................... 3768 64,944 3.b.
c. Industrial development and similar obligations........................... 3769 0 3.c.
4. Other domestic debt securities: /////////////////
a. All holdings of private (i.e., nongovernment-issued or -guaranteed) /////////////////
certificates of participation in pools of residential mortgages.......... 0408 8,336 4.a.
b. All other domestic debt securities: /////////////////
(1) Privately-issued collateralized mortgage obligations (include /////////////////
REMICs).............................................................. 5361 0 4.b.(1)

(2) All other............................................................ 5363 5,018 4.b.(2)
5. Foreign debt securities..................................................... 3635 1,250 5.
6. Equity securities: /////////////////
a. Marketable equity securities: /////////////////
(1) Investments in mutual funds.......................................... 3637 0 6.a.(1)
(2) Other marketable equity securities................................... 3639 310 6.a.(2)
(3) LESS: Net unrealized loss on marketable equity securities............ 3641 0 6.a.(3)
b. Other equity securities (includes Federal Reserve stock)................. 3642 7,531 6.b.
7. Total (sum of items 1 through 6) (total of column A must equal Schedule RC, /////////////////
item 2)..................................................................... 0390 2,105,316 7.
</TABLE>
- --------------------------
(1) See discussion in Glossary entry for "market value of securities."
(2) Includes obligations (other than certificates of participation in pools of
residential mortgages, CMOs, and REMICs) issued by the Farm Credit System,
the Federal Home Loan Bank System, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, the Financing
Corporation, Resolution Funding Corporation, the Student Loan Marketing
Association, and the Tennessee Valley Authority.
(3) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.

14
<PAGE>

Legal Title of Bank: NationsBank of Virginia N A Call Date: 12/31/93
1111 East Main Street ST-BK: 51-1985 FFIEC 031
Address: Richmond, Va 23261 Vendor ID: D Page RC-5
City, State Zip: Cert: 06866
Transit # 71000036
71000036

Schedule RC-B--Continued

<TABLE>
<CAPTION>
-------------------
Consolidated Bank
-------------------
Book Value
-------------------

Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------- -------------------
<S> <C> <C> <C>
1. Pledged securities............................................................................. 0416 1,354,699 M.1.
2. Maturity and repricing data for debt securities(1),(2) (excluding those in nonaccrual status): /////////////////
a. Fixed rate debt securities with a remaining maturity of: /////////////////
(1) Three months or less.................................................................... 0343 414,360 M.2.a.(1)
(2) Over three months through 12 months..................................................... 0344 664,521 M.2.a.(2)
(3) Over one year through five years........................................................ 0345 968,868 M.2.a.(3)
(4) Over five years......................................................................... 0346 48,476 M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1) through 2.a.(4))...... 0347 2,096,225 M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of: /////////////////
(1) Quarterly or more frequently............................................................ 4544 0 M.2.b.(1)

(2) Annually or more frequently, but less frequently than quarterly......................... 4545 1,250 M.2.b.(2)
(3) Every five years or more frequently, but less frequently than annually.................. 4551 0 M.2.b.(3)
(4) Less frequently than every five years................................................... 4552 0 M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4)).... 4553 1,250 M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total /////////////////
debt securities from Schedule RC-B, sum of items 1 through 5, column A, minus /////////////////
nonaccrual debt securities included in Schedule RC-N, item 9, column C)..................... 0393 2,097,475 M.2.c.
3. Taxable securities issued by states and political subdivisions in the U.S. (included in /////////////////
Schedule RC-B, item 3, column A, above)........................................................ 0301 0 M.3.
4. Debt securities restructured and in compliance with modified terms (included in /////////////////
Schedule RC-B, items 3 through 5, column A, above).............................................. 5365 0 M.4.
5. Debt securities held for sale (included in Schedule RC-B, items 1 through 5, column A, /////////////////
above)......................................................................................... 5366 338,120 M.5.
6. Floating rate debt securities with a remaining maturity of one year or less (included in /////////////////
Memorandum item 2.b.(5) above)................................................................. 5519 0 M.6.
------------------
</TABLE>
- -------------
(1) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(2) Memorandum item 2 is not applicable to savings banks that must complete
supplemental Schedule RC-J.

<PAGE>

Legal Title of Bank: NationsBank of Virginia Call Date: 12/31/93
1111 East Main Street ST-BK: 51-1985 FFIEC 031
Address: Richmond, Va 23261 Vendor ID: D Page RC-6
City, State Zip: Cert: 06886
Transit Number: 71000036
Schedule RC-C--Loans and Lease Financing Receivables

Part I. Loans and Leases

Do not deduct the allowance for loan and lease losses from
amounts reported in this schedule. Report total loans and
leases, net of unearned income. Exclude assets held in
trading accounts.

------
C415
------------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
-------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate............................................. 1410 1,885,440 ////////////////// 1.

a. Construction and land development..................................... ////////////////// 1415 472,189 1.a.
b. Secured by farmland (including farm residential and other ////////////////// //////////////////
improvements)......................................................... ////////////////// 1420 5,718 1.b.
c. Secured by 1-4 family residential properties: ////////////////// //////////////////
(1) Revolving, open-end loans secured by 1-4 family residential ////////////////// //////////////////
properties and extended under lines of credit..................... ////////////////// 1797 241,095 1.c.(1)
(2) All other loans secured by 1-4 family residential properties: ////////////////// //////////////////
(a) Secured by first liens........................................ ////////////////// 5367 435,885
1.c.(2)(a)
(b) Secured by junior liens....................................... ////////////////// 5368 118,011
1.c.(2)(b)
d. Secured by multifamily (5 or more) residential properties............ ////////////////// 1460 129,478 1.d.
e. Secured by nonfarm nonresidential properties.......................... ////////////////// 1480 483,064 1.e.
2. Loans to depository institutions: ////////////////// //////////////////
a. To commercial banks in the U.S. ...................................... ////////////////// 1505 1,815,630 2.a.
(1) To U.S. branches and agencies of foreign banks.................... 1506 563 ////////////////// 2.a.(1)
(2) To other commercial banks in the U.S. ............................ 1507 1,815,067 ////////////////// 2.a.(2)
b. To other depository institutions in the U.S. ......................... 1517 2,000 1517 2,000 2.b.
c. To banks in foreign countries......................................... ////////////////// 1510 0 2.c.
(1) To foreign branches of other U.S. banks........................... 1513 0 ////////////////// 2.c.(1)
(2) To other banks in foreign countries............................... 1516 0 ////////////////// 2.c.(2)
3. Loans to finance agricultural production and other loans to farmers...... 1590 18,811 1590 18,811 3.
4. Commercial and industrial loans: ////////////////// //////////////////
a. To U.S. addressees (domicile)......................................... 1763 2,836,674 1763 2,836,674 4.a.
b. To non-U.S. addressees (domicile)..................................... 1764 12,894 1764 12,894 4.b.
5. Acceptances of other banks: ////////////////// //////////////////
a. Of U.S. banks......................................................... 1756 0 1756 0 5.a.
b. Of foreign banks...................................................... 1757 0 1757 0 5.b.
6. Loans to individuals for household, family, and other personal ////////////////// //////////////////
expenditures (i.e., consumer loans) (includes purchased paper)........... ////////////////// 1975 1,064,230 6.
a. Credit cards and related plans (includes check credit and other ////////////////// //////////////////
revolving credit plans)............................................... 2008 78,995 ////////////////// 6.a.
b. Other (includes single payment, installment, and all student loans)... 2011 985,235 ////////////////// 6.b.
7. Loans to foreign governments and official institutions (including ////////////////// //////////////////
foreign central banks)................................................... 2081 0 2081 0 7.
8. Obligations (other than securities and leases) of states and political ////////////////// //////////////////
subdivisions in the U.S. (includes nonrated industrial development ////////////////// //////////////////
obligations): ////////////////// //////////////////
a. Taxable obligations................................................... 2033 0 2033 0 8.a.

b. Tax-exempt obligations................................................ 2079 206,928 2079 206,928 8.b.
9. Other loans.............................................................. 1563 331,017 ////////////////// 9.
a. Loans for purchasing or carrying securities (secured and unsecured).... ////////////////// 1545 89,646 9.a.
b. All other loans (exclude consumer loans).............................. ////////////////// 1564 241,371 9.b.
10. Lease financing receivables (net of unearned income)..................... ////////////////// 2165 34,157 10.
a. Of U.S. addressees (domicile)......................................... 2182 34,157 ////////////////// 10.a.
b. Of non-U.S. addressees (domicile)..................................... 2183 0 ////////////////// 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above.......... 2123 0 0 11.
12. Total loans and leases, net of unearned income (sum of items 1 through ////////////////// //////////////////
10 minus item 11) (total of column A must equal Schedule RC, item 4.a)... 2122 8,207,781 2122 8,207,781 12.
---------------------------------------
</TABLE>

16
<PAGE>

Legal Title of Bank: NationsBank of Virginia N A Call Date: 12/31/93
1111 East Main Street ST-BK: 51-1985 FFIEC 031
Address: Richmond, Va 23261 Vendor ID: D Page RC-7
City, State Zip: Cert: 06886
Transit Number: 71000036
---------

Schedule RC-C--Continued

Part I. Continued

<TABLE>
<CAPTION>
------------------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank Offices
- -----------------------------------------------
Memoranda
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------------------------------------ -----------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Commercial paper included in Schedule RC-C, part I, above................... 1496 0 1496 0
M.1.
2. Loans and Leases restructured and in compliance with modified terms ////////////////// //////////////////
(included) in Schedule RC-C, part I, above): ////////////////// //////////////////
a. Loans secured by real estate: ////////////////// //////////////////
(1) To U.S. addresses (domicile)......................................... 1687 0 M.2.a.(1)
(2) To non-U.S. addresses (domicile)..................................... 1689 0 M.2.a.(2)
b. Loans to finance agricultural production and other Loans to farmers...... 1613 0 M.2.b
c. Commercial and industrial loans: ////////////////// //////////////////
(1) To U.S. addresses (domicile)......................................... 1758 650 M.2.c.(1)
(2) To non-U.S. addresses (domicile)..................................... 1759 0 M.2.c.(2)
d. All other loans (exclude loans to individuals for household, family, and //////////////////
other personal expenditures)............................................. 1615 0 M.2.d.
e. Lease financing receivables: //////////////////
(1) Of U.S. addressees (domicile)........................................ 1789 0 M.2.e.(1)
(2) Of non-U.S. addressees (domicile).................................... 1790 0 M.2.e.(2)

f. Total (sum of Memorandum items 2.a through 2.e).......................... 1616 650 M.2.f.
3. Maurity and repricing data for loans and leases(1) (excluding those in //////////////////
nonaccrual status): //////////////////
a. Fixed rate loans and leases with a remaining maturity of: //////////////////
(1) Three months or less.................................................. 0348 491,495 M.3.a.(1)
(2) Over three months through 12 months................................... 0349 650,781 M.3.a.(2)
(3) Over one year through five years...................................... 0356 1,632,271 M.3.a.(3)
(4) Over five years....................................................... 0357 414,349 M.3.a.(4)
(5) Total fixed rate loans and leases (sum of Memorandum items 3.a.(1) //////////////////
through 3.a.(4))...................................................... 0358 3,188,896 M.3.a.(5)
b. Floating rate loans with a repricing frequency of: //////////////////
(1) Quarterly or more frequently.......................................... 4554 4,791,170 M.3.b.(1)
(2) Annually or more frequently, but less frquently than quarterly........ 4555 13,884 M.3.b.(2)
(3) Every five years or more frequently, but less frequently than //////////////////
annually.............................................................. 4561 66,127 M.3.b.(3)
(4) Less frequently than every five years................................. 4564 0 M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum items 3.b.(1) //////////////////

through 3.b.(4))...................................................... 4567 4,871,181 M.3.b.(5)
c. Total loans and leases (sum of Memorandum items 3.a.(5) and 3.b.(5)) (must //////////////////
equal the sum of total loans and leases, net from Schedule RC-C, part I, //////////////////
item 12, plus unearned income from Schedule RC-C, part I, item 11, minus //////////////////
total nonaccrual loans and leases from Schedule RC-N, sum of items 1 //////////////////
through 8, column C)...................................................... 1479 8,060,077 M.3.c.
4. Loans to finance commercial real estate, construction, and land development //////////////////
activities (not secured by real estate) included in Schedule RC-C, part I, //////////////////
items 4 and 9, column A, page RC-6(2)........................................ 2746 113,008 M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I, above).... 5369 0 M.5.
6. Adjustable rate closed-end loans secured by first liens on 1-4 family --------------------
residential properties (included in Schedule RC-C, part I, item 1.c.(2)(a), ////////////////// RCON Bil Mil Thou
--------------------
column B, page RC-6)......................................................... ////////////////// 5370 78,508
M.6.
</TABLE>

- ---------------------
(1) Memorandum item 3 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, item 1, column A.

17
<PAGE>

<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-8
City, State Zip: Richmond, Va 23261 Cert: 06886
Transit Number: 71000036

Schedule RC-D is to be completed only by banks with $1 billion or more in total

assets.

Schedule RC-D--Assets Held in Trading Accounts in
Domestic Offices Only
<TABLE>
<CAPTION>
--------
C420
--------- --------
Domestic Offices
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------- ------------------
<S> <C> <C> <C>
1. U.S. Treasury securities........................................................ 1010 0 1.
2. U.S. Government agency and corporation obligations.............................. 1020 0 2.
3. Securities issued by states and political subdivisions in the U.S. ............. 1025 0 3.
4. Other bonds, notes, and debentures.............................................. 1045 0 4.
5. Certificates of deposit......................................................... 1026 N/A 5.
6. Commercial paper................................................................ 1027 N/A 6.
7. Banker's acceptances............................................................ 1028 9,377 7.
8. Other........................................................................... 1029 1 8.
9. Total (sum of items 1 through 8)................................................ 2146 9,378 9.
------------------
</TABLE>

18
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: Page R
City, State Zip: Richmond, VA 23261

Transit Number: 71000036 C425

Schedule RC-E--Deposit Liabilities

Part I. Deposits in Domestic Offices

Transaction Accounts
--------------------
(Column A) (Column B)
Total transaction Memo: Total
accounts (including demand deposits
total demand (included in
deposits) column A
------------------ -----------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou

- ------------------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Deposits of: ////////////////// /////////////////
1. Individuals, partnerships, and corporations................................. 2201 3,694,219 2240 2,003,966
2. U.S. Government............................................................. 2202 5,945 2280 5,945
3. States and political subdivisions in the U.S. .............................. 2203 94,756 2290 94,756
4. Commercial banks in the U.S. ............................................... 2206 215,954 2310 215,954
a. U.S. branches and agencies of foreign banks.............................. ////////////////// /////////////////
b. Other commercial banks in the U.S. ...................................... ////////////////// /////////////////
5. Other depository institutions in the U.S. .................................. 2207 10,679 2312 10,679
6. Banks in foreign countries.................................................. 2213 0 2320 0
a. Foreign branches of other U.S. banks..................................... ////////////////// /////////////////
b. Other banks in foreign countries......................................... ////////////////// /////////////////
7. Foreign governments and official institutions ////////////////// /////////////////
(including foreign central banks)........................................... 2216 0 2300 0
8. Certified and official checks............................................... 2330 57,903 2330 57,903
9. Total (sum of items 1 through 8) (sum of ////////////////// /////////////////
columns A and C must equal Schedule RC, ////////////////// /////////////////
item 13.a).................................................................. 2215 4,079,456 2210 2,389,203
</TABLE>

<TABLE>
<CAPTION>
C425
Nontransaction
Accounts
------------------
(Column C)
Total
nontransaction
accounts
(including MMDAs)
------------------
<S> <C> <C> <C>
Deposits of: //////////////////
1. Individuals, partnerships, and corporations................................. 2346 5,181,647 1.
2. U.S. Government............................................................. 2520 47,300 2.
3. States and political subdivisions in the U.S. .............................. 2530 70,529 3.
4. Commercial banks in the U.S. ............................................... ////////////////// 4.
a. U.S. branches and agencies of foreign banks.............................. 2347 0 4.a.
b. Other commercial banks in the U.S. ...................................... 2348 139 4.b.
5. Other depository institutions in the U.S. .................................. 2349 894 5.
6. Banks in foreign countries.................................................. ////////////////// 6.
a. Foreign branches of other U.S. banks..................................... 2367 0 6.a.
b. Other banks in foreign countries......................................... 2373 0 6.b.
7. Foreign governments and official institutions //////////////////
(including foreign central banks)........................................... 2377 0 7.
8. Certified and official checks............................................... ////////////////// 8.
9. Total (sum of items 1 through 8) (sum of //////////////////
columns A and C must equal Schedule RC, //////////////////
item 13.a).................................................................. 2385 5,300,509 9.
</TABLE>

Memoranda Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C): ////////////////////
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts...... 6835 827,420 M.1.a.
b. Total brokered deposits.................................................. 2365 20,000 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above): ////////////////////
(1) Issued in denominations of less than $100,000....................... 2343 0 M.1.c.(1)
(2) Issued either in denominations of $100,000 or in denominations greater ////////////////////
than $100,000 and participated out by the broker in shares of ////////////////////
$100,000 or less..................................................... 2344 0 M.1.c.(2)
d. Total deposits denominated in foreign currencies......................... 3776 0 M.1.d.
e. Preferred deposits....................................................... 5590 164,808 M.1.e.
2. Components of total nontransaction accounts (sum of Memoranda items 2.a ////////////////////
through 2.d must equal item 9, column c above): ////////////////////
a. Savings deposits: ////////////////////
(1) Money market deposit accounts (MMDAs)................................. 6810 1,203,315 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs)............................... 0352 1,015,936 M.2.a.(2)
b. Total time deposits of less than $100,000................................. 6648 2,533,506 M.2.b.
c. Time certificates of deposit of $100,000 or more.......................... 6645 435,034 M.2.c.
d. Open-account time deposits of $100,000 or more............................ 6646 112,718 M.2.d.
3. All NOW accounts (included in column A above)................................ 2398 1,690,253 M.3.
</TABLE>

<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-10
Transit Number: 71000036

Schedule RC-E -- Continued

Part I. Continued

Memoranda (continued)

tinued)

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

Deposit Totals for FDIC Insurance Assessments(1)
------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------- ------------------------
<S> <C> <C> <C>
4. Total deposits in domestic offices (sum of item 9, column A and item 9, column C) /////////////////////
(must equal Schedule RC, item 13.a)...................................................... 2200 9,379,965 M.4.
/////////////////////
a. Total demand deposits (must equal item 9, column B)................................... 2210 2,389,203 M.4.a.

b. Total time and savings deposits(2) (must equal item 9, column A plus item 9, /////////////////////
column C minus item 9, column B)...................................................... 2350 6,990,762 M.4.b.
------------------------
</TABLE>
- ---------------------------------
(1) An amended Certified Statement should be submitted to the FDIC if the
deposit totals reported in this item are amended after the semiannual
Certified Statement originally covering this report date has been filed
with the FDIC.
(2) For FDIC insurance assessment purposes, "total time and savings deposits"
consists of nontransaction accounts and all transaction accounts other than
demand deposits.

------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- --------------------------------------------------------------------------------------------- ------------------------
<S> <C> <C> <C>
5. Time deposits of less than $100,000 and open-account time deposits of $100,000 or more ////////////////////////
(included in Memorandum items 2.b and 2.d above) with a remaining maturity or repricing ////////////////////////
frequency of:(1) ////////////////////////
a. Three months or less................................................................... 0359 812,543 M.5.a.
b. Over three months through 12 months (but not over 12 months)........................... 3644 1,063,001 M.5.b.
6. Maturity and repricing data for time certificates of deposit of $100,000 or more:(1) ////////////////////////
a. Fixed rate time certificates of deposit of $100,000 or more with a remaining ////////////////////////
maturity of: ////////////////////////
(1) Three months or less............................................................... 2761 164,790 M.6.a.(1)
(2) Over three months through 12 months................................................ 2762 182,051 M.6.a.(2)
(3) Over one year through five years................................................... 2763 67,317 M.6.a.(3)
(4) Over five years.................................................................... 2765 20,876 M.6.a.(4)
(5) Total fixed rate time certificates of deposit of $100,000 or more (sum of ////////////////////////
Memorandum items 6.a.(1) through 6.a.(4)).......................................... 2767 435,034 M.6.a.(5)
b. Floating rate time certificates of deposit of $100,000 or more with a repricing ////////////////////////
frequency of: ////////////////////////
(1) Quarterly or more frequently....................................................... 4568 0 M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly.................... 4569 0 M.6.b.(2)
(3) Every five years or more frequently, but less frequently than annually............. 4571 0 M.6.b.(3)
(4) Less frequently than every five years.............................................. 4572 0 M.6.b.(4)
(5) Total floating rate time certificates of deposit of $100,000 or more (sum of ////////////////////////
Memorandum items 6.b.(1) through 6.b.(4)).......................................... 4573 0 M.6.b.(5)
c. Total time certificates of deposit of $100,000 or more (sum of Memorandum items 6.a.(5) ////////////////////////
and 6.b.(5)) (must equal Memorandum item 2.c. above)................................... 6645 435,034 M.6.c.
------------------------
</TABLE>
- ---------------------------------
(1) Memorandum item 5 and 6 are not applicable to savings banks that must
complete supplemental Schedule RC-J.

20
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93

of Virginia, N.A. ST-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-11
City, State Zip: Richmond, Va 23261 Cert: 06886
Transit Number: 71000036

Schedule RC-E--Continued

Part II. Deposits in Foreign Offices (including Edge and
Agreement subsidiaries and IBFs)
<TABLE>
<CAPTION>
--------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ---------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
Deposits of: //////////////////
1. Individuals, partnerships, and corporations............................................... 2621 0 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks)............................ 2623 0 2.
3. Foreign banks (including U.S. branches and //////////////////
agencies of foreign banks, including their IBFs)........................................... 2625 0 3.
4. Foreign governments and official institutions (including foreign central banks)........... 2650 0 4.
5. Certified and official checks............................................................. 2330 0 5.
6. All other deposits........................................................................ 2668 0 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b)...................... 2200 0 7.
--------------------
</TABLE>

Schedule RC-F--Other Assets
<TABLE>
<CAPTION>
----------
C430
---------------------------

Dollar Amounts in Thousands /////////// Bil Mil Thou
- ---------------------------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C>
1. Income earned, not collected on loans..................................................... RCFD 2164 33,988 1.
2. Net deferred tax assets(1)................................................................ RCFD 2148 50,598 2.
3. Excess residential mortgage servicing fees receivable..................................... RCFD 5371 0 3.
4. Other (itemize amounts that exceed 25% of this item)...................................... RCFD 2168 155,292 4.
------------- ---------------------------
a. TEXT 3549 RCFD 3549 N/A //////////////////////// 4.a.
------------- ---------------------------------------------- ---------------------------
b. TEXT 3550 RCFD 3550 N/A //////////////////////// 4.b.
------------- ---------------------------------------------- ---------------------------
c. TEXT 3551 RCFD 3551 N/A //////////////////////// 4.c.
----------------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)........................ RCFD 2160 239,878
---------------------------- 5.
</TABLE>

Memorandum

<TABLE>
<CAPTION>
----------------------------
Dollar Amounts in Thousands /////////// Bil Mil Thou
- ---------------------------------------------------------------------------------------------- ----------------------------
<S> <C> <C> <C>
1. Deferred tax assets disallowed for regulatory capital purposes............................ RCFD 5610 0 M.1.
----------------------------
</TABLE>

Schedule RC-G--Other Liabilities
<TABLE>
<CAPTION>
-----------
C435
---------------- -----------
Dollar Amounts in Thousands /////////// Bil Mil Thou
- ---------------------------------------------------------------------------------------------- ----------------------------
<S> <C> <C> <C>
1. a. Interest accrued and unpaid on deposits in domestic offices(2)......................... RCON 3645 18,303 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable) ............. RCFD 3646 19,991 1.b.
2. Net deferred tax liabilities(1)........................................................... RCFD 3049 0 2.
3. Minority interest in consolidated subsidiaries............................................ RCFD 3000 0 3.
4. Other (itemize amounts that exceed 25% of this item)...................................... RCFD 2938 47,773 4.
------------- ---------------------------
a. TEXT 3552 Intercompany Accounts Payable RCFD 3552 35,794 ///////////////////////// 4.a.
------------- -----------------------------------------------
b. TEXT 3553 RCFD 3553 N/A ///////////////////////// 4.b.
------------- -----------------------------------------------
c. TEXT 3554 RCFD 3554 N/A ///////////////////////// 4.c.
-----------------------------------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20)......................... RCFD 2930 86,067 5.
-----------------------------
</TABLE>
- -------------

(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) For savings banks, include "dividends" accrued and unpaid on deposits.

21
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-12
City, State Zip: Richmond, Va 23261 Cert: 06886
Transit Number: 71000036
---------
Schedule RC-H--Selected Balance Sheet Items for Domestic Offices

C440
------
Domestic Offices
---------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Customers' liability to this bank on acceptances outstanding................ 2155 9,775 1.
2. Bank's liability on acceptances executed and outstanding.................... 2920 9,775 2.
3. Federal funds sold and securities purchased under agreements to resell...... 1350 51,400 3.
4. Federal funds purchased and securities sold under agreements to repurchase.. 2800 1,203,787 4.
5. Other borrowed money........................................................ 2850 49,225 5.
EITHER ////////////////////
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs.. 2163 N/A 6.
OR ////////////////////
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs... 2941 0 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement ////////////////////
subsidiaries, and IBFs)..................................................... 2192 11,677,970 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement ////////////////////
subsidiaries, and IBFs)..................................................... 3129 10,799,634 9.
</TABLE>

Memorandum (to be completed only by banks with IBFs and other "foreign" offices)

Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EITHER ///////////////////
1. Net due from the IBF of the domestic offices of the reporting bank.......... 3051 N/A M.1.
OR ///////////////////
2. Net due to the IBF of the domestic offices of the reporting bank............ 3059 0 M.2.
</TABLE>

Schedule RC-I--Selected Assets and Liabilities of IBFs

To be completed only by banks with IBFs and other "foreign" offices.

<TABLE>
<CAPTION>
C445
------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, ////////////////////
item 12).................................................................... 2133 N/A 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, ////////////////////
part I, item 12, column A).................................................. 2076 N/A 2.

3. IBF commercial and industrial loans (component of Schedule RC-C, part I, ////////////////////
item 4, column A)........................................................... 2077 N/A 3.
4. Total IBF liabilities (component of Schedule RC, item 21)................... 2898 N/A 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of ////////////////////
Schedule RC-E, part II, items 2 and 3)...................................... 2379 N/A 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, ////////////////////
4, 5, and 6)................................................................ 2381 N/A 6.
</TABLE>

22
<PAGE>

Legal Title of Bank: NationsBank of Call Date: 12/31/93
Virginia, N.A. AT-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-13
City, State Zip: Richmond, Va 23261 Cert: 06866
Transit Number: 71000036
---------

Schedule RC-K--Quarterly Average (1)
<TABLE>
<CAPTION>
------------
C455
---------------------------
Dollar Amounts in Thousands ////////// Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS ///////////////////////////
1. Interest-bearing balances due from depository institutions................. RCFD 3381 0 1.
2. U.S. Treasury securities and U.S. Government agency and corporation ///////////////////////////
obligations............................................................... RCFD 3382 1,999,669 2.
3. Securities issued by states and political subdivisions in the U.S.......... RCFD 3383 84,519 3.
4. a. Other debt securities................................................... RCFD 3647 39,858 4.a.
b. Equity securities (includes investments in mutual funds and Federal ///////////////////////////
Reserve stock).......................................................... RCFD 3648 7,531 4.b.
5. Federal funds sold and securities purchased under agreements to resell in ///////////////////////////
domestic offices of the bank and of its Edge and Agreement subsidiaries, ///////////////////////////
and in IBFs................................................................ RCFD 3365 2,160,493 5.
6. Loans: ///////////////////////////
a. Loans in domestic offices: ///////////////////////////

(1) Total loans......................................................... RCON 3360 6,317,491 6.a.(1)
(2) Loans secured by real estate........................................ RCON 3385 1,879,205 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers. RCON 3386 21,265 6.a.(3)
(4) Commercial and industrial loans..................................... RCON 3387 2,843,865 6.a.(4)
(5) Loans to individuals for household, family, and other personal ///////////////////////////
expenditures........................................................ RCON 3388 1,078,847 6.a.(5)
(6) Obligations (other than securities and leases) of states and ///////////////////////////
political subdivisions in the U.S. ................................. RCON 3389 208,385 6.a.(6)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and ///////////////////////////
IBFs.................................................................... RCFN 3360 0 6.b.
7. Assets held in trading accounts............................................ RCFD 3401 7,921 7.
8. Lease financing receivables (net of unearned income)....................... RCFD 3484 32,451 8.

9. Total assets............................................................... RCFD 3368 11,869,709 9.
LIABILITIES ///////////////////////////
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ///////////////////////////
ATS accounts, and telephone and preauthorized transfer accounts) (exclude ///////////////////////////
demand deposits)........................................................... RCON 3485 1,620,936 10.
11. Nontransaction accounts in domestic offices: ///////////////////////////
a. Money market deposit accounts (MMDAs)................................... RCON 3486 1,209,305 11.a.
b. Other savings deposits.................................................. RCON 3487 1,006,133 11.b.
c. Time certificates of deposit of $100,000 or more........................ RCON 3345 542,729 11.c.
d. All other time deposits................................................. RCON 3469 2,634,427 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement ///////////////////////////
subsidiaries, and IBFs..................................................... RCFN 3404 3,020 12.
13. Federal funds purchased and securities sold under agreements to repurchase ///////////////////////////
in domestic offices of the bank and of its Edge and Agreement subsidiaries, ///////////////////////////
and in IBFs................................................................ RCFD 3353 1,582,506 13.
14. Other borrowed money....................................................... RCFD 3355 39,959 14.
---------------------------
</TABLE>

- ------------
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter, or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).

23
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-14
City, State Zip: Richmond, Va 23261 Cert: 06886
Transit Number: 71000036

Schedule RC-L--Off-Balance Sheet Items

Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.

<TABLE>
<CAPTION>
C460
------------

Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unused commitments: ////////////////////
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home ////////////////////
equity lines................................................................................ 3814 250,130 1.a.

b. Credit card lines........................................................................... 3815 0 1.b
c. Commercial real estate, construction, and land development: ////////////////////
(1) Commitments to fund loans secured by real estate........................................ 3816 129,242
1.c.(1)
(2) Commitments to fund loans not secured by real-estate.................................... 6550 0
1.c.(2)
d. Securities underwriting..................................................................... 3817 0 1.d.
e. Other unused commitments.................................................................... 3818 3,340,753 1.e.
2. Financial standby letters of credit and foreign office guarantees.............................. 3819 659,771 2.
--------------------------
a. Amount of financial standby letters of credit conveyed to others RCFD 3820 0 //////////////////// 2.
a.
--------------------------
3. Performance standby letters of credit and foreign office guarantees............................ 3821 91,267 3.
a. Amount of performance standby letters of credit conveyed to --------------------------
others............................................................ RCFD 3822 0 //////////////////// 3.a.
--------------------------
4. Commercial and similar letters of credit....................................................... 3411 6,518 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by
the reporting bank............................................................................. 3428 0 5.
6. Participants in acceptances (as described in the instructions) acquired by the reporting ////////////////////
(nonaccepting) bank............................................................................ 3429 0 6.
7. Securities borrowed............................................................................ 3432 0 7.
8. Securities lent (including customers' securities lent where the customer is indemnified ////////////////////
against loss by the reporting bank)............................................................ 3433 0 8.
9. Mortgages transferred (i.e., sold or swapped) with recourse that have been treated as sold
for Call Report purposes: ////////////////////
a. FNMA and FHLMC residential mortgage loan pools: ////////////////////
(1) Outstanding principal balance of mortgages transferred as of the report date............ 3650 0
9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3651 0
9.a.(2)
b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools: ////////////////////
(1) Outstanding principal balance of mortgages transferred as of the report date........... 3652 0
9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3653 0
9.b.(2)
c. Farmer Mac agricultural mortgage loan pools: ////////////////////
(1) Outstanding principal balance of mortgages transferred as of the report date............ 3654 0
9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3655 0
9.c.(2)
10. When-issued securities: ////////////////////
a. Gross commitments to purchase............................................................... 3434 0 10.a.
b. Gross commitments to sell................................................................... 3435 0 10.b.
11. Interest rate contracts (exclude when-issued securities): ////////////////////
a. Notional value of interest rate swaps....................................................... 3450 518,372 11.a.
b. Futures and forward contracts............................................................... 3823 0 11.b.
c. Option contracts (e.g., options on Treasuries): ////////////////////
(1) Written option contracts................................................................ 3824 25,520

11.c.(1)
(2) Purchased option contracts.............................................................. 3825 25,520

11.c.(2)
12. Foreign exchange rate contracts: ////////////////////
a. Notional value of exchange swaps (e.g., cross-currency swaps)............................... 3826 0 12.a.
b. Commitments to purchase foreign currencies and U.S. dollar exchange (spot, forward, ////////////////////
and futures)................................................................................ 3415 0 12.b.
c. Option contracts (e.g., options on foreign currency): ////////////////////
(1) Written option contracts................................................................ 3827 0
12.c.(1)
(2) Purchased option contracts.............................................................. 3828 0
12.c.(2)

</TABLE>

24
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK: 51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-15
City, State Zip: Richmond, Va 23261 Cert: 06886
Transit Number: 71000036

Schedule RC-L--Continued

<TABLE>
<CAPTION>
-----
C461
--------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
13. Contracts on other commodities and equities: ////////////////////
a. Notional value of other swaps (e.g., oil swaps)......................... 3829 0 13.a.
b. Futures and forward contracts (e.g., stock index and ////////////////////
commodity--precious metals, wheat, cotton, livestock-- ////////////////////
contracts).............................................................. 3830 0 13.b.
c. Option contracts (e.g., options on commodities, individual ////////////////////
stocks and stock indexes): ////////////////////
(1) Written option contracts............................................ 3831 0 13.c.(1)
(2) Purchased option contracts.......................................... 3832 800 13.c.(2)
14. All other off-balance sheet liabilities (itemize and describe ////////////////////
each component of this item over 25% of Schedule RC, item 28, ////////////////////
"Total equity capital").................................................... 3430 0 14.
////////////////////
--------- ------------------------------
a. TEXT 3555 RCFD 3555 N/A //////////////////// 14.a.
----------------------------------------
b. TEXT 3556 RCFD 3556 N/A //////////////////// 14.b.
----------------------------------------
c. TEXT 3557 RCFD 3557 N/A //////////////////// 14.c.
----------------------------------------
d. TEXT 3558 RCFD 3558 N/A //////////////////// 14.d.

-----------------------------------------------------------------------
15. All other off-balance sheet assets (itemize and describe each ////////////////////
component of this item over 25% of Schedule RC, item 28, "Total ////////////////////
equity capital")........................................................... 5591 0 15.
////////////////////
---------- ------------------------------
a. TEXT 5592 RCFD 5592 N/A //////////////////// 15.a.
----------------------------------------
b. TEXT 5593 RCFD 5593 N/A //////////////////// 15.b.
----------------------------------------
c. TEXT 5594 RCFD 5594 N/A //////////////////// 15.c.
----------------------------------------
d. TEXT 5595 RCFD 5595 N/A //////////////////// 15.d.
-----------------------------------------------------------------------------------------------
</TABLE>

Memoranda

--------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Loans originated by the reporting bank that have been sold or participated ////////////////////
to other during the calendar quarter ending with the report date (exclude ////////////////////
the portions of such loans retained by the reporting bank; see instructions ////////////////////
for other exclusions)....................................................... 3431 827 M.1.
2. Loans purchased by the reporting bank during the calendar quarter ending with ////////////////////
the report date (see instructions for exclusions)............................ 3488 3,828 M.2.
3. Unused commitments with an original maturity exceeding one year that are ////////////////////
reported in Schedule RC-L, items 1.a through 1.e, above (report only the ////////////////////
unused portions of commitments that are fee paid or otherwise legally ////////////////////
binding).................................................................... 3833 1,856,188 M.3.
a. Participations in commitments with an original maturity ---------- ----- ////////////////////
exceeding one year conveyed to others.................. RCFD 3834 19,655 //////////////////// M.3.a.
---------- ----- ////////////////////
4. To be completed only by banks with $1 billion or more in total assets: ////////////////////
Standby letters of credit and foreign office guarantees (both financial ////////////////////
and performance) issued to non-U.S. addresses (domicile) included in ////////////////////
Schedule RC-L, items 2 and 3, above......................................... 3377 N/A M.4.
5. To be completed for the September report only: ////////////////////
Installment loans to individuals for household, family, and other personal ////////////////////
expenditures that have been securitized and sold without recourse (with ////////////////////
servicing retained), amounts outstanding by type of loan: ////////////////////
a. Loans to purchase private passenger automobiles.......................... 2741 N/A M.5.a.
b. Credit cards and related plans........................................... 2742 N/A M.5.b.
c. All other consumer installment credit (including mobile home loans)...... 2743 N/A M.5.c.
--------------------
</TABLE>

<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-16
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036

Schedule RC-M--Memoranda

<TABLE>
<CAPTION>
----------
C465
--------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------ --------------------
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal //////////////////
shareholders, and their related interests as of the report date: //////////////////
a. Aggregate amount of all extensions of credit to all executive officers, directors, principal //////////////////
shareholders, and their related interests........................................................ 6164 65,519 1.a.
b. Number of executive officers, directors, and principal shareholders to whom the amount of all //////////////////
extensions of credit by the reporting bank (including extensions of credit to
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number //////////////////
of total capital as defined for thie purpose in agency regulations. -----------------------------
RCFD 6165 9 ////////////////// 1.b.
-----------------------------
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches //////////////////
and agencies of foreign banks(1) (included in Schedule RC, items 3.a and 3.b)........................ 3405 0 2.
3. Not applicable....................................................................................... //////////////////
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
(include both retained servicing and purchased servicing): //////////////////
a. Mortgages serviced under GNMA contract............................................................ 5500 0 4.a
b. Mortgages serviced under a FHLMC contract: //////////////////
(1) Serviced with recourse to servicer............................................................ 5501 0
4.b.(1)
(2) Serviced without recourse to servicer......................................................... 5502 0
4.b.(2)
c. Mortgages serviced under a FNMA contract: //////////////////
(1) Serviced under a regular option contract...................................................... 5503 0
4.c.(1)
(2) Serviced under a special option contract...................................................... 5504 0
4.c.(2)
d. Mortgages serviced under other servicing contracts ............................................... 5505 83,631 4.d
5. To be completed only by banks with $1 billion or more in total assets: //////////////////
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must //////////////////
equal Schedule RC, item 9): //////////////////
a. U.S. addresses (domicile)......................................................................... 2103 9,775 5.a.
b. Non-U.S. addresses (domicile)..................................................................... 2104 N/A 5.b.
6. Intangible assets: //////////////////
a. Mortgage servicing rights......................................................................... 3164 0 6.a.

b. Other identifiable intangible assets: //////////////////
(1) Purchased credit card relationships........................................................... 5506 0
6.b.(1)
(2) All other identifiable assets................................................................. 5507 0
6.b.(2)
c. Goodwill.......................................................................................... 3163 0 6.c.
d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10)............................ 2143 0 6.d.
e. Intangible assets that have been grandfathered for regulatory capital purposes.................... 6442 0 6.e.
--------------------
</TABLE>

<TABLE>
<S> <C> <C> <C>
7. Does your bank have any mandatory convertible debt that is part of your primary or secondary YES NO
--------------------
capital?............................................................................................. 6167 /// X 7.
--------------------
If yes, complete items 7.a through 7.e: RCFD Bil Mil Thou
--------------------
a. Total equity contract notes, gross................................................................ 3290 N/A 7.a.
b. Common or perpetual preferred stock dedicated to redeem the above notes........................... 3291 N/A 7.b.
c. Total equity commitment notes, gross.............................................................. 3293 N/A 7.c
d. Common or perpetual preferred stock dedicated to redeem the above notes........................... 3294 N/A 7.d
e. Total (item 7.a minus 7.b plus 7.c minus 7.d)..................................................... 3295 N/A 7.e
</TABLE>

- ------------
(1) Do not report federal funds sold and securities purchased under
---
agreements to resell with other commercial banks in the U.S. in this item.

26
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-17
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036

Schedule RC-M--Continued

<TABLE>
<CAPTION>
-------------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- --------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C>
8. a. Other real estate owned: /////////////////////////
(1) Direct and indirect investments in real estate ventures................ RCFD 5372 0 8.a.(1)
(2) All other real estate owned: /////////////////////////
(a) Construction and land development in domestic offices.............. RCON 5508 35,035 8.a.(2)(a)
(b) Farmland in domestic offices....................................... RCON 5509 3,480 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices.............. RCON 5510 8.a.(2)(c)

(d) Multifamily (5 or more) residential properties in domestic /////////////////////////
offices............................................................ RCON 5511 8,546 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices.............. RCON 5512 66,707 8.a.(2)(e)
(f) In foreign offices................................................. RCFN 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule /////////////////////////
RC, item 7)............................................................ RCFD 2150 116,390 8.a.3
b. Investments in unconsolidated subsidiaries and associated companies: /////////////////////////
(1) Direct and indirect investments in real estate ventures................ RCFD 5374 0 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and /////////////////////////
associated companies................................................... RCFD 5375 0 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule /////////////////////////
RC, item 8)............................................................ RCFD 2130 0 8.b.(3)
c. Total assets of unconsolidated subsidiaries and associated companies....... RCFD 5376 0 8.c.
9. Noncumulative perpetual preferred stock and related surplus included in /////////////////////////
Schedule RC, item 23, "Perpetual preferred stock and related surplus"......... RCFD 3778 0 9.
-------------------------
</TABLE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interbank holdings of capital instruments (to be completed for the ////////////////////
December report only): ////////////////////
a. Reciprocal holdings of banking organizations' capital instruments........ 3836 0 M.1.a.
b. Nonreciprocal holdings of banking organizations' capital instruments..... 3837 0 M.1.b.
--------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>

27
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-18
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036

Schedule RC-N--Past Due and Nonaccrual Loans, Leases, and Other Assets

The FFIEC regards the information reported in all of Memorandum item 1, in items
1 through 10, column A, and in Memorandum items 2 and 3, column A, as
confidential.

<TABLE>
<CAPTION>
-------
C470
-------------------------------------------------------------

(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing

-------------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<C>
1. Loans secured by real estate: ///////////////// ///////////////// /////////////////
a. To U.S. addresses (domicile)............................. 1245 15,859 1246 1,664 1247 46,029
1.a.
b. To non-U.S. addresses (domicile)......................... 1248 0 1249 0 1250 0
1.b.
2. Loans to depository institutions and ///////////////// ///////////////// /////////////////
acceptances of other banks: ///////////////// ///////////////// /////////////////
a. To U.S. banks and other U.S. depository ///////////////// ///////////////// /////////////////
institutions............................................. 5377 0 5378 0 5379 0
2.a.
b. To foreign banks......................................... 5380 0 5381 0 5382 0
2.b.
3. Loans to finance agricultural production and ///////////////// ///////////////// /////////////////
other loans to farmers...................................... 1594 320 1597 67 1583 1,386
3.
4. Commerical and industrial loans: ///////////////// ///////////////// /////////////////
a. To U.S. addresses (domicile)............................. 1251 32,151 1252 2,618 1253 75,702
4.a.
b. To non-U.S. addresses (domicile)......................... 1254 0 1255 0 1256 0
4.b.
5. Loans to individuals for household, family, and ///////////////// ///////////////// /////////////////
other personal expenditures: ///////////////// ///////////////// /////////////////
a. Credit cards and related plans........................... 5383 602 5384 0 5385 2
5.a.
b. Other (includes single payment, installment, ///////////////// ///////////////// /////////////////
and all student loans)................................... 5386 16,970 5387 1,843 5388 3,990
5.b.
6. Loans to foreign governments and official ///////////////// ///////////////// /////////////////
institutions................................................ 5389 0 5390 0 5391 0
6.
7. All other loans............................................. 5459 2,363 5460 517 5461 20,595
7.
8. Lease financing receivables: ///////////////// ///////////////// /////////////////
a. Of U.S. addresses (domicile)............................. 1257 477 1258 0 1259 0

8.a.
b. Of non-U.S. addresses (domicile)......................... 1271 0 1272 0 1791 0
8.b.
9. Debt securities and other assets (exclude other ///////////////// ///////////////// /////////////////
real estate owned and other repossessed assets)............. 3505 0 3506 0 3507 0
9.
-------------------------------------------------------------
</TABLE>

Amounts reported in items 1 through 8 above include guaranteed and unguaranteed
portions of past due and nonaccrual loans and leases. Report in item 10 below
certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 8.

<TABLE>
<CAPTION>
-------------------------------------------------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
-------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
<C>
10. Loans and leases reported in items 1 through 8 ///////////////// ///////////////// /////////////////
above which are wholly or partially guaranteed ///////////////// ///////////////// /////////////////
by the U.S. Government..................................... 5612 171 5613 343 5614 402
10.
a. Guaranteed portion of loans and leases included in ///////////////// ///////////////// /////////////////
item 10 above........................................... 5615 171 5616 343 5617 402

10.a.
-------------------------------------------------------------
</TABLE>

<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-19
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036
---------

Schedule RC-N--Continued

---------
Memoranda C473
---------------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ---------------------------------------------------- --------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Restructured loans and leases included in ////////////////// ////////////////// //////////////////
Schedule RC-N, items 1 through 8, above.......... 1658 0 1659 0 1661 23,296 M.1.
2. Loans to finance commercial real estate, ////////////////// ////////////////// //////////////////
construction, and land development activities ////////////////// ////////////////// //////////////////
(not secured by real estate) included in ////////////////// ////////////////// //////////////////
Schedule RC-N, items 4 and 7, above.............. 6558 344 6559 0 6560 13,154 M.2.
--------------------- -------------------- --------------------
3. Loans secured by real estate in domestic offices RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
(included in Schedule RC-N, item 1, above): --------------------- -------------------- --------------------
////////////////// ////////////////// //////////////////
a. Construction and land development............. 2759 499 2769 151 3492 12,624 M.3.a.
b. Secured by farmland........................... 3493 0 3494 0 3495 135 M.3.b.
c. Secured by 1-4 family residential properties: ////////////////// ////////////////// //////////////////
(1) Revolving, open-end loans secured by ////////////////// ////////////////// //////////////////
1-4 family residential properties and ////////////////// ////////////////// //////////////////
extended under lines of credit............ 5398 326 5399 102 5400 186 M.3.c.(1)
(2) All other loans secured by 1-4 family ////////////////// ////////////////// //////////////////
residential properties.................... 5401 8,879 5402 1,411 5403 3,258 M.3.c.(2)
d. Secured by multifamily (5 or more) ////////////////// ////////////////// //////////////////
residential properties........................ 3499 0 3500 0 3501 994 M.3.d.
e. Secured by nonfarm nonresidential properties.. 3502 6,155 3503 0 3504 28,832 M.3.e.
---------------------------------------------------------------
</TABLE>

Schedule RC-O--Other Data for Deposit Insurance Assessments
An amended Certified Statement should be submitted to the FDIC if the amounts

reported in items 1 through 9 of this schedule are amended after the semiannual
Certified Statement originally covering this report date has been filed with the
FDIC.

<TABLE>
<CAPTION>
--------
C475
--------------------

Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Unposted debits (see instructions): //////////////////
a. Actual amount of all unposted debits..................................................... 0030 N/A 1.a.
OR //////////////////
b. Separate amount of unposted debits: //////////////////
(1) Actual amount of unposted debits to demand deposits.................................. 0031 0 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits(1)..................... 0032 0 1.b.(2)
2. Unposted credits (see instructions): //////////////////
a. Actual amount of all unposted credits.................................................... 3510 N/A 2.a.
OR //////////////////
b. Separate amount of unposted credits: //////////////////
(1) Actual amount of unposted credits to demand deposits................................. 3512 0 2.b.(1)
(2) Actual amount of unposted credits to time and savings deposits(1).................... 3514 0 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total //////////////////
deposits in domestic offices) 3520 34,228 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in //////////////////
Puerto Rico and U.S. territories and possessions (not included in total deposits): //////////////////
a. Demand deposits of consolidated subsidiaries............................................. 2211 0 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries................................ 2351 0 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries..................... 5514 0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions: //////////////////
a. Demand deposits in insured branches (included in Schedule RC-E, Part II)................. 2229 0 5.a.
b. Time and savings deposits(1) in insured branches (included in Schedule RC-E, Part II).... 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches //////////////////
(included in Schedule RC-G, item 1.b).................................................... 5515 0 5.c.
--------------------
</TABLE>
- --------------
(1) For FDIC insurance assessment purposes, "time and savings deposits"
consists of nontransaction accounts and all transaction accounts other than
demand deposits.

<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-20
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036
71000036

Schedule RC-O -- Continued
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------- ----------------------
<S> <C> <C> <C>
Item 6 is not applicable to state nonmember banks that have not been authorized by the /////////////////////
Federal Reserve to act as pass-through correspondents. /////////////////////
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on /////////////////////
behalf of its respondent depository institutions that are also reflected as deposit /////////////////////
liabilities of the reporting bank: /////////////////////
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, /////////////////////
Memorandum item 4.a).................................................................. 2314 0 6.a.
b. Amount reflected in time and savings deposits(1) (included in Schedule RC-E, Part I, /////////////////////
Memorandum item 4.b).................................................................. 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1) /////////////////////
a. Unamortized premiums.................................................................. 5516 1,326 7.a.
b. Unamortized discounts................................................................. 5517 0 7.b.
---------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----
8. To be completed by banks with "Oaker deposits." ---------------------
Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)93) /////////////////////
of the Federal Deposit Insurance Act (from most recent FDIC Oaker Transaction /////////////////////
Worksheet(s))............................................................................. 5518 0 8.
---------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----
---------------------
9. Deposits in lifeline accounts............................................................ 5596 /////////////// 9.
---------------------
</TABLE>
- --------------------
(1) For FDIC insurance assessment purposes, "time and savings deposits"
consists of nontransaction accounts and all transaction accounts other than
demand deposits.

Memoranda (to be completed each quarter except as noted)
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------- ----------------------
<S> <C> <C> <C>
1. Total deposits in domestic offices of the bank (sum of Memorandum items 1.a.(1) and 1.b(1) /////////////////////
must equal Schedule RC, item 13.a): /////////////////////
a. Deposit accounts of $100,000 or less: /////////////////////
(1) Amount of deposit accounts of $100,000 or less..................................... 2702 6,622,075 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less (to be Number /////////////////////
--------------------------- /////////////////////

completed for the June report only).................. RCON 3779 N/A ///////////////////// M.1.a.(2)
--------------------------- /////////////////////
b. Deposit accounts of more than $100,000: /////////////////////
(1) Amount of deposit accounts of more than $100,000..... Number 2710 2,757,890 M.1.b.(1)
---------------------------
(2) Number of deposit accounts of more than $100,000..... RCON 2722 8,660 ///////////////////// M.1.b.(2)
---------------------------------------------------
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the
number of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2)
above by $100,000 and subtracting the result from the amount of deposit accounts of
more than $100,000 reported in Memorandum item 1.b.(1) above.

Indicate in the appropriate box at the right whether your bank has a method or procedure YES NO
for determining a better estimate of uninsured deposits than the estimate described -----------------
above...................................................................................... 6861 /// X M.2.a.
-----------------
RCON Bil Mil Thou
b. If the box marked YES has been checked, report the estimate of uninsured deposits -----------------
determined by using your bank's method or procedure........................................ 5597 N/A M.2.b.
-----------------
</TABLE>

- -------------------------------------------------------------------------------
Person to whom questions about the Reports of Condition C477
and Income should be directed: --------

Janis C. Melvin, Control Analyst II (404) 607-4423
- ----------------------------------- -----------------------------------------
Name and Title (TEXT 8901) Area code and phone number (TEXT 8902)

<PAGE>
Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-21
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036

Schedule RC-R--Risk-Based Capital

This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1992,
must complete items 2 through 9 and Memorandum item 1. Banks with assets of less
than $1 billion must complete items 1 through 3 below or Schedule RC-R in its
entirety, depending on their response to item 1 below.

<TABLE>
<S> <C> <C> <C>
1. Test for determining the extent to which Schedule RC-R must be completed.

To be completed only by banks with total assets of less than $1 billion. C480
Indicate in the appropriate box at the right whether the bank has total YES NO
capital greater than or equal to eight percent of adjusted total assets.................. RCFD 6056 N/A 1.
--------------------------
</TABLE>

For purposes of this test, adjusted total assets equals total assets less
cash, U.S. Treasuries, U.S. Government agency obligations, and 80 percent
of U.S. Government-sponsored agency obligations plus the allowance for loan
and lease losses and selected off-balance sheet items as reported on
Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete
items 2 and 3 below. If the box marked NO has been checked, the bank must
complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual
risk-based capital ratio is less than eight percent or that the bank is not
in compliance with the risk-based capital guidelines.

<TABLE>
<CAPTION>
---------------------------------------
(Column A) (Column B)
Subordinated Debt(1) Other
and Intermediate Limited-
Items 2 and 3 are to be completed by all banks. Term Preferred Life Capital
Stock Instruments
------------------- -------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
2. Subordinated debt(1) and other limited-life capital instruments (original ////////////////// //////////////////
weighted average maturity of at least five years) with a remaining ////////////////// //////////////////
maturity of: ////////////////// //////////////////
a. One year or less.......................................................... 3780 0 3786 0 2.a.
b. Over one year through two years........................................... 3781 0 3787 0 2.b.
c. Over two years through three years........................................ 3782 0 3788 0 2.c.
d. Over three years through four years....................................... 3783 0 3789 0 2.d.
e. Over four years through five years........................................ 3784 0 3790 0 2.e.
f. Over five years........................................................... 3785 0 3791 0 2.f.
---------------------------------------
</TABLE>

RCFD Bil Mil Thou
-------------------
<S> <C> <C> <C>
3. Total qualifying capital (i.e., Tier 1 and Tier 2 capital) allowable under the risk-based
capital guidelines................................................................................ 3792 1,007,359 3.
-------------------
</TABLE>

<TABLE>
<CAPTION>
(Column A) (Column B)
Assets Credit Equiv-
Items 4-9 and Memorandum item 1 are to be completed Recorded alent Amount
by banks that answered NO to item 1 above and on the of Off-Balance
by banks with total assetes of $1 billion or more. Balance Sheet Sheet Items(2)
------------------- -------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou

------------------- -------------------
<S> <C> <C> <C> <C> <C>
4. Assets and credit equivalent amounts of off-balance sheet items assigned
to the Zero percent risk category: ////////////////// //////////////////
a. Assets recorded on the balance sheet: ////////////////// //////////////////
(1) Securities issued by, other claims on, and claims unconditionally ////////////////// //////////////////
guaranteed by, the U.S. Government and its agencies and other ////////////////// //////////////////
OECD central governments.............................................. 3794 2,038,239 //////////////////
4.a.(1)
(2) All other............................................................. 3795 423,132 //////////////////
4.a.(2)
b. Credit equivalent amount of off-balance sheet items....................... ////////////////// 3796 0 4.b.
------------------- -------------------
</TABLE>
- ----------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.e,
"Total."
(2) Do not report in column B the risk-weighted amount of assets reported in
column A.

<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-22

City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036

Schedule RC-R--Continued

<TABLE>
<CAPTION>
-------------------------------------------
(Column A) (Column B)
Assets Credit Equiv-
Recorded alent Amount
on the of Off-Balance
Balance Sheet Sheet Items(1)
-------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items //////////////////// /////////////////
assigned to the 20 percent risk category: //////////////////// /////////////////
a. Assets recorded on the balance sheet: //////////////////// /////////////////
(1) Claims conditionally guaranteed by the U.S. Government and its //////////////////// /////////////////
agencies and other DECD central governments..................... 3798 96 ///////////////// 5.a.(1)
(2) Claims collateralized by securities issued by the U.S. Govern- //////////////////// /////////////////
ment and its agencies and other OECD central governments; by //////////////////// /////////////////
securities issued by U.S. Government-sponsored agencies; and //////////////////// /////////////////
by cash on deposit.............................................. 3799 7,619 ///////////////// 5.a.(2)
(3) All other....................................................... 3800 2,394,099 ///////////////// 5.a.(3)
b. Credit equivalent amount of off-balance sheet items................. //////////////////// 3801 29,030 5.b.
6. Assets and credit equivalent amounts of off-balance sheet items //////////////////// /////////////////
assigned to the 50 percent risk category: //////////////////// /////////////////
a. Assets recorded on the balance sheet................................ 3802 386,841 ///////////////// 6.a.
b. Credit equivalent amount of off-balance sheet items................. //////////////////// 3803 18,498 6.b.
7. Assets and credit equivalent amounts of off-balance sheet items //////////////////// /////////////////
assigned to the 100 percent risk category: //////////////////// /////////////////
a. Assets recorded on the balance sheet................................ 3804 6,664,990 ///////////////// 7.a.
b. Credit equivalent amount of off-balance sheet items................. //////////////////// 3805 1,613,537 7.b.
8. On-balance sheet values (or portions thereof) of interest rate, foreign //////////////////// /////////////////
exchange rate, and commodity contracts which have a capital //////////////////// /////////////////
assessment for their off-balance sheet exposure under the risk-based //////////////////// /////////////////
capital guidelines and those contracts (e.g., futures contracts) //////////////////// /////////////////
excluded from the calculation of the risk-based capital ratio (exclude //////////////////// /////////////////
margin accounts and accrued receivables from this item)............... 3806 3,069 ///////////////// 8.
9. Total assets recorded on the balance sheet (sum of items 4.a, 5.a, 6.a, //////////////////// /////////////////
7.a, and 8, column A) (must equal Schedule RC, item 12 plus items 4.b //////////////////// /////////////////
and 4.c, plus Schedule RC-B, item 6.a.(3), column A)................... 3807 11,918,085 ///////////////// 9.
-----------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------
(Column A) (Column B)
Notional Replacement
Principal Cost

Memorandum Value (Market Value)
-------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Notional principal value and replacement cost of interest rate and //////////////////// //////////////////
foreign exchange rate contracts (in column B, report only those //////////////////// //////////////////
contracts with a positive replacement cost): //////////////////// //////////////////
a. Interest rate contracts (exclude futures contracts)................. //////////////////// 3808 23,802 M.1.a.
(1) With a remaining maturity of one year or less................... 3809 105,822 //////////////////
M.1.a.(1)
(2) With a remaining maturity of over one year...................... 3810 438,870 //////////////////
M.1.a.(2)
b. Foreign exchange rate contracts (exclude contracts with an original //////////////////// //////////////////
maturity of 14 days or less and futures contracts).................. //////////////////// 3811 0 M.1.b.
(1) With a remaining maturity of one year or less................... 3812 0 //////////////////
M.1.b.(1)
(2) With a remaining maturity of over one year...................... 3813 0 //////////////////
M.1.b.(2)
------------------------------------------
- --------------
</TABLE>
(1) Do not report in column B the risk-weighted amount of assets reported in

(2) Until a final rule on the regulatory capital treatment of net unrealized
holding gains (losses) on available-for-sale
securities that is applicable to the reporting bank has taken effect, a
bank that has adopted FASB Statement No. 115
should include the difference between the fair value and amortized cost
of the available-for-sale securities in Item 8
and report the amortized cost of these securities in Item 4 through 7
above. Item 8 also includes on-balance sheet asset
values (or portions thereof) of off-balance sheet interest rate, foreign
exchange rate and commodity contracts and these
contracts (e.g., futures contracts) not subject to risk-based capital.
Exclude from Item 8 margin account and accrued
receivables as well as any portion of the allowance for loan and lease
losses in excess of the amount that may be
included in Tier 2 capital.
column A.

3<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D Page RC-23
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036

Optional Narrative Statement Concerning the Amounts
Reported in the Reports of Condition and Income

at close of business on December 31, 1993

NationsBank of Virginia, N.A. Richmond , Virginia
- ------------------------------------- ------------------ --------------
Legal Title of Bank City State

The management of the reporting bank may, if it wishes, submit a brief narrative
statement on the amounts reported in the Reports of Condition and Income. This
optional statement will be made available to the public, along with the
publicity available data in the Reports of Condition and Income, in response to
any request for individual bank report data. However, the information reported
in column A and in all of Memorandum item 1 of Schedule RC-N is regarded as
confidential and will not be released to the public. BANKS CHOOSING TO SUBMIT
THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES NOT CONTAIN THE
NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK CUSTOMERS, REFERENCES TO THE
AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER
INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD
COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not to make a
statement may check the "No comment" box below and should make no entries of
any kind in the space provided for the narrative statement; i.e., DO NOT enter
in this space such phrases as "No statement," "Not applicable," "N/A,"
"No comment," and "None."

The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement must
not exceed 750 characters, including punctuation, indentation, and standard
spacing between words and sentences. If any submission should exceed 750
characters, as defined, it will be truncated at 750 characters with no notice
to the submitting bank and the truncated statement will appear as the bank's
statement both on agency computerized records and in computer-file releases to
the public.

All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bnak who thereby
attests to its accuracy.

If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing narrative
statement will be deleted from the files, and from disclosure; the bank, at its
option, may replace it with a statement, under signature, appropriate to the
amended data.

The optional narrative statement will appear in agency records and in release to
the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE

INFORMATION CONTAINED THEREIN. A STATEMENT OF THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- --------------------------------------------------------------------------------
No comment /X/ (RCON 6979) / C471 / C472 /
----------------
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)

-------------------------------------------------- ------------------
Signature of Executive Officer of Bank Date of Signature

33
<PAGE>

Legal Title of Bank: NationsBank Call Date: 12/31/93
of Virginia, N.A. ST-BK:51-1985 FFIEC 031
Address: 1111 East Main Street Vendor ID: D
City, State Zip: Richmond, VA 23261 CERT: 06886
Transit Number: 71000036
---------

THIS PAGE IS TO BE COMPLETED BY ALL BANKS
...............................................................................

NAME AND ADDRESS OF BANK OMB No. For OCC: 1557-0081
CALL NO. 186 31 12-31-93 OMB No. For FDIC: 3064-0052
CERT: 06886 00610 STBK 51-1985 OMB No. For Federal Reserve: 7100-0036
NATIONSBANK OF VIRGINIA, NATIONAL AS
REG. REL. GRP. - 5TH FLR - 600 PEACH Expiration Date: 2/28/95
ATLANTA, GA 30308
SPECIAL REPORT
(Dollar Amounts in Thousands)

-----------------------------------------------------
CLOSE OF BUSINESS FDIC Certificate Number
DATE
12/31/93 06886

- --------------------------------------------------------------------------------
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
................................................................................

The following information is required by Public Laws 90-44 and 102-242, but does
not constitute a part of the Report of Condition. With each Report of Condition,
these Laws require all banks to furnish a report of all loans or other
extensions of credit to their executive officers made since the date of the
previous Report of Condition. Data regarding individual loans or other
extensions of credit are not required. If no such loans or other extensions of
credit were made during the period, insert "none" against subitem (a). (Exclude
the first $5,000 of indebtedness of each executive officer under bank credit
card plan.) See Sections 215.2 and 215.3 of Title 12 of the Code of Federal
Regulations (Federal Reserve Board Regulation O) for the definitions of
"executive officer" and "extension of credit," respectively. Exclude loans and
other extensions of credit to directors and principal shareholders who are not
executive officers.
................................................................................

<TABLE>
<S> <C> <C> <C> <C> <C>
----------------------
a. Number of loans made to executive officers since the previous Call Report date......... RCFD 3561 NONE a.
----------------------
b. Total dollar amount of above loans (in thousands of dollars)........................... RCFD 3562 0 b.
----------------------
c. Range of interest charged on above loans
------------------------------------------------------
(example: 9 3/4% = 9.75).............................. RCFD 7701/7702 0.00 % to 0.00 % c.
------------------------------------------------------
</TABLE>

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

- -----------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER DATE (Month, Day, Year)
AUTHORIZED TO SIGN REPORT

Joe L. Price, Senior Vice President 1-24-94
- -----------------------------------------------------------------------

NAME AND TITLE OF PERSON TO WHOM AREA CODE/PHONE NUMBER (TEXT 8904)
INQUIRIES MAY BE DIRECTED (TEXT 8903)

Janis C. Melvin, Control Analyst II (404) 607-4423
- ------------------------------------------------------------------------
FDIC 8040/53 (12-92)