UNITED DOMINION REALTY TRUST INC, S-3/A, 1994-03-29

UNITED DOMINION REALTY TRUST INC
S-3/A, 1994-03-29
REAL ESTATE INVESTMENT TRUSTS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 29, 1994

REGISTRATION NO. 33-52521
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

Amendment No. 1

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(2)
<S> <C> <C> <C> <C>
% Notes due
April 1, 1999............... $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.

(2) Previously paid.

<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 29, 1994
$75,000,000

UNITED DOMINION
REALTY TRUST

LOGO

% NOTES DUE APRIL 1, 1999

Interest on the Notes is payable semi-annually on April 1 and October
1, commencing October 1, 1994. 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 April , 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 April , 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>
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>
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 95 properties include 76 apartment communities, 15 shopping
centers, two warehouse/industrial properties and two office properties. The
apartment properties consist of 18,562 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
<TABLE>
<S> <C>

Securities Offered............ $75,000,000 aggregate principal amount of % Notes due April 1, 1999.
Interest Payment Dates........ April 1 and October 1, commencing October 1, 1994.
Maturity Date................. April 1, 1999.
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 on the property of the Trust
or any Subsidiary is greater than 40% of the Trust's Total Assets.
</TABLE>
3

<PAGE>
<TABLE>
<S> <C>
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.
</TABLE>

For a more complete description of the terms of and definitions used in the
foregoing limitations, see Description of Notes -- Certain Covenants.
4

<PAGE>
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 38 apartment properties containing 9,885 units at a total
cost of approximately $277 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.

On March 11, 1994, the Trust acquired one apartment community, Lakewood
Place (346 units), in Tampa, Florida at a cash purchase price of $11.9 million,
excluding closing costs.

The Trust also has four other apartment properties containing 1,420 units
under contract in separate transactions at a cash purchase price totalling $51.8
million, excluding closing costs. These properties are located in Tampa, Florida
(244 units), Orlando, Florida (360 units), Macon, Georgia (240 units), and
Raleigh, North Carolina (576 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 29
properties (6,181 units) located primarily in the Southeast at a purchase price
estimated to approach $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
5

<PAGE>
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.
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 $60.1 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 4.2%, 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 $31.45 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>
<CAPTION>
DECEMBER 31, 1993
HISTORICAL AS ADJUSTED
<S> <C> <C>
(IN THOUSANDS)
Debt:
Mortgage notes payable.............................. $ 72,862 $ 72,862
% Notes due April 1, 1999........................ -- 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>

<PAGE>
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>
<CAPTION>
YEAR ENDED DECEMBER 31,
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT RATIO INFORMATION AND PER SHARE
DATA)
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
<CAPTION>
DECEMBER 31,
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
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>
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>
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 late 1991 approximately $14 million of 9% convertible subordinated
debentures outstanding for most 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>
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 $12 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>
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 38
apartment properties containing 9,885 units at a total cost of approximately
$277 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.
11

<PAGE>

The following chart shows the geographic distribution of the Trust's
apartment properties as of December 31, 1993. The chart excludes two apartment
properties in Raleigh, North Carolina and Tampa, Florida, acquired in March,
1994. See Recent Developments.

<TABLE>
<CAPTION>
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

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
Lakewood Place (6) Tampa, FL 3-11-94 346 11.9 -- --
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

</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
Lakewood Place (6) --
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

</TABLE>
13

<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>
River Road Terrace Petersburg, VA 8-31-81 128 $ 2.6 $ -- $404
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 18,562 $528.8 $64.2
====== ====== =====
</TABLE>
<TABLE>
AVERAGE
NAME OCCUPANCY(4)
---- -----------
<S> <C>
River Road Terrace 98%
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) These properties were acquired in March, 1994. Average rent and occupancy
data for a full month under Trust management are not available.

<PAGE>
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:
<TABLE>
NAME AGE OFFICE
<S> <C> <C>
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

</TABLE>

DESCRIPTION OF NOTES

The Notes are to be issued under an Indenture, dated as of April 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>
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 April
1, 1999. The Notes will bear interest from April , 1994 or from the
immediately preceding Interest Payment Date (as defined below) to which interest
has been paid, payable semi-annually in arrears on April 1 and October 1 of each
year, commencing on October 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 March 15 or September 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.

The Notes will not have the benefit of any sinking fund obligations.

If any Interest 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 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, 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
16

<PAGE>
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 therewith 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 of 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 governmental 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 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) (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 account 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>

INDEX TO FINANCIAL STATEMENTS

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

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>

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>

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>

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>

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>

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

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

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

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

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

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

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

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

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
APRIL 1,

PROSPECTUS

GOLDMAN, SACHS & CO.

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 April 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*
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*

- -------------
*Previously filed

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

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

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Richmond, Commonwealth of Virginia, on March 28, 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
amendment to the registration statement has been signed by the following
persons in the capacities indicated on March 28, 1994.
<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

*By James Dolphin, Attorney-in-Fact

</TABLE>

II-3

EXHIBIT INDEX

EXHIBIT DOCUMENT

1- Form of Underwriting Agreement
4(d)(i)- Indenture dated as of April 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
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>

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 . . . . . . . . . . . . . . . . . . 4
coupon. . . . . . . . . . . . . . . . . . . . . 4
Custodian . . . . . . . . . . . . . . . . . . . 4
Debt. . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest. . . . . . . . . . . . . . . 4
Disqualified Stock. . . . . . . . . . . . . . . 4
Dollar" or "$ . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . 4
ECU . . . . . . . . . . . . . . . . . . . . . . 4
Euroclear . . . . . . . . . . . . . . . . . . . 5
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. . . . . . . . . . . . . . . . . . . . 7
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. . . . . . . . . . . . . . 9
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. . . . . . . . . . . . . 10
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. . . . . . . . 11
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 . . . . 16
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 . . . . . . . . . . . . . . . . . 17

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 . . . . . . 20
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . 24
SECTION 303. Execution, Authentication Delivery and Dating. . 24
SECTION 304. Temporary Securities . . . . . . . . . . . . . . 26
SECTION 305. Registration, Registration of Transfer and
Exchange. . . . . . . . . . . . . . . . . . . . 29
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities. . . . . . . . . . . . . . . . . . . 32
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . 33
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . 35
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . 36
SECTION 310. Computation of Interest. . . . . . . . . . . . . 37

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture. . . . . 37
SECTION 402. Application of Trust Funds . . . . . . . . . . . 38

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default. . . . . . . . . . . . . . . . 39
SECTION 502. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . 41
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . 42
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . 43
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons. . . . . . . . . . . . 44
SECTION 506. Application of Money Collected . . . . . . . . . 44
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . 44
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts. . . . . . 45
SECTION 509. Restoration of Rights and Remedies . . . . . . . 45
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . 46
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . 46
SECTION 512. Control by Holders of Securities . . . . . . . . 46
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . 46
SECTION 514. Waiver of Usury, Stay or Extension Laws. . . . . 47
SECTION 515. Undertaking for Costs. . . . . . . . . . . . . . 47

ARTICLE SIX

THE TRUSTEE

SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . 48
SECTION 602. Certain Rights of Trustee. . . . . . . . . . . . 48
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. . . . . . . . . . . . . . . . . . . 49
SECTION 604. May Hold Securities. . . . . . . . . . . . . . . 50
SECTION 605. Money Held in Trust. . . . . . . . . . . . . . . 50
SECTION 606. Compensation and Reimbursement . . . . . . . . . 50
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests . . . . . . . . . . . . . 51
SECTION 608. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . 51
SECTION 609. Acceptance of Appointment By Successor . . . . . 53
SECTION 610. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . . 54
SECTION 611. Appointment of Authenticating Agent. . . . . . . 54

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST

SECTION 701. Disclosure of Names and Addresses of Holders . . 56
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . 56
SECTION 703. Reports by Trust . . . . . . . . . . . . . . . . 56
SECTION 704. Trust to Furnish Trustee Names and Addresses
of Holders. . . . . . . . . . . . . . . . . . . 57

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. . . . . . . . . . . . . . . 58
SECTION 802. Rights and Duties of Successor Corporation . . . 58
SECTION 803. Officers' Certificate and Opinion of Counsel . . 59

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . . . . . 59
SECTION 902. Supplemental Indentures with Consent of
Holders . . . . . . . . . . . . . . . . . . . . 61
SECTION 903. Execution of Supplemental Indentures . . . . . . 62
SECTION 904. Effect of Supplemental Indentures. . . . . . . . 62
SECTION 905. Conformity with Trust Indenture Act. . . . . . . 62
SECTION 906. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . 62
SECTION 907. Notice of Supplemental Indentures. . . . . . . . 63

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium or Make-Whole
Amount, if any, Interest and Additional
Amounts . . . . . . . . . . . . . . . . . . . . 63
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . 63
SECTION 1003. Money for Securities Payments to Be Held in
Trust . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1004. Limitations on Incurrence of Debt. . . . . . . . 66
SECTION 1005. Existence. . . . . . . . . . . . . . . . . . . . 68
SECTION 1006. Maintenance of Properties. . . . . . . . . . . . 68
SECTION 1007. Insurance. . . . . . . . . . . . . . . . . . . . 68
SECTION 1008. Payment of Taxes and Other Claims. . . . . . . . 68
SECTION 1009. Provision of Financial Information . . . . . . . 68
SECTION 1010. Statement as to Compliance . . . . . . . . . . . 69
SECTION 1011. Additional Amounts . . . . . . . . . . . . . . . 69
SECTION 1012. Waiver of Certain Covenants. . . . . . . . . . . 70

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article . . . . . . . . . . . . 71
SECTION 1102. Election to Redeem; Notice to Trustee. . . . . . 71
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed. . . . . . . . . . . . . . . . . . . . 71
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . 71
SECTION 1105. Deposit of Redemption Price. . . . . . . . . . . 73
SECTION 1106. Securities Payable on Redemption Date. . . . . . 73
SECTION 1107. Securities Redeemed in Part. . . . . . . . . . . 74

ARTICLE TWELVE

SINKING FUNDS

SECTION 1201. Applicability of Article . . . . . . . . . . . . 75
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. . . . . . . . . . . . . . . . . . . 75
SECTION 1203. Redemption of Securities for Sinking Fund. . . . 75

ARTICLE THIRTEEN

REPAYMENT AT THE OPTION OF HOLDERS

SECTION 1301. Applicability of Article . . . . . . . . . . . . 77
SECTION 1302. Repayment of Securities. . . . . . . . . . . . . 77
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . 77
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable . . . . . . . . . . . . . . . . 78
SECTION 1305. Securities Repaid in Part. . . . . . . . . . . . 79

ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1401. Applicability of Article; Trust's Option to
Effect Defeasance or Covenant Defeasance. . . . 79
SECTION 1402 Defeasance and Discharge . . . . . . . . . . . . 80
SECTION 1403. Covenant Defeasance. . . . . . . . . . . . . . . 80
SECTION 1404. Conditions to Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . . . . 81
SECTION 1405. Deposited Money and Government Obligations to
Be Held in Trust; Other Miscellaneous
Provisions. . . . . . . . . . . . . . . . . . . 83

ARTICLE FIFTEEN

MEETINGS OF HOLDERS OF SECURITIES

SECTION 1501. Purposes for Which Meetings May Be Called. . . . 84
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . 84
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . 85
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . 85
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings . . . . . . . . . . . . 86
SECTION 1506. Counting Votes and Recording Action of
Meetings. . . . . . . . . . . . . . . . . . . . 87
SECTION 1507. Evidence of Action Taken by Holders. . . . . . . 87
SECTION 1508. Proof of Execution of Instruments. . . . . . . . 88

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 April 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 April 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.

(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 consisting 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
modification of, in addition to or in lieu of any of the provisions
of Article Fourteen;

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

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

(22) whether and under what circumstances the 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 receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as
the case may be, in the form set forth in Exhibit A-1 to this Indenture
or such other certificate as may be specified with respect to any series
of Securities pursuant to Section 301, dated no earlier than 15 days
prior to the earlier of the date on which such Bearer Security is
delivered and the date on which any temporary Security first becomes
exchangeable for such Bearer Security in accordance with the terms of
such temporary Security and this Indenture. Except as permitted by
Section 306, the Trustee shall not authenticate and deliver any Bearer
Security unless all appurtenant coupons for interest then matured have
been detached and 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 is payable (except
as otherwise specified pursuant to Section 301 for the Securities
of such series):

(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding
Securities of that series and any related coupons;

(B) the principal of (and premium or Make-Whole Amount,
if any, on) any Outstanding Securities of that series which
have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates borne
by or provided for in such Securities;

(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest and any
Additional Amounts at the rate or rates borne by or provided
for in such Securities; and

(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and

(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of (or premium
or Make-Whole Amount, if any) or interest on Securities of that
series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any
right consequent thereon.

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

The 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, now 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 taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;

(5) the Trustee may consult with counsel and 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 tust 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 insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,

then, in any such case, (i) the 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 April 1 of each year commencing with the first
April 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 April 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, setting
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 the Trustee its agent to receive all such
presentations, surrenders, notices and demands.

Unless otherwise specified with respect to any Securities pursuant
to Section 301, no payment of principal, premium, Make-Whole Amount or
interest on or Additional Amounts in respect of Bearer Securities shall
be made at any office or agency of the 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 premium 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 of 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 in reliance on
any Officers' Certificate furnished pursuant to this Section or in
reliance on the Trust's 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.

<PAGE>
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.

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 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;

(10) the CUSIP number of such Security, if any, provided that
neither the Trust nor the Trustee shall have any responsibility for
any such CUSIP number; and

(11) if applicable, that a Holder of Securities who desires to
convert Securities to be redeemed must satisfy the requirements for
conversion contained in such Securities, the then existing
conversion price or rate and the date and time when the option to
convert shall expire.

Notice of redemption of Securities to be redeemed shall be given by
the Trust or, at the Trust 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 "optional sinking fund payment." If provided for by
the terms of any Securities of any series, the cash amount of any
mandatory sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities.

The 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 thereon, 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 repayment
at the option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such Security
would be less than the minimum authorized denomination of Securities of
or within the series of which such Security to be repaid is a part.
Except as otherwise may be provided by the terms of any Security
providing for repayment at the option of the Holder thereof, exercise of
the repayment option by the Holder shall be irrevocable unless waived by
the 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(9) or otherwise, as the case may be, but, except
as specified above, the remainder of this Indenture and such Securities
and any coupons appertaining thereto shall be unaffected thereby.

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(7) and 501(8) are concerned, at any time during the
period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied
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 serial
numbers of the Outstanding Securities of such series held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes
cast at the meeting. A record, at least in duplicate, of the
proceedings of each meeting of Holders of Securities of any series shall
be prepared by the secretary of the meeting and there shall be attached
to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the fact, setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section
1502 and, if applicable, Section 1504. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the 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.

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>
STATE OF _________________________________

CITY/COUNTY OF __________________________

The foregoing instrument was acknowledged before me in the
City/County of _____________________________, State of
_______________________, by __________________,
_______________________________ of United Dominion Realty Trust, Inc. a
corporation, on behalf of the corporation.

My commission expires ________________________________________.

____________________________________
Notary Public

STATE OF _________________________________

CITY/COUNTY OF __________________________

The foregoing instrument was acknowledged before me in the
City/County of _____________________________, State of
_______________________, by __________________,
_______________________________ of NationsBank of Virginia, N.A., a
corporation, on behalf of the corporation.

My commission expires ________________________________________.

____________________________________
Notary Public

<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 APRIL 1, 1999

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 , or registered assigns, upon presentation, the principal
sum of DOLLARS on April 1, 1999 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 April 1 and October 1 in each year,
commencing October 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
March 15 or September 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 April 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 April 1, 1999,"
limited in aggregate principal amount to $75,000,000.

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 waiver 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 April, 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 April
1, 1996" 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.

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 Amendment No. 1 to the
Registration Statement (Form S-3 No. 33-52521) 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

Ernst & Young

Richmond, Virginia
March 25, 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 Amendment 1 to the Registration Statement (Form
S-3), File No. 33-52521, 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 25, 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 Amendment
No. 1 to the Registration Statement (Form S-3), File No. 33-52521 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 25, 1994