EVANS WITHYCOMBE RESIDENTIAL INC, S-3/A, 1997-03-20

EVANS WITHYCOMBE RESIDENTIAL INC
S-3/A, 1997-03-20
REAL ESTATE INVESTMENT TRUSTS

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 20, 1997

REGISTRATION NO. 333-19879
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

EVANS WITHYCOMBE RESIDENTIAL, INC.
(Exact name of guarantor of the Debt Securities and issuer of common stock,
preferred stock and warrants as specified in its charter)

MARYLAND 86-0766008
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

EVANS WITHYCOMBE RESIDENTIAL, L.P.
(Exact name of issuer of the Debt Securities as specified in its charter)

DELAWARE 86-0766007
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

6991 East Camelback Road, Suite A-200, Scottsdale, Arizona 85251, (602) 840-1040
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

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

STEPHEN O. EVANS
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
EVANS WITHYCOMBE RESIDENTIAL, INC.
6991 EAST CAMELBACK ROAD, SUITE A-200
SCOTTSDALE, ARIZONA 85251
(602) 840-1040
(Name, address, including zip code and telephone number, including area code, of
agent for service)

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

COPY TO:
KENNETH M. DORAN, ESQ.
GIBSON, DUNN & CRUTCHER LLP
333 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071-3197
(213) 229-7000

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.

If the only securities being registered on this Form are 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. /X/

If this Form is filed to register additional securities for an offering
pursuant Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement from the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

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

PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS AND RELATES TO
REGISTRATION STATEMENT NO. 33-96756 PREVIOUSLY FILED BY THE COMPANY ON FORM S-3
AND DECLARED EFFECTIVE ON DECEMBER 8, 1995.

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

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- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE

This Registration Statement relates to securities which may be offered from
time to time by Evans Withycombe Residential, Inc. (the "Company") and Evans
Withycombe Residential, L.P., a majority-owned limited partnership subsidiary of
the Company (the "Operating Partnership"). This Registration Statement contains
a form of basic prospectus (the "Basic Prospectus") relating to both the Company
and the Operating Partnership which will be used in connection with an offering
of securities by the Company and/or the Operating Partnership. The specific
terms of the securities to be offered will be set forth in a Prospectus
Supplement relating to such securities.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED MARCH 20, 1997

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH , 1997)

[LOGO]
EVANS WITHYCOMBE RESIDENTIAL, L.P.
$75,000,000 % NOTES DUE 2004
$50,000,000 % NOTES DUE 2007
------------------

The % Notes due 2004 (the "2004 Notes") and the % Notes due 2007 (the
"2007 Notes" and, together with the 2004 Notes, the "Notes"), offered hereby
(the "Offering") are being issued by Evans Withycombe Residential, L.P., a
Delaware limited partnership (the "Operating Partnership"), in aggregate
principal amounts of $75,000,000 and $50,000,000, respectively. The Notes will
mature on April 15, 2004 and April 15, 2007, respectively, and are redeemable at
any time at the option of the Operating Partnership, 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 to the redemption date and (ii) the Make-Whole
Amount (as defined in "Description of the Notes--Optional Redemption"), if any.
The Notes are not subject to any mandatory sinking fund. Interest on the Notes
is payable semi-annually in arrears on each of April 15 and October 15,
commencing October 15, 1997.

Each series of Notes will be represented by a single fully-registered global
note in book-entry form, without coupons (each a "Global Note"), registered in
the name of the nominee of the Depository Trust Company ("DTC"). Beneficial
interests in the Global Notes will be shown on, and transfers thereof will be
effected only through, records maintained by DTC (with respect to beneficial
interests of participants) or by participants or persons that hold interests
through participants (with respect to beneficial interests of beneficial
owners). Owners of beneficial interests in the Global Notes will be entitled to
physical delivery of Notes in definitive form equal in principal amount to their
respective beneficial interest only under the limited circumstances described
under "Description of the Notes--Book-Entry System." Settlement for the Notes
will be made in immediately available funds. The Notes will trade in DTC's
Same-Day Funds Settlement System until maturity or until the Notes are issued in
definitive form, and secondary market trading activity in the Notes will
therefore settle in immediately available funds. All payments of principal and
interest in respect of the Notes will be made by the Operating Partnership in
immediately available funds. See "Description of the Notes--Same-Day Settlement
and Payment."

SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THE ACCOMPANYING PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS RELATING TO AN INVESTMENT IN THE NOTES.

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

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.

<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING OPERATING
PUBLIC (1) DISCOUNT (2) PARTNERSHIP (1)(3)
<S> <C> <C> <C>
Per 2004 Note................. % % %
Total......................... $ $ $
Per 2007 Note................. % % %
Total......................... $ $ $
</TABLE>

(1) Plus accrued interest, if any, from , 1997.

(2) The Operating Partnership has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended. See "Underwriting."

(3) Before deducting estimated expenses of $500,000 payable by the Operating
Partnership.
--------------------------

The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if delivered to and accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Global Notes will be made in New York, New York on or about
, 1997 against payment therefor in immediately available funds.

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

MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
---------------

The date of this Prospectus Supplement is , 1997
<PAGE>

Certain persons participating in this offering may engage in transactions that
stabilize, maintain, or otherwise affect the price of the Notes. such
transactions may include stabilizing, the purchase of Notes to cover syndicate
short positions and the imposition of penalty bids. For a description of those
activities, see "Underwriting."

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

TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Supplement Summary.............................................................................. S-3
Recent Developments........................................................................................ S-7
Use of Proceeds............................................................................................ S-8
Capitalization............................................................................................. S-9
Selected Financial Information............................................................................. S-11
Business and Properties.................................................................................... S-14
Description of the Notes................................................................................... S-22
Underwriting............................................................................................... S-29
Legal Matters.............................................................................................. S-30

PROSPECTUS

Available Information...................................................................................... 2
Incorporation of Certain Documents by Reference............................................................ 3
Risk Factors............................................................................................... 3
The Company and the Operating Partnership.................................................................. 7
Use of Proceeds............................................................................................ 7
Consolidated Ratios of Earnings to Fixed Charges........................................................... 8
Description of Debt Securities............................................................................. 8
Description of the Capital Stock........................................................................... 21
Certain Provisions of Maryland Law and of the Company's Charter and Bylaws................................. 24
Description of Warrants.................................................................................... 28
Federal Income Tax Considerations.......................................................................... 28
Plan of Distribution....................................................................................... 29
Experts.................................................................................................... 30
Legal Matters.............................................................................................. 30
</TABLE>

S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS OR INCORPORATED HEREIN BY REFERENCE. CAPITALIZED TERMS
USED IN THIS PROSPECTUS SUPPLEMENT SUMMARY HAVE THE MEANINGS SET FORTH ELSEWHERE
IN THE PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. UNLESS OTHERWISE
INDICATED OR AS THE CONTEXT OTHERWISE REQUIRES, (A) REFERENCES TO THE "COMPANY"
INCLUDE EVANS WITHYCOMBE RESIDENTIAL, INC., ITS PREDECESSOR, EVANS WITHYCOMBE,
INC., AND ITS AFFILIATES, PREDECESSORS AND PARTNERS (COLLECTIVELY, "EVANS
WITHYCOMBE"), EVANS WITHYCOMBE RESIDENTIAL, L.P. (THE "OPERATING PARTNERSHIP"),
EVANS WITHYCOMBE FINANCE PARTNERSHIP, L.P. (THE "FINANCING PARTNERSHIP") AND
EVANS WITHYCOMBE MANAGEMENT, INC. (THE "MANAGEMENT COMPANY") AND (B) REFERENCES
TO THE OPERATING PARTNERSHIP INCLUDE THE FINANCING PARTNERSHIP.

THE OPERATING PARTNERSHIP

Evans Withycombe Residential, L.P. (the "Operating Partnership") is one of
the largest developers and managers of upscale apartment communities in Arizona
and has expanded its operations into selected sub-markets in Southern
California. The Operating Partnership's property portfolio consists of
stabilized properties and properties under construction and in lease-up. The
Operating Partnership owns and manages 44 stabilized multifamily apartment
communities located in Arizona and seven stabilized multifamily communities in
Southern California, containing a total of 14,523 apartments, of which 12,125
are in Arizona and 2,398 are in Southern California. The 51 stabilized
communities in Arizona and California are referred to herein as the "Stabilized
Communities." See "Business and Properties--Communities." The Operating
Partnership is also in the process of developing or expanding five apartment
communities in Arizona with a total of 1,198 apartments (the "Communities Under
Construction" and, together with the Stabilized Communities, the "Communities").
The Operating Partnership generally considers a property stabilized when it
first reaches 93% physical occupancy. The Operating Partnership also owns sites
intended for the development of three additional multifamily apartment
communities, and a site intended for the expansion of one of the Communities
Under Construction, all of which are in Phoenix. There can be no assurance that
the sites intended for development will be developed.

Evans Withycombe Residential, Inc. (the "Company"), operates as a
self-administered and self-managed real estate investment trust (a "REIT"). All
of the Communities and other assets of the Company are held by, and all of the
Company's operations are conducted through, the Operating Partnership (either
directly or through subsidiaries). The Company is the sole general partner and
also a limited partner of the Operating Partnership and owns an approximately
79.7% interest therein. To maintain the Company's qualification as a REIT while
realizing income from its fee management and related service business, the
Company's management operations are conducted through Evans Withycombe
Management, Inc. (the "Management Company") pursuant to the terms of management
agreements with the Operating Partnership and the Financing Partnership.

The Operating Partnership's principal executive office is located at 6991
East Camelback Road, Suite A-200, Scottsdale, Arizona 85251, and its telephone
number is (602) 840-1040.

S-3
<PAGE>
THE STABILIZED COMMUNITIES

The Stabilized Communities consist of 51 stabilized multifamily apartment
communities located in the following metropolitan areas:

<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
METROPOLITAN AREA COMMUNITIES APARTMENTS TOTAL(1)
- ------------------------------------------------------- ----------------- ----------- -----------
<S> <C> <C> <C>
Phoenix, Arizona....................................... 37 9,864 67.9%
Tucson, Arizona........................................ 7 2,261 15.6%
Southern California.................................... 7 2,398 16.5%
--
----------- -----
51 14,523 100.0%
--
--
----------- -----
----------- -----
</TABLE>

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

(1) The Operating Partnership is in preliminary negotiations with respect to the
sale of three Communities in Arizona with a total of 863 units (see "Recent
Developments--Other Recent Developments-- Dispositions"). In the event that
the three dispositions are consummated, the total number of apartments would
be 13,660 and the number of Communities, number of units and percent of
total in each market would be as follows: Phoenix--34 Communities, 9,001
Units, 65.9%; Tucson--7 Communities, 2,261 Units, 16.5%; Southern
California--7 Communities, 2,398 Units, 17.6%.

All of the Stabilized Communities are owned and operated by the Operating
Partnership and have an average size of 285 units. The average size of the
apartments in the Communities is 902 square feet. The Operating Partnership's
goal is for each community to reflect the Operating Partnership's brand image as
a market leader in its property type and geographical sub-market. Each Community
is individually designed to suit the specific site characteristics and
anticipated needs and desires of the residents. The Communities have been
designed and constructed in an attempt to integrate the natural surroundings and
architectural character of the neighborhood. The Communities are extensively
landscaped to create inviting open spaces and to complement the building
architecture. The objectives of the site layout and building design are to
provide residents with premium views, convenient parking, easy access to
amenities and a comfortable living environment.

S-4
<PAGE>
THE OFFERING

Unless otherwise indicated, all capitalized terms used herein and not
defined herein shall have the meanings provided in "Description of the
Notes--Additional Covenants of the Operating Partnership." For a more complete
description of the terms of the Notes specified in the following summary, see
"Description of the Notes" and "Description of Debt Securities" in the
accompanying Prospectus.

<TABLE>
<S> <C>
SECURITIES OFFERED................ $75,000,000 aggregate principal amount of % Notes due
2004 and $50,000,000 aggregate principal amount of %
Notes due 2007.

MATURITY.......................... The 2004 Notes will mature on April 15, 2004 and the
2007 Notes will mature on April 15, 2007.

INTEREST PAYMENT DATES............ Semi-annually in arrears on each of April 15 and October
15, commencing October 15, 1997.

RANKING........................... The Notes will rank PARI PASSU with (I.E., the Notes
will generally rank equally with) each other and with
all the Operating Partnership's other unsecured and
unsubordinated indebtedness, but will be effectively
subordinated following this Offering to $277.7 million
of indebtedness that is secured by mortgages on 33 of
the Operating Partnership's Communities. See
"Capitalization."

USE OF PROCEEDS................... The net proceeds to the Operating Partnership from this
Offering will be used to repay indebtedness outstanding
under the Operating Partnership's $225 million unsecured
revolving credit facility ("Revolving Credit Facility").
At February 28, 1997, there was approximately $155
million outstanding on the Revolving Credit Facility
with an effective interest rate of 6.94%.

LIMITATIONS ON INCURRENCE OF TOTAL
DEBT............................ The Operating Partnership and its Subsidiaries (as
defined) will not incur any Debt (as defined) other than
Intercompany Debt, (as defined), if, after giving effect
thereto, the aggregate principal amount of all
outstanding Debt of the Operating Partnership and its
Subsidiaries is greater than 60% of Total Assets (as
defined).

LIMITATIONS ON INCURRENCE OF
SECURED DEBT.................... In addition to the foregoing limitation on the
incurrence of Debt, the Operating Partnership and its
Subsidiaries will not incur any Secured Debt (as
defined) if, after giving effect thereto, the aggregate
principal amount of all outstanding Secured Debt of the
Operating Partnership and its Subsidiaries is greater
than 40% of Total Assets (as defined).

DEBT SERVICE COVERAGE............. In addition to the foregoing limitation on the
incurrence of Debt, the Operating Partnership and its
Subsidiaries will not incur any Debt, other than
Intercompany Debt, if the ratio of Consolidated Income
Available for Debt Service (as defined) to Annual Debt
Service Charge (as defined) for the four consecutive
fiscal quarters most recently ended prior to the date of
the incurrence of such additional Debt, is less than 1.5
to 1,
</TABLE>

S-5
<PAGE>

<TABLE>
<S> <C>
on a pro forma basis after giving effect to the
incurrence of such Debt and to the application of the
proceeds therefrom, as calculated based on certain
assumptions described below under "Description of the
Notes--Additional Covenants of the Operating
Partnership--Debt Service Coverage."

MAINTENANCE OF TOTAL UNENCUMBERED
ASSETS.......................... The Operating Partnership shall maintain at all times
Total Unencumbered Assets (as defined) of not less than
150% of the aggregate outstanding principal amount of
Unsecured Debt (as defined) of the Operating Partnership
and its Subsidiaries.

OPTIONAL REDEMPTION............... The Notes are redeemable at any time at the option of
the Operating Partnership, 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
to the redemption date and (ii) the Make-Whole Amount
(as defined below under "Description of the
Notes--Optional Redemption"), if any. See "Description
of the Notes--Optional Redemption."
</TABLE>

S-6
<PAGE>

RECENT DEVELOPMENTS

ARIZONA DEVELOPMENT ACTIVITY

In 1996 and 1997 the Operating Partnership developed 1,564 stabilized
apartment units in Arizona, as part of the construction of four new Communities
and the expansion of five existing Communities.

EXPANSION INTO SOUTHERN CALIFORNIA

In 1996 and 1997, the Operating Partnership acquired an aggregate of six
apartment communities in Southern California, increasing its California
portfolio to seven apartment communities comprising a total of 2,398 apartments.

- - In March 1997, the Operating Partnership purchased the Marquessa Apartments, a
336 unit apartment community in Corona Hills, California for a total purchase
price of $23.0 million, of which approximately $18.35 million was represented
by the assumption of debt and the remainder was funded from borrowings under
the Revolving Credit Facility.

- - In February 1997, the Operating Partnership purchased Canyon Ridge Apartments,
a 162 unit apartment community in San Diego for a total purchase price of
approximately $11 million in cash, which the Operating Partnership funded with
borrowings under its Revolving Credit Facility.

- - In June 1996, the Operating Partnership acquired the Canyon Crest Views
apartments, a 178 unit apartment community in Riverside, California for a
total purchase price of approximately $12.8 million in cash.

- - In July 1996, the Operating Partnership acquired Portofino, a 176 unit
apartment community in Chino Hills, California for a total purchase price of
approximately $12.2 million in cash and Parkview Terrace Club Apartments, a
558 unit apartment community in Redlands, California for $9.3 million in cash
and the assumption of approximately $22.6 million in tax exempt bonds.

- - In December 1996, the Operating Partnership acquired the Redlands Lawn &
Tennis Club Apartments, a 496 unit apartment community in Redlands,
California, for a total purchase price of $28.8 million, which included the
assumption of approximately $24 million in tax exempt bond financing.

Additionally, the Operating Partnership is actively pursuing and is in
preliminary negotiations regarding additional properties in Riverside/San
Bernardino and San Diego, but no assurance can be given that it will continue to
pursue or consummate any acquisitions as a result of these negotiations.

FINANCING ACTIVITY

- - 1997 COMMON STOCK OFFERING. In February 1997, the Company completed a public
offering of 1,800,000 shares of its common stock. Net proceeds to the Company
were approximately $35,820,000. The Company used the proceeds to pay down the
Revolving Credit Facility.

- - DEBT RATING. At February 28, 1997, the Company's total debt was approximately
$413.6 million and the Company's debt to total market capitalization (market
equity plus debt) was approximately 44.7%. The Company received an investment
grade rating of "BBB-" from Standard & Poor's Corporation, "Baa3" from Moody's
Investors Service, Inc. and "BBB-" from Fitch Investors Service, Inc. in
December 1996 with respect to prospective issuances of senior unsecured debt.
A security rating is not a recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time by the assigning rating
organization, and each rating should be evaluated independently of any other
rating. A rating of (a) BBB- from Standard & Poor's Corporation indicates that
the obligations of the Operating Partnership are in the lower range of those
obligations that exhibit adequate protection parameters, (b) Baa3 from Moody's
Investor Service Inc. indicates that the obligations of the Operating
Partnership are considered to be in the lower range of medium-grade
obligations, which are not

S-7
<PAGE>

considered to be highly protected or poorly secured and (c) BBB- from Fitch
Investors Service, Inc. indicates that the obligations of the Operating
Partnership are considered to be of investment grade and of satisfactory
credit quality and that its ability to pay interest and to repay principal is
considered to be adequate.

- - REDUCTION OF MORTGAGE INDEBTEDNESS. In January 1997, the Operating Partnership
repaid four mortgage loans with an aggregate unpaid principal balance of
approximately $24.9 million with borrowings under the Revolving Credit
Facility. The mortgages were repaid with respect to Miramonte, Scottsdale
Meadows, Rancho Murietta and Villa Encanto. See "Capitalization."

- - EXPANDED REVOLVING CREDIT FACILITY. On September 25, 1996, the Company
expanded its existing $125 million unsecured revolving credit facility to $225
million with a bank group. The Revolving Credit Facility bears interest at a
floating rate of the London Interbank Offered Rate ("LIBOR") plus 150 basis
points (100 basis points equals one percent) (or, at the option of the
Company, at the prime rate announced by the banks). The interest rate was
reduced 25 basis points upon the Company achieving an investment grade rating
of "Baa3" or "BBB-." The Revolving Credit Facility has a term of three years,
with an option to extend for one year, subject to certain conditions, and
provides for monthly payments of interest only. It will be used to finance
acquisitions, to fund construction and development and renovation costs and
for working capital purposes. At March 19, 1997, there was approximately $159
million outstanding on the Revolving Credit Facility with an effective
interest rate of 6.94%.

- - 1996 COMMON STOCK OFFERING. In the second quarter of 1996, the Company
completed a public offering of 4,700,000 shares of its common stock of which
2,088,889 shares were sold by the Company and an aggregate of 2,611,111 shares
were sold by two institutional stockholders. Net proceeds to the Company were
approximately $40,891,000. The Company used the proceeds from the sale of
common stock to pay down amounts outstanding under its Revolving Credit
Facility.

OTHER RECENT DEVELOPMENTS

- - MANAGEMENT AGREEMENTS. The Operating Partnership has entered into agreements,
effective as of March 1, 1997, to manage four apartment communities in the
Phoenix area with approximately 590 units.

- - DISPOSITIONS. In accordance with its selective disposition strategy, the
Operating Partnership is in preliminary negotiations with respect to the sale
of three Communities. No assurance can be given that such dispositions or
sales will be consummated.

USE OF PROCEEDS

The net proceeds to the Operating Partnership from the sale of the Notes
offered hereby, after payment of expenses related to the Offering and
underwriting discounts and commissions, are estimated to be approximately $123.3
million. The Operating Partnership will use such net proceeds to repay
indebtedness then outstanding under its Revolving Credit Facility. The Operating
Partnership expects that it will borrow additional amounts under the Revolving
Credit Facility following the Offering to fund acquisitions and developments
from time to time and for working capital purposes. At March 19, 1997,
outstanding borrowings under the Revolving Credit Facility amounted to
approximately $159 million and had an effective interest rate of 6.94%. The
Operating Partnership incurred the indebtedness under the Revolving Credit
Facility primarily to fund acquisitions and developments. The Revolving Credit
Facility has a term of three years, ending September 1999, with an option for
the Company to extend for one year, subject to certain conditions.

S-8
<PAGE>

CAPITALIZATION

The following table sets forth, as of December 31, 1996, the actual
capitalization of the Operating Partnership and its adjusted capitalization
after giving effect to (a) the issuance and sale of the Notes and the
application of the net proceeds therefrom as described under the caption "Use of
Proceeds" and (b) the issuance of 1,800,000 Units of the Operating Partnership
to the Company in connection with the contribution to the Operating Partnership
of the net proceeds from the sale of a like number of shares of common stock of
the Company in February 1997 (the "1997 Stock Offering") and the application of
the net proceeds therefrom of approximately $35,820,000 to repay a portion of
the outstanding balance under the Revolving Credit Facility. The table below
does not give effect to the acquisition of Canyon Ridge and Marquessa in the
first quarter of 1997. See "Recent Developments." The information set forth in
the table should be read in conjunction with the financial and other information
included elsewhere and incorporated by reference in this Prospectus Supplement
and the accompanying Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
ACTUAL AS ADJUSTED
--------- -----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
DEBT
Mortgage and notes payable (1)....................................... $ 40,143 $ 15,233
"AA"-rated securitized debt.......................................... 130,520 130,520
$50 million securitized debt......................................... 49,509 49,509
% Notes due 2004................................................... -- 75,000
% Notes due 2007................................................... -- 50,000
Unsecured Revolving Credit Facility (1).............................. 152,000 16,090
Variable rate tax free IDA bonds..................................... 64,000 64,000
--------- -----------
436,172 400,352
PARTNERS' CAPITAL (2).................................................. 283,954 319,774
--------- -----------
Total capitalization................................................. $ 720,126 $ 720,126
--------- -----------
--------- -----------
</TABLE>

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

(1) The as adjusted column further reflects that in January 1997, the Operating
Partnership repaid four mortgage loans with an unpaid principal of
approximately $24.9 million with borrowings under the Revolving Credit
Facility.

(2) The Company acquired 1,800,000 units in the Operating Partnership for
$35,820,000 representing the proceeds received from the sale of 1,800,000
shares of Common Stock of the Company on February 14, 1997.

S-9
<PAGE>

PRINCIPAL MATURITIES

The following table sets forth the principal maturities as adjusted as of
December 31, 1996 to give effect to the 1997 Stock Offering and this Offering
and the application of the proceeds thereof.

<TABLE>
<CAPTION>
YEAR
- ---------------------------------------------------------------------------------- DEBT
MATURING
-----------
(AMOUNTS IN
THOUSANDS)
<S> <C>
1997.............................................................................. $ 15,715
1998.............................................................................. 563
1999.............................................................................. 16,695
2000.............................................................................. 650
2001.............................................................................. 131,218
2002.............................................................................. 750
2003.............................................................................. 806
2004.............................................................................. 75,863
2005.............................................................................. 24,953
2006.............................................................................. 43,189
2007.............................................................................. 67,300
Thereafter........................................................................ 22,650
-----------
Total......................................................................... $ 400,352
-----------
-----------
</TABLE>

S-10
<PAGE>

SELECTED FINANCIAL INFORMATION

The following table sets forth certain financial and operating data on a
consolidated basis for the Operating Partnership and on a combined historical
basis for Evans Withycombe. The following information should be read in
conjunction with all of the consolidated financial statements and notes thereto
included in the Operating Partnership's Form 10 incorporated by reference into
the accompanying Prospectus.

EXPENSES:
Repairs and maintenance..................... 11,607 8,293 6,288 4,730 3,272
Other property operating.................... 12,713 8,699 7,834 6,593 4,684
Advertising................................. 1,864 1,244 966 1,022 783
Real estate taxes........................... 6,915 4,723 3,204 2,869 2,307
Property management......................... 3,225 2,825 2,505 2,605 2,417
General and administrative.................. 1,387 1,321 1,175 1,466 1,360
Interest.................................... 24,225 12,650 7,836 6,361 5,909
Depreciation and amortization............... 20,885 13,762 10,333 10,319 7,146
Write-down of real estate assets (1)........ -- -- -- 1,361 10,284
Other (2)................................... -- -- 5,233 -- --
--------- --------- --------- --------- ---------
Total expenses................................ 82,821 53,517 45,374 37,326 38,162
--------- --------- --------- --------- ---------

Income (loss) before minority interest and
extraordinary item.......................... 18,805 21,014 11,585 6,612 (6,709)
Minority interest (3)......................... (75) (89) (42) -- --
Extraordinary item-gain on extinguishment of
debt (1).................................... -- -- -- 6,061 12,569
--------- --------- --------- --------- ---------
Net income.................................... $ 18,730 $ 20,925 $ 11,543 $ 12,673 $ 5,860
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Earnings per unit (4)....................... $ 0.84 $ 1.02
--------- ---------
--------- ---------
Earnings per unit for the period August 17 to
December 31, 1994 (4)....................... $ 0.38
---------
---------
</TABLE>

S-11
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
(AMOUNTS IN THOUSANDS, EXCEPT PER UNIT AND PROPERTY
INFORMATION)
<S> <C> <C> <C> <C> <C>
OTHER INFORMATION:
Cash flows from:
Operating activities.................... $ 38,721 $ 36,983 $ 21,998 $ 20,897 $ 13,271
Investing activities.................... (129,461) (118,061) (211,651) (79,511) (61,829)
Financing activities.................... 89,674 82,273 189,614 57,417 50,792
Ratio of Annual Debt Service Charge (5)... 2.64x 3.76x 4.48x N/A N/A
Ratio of Debt to Total Assets (5)......... 46.78% 39.19% 22.39% N/A N/A
Ratio of Secured Debt to Total Assets
(5)..................................... 30.36% 33.84% 22.39% N/A N/A
Percentage of Total Unencumbered Assets to
Unsecured Debt.......................... 248% 233% N/A N/A N/A
Total rental communities (end of
period)................................. 49 41 32 31 27
Total number of apartments (end of
period)................................. 13,905 11,053 7,924 7,695 6,502
Physical occupancy (end of period) (6).... 93% 96% 97% 97% 97%
Weighted average number of apartments
(7)..................................... 12,887 9,798 7,740 6,641 4,998
Weighted average monthly revenue per unit
(8)..................................... $ 715 $ 641 $ 586 $ 532 $ 498
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET INFORMATION:
Real estate, before accumulated
depreciation.............................. $ 761,550 $ 587,183 $ 399,987 $ 292,513 $ 215,549
Total assets................................ 735,467 579,564 402,486 271,055 204,836
Total debt.................................. 436,172 297,456 127,787 106,545 64,792
Minority interest........................... 827 889 1,247 -- --
Equity...................................... $ 283,954 $ 259,055 $ 253,867 $ 142,886 $ 122,135
</TABLE>

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

(1) During 1993, the Operating Partnership negotiated a discounted payoff of a
mortgage loan secured by The Meadows and Promontory Pointe (1992). The
excess of the amounts owed for principal and interest over the amount paid
to pay off the loan is recorded as an extraordinary item-gain on
extinguishment of debt. The Operating Partnership determined that the
carrying values of the communities were in excess of net realizable value.
The excess of $1,361 and $10,284 was charged to write down of real estate
assets.

(2) In connection with the repayment of existing indebtedness at the time of the
IPO, prepayment penalties and lender participation (additional interest)
totaling $2,594 were paid. Prior to the IPO, an Executive Incentive Deferred
Compensation Plan was canceled and the $2,639 that was funded by the
Operating Partnership was expensed during 1994.

(3) Net income includes an adjustment for Evans Withycombe Finance, Inc.'s one
percent interest in the Financing Partnership for the years ended December
31, 1996 and 1995 and the period from August 17 to December 31, 1994,
respectively.

(4) Net income per Unit is based on 22,184,395, 20,590,873 and 20,086,884
weighted average number of Units outstanding for the years ended December
31, 1996 and 1995 and the period from August 17 to December 31, 1994,
respectively.

(5) For a definition of these terms, see "Description of the Notes--Additional
Covenants of the Operating Partnership."

S-12
<PAGE>

(6) Physical Occupancy is defined as the number of apartments occupied or leased
(including models and employee apartments) divided by the total number of
leaseable apartments within the community, expressed as a percentage.
Physical occupancy has been calculated using the average of the occupancy
that existed on the last day of each month over each period.

(7) Weighted average number of apartments is the average of all apartments
during the period. For stabilized properties, all apartments are included in
the calculation of the weighted average. For communities in the lease-up
phase, only apartments that are completed and occupied are included in the
weighted average calculation.

(8) Weighted average monthly revenue per apartment is derived by dividing rental
income by the weighted average number of apartments.

S-13
<PAGE>
BUSINESS AND PROPERTIES

OVERVIEW

The Operating Partnership is managed by its general partner, the Company, a
self-administered and self-managed equity REIT that was founded in 1977 (Evans
Withycombe's initial public offering (the "IPO") was in August 1994; its
predecessor entities were founded in 1977). Since its inception, the Company has
focused on the development, acquisition, management and ownership of upscale
multifamily apartment communities in Phoenix and Tucson, Arizona. During the
last two years, the Operating Partnership has expanded its focus to include
selected sub-markets in Southern California. Since 1977, the Company, through
the Operating Partnership and its predecessor entities, has developed 47
properties consisting of 10,663 apartments and acquired 38 properties consisting
of an additional 10,160 apartments, some of which were selectively sold over the
past several years.

The Operating Partnership's current portfolio consists of the following
Stabilized Communities and Communities Under Construction and in Lease Up:

- STABILIZED COMMUNITIES. The Operating Partnership owns and manages 44
Stabilized Communities located in the Phoenix and Tucson metropolitan
areas, containing a total of 12,125 apartments. In addition, the Company
owns and manages seven Stabilized Communities in the Southern California
submarkets of San Bernardino/Riverside and San Diego, which contain a
total of 2,398 apartments.

- COMMUNITIES UNDER CONSTRUCTION AND IN LEASE UP. The Operating Partnership
owns five apartment Communities Under Construction in Arizona with a total
of 1,198 apartments. Four of these communities are new developments and
one is an expansion of an existing Community owned by the Operating
Partnership.

BUSINESS STRATEGIES

The Operating Partnership's business strategy is to improve cash flow from
Stabilized Communities through intensive management focusing on maintaining
resident satisfaction and retention, increasing rents, maintaining high
community occupancy levels and controlling operating expenses. The Operating
Partnership's strategy is also to develop and acquire multifamily properties
which will provide both favorable initial returns and long-term growth
prospects.

- - MANAGEMENT OF EXISTING PROPERTIES. The Operating Partnership believes that
favorable supply and demand conditions will result in improving cash flow from
existing properties in Phoenix, Tucson and Southern California and through the
Operating Partnership's property management programs. The property management
team for each apartment community includes on-site management and maintenance
personnel. The property management teams perform leasing and rent collection
functions and coordinate resident services. All personnel are extensively
trained and are encouraged to continue their education through both Operating
Partnership-sponsored and outside training. Property management personnel
utilize state-of-the-art on-site computer management systems to assist in the
timely leasing of vacant apartments, collection of rents, maintenance
management and delivery of services to the apartment residents.

- - CUSTOMER SERVICE FOCUS. The focus of the Operating Partnership's on-site
management program is on providing prompt, courteous and responsive service to
its residents. The Operating Partnership believes that a strong resident
retention program emphasizing customer service reduces the Operating
Partnership's turnover rate and encourages residents to refer new customers.
The Operating Partnership solicits resident feedback and responds to
maintenance requests on a same day basis and provides 24-hour-a-day emergency
maintenance services.

- - PREVENTIVE MAINTENANCE PROGRAMS. The Operating Partnership conducts periodic
capital and preventive maintenance programs at each Community. In addition,
periodic preventive maintenance checks are

S-14
<PAGE>
made in each apartment pursuant to which appliances, heating and cooling
systems and apartment interiors are inspected and serviced as necessary. The
Operating Partnership believes that these programs lower operating costs over
the life of the Communities, increase the long-term value and maintain the
upscale market position of the Communities.

- - DEVELOPMENT STRATEGY. The Operating Partnership seeks to develop properties in
markets where it discerns a strong demand and where it anticipates attractive
rates of return. The Operating Partnership develops its Communities in markets
where resident profiles justify the development of high quality apartments
offering extensive resident amenities and services. In evaluating whether to
develop an apartment community in a particular location, the Operating
Partnership analyzes relevant demographic, economic and financial data.
Specifically, the Operating Partnership considers the following factors, among
others, in determining the viability of a potential new apartment community:
(i) income levels and employment growth trends in the relevant market, (ii)
uniqueness of location, (iii) household growth and net migration of the
relevant market's population, (iv) supply/demand ratio, competitive housing
alternatives, sub-market occupancy and rent levels and (v) barriers to entry
which would limit competition. The development risk is minimized by having
fixed price construction contracts in place before starting construction;
acquiring land only after entitlements are in place; maintaining adequate
contingency reserves; and underwriting new projects at current market rents.
The Operating Partnership currently intends to develop apartment communities
in select sub-markets in Phoenix and intends to develop communities in its
California sub-markets when economic conditions warrant. See "--Communities
Under Construction."

- - ACQUISITION STRATEGY. The Operating Partnership believes that it is well
positioned to take advantage of market timing opportunities in certain
Southern California markets, including San Diego and Riverside/ San
Bernardino, which will permit it to acquire existing apartment properties at
favorable prices. The Operating Partnership focuses on properties with below
market occupancies and rents, so that it can benefit both from property
repositioning and market improvements. The target acquisition properties will
often be under-managed, but fundamentally sound properties. Improvements to
landscaping, recreational amenities, and apartment interiors, coupled with
more effective management and marketing may result in significant revenue
increases over revenue levels at the time of acquisition. Such repositioning
may require substantial expenditures for capital improvements, refurbishments
and marketing.

The Operating Partnership believes that the Company's status as a publicly
traded REIT will enhance its ability to acquire properties or development
sites by providing property sellers a means to defer federal income taxes on
gains through the issuance of units of partnership interest in the Operating
Partnership ("Units") as consideration for the acquisition. Units were
utilized in the acquisition of Acacia Creek during the first quarter of 1995
and The Ashton during the fourth quarter of 1995. In addition, the Operating
Partnership's and the Company's access to the capital market allows for
additional financing flexibility for acquisitions.

- - DISPOSITION STRATEGY. The Operating Partnership may, from time to time, elect
to sell certain of its properties or exchange such properties for other
properties in a tax-free exchange when it believes that such resources could
be better allocated elsewhere.

- - THIRD PARTY FEE MANAGEMENT BUSINESS. The Operating Partnership succeeded to
the third party property management activities of its predecessor. Although it
contributes a small part of the Operating Partnership's revenues, the
Management Company continues to manage multifamily properties owned by third
parties. The fee management business is highly competitive and fragmented. The
Operating Partnership's competitors include a variety of local, regional and
national firms with no one firm controlling a significant market share in the
Operating Partnership's markets. The Operating Partnership will take advantage
of its reputation and experience as a property manager and accept property
management assignments that it expects to be profitable and which complement
the Operating Partnership's property portfolio.

S-15
<PAGE>

Effective March 1, 1997, the Operating Partnership entered into agreements
to manage four apartment communities located in Phoenix, Arizona containing
approximately 570 units increasing the third party fee managed portfolio to nine
apartment communities containing approximately 1,800 units.

The Operating Partnership's business strategies stated above include
estimates and forward-looking statements and prospects regarding, among other
things, the stability of occupancy and rent levels in the Operating
Partnership's markets and its ability to acquire existing apartment communities
at favorable prices. This forward-looking information involves risks and
uncertainties that could significantly impact the Operating Partnership's
ability to successfully implement these strategies. Among the factors that could
cause actual results to differ materially from the forward-looking statements
above are: the timing of the Operating Partnership's acquisitions and planned
development of new, and expansion of existing, communities; the actual costs
associated with such acquisitions and developments; the demand for apartments in
its markets; the strength of the local economies; and the Operating
Partnership's ability to successfully expand its operations into selected
submarkets of Southern California, markets in which it did not have any
operating experience prior to 1995. See "Risk Factors" in the accompanying
Prospectus.

COMMUNITIES

REGIONAL FOCUS

The Operating Partnership has focused on becoming a major presence in each
of its markets, allowing it to capitalize on its superior customer service,
product design and property locations while establishing and maintaining a
strong brand identity. The Operating Partnership seeks to operate in markets
where population and employment growth rates are expected to exceed the national
averages and where it believes it can become one of the regionally significant
owners and managers of multifamily apartment properties. The Communities are
located in growing sub-markets in Phoenix and Tucson, Arizona and Southern
California. The Communities are in sub-markets close to areas of employment,
transportation and shopping and in master planned communities.

- - Arizona. The Operating Partnership's size and prominence in its primary
Arizona markets provide it with a number of competitive advantages, including
superior market knowledge resulting in choice site selection, product
differentiation, economies of scale in operations and the ability to utilize
specialized marketing techniques.

- - California. After conducting an extensive study of a number of potential
markets within its region, the Operating Partnership has determined that
certain markets in Southern California present significant opportunities for
growth and attractive investment opportunities. The Operating Partnership has
acquired 2,398 units in this market and believes that properties continue to
be available for purchase in the market at prices below replacement costs
which could result in growth and attractive yields for the Operating
Partnership.

EXPANSION INTO SOUTHERN CALIFORNIA

OVERVIEW. The Operating Partnership has expanded its operations into
Sourthern California while continuing to grow within Arizona. The Operating
Partnership's geographic growth goal is to establish a major market presence in
each of its metropolitan areas, rather than entering additional markets for
portfolio diversification alone. Consistent with that goal, the Operating
Partnership has carefully analyzed the real estate investment potential of a
number of major Western metropolitan areas and has selected the Southern
California market.

GEOGRAPHIC EXPANSION. The Operating Partnership believes that selective
geographic expansion with the intent of establishing a significant market
presence in each market it enters presents a number of advantages, as summarized
below.

S-16
<PAGE>

- - BROADER INVESTMENT OPPORTUNITIES. The Operating Partnership intends to
enter only those additional markets that provide significant investment
opportunities. Operating in these nearby markets would allow the Operating
Partnership to allocate its resources efficiently to those specific markets
that presented the greatest opportunities at any given time.

- - MANAGEMENT SYSTEMS. The Operating Partnership's strong management team and
systems give the Operating Partnership the capabilities for this expansion.
The Operating Partnership has excellent management and marketing systems
which it believes have allowed it to achieve high quality and value
throughout its operations and can be duplicated in other markets. The
Operating Partnership's expertise give it a significant advantage in
successfully entering other markets, particularly those that are fragmented
and do not have a leading apartment company that provides a differentiated
product.

- - DIVERSIFICATION. Although the markets that the Operating Partnership is
evaluating are all in relatively close proximity within the Western United
States, expansion beyond Arizona provides diversification relative to the
Arizona market and economy.

CRITERIA FOR EXAMINING NEW MARKETS. When evaluating potential markets for
expansion, the Operating Partnership considered, among other things, the
following factors:

- - MARKET SIZE. The Operating Partnership believes that an expansion market
needs to be large enough to provide economic diversity and to allow the
Company to build a large apartment portfolio.

- - ACCESSIBILITY. The Operating Partnership intends to maintain a centralized
corporate structure rather than a regional subsidiary structure, allowing it
to centralize control and communication, asset allocation, maintenance of
the brand image, human resource allocation and standardized operating
procedures. Therefore it seeks expansion markets that are easily accessible
from the Operating Partnership's Scottsdale, Arizona headquarters.

- - STRONG INVESTMENT CHARACTERISTICS. The Operating Partnership's expansion
markets must have near-term and long-term investment potential and economic
stability.

- - FRAGMENTED COMPETITION. The Operating Partnership believes it has
successfully differentiated its product from those of its competitors in
Phoenix and Tucson. Therefore, the Operating Partnership seeks markets where
the competition is fragmented, allowing it to replicate such product
differentiation.

EXPANSION INTO SOUTHERN CALIFORNIA MARKETS. Because acquisitions at low
prices below replacement cost are available in these target markets, the
Operating Partnership's initial growth in these markets will occur through
property acquisitions. The Operating Partnership plans no development and
construction of properties in these markets in the near term, except for the
potential expansion of existing properties. The Operating Partnership
anticipates that it will begin building in these markets at such time after
economic occupancy and rent levels have risen to justify new construction.

REPUTATION FOR QUALITY

As a long-term investor, the Operating Partnership develops and acquires its
communities for long-term value. The properties developed by the Operating
Partnership share an innovative design approach characterized by high-quality
construction, architectural detail, attractive landscaping, extensive amenities
and interior features. Similarly, in seeking acquisition properties, the
Operating Partnership identifies properties which after refurbishment meet the
same standards. The Operating Partnership's reputation for quality in its
markets has led to success in obtaining development entitlements and brand name
identification in its primary markets.

The Operating Partnership's goal is for each Community to be a market leader
in its property type and geographical sub-market. Each Community is individually
designed to suit the specific site characteristics and anticipated needs and
desires of the residents. The Communities have been designed and constructed

S-17
<PAGE>
in an attempt to integrate them with the natural surroundings and architectural
character of the neighborhood. The Communities are landscaped to create an
inviting atmosphere starting with the first approach to the properties.
Landscaping is designed to complement the building architecture, and provide
residents with attractive open spaces. The objectives of the site layout and
building design are to provide residents with premium views, convenient parking,
easy access to amenities and a comfortable living environment. After completion
of the Communities Under Construction, the average age of the Communities will
be seven years.

STABILIZED COMMUNITIES

The following sets forth certain information regarding the current
Stabilized Communities. All of the Communities are owned 100% in fee by the
Operating Partnership. For a description of liens on certain of the Communities
listed below, see "Schedule III--Real Estate Investments and Accumulated
Depreciation" on page F-19 of the Form 10/A incorporated by reference into the
accompanying Prospectus.

<TABLE>
<CAPTION>
AVERAGE AVERAGE
UNIT PHYSICAL PHYSICAL
SIZE OCCUPANCY OCCUPANCY AS
NUMBER OF DEVELOPED/ YEAR DEVELOPED (SQUARE DURING OF DECEMBER
STABILIZED COMMUNITIES CITY APARTMENTS ACQUIRED OR ACQUIRED FEET) 1996(1) 31, 1996(1)
- ------------------------------ ------------ ---------- ----------- -------------- ------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
PHOENIX:
Acacia Creek.................. Scottsdale 508 Acquired 1995 910 97% 98%
Bayside at the Islands........ Gilbert 272 Developed 1988 870 93% 94%
Country Brook (2)............. Chandler 396 Acq/Dev 1991/1993/1996 961 93% 92%
Deer Creek Village............ Phoenix 308 Acquired 1991 819 97% 92%
Gateway Villas................ Phoenix 180 Developed 1995 998 96% 97%
Greenwood Village............. Tempe 270 Acquired 1993 884 96% 93%
Heritage Point................ Mesa 148 Acquired 1994 773 95% 91%
La Mariposa................... Mesa 222 Acquired 1990 928 95% 93%
La Valencia................... Mesa 361 Acquired 1990 950 92% 87%
Ladera........................ Phoenix 248 Developed 1996 1,012 95% 98%
Little Cottonwoods............ Tempe 379 Acq/Acq/Dev 1989/89/90 1,023 91% 85%
Los Arboles (3)............... Chandler 232 Developed 1985 851 95% 92%
Mirador....................... Phoenix 316 Developed 1996 987 85% 94%
Miramonte..................... Scottsdale 151 Developed 1983 782 98% 99%
Morningside................... Scottsdale 160 Acquired 1992 1,019 95% 99%
Mountain Park Ranch........... Phoenix 240 Developed 1995 961 93% 93%
Park Meadow (2)............... Gilbert 224 Acq/Dev 1992/1996 880 96% 93%
Preserve at Squaw Peak........ Phoenix 108 Acquired 1991 952 96% 90%
Promontory Pointe (5)......... Phoenix 424 Acq/Dev 1988/1997 986 91% 83%
Rancho Murietta............... Tempe 292 Acquired 1995 866 97% 87%
Scottsdale Courtyards......... Scottsdale 274 Developed 1993 1,044 97% 100%
Scottsdale Meadows............ Scottsdale 168 Developed 1984 888 95% 99%
Shadow Brook.................. Phoenix 224 Acquired 1993 1,010 97% 98%
Shores at Andersen Springs.... Chandler 299 Developed 1989/1993 889 97% 97%
Silver Creek.................. Phoenix 174 Acquired 1991 775 98% 97%
Sonoran....................... Phoenix 429 Developed 1995 965 93% 89%
Sun Creek..................... Glendale 175 Acquired 1993 762 98% 98%
Superstition Vista............ Mesa 316 Acquired 1995 950 97% 96%
The Enclave................... Tempe 204 Developed 1995 952 97% 100%
The Heritage.................. Phoenix 204 Developed 1995 973 93% 92%
The Ingleside................. Phoenix 120 Developed 1995 987 96% 94%
The Meadows................... Mesa 306 Acquired 1987 809 94% 92%
The Palms..................... Phoenix 132 Developed 1990 1,026 93% 96%
The Pines..................... Mesa 194 Acquired 1992 887 96% 94%
</TABLE>

S-18
<PAGE>

TUCSON:
Harrison Park (4)............. Tucson 172 Acquired 1991/1996 809 87% 85%
La Reserve.................... Oro Valley 240 Developed 1988 900 91% 92%
Orange Grove Village (2)...... Tucson 400 Acs/Dev 1991/1996 714 93% 87%
Suntree Village............... Oro Valley 424 Acquired 1992 831 91% 93%
The Arboretum................. Tucson 496 Acq/Dev 1992/1995 886 93% 89%
The Legends................... Tucson 312 Developed 1995 1,041 94% 94%
Village at Tanque Verde....... Tucson 217 Acq/Dev 1990/1995 694 90% 83%
----------
Total Tucson................ 2,261
----------
Total Arizona: 12,125
----------
----------

CALIFORNIA:
The Ashton.................... Corona Hills 492 Acquired 1995 850 94% 92%
Canyon Crest Views (6)........ Riverside 178 Acquired 1996 1,193 97% 96%
Canyon Ridge (7).............. San Diego 162 Acquired 1997 778 97% 98%
Marquessa (8)................. Corona Hills 336 Acquired 1997 900 96% 98%
Portofino (9)................. Chino Hills 176 Acquired 1996 873 99% 98%
Parkview Terrace Club (9)..... Redlands 558 Acquired 1996 801 96% 95%
Redlands Lawn & Tennis (10)... Redlands 496 Acquired 1996 795 89% 89%
---------- -------
Total California.............. 2,398
----------
----------
TOTAL....................... 14,523
----------
----------
WEIGHTED AVERAGE............ 285 902
---------- -------
---------- -------
</TABLE>

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

(1) Physical occupancy is defined as apartments occupied or leased (including
models and employee apartments) divided by the total number of leasable
apartments within the Community, expressed as a percentage.

(2) A new phase of this Community was completed and reached stabilized occupancy
in 1996.

(3) The Company owns approximately a 10 percent interest in the joint venture
that owns Los Arboles II, as well as two promissory notes with an
outstanding balance of approximately $760,000, secured by subordinated liens
on such property. Los Arboles II contains 200 apartments, was developed in
1987, has an average unit size of 843 square feet and had average physical
occupancy during 1996 of 95 percent and physical occupancy as of December
31, 1996 of 92 percent.

(4) Another phase of this Community is currently under development. See
"Development and Construction Activity" below.

(5) A new phase of this Community reached stabilized occupancy in 1997.

(6) Property was acquired in June 1996.

S-19
<PAGE>
(7) Property was acquired in February 1997.

(8) Property was acquired in March 1997.

(9) Property was acquired in July 1996.

(10) Property was acquired in December 1996.

Of the Stabilized Communities included in the table, 37 are located in the
greater Phoenix area, seven are located in the Tucson area and seven are located
in Southern California. All of the Stabilized Communities are managed and
operated by the Operating Partnership and have an average size of 285 units. The
Stabilized Communities are primarily oriented to attract upscale residents
seeking high levels of amenities, such as clubhouses, exercise rooms, tennis
courts, swimming pools, therapy pools and covered parking. The average unit size
of the Communities is 902 square feet. All have fully-equipped kitchens with
upgraded cabinets, individual utility metering, dishwashers, microwave ovens,
separate dining areas, individual storage, spacious patios and balconies, and
ceramic tile entries. Most have washers/dryers; and many offer high ceilings,
fireplaces, and alarm system prewiring.

COMMUNITIES UNDER CONSTRUCTION AND IN LEASE UP.

The Operating Partnership's current development and construction activity is
summarized below:

<TABLE>
<CAPTION>
ACTUAL OR PERCENTAGE OF
ESTIMATED QUARTER OF ESTIMATED ESTIMATED UNITS LEASED AS
NAME & NUMBER OF CONSTRUCTION CONSTRUCTION COMMENCEMENT STABILIZED OF FEBRUARY 28,
METROPOLITAN AREA: CITY UNITS COST COMMENCEMENT OF LEASE-UP OCCUPANCY 1997
- ----------------------- --------- ----------- --------------- ------------- ------------- --------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
PHOENIX:
The Hawthorne.......... Phoenix 276 $ 17 4Q'95 3Q'96 3Q'97 80%
The Isle at Arrowhead
Ranch................ Glendale 256 17 2Q'96 4Q'96 4Q'97 32%
The Retreat (Phase
I)................... Phoenix 240 14 1Q'97 3Q'97 3Q'98 n/a
----- ---
772 48

TUCSON:
Bear Canyon............ Tucson 238 15 3Q'95 2Q'96 2Q'97 75%
Harrison Park II
Expansion............ Tucson 188 10 3Q'95 2Q'96 2Q'97 80%
----- ---
426 25
----- ---
TOTAL................ 1,198 $ 73
----- ---
----- ---
</TABLE>

The Company owns sites in the Phoenix area intended for the development of
four additional multifamily apartment communities, which, if completed, are
expected to contain approximately 1115 apartment units. In February 1997, the
Company began the construction at one of the sites of the first phase of The
Retreat, which will contain 240 apartment units. The Company currently
anticipates that it will develop three additional communities in the Phoenix
area (with approximately an aggregate of 635 units) and the second phase of the
Retreat (with an additional 240 units) over the course of the next two years.
The Company currently estimates that such developments, if completed, would
reach stabilized occupancy during the latter part of 1998 through the end of
1999. There can be no assurance that the Company will succeed in obtaining any
necessary governmental approvals or any financing required to develop the
remaining sites or the completion of phase II of the Retreat, or that the
Company will decide to develop any particular project.

The forward-looking information set forth in the table and paragraph above
is forward looking and involves various risks and uncertainties. Such
information is based upon a number of estimates and

S-20
<PAGE>
assumptions that are inherently subject to business, economic and competitive
uncertainties and contingencies, many of which are beyond the Operating
Partnership's control. While all apartment communities previously developed by
the Operating Partnership have been developed on schedule and within budget, the
actual development cost, completion date and stabilization date of any project
will be dependent upon a variety of factors beyond the control of the Operating
Partnership including, for example, labor and other personnel costs, material
costs, weather conditions, government fees and leasing rate. See "Risk Factors"
in the accompanying Prospectus. The inclusion of estimates herein should not be
regarded as a representation by the Operating Partnership or the Underwriters or
any other person that the estimates will be achieved.

ENVIRONMENTAL MATTERS

Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or petroleum
product releases at such property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and
clean-up costs incurred by such parties in connection with the contamination.

The Operating Partnership believes that the Communities are in compliance in
all material respects with all federal, state and local laws, ordinances and
regulations regarding hazardous or toxic substances or petroleum products. The
Operating Partnership has not been notified by any governmental authority, and
is not otherwise aware, of any material noncompliance, liability or claim
relating to hazardous or toxic substances or petroleum products in connection
with any of its properties.

EMPLOYEES

As of February 28, 1997, the Operating Partnership, primarily through the
Management Company, employed 583 persons. The Management Company and/or the
Operating Partnership employ substantially all of the professional employees
that are currently engaged in the residential property management, development
and construction businesses of the Company. The Operating Partnership believes
that its relations with its employees are good.

REGULATION

Apartment communities are subject to various laws, ordinances and
regulations, including laws, ordinances and regulations related to fair housing,
Americans with disabilities and building safety. The Operating Partnership
believes that each Community has the necessary permits and approvals to operate
its business and that each Community is in material compliance with present
laws, ordinances and regulations.

LEGAL PROCEEDINGS

None of the Company, the Operating Partnership, any of the Communities or
Evans Withycombe is presently subject to any material litigation nor, to the
Operating Partnership's knowledge, is any litigation threatened against the
Company, the Operating Partnership, any of the Communities or Evans Withycombe,
other than routine litigation and administrative proceedings arising in the
ordinary course of business, some of which are expected to be covered by
liability insurance and all of which collectively are not expected to have a
material adverse effect on the business, financial condition or results of
operations of the Operating Partnership.

S-21
<PAGE>
DESCRIPTION OF THE NOTES

GENERAL

The 2004 Notes and the 2007 Notes offered hereby constitute separate series
of Debt Securities (which are more fully described in the accompanying
Prospectus), each to be issued pursuant to an indenture dated as of March ,
1997, as amended or supplemented (the "Indenture"), between the Operating
Partnership and Bank One, Columbus, N.A., as trustee (the "Trustee"), and will
be limited in aggregate principal amount to $75,000,000 and $50,000,000,
respectively. The following description of the particular terms of the Notes
supplements, the description of the general terms and provisions of the Debt
Securities set forth in the accompanying Prospectus, to which description
reference is hereby made. The terms of the Notes include those provisions
contained in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The
Notes are subject to all such terms, and holders of Notes are referred to the
Indenture and the Trust Indenture Act for a statement thereof. The following
summary of certain provisions of the Indenture does not purport to be complete
and is subject to and qualified in its entirety by reference to the Indenture,
including the definitions therein of certain terms used below. Copies of the
Indenture and the Notes are available for inspection at the office of the
Trustee located at Bank One, Columbus, N.A., Corporate Trust Department, 100
East Broad Street, Columbus, Ohio 43215. As used in this section "Description of
the Notes," the "Operating Partnership" refers to Evans Withycombe Residential,
L.P. and the "Company" refers to Evans Withycombe Residential, Inc., in each
case, exclusive of their respective subsidiaries and affiliates.

The Notes will be direct, unsecured and unsubordinated obligations of the
Operating Partnership and will rank PARI PASSU with (I.E., the Notes will
generally rank equally with) each other and with all other unsecured and
unsubordinated indebtedness of the Operating Partnership from time to time
outstanding. The Notes will be effectively subordinated to mortgage and other
secured indebtedness of the Operating Partnership and to secured and unsecured
indebtedness and other liabilities of Subsidiaries of the Operating Partnership.
As of December 31, 1996, such secured indebtedness and indebtedness of
Subsidiaries of the Operating Partnership aggregated approximately $284.2
million, and such unsecured and unsubordinated indebtedness of the Operating
Partnership aggregated approximately $152 million. See "Capitalization" and "Use
of Proceeds." Subject to certain limitations set forth in the Indenture, and as
described under "Additional Covenants of the Operating Partnership" below, the
Indenture will permit the Operating Partnership and its Subsidiaries to incur
additional secured and unsecured indebtedness.

The 2004 Notes will mature on April 15, 2004 and the 2007 Notes will mature
on April 15, 2007, (each a "Maturity Date"). The Notes are not subject to any
sinking fund provisions. The Notes are subject to redemption at the Operating
Partnership's option. See "--Optional Redemption." The Notes will be issued only
in fully registered, book-entry form without coupons, in denominations of $1,000
and integral multiples thereof, except under the limited circumstances described
below under "Book-Entry System."

Except as described under "Additional Covenants of the Operating
Partnership" below and under "Description of Debt Securities--Merger,
Consolidation or Sale" in the accompanying Prospectus, the Indenture does not
contain any provisions that would limit the ability of the Operating Partnership
to incur indebtedness or that would afford holders of the Notes protection in
the event of (i) a highly leveraged or similar transaction involving the
Operating Partnership, the management of the Operating Partnership or the
Company, or any affiliate of any of them, (ii) a change of control of the
Operating Partnership or the Company, or (iii) a reorganization, restructuring,
merger or similar transaction involving the Operating Partnership or the Company
that may adversely affect the holders of the Notes. In addition, subject to the
limitations set forth under "Description of Debt Securities--Merger,
Consolidation or Sale" in the accompanying Prospectus, the Operating Partnership
may, in the future, enter into certain transactions such as the sale of all or
substantially all of its assets or the merger or consolidation of the Operating
Partnership that would increase the amount of the Operating Partnership's
indebtedness or substantially

S-22
<PAGE>
reduce or eliminate the Operating Partnership's assets, which may have an
adverse effect on the Operating Partnership's ability to service its
indebtedness, including the Notes. The Operating Partnership and its management
have no present intention of engaging in a highly leveraged or similar
transaction involving the Operating Partnership.

PRINCIPAL AND INTEREST

The 2004 and 2007 Notes will bear interest at the rates set forth on the
cover page of this Prospectus Supplement from the date of issuance or from the
immediately preceding Interest Payment Date (as defined below) to which interest
has been paid, payable semi-annually in arrears on each April 15 and October 15,
commencing October 15, 1997 (each, an "Interest Payment Date"), and on the
applicable Maturity Date, to the persons (the "Holders") in whose names the
Notes are registered in the security register applicable to the Notes at the
close of business on the date 15 calendar days prior to such payment day
regardless of whether such day is a Business Day, as defined below (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.

If any Interest Payment Date or a 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 such Maturity Date, as the case may be. "Business Day" means any day, other
than a Saturday or Sunday, on which banking institutions in The City of New York
are open for business.

ADDITIONAL COVENANTS OF THE OPERATING PARTNERSHIP

Reference is made to the section entitled "Description of Debt Securities"
in the accompanying Prospectus for a description of the covenants applicable to
the Notes. In addition to the foregoing, the following covenants of the
Operating Partnership will apply to the Notes for the benefit of the Holders.

LIMITATION ON INCURRENCE OF TOTAL DEBT. The Operating Partnership will not,
and will not permit any Subsidiary to, incur any Debt (as defined below), other
than Intercompany Debt (as defined below) if, immediately after giving effect to
the incurrence of such additional Debt, the aggregate principal amount of all
outstanding Debt of the Operating Partnership and its Subsidiaries is greater
than 60% of Total Assets (as defined below).

LIMITATION ON INCURRENCE OF SECURED DEBT. In addition to the foregoing
limitation on the incurrence of Debt, the Operating Partnership will not, and
will not permit any Subsidiary to, incur any Secured Debt (as defined below) if,
immediately after giving effect to the incurrence of such additional Secured
Debt, the aggregate principal amount of all outstanding Secured Debt of the
Operating Partnership and its Subsidiaries is greater than 40% of Total Assets.

DEBT SERVICE COVERAGE. In addition to the foregoing limitation on the
incurrence of Debt, the Operating Partnership will not, and will not permit any
Subsidiary to, incur any Debt, other than Intercompany Debt, if the ratio of
Consolidated Income Available for Debt Service to Annual Debt Service Charge (in
each case as defined below) for the period consisting of the four consecutive
fiscal quarters most recently ended prior to the date on which such additional
Debt is to be incurred is less than 1.5 to 1, on a pro forma basis after giving
effect to the incurrence of such Debt and to the application of the proceeds
therefrom, and calculated on the assumption that (i) such Debt and any other
Debt incurred 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 since the first day of such four-quarter period had occurred at
the beginning of such period (except that, in making such computation under this
subsection (ii) or subsection (i) above, the amount of Debt under any revolving
credit facility shall be computed based upon the average daily balance of such
Debt during such period), and (iii) any increase or decrease in Total Assets, or
any other acquisition or

S-23
<PAGE>

disposition by the Operating Partnership or any Subsidiary of any asset or group
of assets, since the first day of such four-quarter period, including, without
limitation, by merger, stock purchase or sale, or asset purchase or sale, had
occurred at the beginning of such period, in each case with the appropriate
adjustments to net income and Debt levels with respect to such increase,
decrease or other acquisition or disposition being included in such pro forma
calculation. For purposes of the adjustments referred to in clause (iii) of the
preceding sentence, any income earned (or loss incurred) as a result of any such
increase, decrease or other acquisition or disposition referred to in clause
(iii) for a period less than such four-quarter period shall be annualized for
such four-quarter period.

MAINTENANCE OF TOTAL UNENCUMBERED ASSETS. The Operating Partnership shall
maintain at all times Total Unencumbered Assets (as defined below) of not less
than 150% of the aggregate outstanding principal amount of Unsecured Debt (as
defined below) of the Operating Partnership and its Subsidiaries.

As used herein:

"Annual Debt Service Charge" for any period means the amount which is
expensed for interest on Debt.

"Annualized EBITDA" means earnings before interest, taxes, depreciation and
amortization for the 12-month period ending on the last day of each month for
all properties owned by the Operating Partnership and its Subsidiaries,
excluding the effect of items classified as extraordinary items in accordance
with generally accepted accounting principles, and adjusted to reflect the
assumption that any acquisition or disposition by the Operating Partnership or
any Subsidiary of any assets since the first day of such period and any related
repayment of Debt had occurred as of the first day of such period with
appropriate adjustments with respect to such acquisition or disposition.

"Annualized EBITDA After Minority Interest" means Annualized EBITDA after
minority interest, if any, in Subsidiaries of the Operating Partnership.

"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income plus amounts which have been deducted in determining
Consolidated Net Income during such period for (i) Consolidated Interest
Expense, (ii) provision for taxes of the Operating Partnership and its
Subsidiaries based on income, (iii) amortization (other than amortization of
debt discount) and depreciation, (iv) provisions for losses from sales or joint
ventures, (v) increases in deferred taxes and other non-cash charges, (vi)
charges resulting from a change in accounting principles, and (vii) charges for
early extinguishment of debt, and less amounts which have been added in
determining Consolidated Net Income during such period for (a) provisions for
gains from sales or joint ventures, and (b) decreases in deferred taxes and
other non-cash credits.

"Consolidated Interest Expense" means, for any period, and without
duplication, all interest (including the interest component of rentals on
capitalized leases, letter of credit fees, commitment fees and other like
financial charges) and all amortization of debt discount on all Debt (including,
without limitation, payment-in-kind, zero coupon and other like securities), but
excluding legal fees, title insurance charges, and other out-of-pocket fees and
expenses incurred in connection with the issuance of Debt and the amortization
of any such debt issuance costs that are capitalized, all determined in
accordance with generally accepted accounting principles.

"Consolidated Net Income" for any period means the amount of consolidated
net income (or loss) of the Operating Partnership and its Subsidiaries for such
period determined on a consolidated basis in accordance with generally accepted
accounting principles.

"Debt" means any indebtedness of the Operating Partnership or any Subsidiary
whether or not contingent, in respect of (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 Operating Partnership or any Subsidiary (iii)
the reimbursement

S-24
<PAGE>

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 except any such balance that constitutes an
accrued expense or trade payable or (iv) any lease of property by the Operating
Partnership or any of its Subsidiaries as lessee which is reflected in the
Operating Partnership's consolidated balance sheet as a capitalized lease in
accordance with generally accepted accounting principles, and (v) to the extent
not otherwise included in (i) through (iv) above, any obligation by the
Operating Partnership or any Subsidiary to be liable for, or to pay, as obligor,
guarantor or otherwise (other than for purposes of collection in the ordinary
course of business), indebtedness of another person (other than the Operating
Partnership or any Subsidiary).

"Intercompany Debt" means indebtedness owed by the Operating Partnership or
any Subsidiary solely to the Operating Partnership or any Subsidiary.

"Secured Debt" means Debt secured by any mortgage, lien, charge,
encumbrance, trust deed, deed of trust, deed to secure debt, security agreement,
pledge, conditional sale or other title retention agreement, capitalized lease,
or other security interest or agreement granting or conveying security title to
or a security interest in real property or other tangible assets.

"Senior Executive Group" means, collectively, those individuals holding the
offices of Chairman, President, Chief Executive Officer, Chief Operating
Officer, or any Executive Vice President of the Company.

"Subsidiary" means (i) any corporation, partnership, limited liability
company or other entity the majority of the shares of the non-voting capital
stock or other equivalent ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Operating
Partnership, and the majority of the shares of the voting capital stock or other
equivalent ownership interests of which (except directors' qualifying shares)
are at the time directly or indirectly owned by the Operating Partnership or by
the Operating Partnership and the Company, any other Subsidiary, and/or one or
more individuals of the Senior Executive Group (or, in the event of death or
disability of any of such individuals, his/her respective legal
representative(s)), or such individuals' successors in office as an officer of
the Company, and (ii) any other entity (other than the Company) the accounts of
which are consolidated with the accounts of the Operating Partnership.

"Total Assets" as of any date means the sum of (i) the amount determined by
multiplying the sum of the shares of common stock of the Company issued in the
initial public offering of the Company ("IPO") and the units of the Operating
Partnership not held by the Company outstanding on the date of the IPO, by
$20.00 (the "IPO Price"), (ii) the principal amount of the outstanding
consolidated debt of the Company on the date of the IPO, (iii) the purchase
price or cost of any real estate assets acquired (including the value, at the
time of such acquisition, of any units of the Operating Partnership or shares of
common stock of the Company issued in connection therewith) or developed after
the IPO by the Operating Partnership or any Subsidiary, and (iv) cash and
restricted cash on the Operating Partnership's balance sheet, HOWEVER, Total
Assets shall be reduced by the amount of the proceeds of any real estate assets
disposed of after the IPO by the Operating Partnership or any Subsidiary.

"Total Unencumbered Assets" as of any date means Total Assets as of such
date multiplied by a fraction, the numerator of which is Unencumbered Annualized
EBITDA After Minority Interest and the denominator of which is Annualized EBITDA
After Minority Interest.

"Unencumbered Annualized EBITDA After Minority Interest" means Annualized
EBITDA after minority interest, if any, in Subsidiaries of the Operating
Partnership less any portion thereof attributable to assets that are mortgaged,
pledged or otherwise hypothecated as collateral for Secured Debt.

"Unsecured Debt" means Debt that is not Secured Debt.

S-25
<PAGE>
Reference is made to the section entitled "Description of Debt
Securities--Certain Covenants" in the accompanying Prospectus for a description
of additional covenants applicable to the Notes. Compliance with the covenants
described herein and such additional covenants with respect to the Notes
generally may not be waived by the Board of Directors of the Company, as general
partner of the Operating Partnership, or by the Trustee unless the Holders of at
least a majority in principal amount of all outstanding Notes consent to such
waiver; provided, however, that the defeasance and covenant defeasance
provisions of the Indenture described under "Description of Debt
Securities--Discharge, Defeasance and Covenant Defeasance" in the accompanying
Prospectus will apply to the Notes, including with respect to the covenants
described in this Prospectus Supplement.

OPTIONAL REDEMPTION

The Notes may be redeemed at any time at the option of the Operating
Partnership, in whole or from time to time 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 below), if any, with respect to such Notes (the "Redemption Price").

If notice has been given as provided in the Indenture and funds for the
redemption of any Notes called for redemption shall have been made available on
the redemption date referred to in such notice, 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 security register for the Notes, 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 Operating
Partnership, the Operating Partnership will notify the Trustee at least 45 days
prior to giving notice of redemption (or such shorter period as is satisfactory
to the Trustee) of the aggregate principal amount of Notes to be redeemed and
their 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.

As used herein:

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

"Reinvestment Rate" means .25% plus the arithmetic mean of the yields under
the heading "Week Ending" published in the most recent 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. 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.

S-26
<PAGE>
"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 reports 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 Operating
Partnership.

BOOK-ENTRY SYSTEM

The following are summaries of certain rules and operating procedures of DTC
that affect the payment of principal and interest and transfers of interests in
the Global Notes. Upon issuance, each series of Notes will only be issued in the
form of a Global Note which will be deposited with, or on behalf of, DTC and
registered in the name of Cede & Co., as nominee of DTC. Unless and until it is
exchanged in whole or in part for Notes in definitive form under the limited
circumstances described below, a Global Note may not be transferred except as a
whole (i) by DTC to a nominee of DTC, (ii) by a nominee of DTC to DTC or another
nominee of DTC or (iii) by DTC or any such nominee to a successor of DTC or a
nominee of such successor.

Ownership of beneficial interests in a Global Note will be limited to
persons that have accounts with DTC for such Global Note ("participants") or
persons that may hold interests through participants. Upon the issuance of a
Global Note, DTC will credit, on its book-entry registration and transfer
system, the participants' accounts with the respective principal amounts of the
Notes represented by such Global Note beneficially owned by such participants.
Ownership of beneficial interests in the Global Notes will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by DTC (with respect to interests of participants) and on the records
of participants (with respect to interests of persons holding through
participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may limit or impair the ability to own, transfer or pledge beneficial
interests in the Global Notes.

So long as DTC or its nominee is the registered owner of a Global Note, DTC
or its nominee, as the case may be, will be considered the sole owner or Holder
of the Notes represented by such Global Note for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in a Global
Note will not be entitled to have Notes represented by such Global Note
registered in their names, will not receive or be entitled to receive physical
delivery of such Notes in certificated form and will not be considered the
registered owners or Holders thereof under the Indenture. Accordingly, each
person owning a beneficial interest in a Global Note must rely on the procedures
of DTC and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a Holder under the Indenture. The Operating Partnership understands that
under existing industry practices, if the Operating Partnership requests any
action of Holders or if an owner of a beneficial interest in a Global Note
desires to give or take any action that a Holder is entitled to give or take
under the Indenture, DTC would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
holding through them.

Principal and interest payments on interests represented by a Global Note
will be made to DTC or its nominee, as the case may be, as the registered owner
of such Global Note. None of the Operating Partnership, the Trustee or any other
agent of the Operating Partnership or agent of the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership of interests in the Global
Notes or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. The Operating Partnership expects that DTC, upon
receipt of any payment of principal or interest in respect of a Global Note,
will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in such Global Note as
shown on the records of DTC. The Operating Partnership also expects that
payments

S-27
<PAGE>
by participants to owners of beneficial interests in the Global Notes held
through such participants will be governed by standing customer instructions and
customary practice, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.

If DTC is at any time unwilling or unable to continue as depository for the
Notes and the Operating Partnership fails to appoint a successor depository
registered as a clearing agency under the Exchange Act within 90 days, the
Operating Partnership will issue the Notes in definitive form in exchange for
the respective Global Notes. Any Notes issued in definitive form in exchange for
the Global Notes will be registered in such name or names, and will be issued in
denominations of $1,000 and such integral multiples thereof, as DTC shall
instruct the Trustee. It is expected that such instructions will be based upon
directions received by DTC from participants with respect to ownership of
beneficial interests in the Global Notes.

DTC is a limited-purpose trust company organized under the Banking Law of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities of its participants and to
facilitate the clearance and settlement of transactions among its participants
in such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some of
which (and/or their representatives) own DTC. Access to the DTC book-entry
system is also available to others, such as banks, brokers and dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.

SAME-DAY SETTLEMENT AND PAYMENT

Settlement for the Notes will be made by the Underwriters (as defined
herein) in immediately available funds. All payments of principal and interest
in respect of the Notes will be made by the Operating Partnership 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 the
Notes are issued in certificated form, 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.

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<PAGE>
UNDERWRITING

Subject to the terms and conditions contained in a purchase agreement (the
"Underwriting Agreement"), the Operating Partnership has agreed to sell to
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Goldman,
Sachs & Co. and J.P. Morgan Securities Inc. (collectively, the "Underwriters"),
and the Underwriters have severally agreed to purchase, the principal amount of
Notes set forth opposite their names below. The Underwriting Agreement provides
that the obligations of the Underwriters are subject to certain conditions
precedent, and that the Underwriters will be obligated to purchase all of the
Notes if any are purchased.

<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER 2004 NOTES 2007 NOTES
- --------------------------------------------------------------- ------------- -------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................... $ $

Goldman, Sachs & Co............................................

J. P. Morgan Securities Inc....................................
------------- -------------

Total................................................ $ 75,000,000 $ 50,000,000
------------- -------------
------------- -------------
</TABLE>

The Underwriters have advised the Operating Partnership that they propose
initially to offer each series of Notes to the public at the public offering
price set forth on the cover page of this Prospectus Supplement, and to certain
dealers at such price less a concession not in excess of % (in the case of
the 2004 Notes) and % (in the case of the 2007 Notes) of the principal amount
thereof. The Underwriters may allow, and such dealers may reallow, a discount
not in excess of % of the principal amount thereof on sales to certain other
dealers. After the initial public offering of the Notes, the public offering
price, concession and discount may be changed.

The Operating Partnership has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriters may be required to make
in respect thereof.

Each series of Notes is a new issue of securities with no established
trading market. The Operating Partnership has not applied for and does not
intend to apply for listing of the Notes on any securities exchange. The
Operating Partnership has been advised by the Underwriters that the Underwriters
intend to make a market in the Notes as permitted by applicable laws and
regulations, but the Underwriters are not obligated to do so and may discontinue
market-making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.

Rules of the Securities and Exchange Commission permit the Underwriters to
engage in certain transactions that stabilize the price of the Notes. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Notes.

If the Underwriters create a short position in the Notes in connection with
this Offering (i.e., if they sell more Notes than are set forth on the cover
page of this Prospectus Supplement) the Underwriters may reduce that short
position by purchasing Notes in the open market.

The Underwriters may also impose a penalty bid on selling group members.
This means that if the Underwriters purchase Notes in the open market to reduce
the Underwriters' short position or to stabilize the price of the Notes, they
may reclaim the amount of the selling concession from the selling group members
who sold those Notes as part of the Offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The

S-29
<PAGE>
imposition of a penalty bid might also have an effect on the price of a security
to the extent that it were to discourage resales of the security.

Neither the Operating Partnership nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Notes. In
addition, neither the Operating Partnership nor any of the Underwriters makes
any representation that the Underwriters will engage in such transactions or
that such transactions, once commenced, will not be discontinued without notice.

In the ordinary course of their respective businesses, certain of the
Underwriters or their affiliates from time to time have provided investment
banking, financial advisory or commercial banking services to the Company and
the Operating Partnership, for which they have received usual and customary
fees. Merrill Lynch acted as a representative of various underwriters in
connection with public offerings of the Company's Common Stock in 1994, 1996 and
1997.

LEGAL MATTERS

The validity of the Notes offered hereby will be passed upon for the
Operating Partnership by Gibson, Dunn & Crutcher LLP, Los Angeles, California.
Certain legal matters relating to the Offering will be passed upon for the
Underwriters by Latham & Watkins, Los Angeles, California. Gibson, Dunn &
Crutcher LLP and Latham & Watkins will rely as to all matters of Maryland law on
the opinion of Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland.

S-30
<PAGE>

SUBJECT TO COMPLETION, DATED MARCH 20, 1997

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

[LOGO]

$125,000,000
EVANS WITHYCOMBE RESIDENTIAL, INC.
PREFERRED STOCK, COMMON STOCK, WARRANTS AND GUARANTEES

$200,000,000
EVANS WITHYCOMBE RESIDENTIAL, L.P.
DEBT SECURITIES
---------------------

Evans Withycombe Residential, Inc. (the "Company") may offer and issue from
time to time (i) shares of its Common Stock, par value $.01 per share (the
"Common Stock"), (ii) shares of its Preferred Stock, par value $.01 per share
(the "Preferred Stock"), (iii) warrants to purchase Common Stock or Preferred
Stock (the "Warrants"), or (iv) unconditional guarantees (the "Guarantees") of
unsecured Debt Securities (as defined below), with an aggregate public offering
price of up to $125,000,000 (or its equivalent in another currency based on the
exchange rate at the time of sale) in amounts, at prices and on terms to be
determined at the time of offering. Evans Withycombe Residential, L.P. (the
"Operating Partnership") may from time to time offer in one or more series
unsecured non-convertible debt securities ("Debt Securities"), with an aggregate
public offering price of up to $200,000,000 (or its equivalent in another
currency based on the exchange rate at the time of sale) in amounts, at prices
and on terms to be determined at the time of offering. The Debt Securities may
be guaranteed by Guarantees of the Company as to payment of principal, premium,
if any, and interest. The Common Stock, Preferred Stock, Warrants and Debt
Securities (collectively, the "Securities") may be offered, separately or
together, in more separate classes or series, in amounts, at prices and on terms
to be set forth in one or more supplements to this Prospectus (each, a
"Prospectus Supplement"). Any Securities may be offered with other Securities or
separately. Preferred Stock may be convertible into shares of Common Stock.

The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable (i) in the case of Common Stock, any initial
public offering price; (ii) in the case of Preferred Stock, the specific title
and stated value, any dividend, liquidation, redemption, conversion, voting and
other rights, and any initial public offering price; and (iii) in the case of
Debt Securities, the specific title, aggregate principal amount, currency, form
(which may be registered or bearer, or certificated or global), authorized
denominations, maturity, rate (or manner of calculation thereof) and time of
payment of interest, terms for redemption at the option of the Operating
Partnership or repayment at the option of the holder, terms for sinking fund
payments, covenants and any initial public offering price. In addition, such
specific terms may include limitations on direct or beneficial ownership and
restrictions on transfer of the Securities, in each case as may be appropriate
to preserve the status of the Company as a real estate investment trust ("REIT")
for Federal income tax purposes.

The applicable Prospectus Supplement will contain information, where
appropriate, about all material United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.

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

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

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

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

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

THE DATE OF THIS PROSPECTUS IS , 1997
<PAGE>
Certain persons participating in an offering of Securities may engage in
transactions that stabilize, maintain, or otherwise affect the price of the
Securities. Such transactions may include stabilizing, the purchase of
Securities to cover syndicate short positions and the imposition of penalty
bids. For a description of those activities, see "Underwriting" in the
accompanying Prospectus Supplement.

No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus or any Prospectus Supplement, and, if given or
made, such information or representation must not be relied upon as having been
authorized by the Company or the Operating Partnership or by any underwriter,
agent or dealer. This Prospectus and any Prospectus Supplement shall not
constitute an offer to sell or a solicitation of an offer to buy any of the
Securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. Neither the
delivery of this Prospectus and any Prospectus Supplement nor any sale made
thereunder shall, under any circumstances, create any implication that the
information therein is correct as of the time subsequent to the date thereof.

Unless otherwise indicated or as the context otherwise requires, (a)
references to the "Company" shall include the Company's predecessor, Evans
Withycombe, Inc., and its affiliates, predecessors and partners (collectively,
"Evans Withycombe"), the Operating Partnership and Evans Withycombe Finance
Partnership, L.P. (the "Financing Partnership") and Evans Withycombe Management,
Inc. (the "Management Company"), and (b) references to the Operating Partnership
shall include the Financing Partnership.

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

AVAILABLE INFORMATION

The Company and the Operating Partnership have filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement on Form S-3 (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Securities Act"), covering the Securities offered hereby. This Prospectus omits
certain information and exhibits included in the Registration Statement, copies
of which may be obtained upon payment of a fee prescribed by the Commission or
may be examined free of charge at the principal office of the Commission in
Washington, D.C. Statements contained in this Prospectus as to the content of
any contract or other document are not necessarily complete, and in each
instance reference is made to the copy of the contract or other document filed
as an exhibit to the Registration Statement, each statement being qualified in
all respects by such reference and the exhibits and schedules thereto. For
further information regarding the Company, the Operating Partnership and the
Securities offered hereby, reference is hereby made to the Registration
Statement, including the exhibits and schedules thereto, which may be inspected
without charge at the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. and copies of the Registration Statement or any part thereof
may be obtained from such office, upon payment of the fees prescribed by the
Commission.

The Company is and the Operating Partnership will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith the Company files and the
Operating Partnership will file reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information filed
with the Commission by the Company and the Operating Partnership 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 the
regional offices of the Commission located at 500 West Madison Street, Room
1400, Chicago, Illinois 60661-2511 and at 7 World Trade Center, Suite 1300, New
York, New York 10048. 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, at prescribed rates. The Company's Common Stock is listed on the New York
Stock Exchange (the "NYSE") and the reports, proxy and information statements
and other information filed by the Company with the NYSE can also be inspected
at the offices of the NYSE at 20 Broad Street, New York,

2
<PAGE>
New York 10005. The Commission maintains a website that contains reports, proxy
and information statements and other information filed electronically with the
Commission at http://www.sec.gov.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents filed by the Company (File No. 1-13256) and the
Operating Partnership (File No. 0-22109) with the Commission pursuant to the
Exchange Act are incorporated herein by reference.

(1) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 filed with the Commission on February 6, 1997, as
amended on Forms 10-K/A filed on March 11, 1997 and on March 20, 1997;

(2) the description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on August 1,
1994;

(3) the Company's Current Report on Form 8-K filed with the Commission on
February 13, 1997;

(4) the Operating Partnership's Registration Statement on Form 10 filed with
the Commission on February 6, 1997, as amended on Forms 10/A filed on
March 11, 1997 and on March 20, 1997; and

(5) all other documents filed by the Company and/or the Operating
Partnership pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of this Prospectus and prior to the filing of
a post-effective amendment which indicates that all Securities offered
hereby have been sold or which deregisters all Securities then remaining
unsold.

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

Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents or into this Prospectus) will be
provided without charge to each person, including any beneficial owner, to whom
this Prospectus is delivered, upon a written or oral request to Evans Withycombe
Residential, Inc., Attention: Secretary, 6991 East Camelback Road, Suite A-200,
Scottsdale, Arizona 85251, telephone number: (602) 840-1040.

RISK FACTORS

This Prospectus, including the documents incorporated by reference herein,
contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"). Also, documents
subsequently filed by the Company or the Operating Partnership with the
Commission and incorporated herein by reference, as well as the Prospectus
Supplements accompanying this Prospectus, will contain forward-looking
statements. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth below and
the matters set forth or incorporated in this Prospectus or any Prospectus
Supplement. The Company and the Operating Partnership caution the reader,
however, that this list of factors may not be exhaustive, particularly with
respect to future filings. Prospective investors should carefully consider,
among other factors, the matters described below before purchasing any of the
Securities offered hereby.

3
<PAGE>

GENERAL REAL ESTATE INVESTMENT RISKS

Real property investments are subject to varying degrees of risk. The yields
available from equity investments in real estate depend on the amount of income
generated and expenses incurred. If the Company's Communities do not generate
revenues sufficient to meet operating expenses, including debt service and
capital expenditures, the Company's cash flow and ability to make distributions
to its shareholders will be adversely affected.

A multifamily apartment community's revenues and value may be adversely
affected by a number of factors including: the national economic climate; the
local economic climate (which may be adversely impacted by plant closings,
industry slowdowns, changing demographics and military base closings); local
real estate conditions (such as oversupply of or reduced demand for apartments);
the perceptions by prospective residents of the safety, convenience and
attractiveness of the communities or neighborhoods in which they are located and
the quality of local schools and other amenities; the ability of the owner to
provide adequate management, maintenance and insurance; and increased operating
costs (including real estate taxes and utilities). Certain significant
expenditures associated with each equity investment (such as mortgage payments,
if any, real estate taxes, insurance and maintenance costs) are generally not
reduced when circumstances cause a reduction in income from the investment. If a
property is mortgaged to secure payment of indebtedness, and if the Company is
unable to meet its mortgage payments, a loss could be sustained as a result of
foreclosure on the property or the exercise of other remedies by the mortgagee.
In addition, real estate values and income from properties are also affected by
such factors as applicable laws, including tax laws, interest rate levels and
the availability of financing.

DEPENDENCE ON PRIMARY MARKETS

The Communities are located in Arizona and selected sub-markets in Southern
California, and the Company's performance could be adversely affected by
economic conditions in these geographic areas, including supply and demand for
apartments in these areas, zoning or other regulatory conditions and competition
from other available apartments and alternative forms of housing. These factors
or a decline in the economy or real estate values in the Arizona markets and
selected sub-markets of Southern California may adversely affect the ability of
the Company to make distributions to its shareholders.

OPERATING RISKS

The Communities are subject to all operating risks common to multifamily
apartment communities in general, any and all of which might adversely affect
apartment occupancy or rental rates. Increases in unemployment in the areas in
which the communities owned or managed by the Company are located might
adversely affect multifamily apartment occupancy or rental rates. Increases in
operating costs due to inflation and other factors may not necessarily be offset
by increased rents. Residents may be unable or unwilling to pay rent increases.
If operating expenses increase, the local rental market may limit the extent to
which rents may be increased to meet increased expenses without decreasing
occupancy rates. If any of the above occurs, the Company's ability to make
distributions to shareholders could be adversely affected.

RISKS OF DEVELOPMENT ACTIVITIES

The Company intends to continue to actively pursue development projects,
including the expansion of existing apartment communities. Such projects
generally require the expenditure of capital as well as various forms of
government and other approvals, the receipt of which cannot be assured.
Consequently, there can be no assurance that any such projects will be completed
or that such projects will prove to be profitable.

4
<PAGE>

RISKS RELATED TO COMPETITION

There are numerous housing alternatives that compete with the Communities in
attracting residents. The Communities compete directly with other multifamily
rental apartments and single family homes that are available for rent in the
markets in which the Communities are located. The Communities also compete for
residents with new and existing homes and condominiums. In addition, other
competitors for development and acquisitions of properties may have greater
resources than the Company.

ENVIRONMENTAL RISKS

Under various federal, state and local laws, ordinances and regulations, the
Company may be considered an owner or operator of real property or may have
arranged for the disposal or treatment of hazardous or toxic substances and,
therefore, may become liable for the costs of removal or remediation of certain
hazardous substances released on or in its property or disposed of by it, as
well as certain other potential costs which could relate to hazardous or toxic
substances (including governmental fines and injuries to persons and property).
Such liability may be imposed whether or not the Company knew of, or was
responsible for, the presence of such hazardous or toxic substances.

RISK OF UNINSURED LOSS

The Company carries comprehensive liability, fire, extended coverage and
rental loss insurance with respect to all of the Communities, with policy
specifications, insured limits and deductibles customarily carried for similar
properties. There are, however, certain types of losses (such as losses arising
from acts of war or from earthquakes) that are not generally insured because
they are either uninsurable or not economically insurable. Should an uninsured
loss or a loss in excess of insured limits occur, the Company could lose its
capital invested in a property, as well as the anticipated future revenues from
such property and would continue to be obligated on any mortgage indebtedness or
other obligations related to the property. Any such loss would adversely affect
the Company and its ability to make distributions.

NO LIMITATION ON INCURRENCE OF DEBT

The Company currently has a policy of incurring debt only if upon such
incurrence the ratio of debt to total market capitalization (I.E., the total
consolidated debt of the Company as a percentage of the market value of issued
and outstanding Common Stock and Units plus total consolidated debt) would be
50% or less, but the organizational documents of the Company do not contain any
limitation on the amount of indebtedness the Company may incur. Accordingly, the
Board of Directors could alter or eliminate this policy. If this policy were
changed, the Company could become more highly leveraged, resulting in an
increase in debt service that could adversely affect the Company's cash
available for distribution to shareholders and could increase the risk of
default on the Company's indebtedness.

LIMITATIONS ON ACQUISITION AND CHANGE IN CONTROL

In addition to the Ownership Limit, certain provisions contained in the
Company's Charter and under Maryland law may have the effect of discouraging a
third party from making an acquisition proposal for the Company and may thereby
inhibit a change in control of the Company. For example, such provisions may (i)
deter tender offers for the Common Stock, which offers may be beneficial to
shareholders or (ii) deter purchases of large blocks of Common Stock, thereby
limiting the opportunity for shareholders to receive a premium for their Common
Stock over then-prevailing market prices. See "Description of the Capital
Stock--Common Shares" and "Certain Provisions of Maryland Law and of the
Company's Charter and Bylaws."

5
<PAGE>
ADVERSE IMPACT ON DISTRIBUTIONS OF FAILURE TO QUALIFY AS A REIT

Since the Company's commencement of operations in 1994, the Company has
operated in a manner to qualify as a REIT under the Code, and the Company
intends to continue to operate in such a manner so as to permit the Company to
qualify as a REIT under the Code. Although the Company believes that it will
continue to operate in such a manner, no assurance can be given that the Company
will remain qualified as a REIT. If in any taxable year the Company were to fail
to qualify as a REIT, the Company would not be allowed a deduction for
distributions to shareholders in computing taxable income and would be subject
to Federal income tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates.

ABSENCE OF PUBLIC MARKET AND POTENTIAL VOLATILITY OF DEBT SECURITIES

Prior to any offering of Debt Securities pursuant to an applicable
prospectus supplement, there has not been a public market for the Debt
Securities, and there can be no assurance that an active trading market will
develop or be sustained or that the Debt Securities will trade at or above the
price at which they are initially offered to the public. Furthermore, except as
otherwise described in the applicable prospectus supplement, the Operating
Partnership does not currently intend to apply for listing of Debt Securities on
any securities exchange. Therefore, no assurance can be given as to the
liquidity of the trading market for the Debt Securities. Furthermore, the market
value of the Debt Securities could be substantially affected by general market
conditions, including changes in interest rates. Moreover, numerous other
factors, such as government regulatory action and changes in tax laws, could
have a significant impact on the future market price of the Debt Securities.

6
<PAGE>
THE COMPANY AND THE OPERATING PARTNERSHIP

The Company operates as a self-administered and self-managed real estate
investment trust (a "REIT") and conducts all of its operations through the
Operating Partnership, either directly or through subsidiaries. A corporate REIT
is a legal entity which holds real estate interests and, through payments of
dividends to shareholders, is permitted to reduce or avoid the payment of
federal income taxes at the corporate level.

The Company is one of the largest developers and managers of upscale
apartment communities in Arizona and has expanded its operation into selected
sub-markets in Southern California. The Company owns and manages 51 stabilized
multifamily apartment communities containing 14,523 units, of which 44
stabilized multifamily apartment communities are located in Phoenix and Tucson,
Arizona, containing a total of 12,125 units and seven stabilized multifamily
apartment communities are located in Southern California and contain a total of
2,398 units (the "Stabilized Communities"). The Company considers an apartment
community stabilized when it reaches the average occupancy level of its
respective sub-market. The Company is also in the process of developing or
expanding five multifamily apartment communities comprising 1,198 units in its
Arizona markets (the "Communities under Construction," and together with the
Stabilized Communities the "Communities"). The Company is fully integrated with
expertise in development, acquisitions, construction and management of apartment
communities. The Company had approximately 583 employees at January 15, 1997.
For further information about the properties of the Company and the Operating
Partnership, see "Item 2. Properties" in the Company's Annual Report on Form
10-K/A for the year ended December 31, 1996, incorporated herein by reference.

All of the Communities and other assets of the Company are held by, and all
of the Company's operations are conducted through, the Operating Partnership
(either directly or through subsidiaries). The Company is the sole general
partner of, and controls a majority of the limited partnership interests in, the
Operating Partnership. As of December 31, 1996, the Company owned 79.7% of the
outstanding partnership interests in the Operating Partnership. To maintain the
Company's qualifications as a REIT while realizing income from its fee
management and related service business, the Company's management operations are
conducted through the Management Company pursuant to the terms of management
agreements with the Operating Partnership and the Financing Partnership. The
Management Company also provides other services to third parties, including
construction, development and related services.

As of December 31, 1996, the Company and the Operating Partnership had
outstanding indebtedness of $436.2 million. Any applicable Prospectus Supplement
relating to securities offered thereby will set forth the outstanding
indebtedness of the issuer and its subsidiaries as of a recent date. The Company
has been advised by certain rating agencies that any Debt Securities issued
hereunder by the Operating Partnership rather than the Company would be rated
more favorably by such agencies because, in the view of such agencies, Debt
Securities issued by the entity that holds title to the Communities involves
less risk.

The Company was incorporated in Maryland in May 1994. The Operating
Partnership is a Delaware limited partnership that was formed in June 1994. The
principal executive offices of the Company and the Operating Partnership are
located at 6991 East Camelback Road, Suite A-200, Scottsdale, Arizona 85251,
telephone number: (602) 840-1040.

USE OF PROCEEDS

The Company is required, by the terms of the partnership agreement of the
Operating Partnership, to invest the net proceeds of any sale of Common Stock,
Preferred Stock or Warrants in the Operating Partnership in exchange for
additional Units. Unless otherwise set forth in the applicable Prospectus
Supplement, the Company and the Operating Partnership anticipate that the
proceeds from the sale of Securities will be used primarily by the Company
and/or the Operating Partnership for the repayment of existing indebtedness.
Such proceeds may also be used for the development of new apartment communities
and the acquisition of additional apartment communities. A more detailed
description of the use of

7
<PAGE>
proceeds from any such sale of Securities shall be set forth in the applicable
Prospectus Supplement. Proceeds from the sales of Securities initially may be
temporarily invested in short-term securities.

CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

The following table sets forth the consolidated ratios of earnings to fixed
charges of the Company and the Operating Partnership.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges................ 1.59x 1.89x 1.83(1)(4) 1.78x(2) (0.08x)(3)
</TABLE>

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

(1) In connection with the repayment of existing indebtedness at the time of the
initial public offering, prepayment penalties and lender participation
(additional interest) totaling $2,594,000 were paid. Prior to the offering,
an Executive Incentive Deferred Compensation Plan was canceled and the
$2,639,000 that was funded by the Company was expensed during 1994.

(2) During 1993, the Company negotiated a discounted payoff of a mortgage loan
secured by an apartment community, the excess of the amount owed for
principal and interest over the amount paid to payoff the loan was recorded
as an extraordinary item-gain on extinguishment of debt. The Company
determined that the carrying value of the community was in excess of net
realizable value. The excess of $1,361,000 was charged to write down of real
estate assets and was recorded in the income (loss) before minority interest
and extraordinary item.

(3) In 1992, the predecessor to the Company had a loss before minority interest
and extraordinary item of $6,709,000, which included a non-cash write down
of real estate assets of $10,284,000 related to one of the Communities. The
predecessor wrote down the carrying value of such Community in conjunction
with the negotiated discounted payoff of the Community's mortgage. The
computation of the ratio of earnings to fixed charges for such year
indicates that earnings were inadequate to cover fixed charges by
approximately $6,801,000.

(4) Ratios of earnings to fixed charges from the period prior to August 17, 1995
relate to the predecessor of the Company and the Operating Partnership.

For the purpose of calculating the ratio of earnings to fixed charges,
earnings consist of income before minority interest and extraordinary items, and
fixed charges reduced by the amount of interest capitalized during the period.
Fixed charges consist of interest expense, capitalized interest and amortization
of deferred financing costs. To date, the Company has not issued any Preferred
Stock; therefore, the ratios of earnings to combined fixed charges and preferred
stock dividend requirements are the same as the ratios of earnings to fixed
charges presented above.

DESCRIPTION OF DEBT SECURITIES

The Debt Securities will be issued under an Indenture (the "Indenture"),
between the Operating Partnership and a Trustee (the "Trustee") chosen by the
Operating Partnership and qualified to act as Trustee under the Trust Indenture
Act of 1939, as amended (the "TIA"). The Indenture has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part and will be
available for inspection at the corporate trust office of the trustee or as
described above under "Available Information." The Indenture is subject to, and
governed by, the TIA. The statements made hereunder relating to the Indenture
and the Debt Securities to be issued thereunder are summaries of all material
provisions thereof and do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all provisions of the Indenture and
such Debt Securities, including the definitions therein of certain terms used
below. All section references appearing herein are to sections of the Indenture.
As used in this

8
<PAGE>
section "Description of Debt Securities," the "Operating Partnership" refers to
Evans Withycombe Residential, L.P. and the "Company" refers to Evans Withycombe
Residential, Inc., in each case, exclusive of their respective subsidiaries and
affiliates.

GENERAL

The Debt Securities may be issued without limit as to aggregate principal
amount, in one or more series, in each case as established from time to time in
or pursuant to authority granted by a resolution of the Board of Directors of
the Company as sole general partner of the Operating Partnership or as
established in one or more indentures supplemental to the Indenture. All Debt
Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the holders
of the Debt Securities of such series, for issuances of additional Debt
Securities of such series (Section 301). The Indenture provides that there may
be more than one Trustee thereunder, each with respect to one or more series of
Debt Securities. Any Trustee under the Indenture may resign or be removed with
respect to one or more series of Debt Securities, and a successor Trustee may be
appointed to act with respect to such series (Section 608). In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each such Trustee shall be a trustee of a trust under the
Indenture separate and apart from the trust administered by any other Trustee
(Section 609), and, except as otherwise indicated herein, any action described
herein to be taken by a Trustee may be taken by each such Trustee with respect
to, and only with respect to, the one or more series of Debt Securities for
which it is Trustee under the Indenture.

Reference is made to the Prospectus Supplement relating to the series of
Debt Securities offered thereby for the specific terms thereof, including:

(1) the title of such Debt Securities and whether such Debt Securities are
guaranteed by the Company or any of its subsidiaries and, if such Debt
Securities are so guaranteed, the terms and conditions of such
guarantee;

(2) any limit on the aggregate principal amount of such Debt Securities that
may be authenticated and delivered under the Indenture;

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

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

(5) the rate or rates, or the method by which such rate or rates shall be
determined, at which such Debt Securities will bear interest, if any,
the date or dates, or the method for determining such date or dates,
from which any interest will accrue, the dates on which any such
interest will be payable, the record dates for such interest payment
dates, or the method by which any such date shall be determined, and the
basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;

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

(7) the period or periods within which, the price or prices at which, the
currency or currencies, currency unit or units or composite currency or
currencies in which, and the terms and conditions upon which such Debt
Securities may be redeemed, as a whole or in part, at the option of the
Operating Partnership, if the Operating Partnership is to have such an
option;

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(8) the obligation, if any, of the Operating Partnership to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, upon the occurrence of
certain events (such as a change of control) or otherwise, and the
period or periods within which, the price or prices at which, the
currency or currencies, currency unit or units or composite currency or
currencies in which, and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;

(9) if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which any registered Debt Securities ("Registered
Securities") shall be issuable and, if other than denominations of
$5,000 and any integral multiple thereof, the denomination or
denominations in which any bearer Debt Securities ("Bearer Securities")
shall be issuable;

(10) if other than the Trustee, the identity of each security registrar
and/or paying agent;

(11) if other than the principal amount thereof, the portion of the principal
amount of the Debt Securities that shall be payable upon declaration of
acceleration of the maturity thereof or the method by which such portion
shall be determined;

(12) if other than U.S. dollars, the currency or currencies in which payment
of the principal of (and premium, if any) or interest or additional
amounts, if any, on the Debt Securities shall be payable or in which the
Debt Securities shall be denominated;

(13) whether the amount of payments of principal of (and premium, if any) or
interest, if any, on the Debt Securities 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;

(14) whether the principal of (and premium, if any) or interest or additional
amounts, if any, on the Debt Securities are to be payable, at the
election of the Operating Partnership or a holder (a "Holder") thereof,
in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such Debt 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 Debt 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 Debt Securities are to be
so payable;

(15) provisions, if any, granting special rights to the Holders of the Debt
Securities upon the occurrence of such events as may be specified;

(16) any deletions from, modifications of or additions to the events of
default (the "Events of Default") or covenants in the Indenture with
respect to Debt Securities of such series;

(17) whether the Debt Securities will be in certificated or book-entry form
and, if certificated, whether the Debt Securities 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 may be
exchanged for Registered Securities and vice versa (if permitted by
applicable laws and regulations), whether any Debt Securities are to be
issuable initially in temporary global form and whether any Debt
Securities 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 Debt Security may exchange such interests for Debt
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances

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<PAGE>
under which any such exchanges may occur, and, if Registered Securities
are to be issuable as a global Debt Security, the identity of the
depositary for such series;

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

(19) the person to whom any interest on any Registered Security shall be
payable, if other than the person in whose name that Debt Security is
registered at the close of business on the applicable record date (the
"Regular Record Date") for such interest, the manner in which, or the
person to whom any interest on any Bearer Security 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 Debt
Security on an interest payment date (an "Interest Payment Date") will
be paid;

(20) if the defeasance and covenant defeasance provisions described herein
are to be inapplicable or any modification of such provisions;

(21) if the Debt Securities to be issuable in definitive form (whether upon
original issue or upon exchange of a temporary Debt Security) 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;

(22) whether and under what circumstances the Operating Partnership will pay
additional amounts on the Debt Securities 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 Operating Partnership will have the option to redeem
such Debt Securities rather than pay such additional amounts (and the
terms of any such option); and

(23) any other terms of such Debt Securities not inconsistent with the terms
of the Indenture.

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

If the terms of a series of Debt Securities provide for the redemption or
repurchase of such Debt Securities at the option of a holder thereof upon the
occurrence of certain events, the Operating Partnership will comply, if
applicable, with Rule 14e-1 under the Exchange Act and any other applicable
provisions of the federal securities laws in connection with any such redemption
or repurchase.

Except as described under "Merger, Consolidation or Sale" or as may be set
forth in any Prospectus Supplement, the Indenture does not contain any other
provisions that would limit the ability of the Operating Partnership to incur
indebtedness or that would afford holders of the Debt Securities protection in
the event of (i) a highly leveraged or similar transaction involving the
Operating Partnership, management of the Operating Partnership or the Company,
or any affiliate of any such party, (ii) a change of control or (iii) a
reorganization, restructuring, merger or similar transaction involving the
Operating Partnership that may adversely affect the holders of the Debt
Securities. In addition, subject to the limitations set forth under "Merger,
Consolidation or Sale," the Operating Partnership may, in the future, enter into
certain transactions, such as the sale of all or substantially all of its assets
or the merger or consolidation of the Operating Partnership, that would increase
the amount of the Operating Partnership's indebtedness or substantially reduce
or eliminate the Operating Partnership's assets, which may have an adverse
effect on the Operating Partnership's ability to service its indebtedness,
including the Debt Securities. Under the New York Business Corporation Law, the
term "substantially all of the Company's assets" is not defined and is,
therefore, subject to New York common law and to judicial interpretation and
review in the context of the unique facts and circumstances of any particular
transaction. In light of the fact

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<PAGE>

that such term is not defined, there may be uncertainty as to whether a given
transaction relates to "substantially all of the assets of the Company" and to
whether a Holder of Debt Securities is entitled to the benefits of the
provisions set forth under "--Merger, Consolidation or Sale" below. In addition,
restrictions on ownership and transfers of the Company's Common Stock and
Preferred Stock are designed to preserve its status as a REIT and, therefore,
may act to prevent or hinder a change of control. See "Description of the
Capital Stock--Restrictions on Ownership." Reference is made to the applicable
Prospectus Supplement for information with respect to any deletions from,
modifications of or additions to the events of default or covenants that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.

The applicable Prospectus Supplement will summarize the nature and scope of
any event risk provisions contained in any offered Debt Security, including the
types of events protected by such provisions and any limitations on the
Operating Partnership's ability to satisfy its obligations under such
provisions. The applicable Prospectus Supplement will also summarize
anti-takeover provisions in other securities of the Operating Partnership or the
General Partner, which could have a material effect on the offered Debt
Securities. Such summary will contain a detailed and quantifiable definition of
any "change in control" provision. In the event that the Operating Partnership
failed to make a required payment of principal or interest or otherwise failed
to comply with any of its obligations with respect to the Debt Securities and
the maturity of the Debt Securities was accelerated as a result of such failure,
it is likely that all or a substantial portion of the Operating Partnership's
debt for borrowed money also would be subject to an acceleration of time for
required payment. If such indebtedness were accelerated, it is likely that the
Operating Partnership would not have sufficient liquidity to satisfy its payment
obligations with respect to its Debt Securities and such other indebtedness and
that such acceleration would have a material adverse effect on the financial
condition and results of operations of the Operating Partnership.

Reference is made to "--Certain Covenants" below and to the description of
any additional covenants with respect to a series of Debt Securities in the
applicable Prospectus Supplement. Except as otherwise described in the
applicable Prospectus Supplement, compliance with such covenants generally may
not be waived with respect to a series of Debt Securities by the Board of
Directors of the Company as sole general partner of the Operating Partnership or
by the Trustee unless the Holders of at least a majority in principal amount of
all outstanding Debt Securities of such series consent to such waiver, except to
the extent that the defeasance and covenant defeasance provisions of the
Indenture described under "--Discharge, Defeasance and Covenant Defeasance"
below apply to such series of Debt Securities. See "--Modification of the
Indenture."

GUARANTEES

Any series of Debt Securities may be guaranteed by the Company or any of its
subsidiaries. The applicability and terms of any such Guarantee relating to a
series of Debt Securities will be set forth in the Prospectus Supplement
relating to such Debt Securities.

DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER

Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series which are Registered Securities, 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
Debt Securities which are Bearer Securities, other than Bearer Securities issued
in global form (which may be of any denomination), shall be issuable in
denominations of $5,000 (Section 302).

Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium, if any) and interest on any series of Debt Securities
will be payable at the corporate trust office of the Trustee, provided that, at
the option of the Operating Partnership, payment of interest may be made by
check mailed to the address of the Person entitled thereto as it appears in the
applicable Security Register or by wire transfer of funds to such Person at an
account maintained within the United States (Sections 301, 307 and 1002).

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<PAGE>
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the Regular Record Date and may
either be paid to the Person in whose name such Debt Security is registered at
the close of business on a special record date (the "Special Record Date") for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder of such Debt Security not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner, all as more completely described in the Indenture.

Subject to certain limitations imposed upon Debt Securities issued in book
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the Trustee. In addition, subject to
certain limitations imposed upon Debt Securities issued in book entry form, the
Debt Securities of any series may be surrendered for registration of transfer
thereof at the corporate trust office of the Trustee. Every Debt Security
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer. No service charge will be made
for any registration of transfer or exchange of any Debt Securities, but the
Trustee or the Operating Partnership may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith
(Section 305). If the applicable Prospectus Supplement refers to any transfer
agent (in addition to the Trustee) initially designated by the Operating
Partnership with respect to any series of Debt Securities, the Operating
Partnership may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
except that the Operating Partnership will be required to maintain a transfer
agent in each place of payment for such series. The Operating Partnership may at
any time designate additional transfer agents with respect to any series of Debt
Securities (Section 1002).

Neither the Operating Partnership nor the Trustee shall be required (i) to
issue, register the transfer of or exchange any Debt Security if such Debt
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Debt Securities to be
redeemed and ending at the close of business on (A) if such Debt Securities are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if such Debt Securities are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if such Debt 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 Debt Security which has been surrendered for
repayment at the option of the Holder, except the portion, if any, of such Debt
Security not to be so repaid (Section 305).

MERGER, CONSOLIDATION OR SALE

The Operating Partnership may consolidate with, or sell, lease or convey all
or substantially all of its assets (see "--General" above) to, or merge with or
into, any other entity, provided that (a) the Operating Partnership shall be the
continuing entity, or the successor entity (if other than the Operating
Partnership) formed by or resulting from any such consolidation or merger or
which shall have received the transfer of such assets shall be organized and
existing under the laws of the United States or a state thereof and shall
expressly assume the due and punctual payment of the principal of (and premium,
if any) and interest (including all additional amounts, if any) on all the Debt
Securities 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

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

CERTAIN COVENANTS

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

MAINTENANCE OF PROPERTIES. The Operating Partnership is required to cause
all of its material properties used or useful in the conduct of its business or
the business of any Subsidiary to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and to cause
to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Operating Partnership 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
Operating Partnership and its Subsidiaries shall not be prevented from selling
or otherwise disposing for value their respective properties (Section 1007).

INSURANCE. The Operating Partnership is required to, and is required to
cause each of its Subsidiaries to, maintain insurance coverage on its property
against loss or damage with financially sound and reputable insurance companies
in amounts and covering such contingencies that are customary for similarly
situated companies in its industry (Section 1008).

PAYMENT OF TAXES AND OTHER CLAIMS. The Operating Partnership is required to
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon its income, profits or property or
that of 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
Operating Partnership or any Subsidiary; provided, however, that the Operating
Partnership 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. The Holders of Debt Securities will be
provided with copies of the annual reports and quarterly reports of the
Operating Partnership. Whether or not the Operating Partnership is subject to
Section 13 or 15(d) of the Exchange Act and for so long as any Debt Securities
are outstanding, the Operating Partnership will, to the extent permitted under
the Exchange Act, be required to file with the Commission the annual reports,
quarterly reports and other documents which the Operating Partnership would have
been required to file with the Commission pursuant to such Section 13 or 15(d)
(the "Financial Statements") if the Operating Partnership 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 Operating Partnership would have been
required so to file such documents if the Operating Partnership were so subject.
The Operating Partnership will also in any event (a) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders of Debt Securities, as
their names and addresses appear in the security register for the Debt
Securities (the "Security Register"), without cost to such Holders, copies of
the annual reports and quarterly reports which the Operating Partnership would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act if the Operating Partnership were subject to such Sections
and (ii) file with the Trustee copies of the annual reports, quarterly reports

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<PAGE>
and other documents which the Operating Partnership would have been required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if
the Operating Partnership were subject to such Sections and (b) if filing such
documents by the Operating Partnership 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). Such written request may be directed to
Evans Withycombe Residential, L.P., 6991 East Camelback Road, Suite A-200,
Scottsdale, Arizona 85251, Attention: Secretary, facsimile (602) 423-8843.

ADDITIONAL COVENANTS. Any additional or different covenants of the
Operating Partnership with respect to any series of Debt Securities will be set
forth in the Prospectus Supplement relating thereto.

EVENTS OF DEFAULT, NOTICE AND WAIVER

The Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (a) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (b) default in the payment of the principal of (or premium, if any,
on) any Debt Security of such series at its maturity; (c) default in making any
sinking fund payment as required for any Debt Security of such series; (d)
default in the performance, or breach, of any other covenant or warranty of the
Operating Partnership contained in the Indenture with respect to any Debt
Security of that series (other than a covenant or a default in the performance
or the breach of which is elsewhere specifically dealt with in the Events of
Default provisions), such default having continued for 60 days after written
notice as provided in the Indenture; (e) a default under any evidence of
Recourse Indebtedness of the Operating Partnership, or under any mortgage,
indenture or other instrument of the Operating Partnership under which there may
be issued or by which there may be secured any Recourse Indebtedness of the
Operating Partnership (or by any Subsidiary, the repayment of which the
Operating Partnership has guaranteed or for which the Operating Partnership is
directly responsible or liable as obligor or guarantor), which default shall
constitute a failure to pay an aggregate principal amount exceeding $5,000,000
of such indebtedness when due and payable after the expiration of any applicable
grace period with respect thereto and shall have resulted in such indebtedness
in an aggregate principal amount exceeding $5,000,000 becoming or 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 to the Operating Partnership by the Trustee or to
the Issuer and the Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series of a written notice specifying such
default and requiring the Operating Partnership to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled and stating
that such notices is a "Notice of Default" under the Indenture; (f) certain
events of bankruptcy, insolvency or reorganization of the Operating Partnership
or a Significant Subsidiary, or court appointment of a Custodian of the
Operating Partnership or any Significant Subsidiary for all or substantially all
of any of their respective property; and (g) any other Event of Default provided
with respect to a particular series of Debt Securities. The term "Significant
Subsidiary" means each significant subsidiary (as defined in Regulation S-X
promulgated under the Securities Act) of the Operating Partnership.

If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time Outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Debt Securities of that series may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities or Securities, the terms of which provide that the principal amount
thereof payable at maturity may be more or less than the principal face amount
thereof at original issuance ("Indexed Securities"), such portion of the
principal amount as may be specified in the terms thereof) of all of the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Operating Partnership (and to the Trustee if given by the
Holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities

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<PAGE>
of such series has been made, but before a judgment or decree for payment of the
money due has been obtained by the Trustee, the Holders of not less than a
majority in principal amount of Outstanding Debt Securities of such series may
rescind and annul such declaration and its consequences if (a) the Operating
Partnership shall have deposited with the applicable Trustee all required
payments of the principal of (and premium, if any) and interest on the Debt
Securities of such series (or of all Debt Securities then Outstanding under the
Indenture, as the case may be), plus certain fees, expenses, disbursements and
advances of the Trustee and (b) all Events of Default, other than the nonpayment
of accelerated principal of (or specified portion thereof), or premium (if any)
or interest on the Debt Securities of such series have been cured or waived as
provided in the Indenture (Section 502). The Indenture also provides that the
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series (or of all Debt Securities then Outstanding under the
Indenture, as the case may be) may waive any past default with respect to such
series and its consequences, except a default (x) in the payment of the
principal of (or premium, if any) or interest on any Debt Security or such
series or (y) in respect of a covenant or provision contained in the Indenture
that cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security affected thereby (Section 513).

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

The Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the 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 Debt Securities of such series, as well as
an offer of indemnity reasonably satisfactory to it (Section 507). This
provision will not prevent, however, any holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Debt Securities at the respective due
dates thereof (Section 508).

Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under the Indenture, unless such
Holders shall have offered to the Trustee thereunder reasonable security or
indemnity (Section 602). The Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of any series (or of all Debt
Securities then Outstanding under the Indenture, as the case may be) shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or of exercising any trust or power
conferred upon the Trustee. However, the Trustee may refuse to follow any
direction which is in conflict with any law or the Indenture, which may involve
the Trustee in personal liability or which may be unduly prejudicial to the
holders of Debt Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, the Operating Partnership
must deliver to the Trustee a certificate, signed by one of several specified
officers of the Operating Partnership, stating whether or not such officer has
knowledge of any default under the Indenture and, if so, specifying each such
default and the nature and status thereof.

MODIFICATION OF THE INDENTURE

Modifications and amendments of the Indenture will be permitted to be made
by the Operating Partnership only with the consent of the Holders of not less
than a majority in principal amount of all

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<PAGE>

Outstanding Debt Securities or series of Outstanding Debt Securities which are
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holders of each such
Debt Security affected thereby, (a) change the Stated Maturity of the principal
of, or premium (if any) on or any installment of principal of or interest on or
any additional amounts with respect to, any such Debt Security; (b) reduce the
principal amount of, or the rate or amount of interest on or any additional
amounts payable in respect of, or any premium payable on redemption of any such
Debt Security, or change any obligation of the Operating Partnership to pay
additional amounts except as otherwise permitted, or reduce the amount of
principal of an Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the maturity thereof or would be provable
in bankruptcy, or adversely affect any right of repayment at the option of the
holder of any such Debt Security; (c) change the place of payment, or the coin
or currency, for payment of principal of, premium, if any, or interest on any
such Debt Security; (d) impair the right to institute suit for the enforcement
of any payment on or 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); (e) reduce the percentage in
principal amount of Outstanding Debt Securities of any series necessary to
modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holders of such Debt Security
(Section 902). A Debt Security shall be deemed Outstanding ("Outstanding") if it
has been authenticated and delivered under the Indenture unless, among other
things, such Debt Security has been canceled or redeemed.

The Indenture provides that the Holders of not less than a majority in
principal amount of a series of Outstanding Debt Securities have the right to
waive compliance by the Operating Partnership with certain covenants relating to
such series of Debt Securities in the Indenture (Section 1014). Modifications
and amendments of the Indenture will be permitted to be made by the Operating
Partnership and the Trustee without the consent of any Holder of Debt Securities
for any of the following purposes: (i) to evidence the succession of another
Person to the Operating Partnership as obligor under the Indenture; (ii) to add
to the covenants of the Operating Partnership for the benefit of the Holders of
all or any series of Debt Securities or to surrender any right or power
conferred upon the Operating Partnership in the Indenture; (iii) to add Events
of Default for the benefit of the Holders of all or any series of Debt
Securities; (iv) to add or change any provisions of the Indenture to facilitate
the issuance of, or to liberalize certain terms of, Debt Securities in bearer
form, or to permit or facilitate the issuance of Debt Securities in
uncertificated form, provided, that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect; (v) to change or eliminate any provisions of the Indenture, provided
that any such change or elimination shall become effective only when there are
no Debt Securities Outstanding of any series created prior thereto which are
entitled to the benefit of such provision; (vi) to secure the Debt Securities;
(vii) to establish the form or terms of Debt Securities of any series; (viii) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under the Indenture by more than one Trustee;
(ix) to cure any ambiguity, defect or inconsistency in the Indenture, provided
that such action shall not adversely affect the interests of Holders of Debt
Securities of any series in any material respect; or (x) to supplement any of
the provisions of the Indenture to the extent necessary to permit or facilitate
defeasance and discharge of any series of such Debt Securities, provided that
such action shall not adversely affect the interests of the Holders of the Debt
Securities of any series in any material respect (Section 901).

The Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding

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shall be the amount of the principal thereof that would be due and payable as of
the date of such determination upon declaration of acceleration of the maturity
thereof, (ii) the principal amount of a Debt Security denominated in a foreign
currency that shall be deemed Outstanding shall be the U.S. dollar equivalent,
determined on the issue date for such Debt Security, of the principal amount
(or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the issue date of such Debt Security of the amount determined as
provided in (i) above), (iii) the principal amount of an Indexed Security that
shall be deemed Outstanding shall be the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Indexed Security pursuant to the Indenture; and (iv) Debt Securities owned by
the Operating Partnership or any other obligor upon the Debt Securities or any
affiliate of the Operating Partnership or of such other obligor shall be
disregarded.

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

Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of Holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage in principal amount of all Outstanding Debt Securities
affected thereby, or 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 Debt Securities of such series that
vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken into account in determining
whether such request, demand, authorization, direction, notice, consent, waiver
or other action has been made, given or taken under the Indenture (Section
1504).

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

The Operating Partnership may discharge certain obligations to Holders of
any series of Debt Securities that have not already been delivered to the
Trustee for cancellation and that either have become due and payable or will
become due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal (and
premium, if

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any) and interest to the date of such deposit (if such Debt Securities have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be (Section 401).

The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of the Indenture, the Operating Partnership may elect either (a) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligation to pay additional amounts, if any, upon
the occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402) or (b) to be released from its obligations with
respect to such Debt Securities under sections 1004 to 1011, inclusive, of the
Indenture (including the restrictions 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 of Default with
respect to such Debt Securities ("covenant defeasance") (Section 1403), in
either case upon the irrevocable deposit by the Operating Partnership with the
Trustee, in trust, of an amount, in such currency or currencies, currency unit
or units or composite currency or currencies in which such Debt Securities are
payable at the stated maturity date specified thereon ("Stated Maturity"), or
Government Obligations (as defined below), or both, applicable to such Debt
Securities which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any) and interest on such Debt Securities, and
any mandatory sinking fund or analogous payments thereon, on the scheduled due
dates therefor.

A trust will only be permitted to be established in accordance with the
preceding paragraph if, among other things, the Operating Partnership has
delivered to the Trustee an Opinion of Counsel (as specified in the Indenture)
to the effect that the Holders of such Debt Securities will not recognize
income, gain or loss for U.S. Federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to U.S. 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 law occurring after the date of the Indenture (Section 1404).
"Government Obligations" means securities which are (i) direct obligations of
the United States of America or the government which issued the foreign currency
in which the Debt Securities of a particular series are payable, for the payment
of which its full faith and credit is pledged or (ii) obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or such government which issued the foreign currency in
which the Debt Securities of such series are payable, the 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.

Unless otherwise provided in the applicable Prospectus Supplement, if after
the Operating Partnership has deposited funds and/or Government Obligations to
effect defeasance or covenant defeasance with respect to Debt Securities of any
series; (a) the Holder of a Debt Security of such series is entitled to, and
does, elect pursuant to the Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,

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currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any) and interest on such Debt Security as they become due out
of the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or such
Conversion Event based on the applicable market exchange rate. "Conversion
Event" means the cessation of use of (i) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the European
Currency Unit, as defined and revised from time to time by the Council of the
European Community ("ECU"), both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Community or (iii) any currency unit or composite currency other than the ECU
for the purposes for which it was established.

Unless otherwise provided in the applicable Prospectus Supplement, all
payments of principal of (and premium, if any) and interest on any Debt Security
that is payable in a foreign currency that ceases to be used by its government
of issuance shall be made in U.S. dollars.

In the event the Operating Partnership effects covenant defeasance with
respect to any Debt Securities and such Debt Securities are declared due and
payable because of the occurrence of any Event of Default other than the Event
of Default described in clause (d) under "Events of Default, Notice and Waiver"
with respect to Sections 1004 to 1011, inclusive, of the Indenture (which
sections would no longer be applicable to such Debt Securities) or described in
clause (g) under "Events of Default, Notice and Waiver" with respect to any
other covenant as to which there has been covenant defeasance, the amount in
such currency, currency unit or composite currency in which such Debt securities
are payable, and Government Obligations on deposit with the Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of their
Stated Maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such event of Default.
However, the Operating Partnership would remain liable to make payment of such
amounts due at the time of acceleration.

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

NO CONVERSION RIGHTS

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

GLOBAL SECURITIES

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

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DESCRIPTION OF THE CAPITAL STOCK

GENERAL

The Articles of Incorporation of the Company, as amended and supplemented
from time to time (the "Charter"), provide that the Company may issue up to
110,000,000 shares of capital stock, consisting of 100,000,000 shares of Common
Stock, par value $.01 per share (the "Common Shares"), and 10,000,000 shares of
Preferred Stock, par value $.01 per share (the "Preferred Shares"). Under
Maryland law, shareholders generally are not liable for the corporation's debts
or obligations.

The following summary does not purport to be complete and is qualified in
its entirety by reference to the applicable provisions of Maryland law and the
Company's Charter.

COMMON SHARES

Subject to the preferential rights of any class of Preferred Shares, and to
the provision of the Company's Charter regarding the consequences of actually or
constructively owning Common Shares in violation of the Ownership Limit
Provision (as discussed below), holders of Common Shares are entitled to receive
distributions on such Common Shares if, as and when authorized and declared by
the Board of Directors of the Company out of assets legally available therefor
and to share ratably in the assets of the Company legally available for
distribution to its shareholders in the event of its liquidation, dissolution or
winding-up after payment of, or adequate provision for, all known debts and
liabilities of the Company. The Company intends to continue to make quarterly
distributions to holders of Common Shares.

Subject to the provisions of the Company's Charter regarding the
consequences of actually or constructively owning Common Shares in violation of
the Ownership Limit Provision and to the matters discussed under "Certain
Provisions of Maryland Law and of the Company's Charter and Bylaws--Control
Share Acquisitions," each outstanding Common Share entitles the holder to one
vote on all matters submitted to a vote of shareholders, including the election
of directors, and, except as otherwise required by law or except as provided
with respect to any other class or series of stock, the holders of such shares
will possess the exclusive voting power. There is no cumulative voting in the
election of directors, which means that the holders of a majority of the
outstanding Common Shares can elect all of the directors then standing for
election and the holders of the remaining shares will not be able to elect any
directors.

Holders of Common Shares have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company. See
"--Restrictions on Ownership."

Subject to the provisions of the Company's Charter regarding the
consequences of actually or constructively owning Common Shares in violation of
the Ownership Limit Provision, all Common Shares will have equal dividend,
distribution, liquidation and other rights and will have no preference,
appraisal or exchange rights.

Pursuant to the Maryland General Corporation Law (the "MGCL"), a corporation
generally cannot dissolve, amend its charter, merge, sell all or substantially
all of its assets, engage in a share exchange or engage in similar transactions
outside the ordinary course of business unless approved by the affirmative vote
of shareholders holding at least two-thirds of the shares entitled to vote on
the matter unless a lesser percentage (but not less than a majority of all of
the votes to be cast on the matter) is set forth in the corporation's charter.
Under the MGCL, the terms "substantially all of the Company's assets" is not
defined and is, therefore, subject to Maryland common law and to judicial
interpretation and review in the context of the unique facts and circumstances
of any particular transaction. In light of the fact that such term is not
defined, there may be uncertainty as to whether a given transaction relates to
"substantially all of the assets of the Company." The Company's Charter provides
that a majority of all of the votes to be cast is the required vote of
shareholders in such situations, except that any proposal (i) to permit
cumulative voting in the election of directors, (ii) to alter provisions of the
Company's Charter with respect to the classified Board, removal of directors,
amendment of the Company's Bylaws, as amended (the

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<PAGE>
"Bylaws"), preemptive rights, indemnification of corporate agents and limitation
of liability of officers and directors, or (iii) that would jeopardize the
Company's status as a REIT for tax purposes, requires, in each case, the
approval of two-thirds of the Common Shares entitled to vote. In addition, a
number of other provisions of the MGCL could have a significant effect on the
Common Shares and the rights and obligations of holders thereof. See "Certain
Provisions of Maryland Law and of the Company's Charter and Bylaws."

PREFERRED SHARES

Preferred Shares may be issued from time to time, in one or more classes, as
authorized by the Board of Directors. Prior to issuance of shares of each class,
the Board of Directors is required by the MGCL and the Company's Charter to fix
for each such class, the terms, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms or conditions of redemption, as are permitted by
Maryland law. The Board could authorize the issuance of Preferred Shares with
terms and conditions which could have the effect of discouraging a takeover or
other transaction which holders of some, or a majority, of the Company's
outstanding shares might believe to be in their best interests or in which
holders of some, or a majority, of shares might receive a premium for their
shares over the market price of such shares. As of the date hereof, no Preferred
Shares are outstanding. If and when issued, the Preferred Shares will be subject
to the restrictions on ownership set forth below.

The applicable Prospectus Supplement will describe the following terms of
any Preferred Shares in respect of which this Prospectus is being delivered (to
the extent applicable to such Preferred Shares): (1) the specific designation,
number of shares, seniority and purchase price; (2) any liquidation preference
per share; (3) any date of maturity; (4) any redemption, repayment or sinking
fund provisions; (5) any dividend rate or rates and the dates on which any such
dividends will be payable (or the method by which such rates or dates will be
determined); (6) any voting rights; (7) whether the Preferred Shares are
convertible and, if so, the securities or rights into which such Preferred
Shares are convertible (which may include other Preferred Shares) and the terms
and conditions upon which such conversions will be effected including the
initial conversion prices or rates, the conversion period and any other related
provisions; (8) the place or places where dividends and other payments on the
Preferred Shares will be payable; (9) any additional voting, dividend,
liquidation, redemption and other rights, preferences, privileges, limitations
and restrictions, including restrictions directed at maintaining the Company's
REIT status; and (10) all material federal income tax considerations applicable
to such Preferred Shares. The Preferred Shares offered hereby will, when issued,
be fully paid and nonassessable.

RESTRICTIONS ON OWNERSHIP

For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
shares may be owned, actually or constructively, by five or fewer individuals
(as defined in the Code to include certain entities) during the last half of a
taxable year and the shares must be beneficially owned by 100 or more persons
during at least 335 days of a taxable year of 12 months (or during a
proportionate part of a shorter taxable year). In addition, certain income
received by the Company from related parties will not be treated as "rents from
real property" in determining whether the Company satisfies the REIT income
tests. Because the Board of Directors believes it is essential for the Company
to qualify as a REIT, the Board of Directors has adopted, and the shareholders
have approved, a provision in the Charter restricting the acquisition of shares
of the Company's capital stock (the "Ownership Limit Provision").

The Ownership Limit Provision provides that, subject to certain exceptions,
no shareholder may actually own, beneficially own (within the meaning of Section
13(d)(3) of the Exchange Act), or be deemed to own by virtue of the constructive
ownership provisions of the Code, more than the Ownership Limit, which is equal
to 9.8% of the lesser in value of the total number or value of the outstanding
Common

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Shares or Preferred Shares (or such other number or value of Preferred Shares as
the Board of Directors may determine in fixing the terms of the Preferred
Shares). The constructive ownership rules of the Code are complex and may cause
shares owned actually or constructively by two or more related individuals and/
or entities to be constructively owned by one individual or entity. As a result,
the acquisition of less than 9.8% of the outstanding Common Shares or 9.8% (or
such other number or value) of the Preferred Shares (or the acquisition of an
interest in an entity which owns shares) by an individual or entity could cause
that individual or entity (or another individual or entity) to own
constructively in excess of 9.8% of the outstanding Common Shares or 9.8% (or
such other number or value) of the outstanding Preferred Shares, and thus
subject such shares to the Ownership Limit Provision. The Ownership Limit
Provision also prohibits the acquisition or transfer of Common Shares and
Preferred Shares if the acquisition or transfer would result in the outstanding
shares of capital stock of the Company being owned by fewer than 100 persons,
and prohibits actual or constructive ownership of capital stock if as a result
of such ownership the Company would violate the "five or fewer" rule discussed
above or would otherwise cause the Company to fail to qualify as a REIT.

The Board of Directors may in its sole discretion waive the Ownership Limit
with respect to a particular acquisition of actual or constructive ownership of
the Company's shares, provided certain conditions are met. The Board of
Directors is not required to consider a request for such waiver, and, as a
condition for granting such a waiver, the Board of Directors may require
opinions of counsel or rulings satisfactory to it and/or an undertaking from the
applicant with respect to preserving the REIT status of the Company.

Except as provided below, in the event of a transfer, acquisition or other
ownership of the Company's capital stock (including any constructive acquisition
or transfer or ownership) in violation of the Ownership Limit Provision, such
transfer, acquisition or ownership shall be null and void from inception, as
though it had not occurred, and the intended transferee or owner will acquire no
rights to, or economic interest in, the shares.

The Charter provides that, if the Board of Directors requests and receives a
ruling from the IRS or an opinion of counsel satisfactory to the Board of
Directors and is otherwise satisfied such actions can be taken without
jeopardizing the Company's REIT status, shares of the Company's capital stock
owned, actually or constructively, or transferred to or otherwise acquired,
actually or constructively, by a person in violation of the Ownership Limit
Provision ("Prohibited Shares") will become subject to a mechanism that, in
effect, is designed to prohibit the person who purported to acquire those shares
from voting, receiving dividends or other distributions, and participating in
the appreciation in value of those shares. In general, pursuant to this
mechanism, the Prohibited Shares would automatically be transferred to a trustee
of a trust, the beneficiary of which would be one or more charitable
organizations, at the close of business on the day preceding the violative
transaction. The intended owner of the Prohibited Shares would have no right to
vote or receive distributions on the Prohibited Shares, and generally would be
entitled to receive only the net proceeds from a sale of the Prohibited Shares,
or the purchase price paid by such person for the Prohibited Shares (or value as
of the date of the acquisition, in the case of an acquisition other than a
purchase), whichever is less. The Company will have a right to purchase the
Prohibited Shares for fair market value during a specified period. Until the
Board of Directors requests and receives a ruling from the IRS or an opinion of
counsel and is otherwise satisfied that implementation of these provisions will
not jeopardize the Company's REIT status, these provisions will not take effect
and attempted transfers or ownership of shares in violation of the Ownership
Limit Provision will be void from inception, as though they had not occurred.

The Ownership Limitation Provision contains an exception for Common Shares
acquired by affiliates of Aldrich, Eastman and Waltch, L.P. ("AEW") and funds
managed by an affiliate of Copley Real Estate Advisors, Inc. ("Copley") in the
transactions undertaken in connection with the formation of the Company (the
"Formation Shares"), that are intended to prevent such entities from violating
the Ownership Limitation Provision as a result of participating in such
transactions. This exception continues to apply to

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Formation Shares in the hands of a direct and indirect transferee of these
entities, provided the transferee is a qualified pension fund and other
conditions are met.

The Ownership Limit Provision will not be automatically removed even if the
REIT provisions of the Code are changed so as to remove any ownership
concentration limitation. Except as otherwise described above, any change of the
Ownership Limit Provision would require an amendment to the Charter. Such
amendment to the Charter requires the affirmative vote of holders owning a
majority of the outstanding shares entitled to vote, unless such amendment would
cause the Company to lose its status as a REIT for tax purposes, in which event
the affirmative vote of holders of two-thirds of the outstanding shares entitled
to vote would be required. In addition to preserving the Company's status as a
REIT, the Ownership Limit Provision may have the effect of precluding an
acquisition of control of the Company without the approval of the Board of
Directors.

All certificates representing Common Shares bear a legend referring to the
restrictions described above.

All persons who own a specified percentage (or more) of the outstanding
shares of the Company's capital stock must file a statement with the Company
containing information regarding their ownership of Common Shares, as set forth
in the income tax regulations promulgated under the Code (the "Treasury
Regulations").

TRANSFER AGENT AND REGISTRAR

The Company has appointed Norwest Bank, Minnesota, National Association as
its transfer agent and registrar.

CERTAIN PROVISIONS OF MARYLAND LAW
AND OF THE COMPANY'S CHARTER AND BYLAWS

The following paragraphs summarize certain provisions of Maryland law and
the Company's Charter and Bylaws. The summary does not purport to be complete
and is subject to and qualified in its entirety by reference to the Company's
Charter and Bylaws, copies of which are filed as exhibits to the Registration
Statement of which this Prospectus is a part, and to Maryland law.

CLASSIFICATION OF THE BOARD OF DIRECTORS

The Company's Charter provides that the initial number of directors of the
Company was three (3), which number may be increased or decreased pursuant to
the Bylaws of the Company but in no event shall be less than the minimum number
required by the MGCL, which in the case of the Company is three (3). The
Company's Bylaws currently provide that the number of directors of the Company
may be established by the Board of Directors but may not be fewer than the
minimum number required by the MGCL nor more than fifteen (15). The Company has
set the number of directors to seven (7). Any vacancy will be filled, at any
regular meeting or at any special meeting called for that purpose, by a majority
of the remaining directors, except that a vacancy resulting from an increase in
the number of directors will be filled by a majority of the entire board of
directors. Pursuant to the terms of the Charter, the directors are divided into
three classes. One class was re-elected to a term expiring in 1998, another
class was re-elected to a term expiring in 1999 and the remaining class holds
office initially for a term expiring at the annual meeting of shareholders to be
held in 1997. As the term of each class expires, directors in that class will be
elected for a term of three years and until their successors are duly elected
and qualify. The Company believes that classification of the Board of Directors
will help to assure the continuity and stability of the Company's business
strategies and policies as determined by the Board of Directors.

The classified director provision could have the effect of making the
removal of incumbent directors more time-consuming and difficult, which could
discourage a third party from making a tender offer or

24
<PAGE>
otherwise attempting to obtain control of the Company, even though such an
attempt might be beneficial to the Company and its shareholders. At least two
annual meetings of shareholders, instead of one, will generally be required to
effect a change in a majority of the Board of Directors. Thus, the classified
board provision could increase the likelihood that incumbent directors will
retain their positions. Holders of voting shares will have no right to
cumulative voting for the election of directors. Consequently, at each annual
meeting of shareholders, the holders of a majority of shares entitled to vote
will be able to elect all of the successors of the class of directors whose term
expires at that meeting.

REMOVAL OF DIRECTORS

The Charter provides that a director may be removed with or without cause by
the affirmative vote of at least two-thirds of the votes entitled to be cast in
the election of directors, and by the vote required to elect a director, the
shareholders may fill a vacancy on the Board resulting from removal. Section
2-406(b) of the MGCL permits a director to be removed with cause, but neither
the MGCL nor the Company's charter defines "cause" in connection therewith. This
provision, when coupled with the provision in the Bylaws authorizing the Board
of Directors to fill vacant directorships, could preclude shareholders from
removing incumbent directors except upon a substantial affirmative vote and
filling the vacancies created by such removal with their own nominees.
Additionally, because the term "cause" is not defined, there may be uncertainty
as to the circumstances in which shareholders have the right to remove a
director.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Company's Charter limits the liability of the Company's directors and
officers to the Company and its shareholders to the fullest extent permitted
from time to time by Maryland law. Maryland law presently permits the liability
of directors and officers to a corporation or its shareholders for money damages
to be limited, except (i) to the extent that it is proved that the director or
officer actually received an improper benefit or profit, or (ii) to the extent
that a judgment or other final adjudication is entered in a proceeding based on
a finding that the director's or officer's action, or failure to act, was the
result of active and deliberate dishonesty and was material to the cause of
action adjudicated in the proceeding. This provision does not limit the ability
of the Company or its shareholders to obtain other relief, such as an injunction
or rescission.

The Company's Charter and Bylaws require the Company to indemnify its
directors, officers and certain other parties to the fullest extent permitted
from time to time by Maryland law. The Charter also permits the Company to
indemnify employees, agents and other persons acting on behalf of or at the
request of the Company. The MGCL permits a corporation to indemnify its
directors, officers and certain other parties against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service to or at the request of the corporation, unless it is established
that: (i) the act or omission of the indemnified party was material to the
matter giving rise to the proceeding and was committed in bad faith or was the
result of active and deliberate dishonesty; (ii) the indemnified party actually
received an improper personal benefit; or (iii) in the case of any criminal
proceeding, the indemnified party had reasonable cause to believe that the act
or omission was unlawful. Indemnification may be made against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by the
director or officer in connection with the proceeding; provided, however, that
if the proceeding is one by or in the right of the corporation, indemnification
may not be made with respect to any proceeding in which the director or officer
has been adjudged to be liable to the corporation. In addition, a director or
officer may not be indemnified with respect to any proceeding charging improper
personal benefit to the director or officer in which the director or officer was
adjudged to be liable on the basis that personal benefit was improperly
received. The termination of any proceeding by conviction, or upon a plea of
nolo contendere or its equivalent, or an entry of any order of probation prior
to judgment, creates a rebuttable presumption that the director or officer did
not meet the requisite standard of conduct required for indemnification to be
permitted. It is

25
<PAGE>
the position of the Commission that indemnification of directors and officers
for liabilities arising under the Securities Act is against public policy and is
unenforceable pursuant to Section 14 of the Securities Act.

BUSINESS COMBINATIONS

Under the MGCL, certain "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between a Maryland
corporation and any person who directly or indirectly beneficially owns ten
percent or more of the voting power of the corporation's shares or an affiliate
of the corporation who, at any time within the two-year period prior to the date
in question, was the beneficial owner of ten percent or more of the voting power
of the then-outstanding voting stock of the corporation (an "Interested
Shareholder") or an affiliate thereof are prohibited for five years after the
most recent date on which the Interested Shareholder became an Interested
Shareholder. Thereafter, any such business combination must be recommended by
the Board of Directors of such corporation and approved by the affirmative vote
of at least (a) 80% of the votes entitled to be cast by holders of outstanding
voting shares of the corporation and (b) two-thirds of the votes entitled to be
cast by holders of outstanding voting shares of the corporation other than
shares held by the Interested Shareholder with whom the business combination is
to be effected, unless, among other things, the corporation's shareholders
receive a minimum price (as defined in the MGCL) for their shares and the
consideration is received in cash or in the same form as previously paid by the
Interested Shareholder for its shares. These provisions of Maryland law do not
apply, however, to business combinations that are approved or exempted by the
Board of Directors of the corporation prior to the time that the Interested
Shareholder becomes an Interested Shareholder. The Board of Directors has
exempted from these provisions of the MGCL any business combination with certain
officers of the Company including Stephen O. Evans and F. Keith Withycombe, and
Evans Withycombe, certain institutional investors that participated in the
formation of the Company and all present or future affiliates or associates of,
or any other person acting in concert or as a group with, any of the foregoing
persons.

CONTROL SHARE ACQUISITIONS

The MGCL provides that "control shares" of a Maryland corporation acquired
in a "control share acquisition" have no voting rights except to the extent
approved by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock owned by the acquiror or by officers or directors who
are employees of the corporation. "Control Shares" are voting shares of stock
which, if aggregated with all other such shares of stock previously acquired by
such person, or in respect of which such person is able to exercise or direct
the exercise of voting power, would entitle the acquiror directly or indirectly
to exercise voting power in electing directors within one of the following
ranges of voting power: (i) one-fifth or more but less than one-third, (ii)
one-third or more but less than a majority or (iii) a majority of all voting
power. Control shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained shareholder approval.
A "control share acquisition" means the acquisition of control shares, subject
to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses),
may compel the Board of Directors to call a special meeting of shareholders to
be held within 50 days of demand to consider the voting rights of the shares. If
no request for a meeting is made, the corporation may itself present the
question at any shareholders meeting.

If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute, then,
subject to certain conditions and limitations, the corporation may redeem any or
all of the control shares (except those for which voting rights have previously
been approved) for fair value determined without regard to the absence of voting
rights for control shares, as of the date of the last control share acquisition
or of any meeting of shareholders at which the voting rights of such shares are
considered and not approved. If voting rights for control shares

26
<PAGE>
are approved at a shareholders meeting and, as a result, the acquiror becomes
entitled to vote a majority of the then outstanding shares entitled to vote, all
other shareholders may exercise appraisal rights. The fair value of the shares
as determined for purposes of such appraisal rights may not be less than the
highest price per share paid in the control share acquisition, and certain
limitations and restrictions otherwise applicable to the exercise of dissenters'
rights do not apply in the context of a control share acquisition.

The control share acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the charter or bylaws of
the corporation.

The Bylaws of the Company contain a provision exempting from the control
share acquisition statute any and all acquisitions of Shares by any officer or
director of the Company and by Stephen O. Evans, F. Keith Withycombe, Evans
Withycombe, certain institutional investors and all present or future affiliates
or associates of, or any other person acting in concert or as a group with, any
of the foregoing persons. There can be no assurance that such provision will not
be amended or eliminated at any point in the future.

AMENDMENTS TO THE CHARTER

The Company's Charter may be amended only by the affirmative vote of the
holders of not less than a majority of all of the votes entitled to be cast on
the matter, except that any proposal (i) to permit cumulative voting in the
election of directors; (ii) to alter provisions of the Company's Charter with
respect to the classified Board, removal of directors, amendment of the Bylaws,
preemptive rights, indemnification of corporate agents and limitation of
liability of officers and directors; or (iii) that would jeopardize the
Company's status as a REIT for tax purposes, requires, in each case, the
approval of two-thirds of the shares entitled to vote. The Company's Bylaws may
be amended by the affirmative vote of holders of not less than two-thirds of all
of the votes entitled to be cast on the matter. Subject to the right of the
shareholders to adopt, alter and repeal Bylaws, the Board of Directors is
authorized to adopt, alter or repeal the Bylaws.

DISSOLUTION OF THE COMPANY

The dissolution of the Company must be approved by the affirmative vote of
the holders of not less than a majority of all of the votes entitled to be cast
on the matter.

ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS

The Bylaws of the Company provide that (a) with respect to an annual meeting
of shareholders, nominations of persons for election to the Board of Directors
and the proposal of business to be considered by shareholders may be made only
(i) pursuant to the Company's notice of the meeting, (ii) by the Board of
Directors or (iii) by a shareholder who is entitled to vote at the meeting and
has complied with the advance notice procedures set forth in the Bylaws, and (b)
with respect to special meetings of shareholders, only the business specified in
the Company's notice of meeting may be brought before the meeting of
shareholders, and nominations of persons for election to the Board of Directors
may be made only (i) pursuant to the Company's notice of the meeting, (ii) by
the Board of Directors or (iii) provided that the Board of Directors has
determined that directors shall be elected at such meeting, by a shareholder who
is entitled to vote at the meeting and has complied with the advance notice
provisions set forth in the Bylaws.

The provisions in the Charter on classification of the Board of Directors,
the business combination provisions of the MGCL and, control share acquisition
provisions of the MGCL, and the advance notice provisions of the Bylaws could
have the effect of discouraging a takeover or other transaction in which holders
of some, or a majority, of the shares might receive a premium for their shares
over the then prevailing market price or which such holders might believe to be
otherwise in their best interests.

27
<PAGE>
DESCRIPTION OF WARRANTS

The Company may issue warrants to purchase Preferred Stock (the "Preferred
Stock Warrants") or Common Stock (the "Common Stock Warrants," together with the
Preferred Stock Warrants, the "Warrants"). Warrants may be issued independently
or together with any Securities and may be attached to or separate from such
Securities. The Warrants are to be issued under warrant agreements (each, a
"Warrant Agreement") to be entered into between the Company and a bank or trust
company, as warrant agent (the "Warrant Agent"), all as shall be set forth in
the Prospectus Supplement relating to the Warrants being offered pursuant
thereto.

WARRANTS

The applicable Prospectus Supplement will describe the following terms of
Preferred Stock Warrants and Common Stock Warrants in respect of which this
Prospectus is being delivered: (1) the title of such Warrants; (2) the
Securities for which such Warrants are exercisable; (3) the price or prices at
which such Warrants will be issued; (4) the number of such Warrants issued with
each share of Preferred Stock or Common Stock: (5) any provisions for adjustment
of the number or amount of shares of Preferred Stock or Common Stock receivable
upon exercise of such Warrants or the exercise price of such Warrants; (6) if
applicable, the date on and after which such Warrants and the related Preferred
Stock or Common Stock will be separately transferable; (7) if applicable, a
discussion of material federal income tax considerations; (8) any other terms of
such Warrants, including terms, procedures and limitations relating to the
exchange and exercise of such Warrants; (9) the date on which the right to
exercise such Warrants shall commence, and the date on which such right shall
expire; and (10) the maximum or minimum number of such Warrants which may be
exercised at any time.

EXERCISE OF WARRANTS

Each Warrant will entitle the holder of Warrants to purchase for cash such
shares of Preferred Stock or Common Stock at such exercise price as shall in
each case be set forth in, or be determinable as set forth in, the Prospectus
Supplement relating to the Warrants offered thereby. Warrants may be exercised
at any time up to the close of business on the expiration date set forth in the
Prospectus Supplement relating to the Warrants offered thereby. After the close
of business on the expiration date, unexercised Warrants will become void.

Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus Supplement,
the Company will, as soon as practicable, forward the shares of Preferred Stock
or Common Stock purchasable upon such exercise. If less than all of the Warrants
represented by such warrant certificate are exercised, a new warrant certificate
will be issued for the remaining Warrants.

FEDERAL INCOME TAX CONSIDERATIONS

The following is a brief and general summary of all material provisions that
currently govern the federal income tax treatment of the Company and its
stockholders. Investors are urged to consult their own tax advisors with respect
to the appropriateness of an investment in the Securities and with respect to
the tax consequences arising under federal law and the laws of any state,
municipality or other taxing jurisdiction, including tax consequences resulting
from such investor's own tax characteristics. In particular, foreign investors
should consult their own tax advisors concerning (i) income taxes on effectively
connected income, (ii) withholding taxes on dividends or interest, (iii) branch
profits taxes, (iv) taxes imposed under the Foreign Investment in Real Property
Tax Act and (v) other tax consequences that may arise under federal, state or
local law.

28
<PAGE>
TAXATION OF THE COMPANY

The Company believes it has operated, and the Company intends to continue to
operate, in such a manner as to qualify as a REIT under the Code, but no
assurance can be given that it will at all times so qualify. The provisions of
the Code pertaining to REITs are highly technical and complex. For the
particular provisions that govern the federal income tax treatment of the
Company and its stockholders, reference is made to Section 856 through 860 of
the Code and the regulations thereunder. The following summary is qualified in
its entirety by such reference.

Under the Code, if certain requirements are met in a taxable year, a REIT
generally will not be subject to federal income tax with respect to income that
it distributes to its stockholders. If the Company fails to qualify during any
taxable year as a REIT, unless certain relief provisions are available, it will
be subject to tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates, which could have a material adverse
effect upon its stockholders.

In any year in which the Company qualifies to be taxed as a REIT,
distributions made to its stockholders out of current or accumulated earnings
and profits will be taxed to stockholders as ordinary income except that
distributions of net capital gains designated by the Company as capital gain
dividends will be taxed as long-term capital gain income to the stockholders. To
the extent that distributions exceed current or accumulated earnings and
profits, they will constitute a return of capital, rather than dividend or
capital gain income, and will reduce the basis for the stockholders' capital
stock with respect to which the distribution is paid and, to the extent that
they exceed such basis, will be taxed in the same manner as gain from the sale
of those shares of capital stock.

PLAN OF DISTRIBUTION

The Securities may be sold (i) through agents, (ii) through underwriters,
(iii) through dealers or (iv) directly to purchasers. The distribution of
Securities may be effected from time to time in one or more transactions at a
fixed price or prices, which may be changed, or at market prices prevailing at
the time of sale, at prices relating to such prevailing market prices or at
negotiated prices.

Offers to purchase the Securities may be solicited by agents designated by
the Company or the Operating Partnership, from time to time. Any such agent
involved in the offer or sale of the Securities will be named, and any
commissions payable by the Company or the Operating Partnership to such agent
will be set forth in the Prospectus Supplement. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of the Securities so
offered and sold.

If an underwriter or underwriters are utilized in the sale of Securities,
the Company or the Operating Partnership, as the case may be, will execute an
underwriting agreement with such underwriter or underwriters at the time an
agreement for such sale is reached, and the names of the specific managing
underwriter or underwriters, as well as any other underwriters, and the terms of
the transactions, including compensation of the underwriters and dealers, if
any, will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Securities.

If a dealer is utilized in the sale of the Securities, the Company or the
Operating Partnership, as the case may be, will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale. The
name of the dealer and the terms of the transactions will be set forth in the
Prospectus Supplement relating thereto.

Offers to purchase the securities may be solicited directly by the Company
or the Operating Partnership and sales thereof may be made by the Company or the
Operating Partnership directly to institutional investors or others. The terms
of any such sales will be described in the Prospectus Supplement relating
thereto.

29
<PAGE>
Agents, underwriters and dealers may be entitled under agreements which may
be entered into with the Company or the Operating Partnership to indemnification
by the Company or the Operating Partnership, as the case may be, against certain
liabilities, including liabilities under the Securities Act, and any such
agents, underwriters or dealers, or their affiliates may be customers of, engage
in transactions with or perform services for the Company or the Operating
Partnership in the ordinary course of business.

If so indicated in the applicable Prospectus Supplement, the Company or the
Operating Partnership will authorize dealers acting as the Company's agents and
underwriters to solicit offers by certain institutions to purchase Securities
from the Company or the Operating Partnership at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated in
such Prospectus Supplement. Each Contract will be for an amount not less than,
and the aggregate principal amount of Securities sold pursuant to Contracts
shall be not less nor more than, the respective amounts stated in the applicable
Prospectus Supplement. Institutions with whom Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions but will in all cases be subject to the approval of the Company or
the Operating Partnership, as the case may be. Contracts will not be subject to
any conditions except (i) the purchase by an institution of the Securities
covered by its Contracts shall not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which such institution is
subject and (ii) if the Securities are being sold to underwriters, the Company
or the Operating Partnership, as the case may be, shall have sold to such
underwriters the total principal amount of the Securities less the principal
amount thereof covered by Contracts.

EXPERTS

The financial statements of Evans Withycombe Residential, Inc. (the Company)
appearing in the Company's Annual Report (Form 10-K/A) for the year ended
December 31, 1996 and the financial statements of Evans Withycombe Residential,
L.P. (the Operating Partnership) appearing in the Operating Partnership's
Registration Statement on Form 10/A, incorporated herein by reference, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
reports thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.

LEGAL MATTERS

The validity of the Debt Securities offered hereby will be passed upon for
the Operating Partnership by Gibson, Dunn & Crutcher LLP, Los Angeles,
California and the validity of the Common Stock, Preferred Stock and Warrants
offered hereby will be passed upon for the Company by Ballard Spahr Andrews &
Ingersoll LLP, Baltimore, Maryland. Gibson, Dunn & Crutcher LLP will rely as to
all matters of Maryland law, including the legality of the Common Stock, on the
opinion of Ballard Spahr Andrews & Ingersoll LLP.

30
<PAGE>
- ------------------------------------------------
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- ------------------------------------------------
------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE OPERATING PARTNERSHIP OR THE UNDERWRITERS.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SHARES IN ANY JURISDICTION IN
WHICH SUCH OFFER TO SELL OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE OPERATING PARTNERSHIP OR THE COMPANY SINCE
THE DATE AS OF WHICH INFORMATION IS FURNISHED.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary.................. S-3
Recent Developments............................ S-7
Use of Proceeds................................ S-8
Capitalization................................. S-9
Selected Financial Information................. S-11
Business and Properties........................ S-14
Description of the Notes....................... S-22
Underwriting................................... S-29
Legal Matters.................................. S-30

PROSPECTUS

Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 3
Risk Factors................................... 3
The Company and the Operating Partnership...... 7
Use of Proceeds................................ 7
Consolidated Ratios of Earnings to Fixed
Charges....................................... 8
Description of Debt Securities................. 8
Description of the Capital Stock............... 21
Certain Provisions of Maryland Law and of the
Company's Charter and Bylaws.................. 24
Description of Warrants........................ 28
Federal Income Tax Considerations.............. 28
Plan of Distribution........................... 29
Experts........................................ 30
Legal Matters.................................. 30
</TABLE>

[LOGO]

EVANS WITHYCOMBE RESIDENTIAL, L.P.

$75,000,000
% NOTES DUE 2004
$50,000,000
% NOTES DUE 2007

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

PROSPECTUS SUPPLEMENT
----------------------------

MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.

, 1997

- ------------------------------------------------
------------------------------------------------
- ------------------------------------------------
------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated fees and expenses in connection
with the issuance and distribution of the Securities registered hereby (all
amounts except the registration fee are estimated).

<TABLE>
<S> <C>
Registration fee............................................ $ 98,485
NYSE listing fee............................................ 40,000
Trustee's fees.............................................. 6,500
Printing, duplicating and engraving expenses................ 100,000
Legal fees and expenses (other than Blue Sky)............... 150,000
Accounting fees and expenses................................ 60,000
Blue sky fees and expenses.................................. 5,000
Miscellaneous............................................... 40,115
---------
Total................................................... $ 500,000
---------
---------
</TABLE>

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

*To be completed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Charter limits the liability of the Company's directors and
officers the Company and its shareholders to the fullest extent permitted from
time to time by Maryland law. Maryland law presently permits the liability of
directors and officers to a corporation or its shareholders for money damages to
be limited, except (i) to the extent that it is proved that the director or
officer actually received an improper benefit or profit or (ii) if a judgment or
other final adjudication is entered in a proceeding based on a finding that the
director's or officer's action, or failure to act, was the result of active and
deliberate dishonesty and was material to the cause of action adjudicated in the
proceeding. This provision does not limit the ability of the Company or its
shareholders to obtain other relief, such as an injunction or rescission.

The Company's Charter and Bylaws require the Company to indemnify its
directors and officers to the fullest extent permitted from time to time by
Maryland law. The Charter also permits the Company to indemnify employees,
agents and other persons acting on behalf of or at the request of the Company.
The MGCL permits a corporation to indemnify its directors, officers and certain
other parties against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their service to or at the request of the
corporation, unless it is established that the act or omission of the
indemnified party was material to the matter giving rise to the proceeding and
(i) was committed in bad faith or was the result of active and deliberate
dishonesty, (ii) the indemnified party actually received an improper personal
benefit or (iii) in the case of any criminal proceeding, the indemnified party
had reasonable cause to believe that the act or omission was unlawful.
Indemnification may be made against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by the director or officer in connection
with the proceeding; provided, however, that if the proceeding is one by or in
the right of the corporation, indemnification may not be made with respect to
any proceeding in which the director or officer has been adjudged to be liable
to the corporation. In addition, a director or officer may not be indemnified
with respect to any proceeding charging improper personal benefit to the
director or officer in which the director or officer was adjudged to be liable
on the basis that personal benefit was improperly received. The termination of
any proceeding by conviction, or upon a plea of nolo contendere or its
equivalent, or an entry of any order of probation prior to judgment, creates a
rebuttable presumption that the director or officer did not meet the requisite

II-1
<PAGE>
standard of conduct required for indemnification to be permitted. It is the
position of the Securities and Exchange Commission that indemnification of
directors and officers for liabilities arising under the Securities Act is
against public policy and is unenforceable pursuant to Section 14 of the
Securities Act.

The Agreement of Limited Partnership of the Operating Partnership also
provides for indemnification of the Company, or any director or officer of the
Company, in its capacity as general partner of the Partnership, from and against
all losses, claims, damages, liabilities, joint or several, expenses (including
legal fees), fines, settlements and other amounts incurred in connection with
any actions relating to the operations of the Operating Partnership as set forth
in the Operating Partnership Agreement.

The Company entered into indemnification agreements with each of its
executive officers and directors. The indemnification agreements require, among
other things, that the Company indemnify its officers and directors to the
fullest extent permitted by the MGCL, and advance to the officers and directors
all related expenses, subject to reimbursement if it is subsequently determined
that indemnification is not permitted. The Company must also indemnify and
advance all expenses incurred by officers and directors seeking to enforce their
rights under the indemnification agreements, and cover officers and directors
under the Company's directors and officers' liability insurance. Although the
form of indemnification agreement offers substantially the same scope of
coverage afforded by provisions in the Charter and the Bylaws, it provides
greater assurance to directors and officers that indemnification will be
available, because, as a contract, it cannot be modified unilaterally in the
future by the Board of Directors or by the shareholders to eliminate the rights
it provides.

II-2
<PAGE>
ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement relating to the Debt Securities

*1.2 Form of Underwriting Agreement relating to the capital stock

1.3 Form of Underwriting Agreement relating to the 2004 Notes and the 2007 Notes

4.1+ Articles of Amendment and Restatement of the Company (previously filed as Exhibit No. 3.1 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by
reference).

4.2+ Amended and Restated Bylaws of the Company (previously filed as Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference).

4.3 Form of Indenture

4.4+ Amended and Restated Agreement of Limited Partnership of Evans Withycombe Residential, L.P.
(previously filed as an exhibit to the Company's annual report on Form 10-K for the fiscal year
ended December 31, 1995 and 1994 and incorporated herein by reference).

*5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of Securities to be issued

*5.2 Opinion of Ballard Spahr Andrews & Ingersoll LLP

12 Statement re: Computation of Consolidated Ratio of Earnings to Fixed Charges

23.1 Consent of Ernst & Young LLP

*23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1)

*23.3 Consent of Ballard Spahr Andrews & Ingersoll LLP (included in Exhibit 5.2)

24+ Powers of Attorney

25.1 Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act
</TABLE>

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

*To be filed by amendment when necessary or incorporated by reference as may be
required with the offering of Securities.

+Previously filed.

ITEM 17. UNDERTAKINGS.

Each of the undersigned Registrants hereby undertake:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change in such information in this registration statement;

II-3
<PAGE>
PROVIDED, HOWEVER, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrants pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

The undersigned Registrants hereby further undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrants' respective annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
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.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the provisions set forth or
described in Item 15 of this Registration Statement, or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of expenses
incurred or paid by a director, officer or controlling person of the Registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person, in connection with the securities
registered hereby, the Registrants 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.

The undersigned Registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.

With respect to offerings of Warrants or rights, the undersigned Registrants
hereby undertake to supplement the Prospectus, after the expiration of the
subscription period, to set forth the results of the subscription offer, the
transactions by the underwriters during the subscription period, the amount of
unsubscribed securities to be purchased by the underwriters, and the terms of
any subsequent reoffering thereof. If any public offering by the underwriters is
to be made on terms differing from those set forth on the cover page of the
applicable prospectus supplement, a post-effective amendment will be filed to
set forth the terms of such offering.

The undersigned Registrants hereby undertake that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

II-4
<PAGE>

(2) For the purpose of determining any liability under the Securities Act of
1933, 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 that time shall be deemed to be
the initial BONA FIDE offering thereof.

II-5
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Scottsdale, State of Arizona, on this 19th day
of March, 1997.

EVANS WITHYCOMBE RESIDENTIAL, INC.

By: /s/ STEPHEN O. EVANS
-------------------------------------------
Stephen O. Evans,
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

EVANS WITHYCOMBE RESIDENTIAL, L.P.

By: EVANS WITHYCOMBE RESIDENTIAL, INC.,
as General Partner

By: /s/ STEPHEN O. EVANS
-------------------------------------------
Stephen O. Evans,
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------ --------------------

<C> <S> <C>
Chairman of the Board of
Directors and Chief
/s/ STEPHEN O. EVANS Executive Officer of the
------------------------------------ Company (Principal Executive March 19, 1997
Stephen O. Evans Officer); Director of the
general partner of the
Operating Partnership

President, Chief Operating
* Officer and Director of the
------------------------------------ Company; Director of the March 19, 1997
Richard G. Berry general partner of the
Operating Partnership

Director of the Company;
* Director of the general
------------------------------------ partner of the Operating March 19, 1997
F. Keith Withycombe Partnership
</TABLE>

II-6
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------ --------------------

<C> <S> <C>
Senior Vice President and
Chief Financial Officer,
/s/ PAUL R. FANNIN Secretary and Treasurer of
------------------------------------ the Company (Principal March 19, 1997
Paul R. Fannin Financial and Accounting
Officer)

Director of the Company;
Director of the general
------------------------------------ partner of the Operating March , 1997
Joseph F. Azrack Partnership

Director of the Company;
* Director of the general
------------------------------------ partner of the Operating March 19, 1997
G. Peter Bidstrup Partnership

Director of the Company;
Director of the general
------------------------------------ partner of the Operating March , 1997
Joseph W. O'Connor Partnership

Director of the Company;
* Director of the general
------------------------------------ partner of the Operating March 19, 1997
John O. Theobald II Partnership

*By: /s/ PAUL R. FANNIN
------------------------------------
Paul R. Fannin
Attorney-in-fact
</TABLE>

II-7
<PAGE>
EXHIBIT INDEX

*1.2 Form of Underwriting Agreement relating to the capital stock

1.3 Form of Underwriting Agreement relating to the 2004 Notes and the 2007 Notes

4.3 Form of Indenture

*5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of Securities to be issued

*5.2 Opinion of Ballard Spahr Andrews & Ingersoll LLP

12 Statement re: Computation of Consolidated Ratio of Earnings to Fixed Charges

23.1 Consent of Ernst & Young LLP

*23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1)

*23.3 Consent of Ballard Spahr Andrews & Ingersoll LLP (included in Exhibit 5.2)

24+ Powers of Attorney

25.1 Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act
</TABLE>

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

*To be filed by amendment when necessary or incorporated by reference as may be
required with the offering of Securities.

+Previously filed

II-8

<PAGE>

EVANS WITHYCOMBE RESIDENTIAL, L.P.

(a Maryland corporation)

___% Notes due 2004
___% Notes due 2007

PURCHASE AGREEMENT

March ___, 1997

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
J.P. Morgan Securities Inc.
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters - North Tower
250 Vesey Street
World Financial Center
New York, New York 10281-1209

Ladies and Gentleman:

Evans Withycombe Residential, L.P., a Delaware limited partnership
(the "Operating Partnership") and Evans Withycombe Residential, Inc., a Maryland
corporation (the "Company") each confirms its respective agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Goldman, Sachs & Co. ("Goldman Sachs"), J.P. Morgan & Co. and J.P.
Morgan Securities ("J.P. Morgan" and together with Merrill Lynch and Goldman
Sachs, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), with respect to the
issue and sale by the Operating Partnership and the purchase by the
Underwriters, acting severally and not jointly, of the respective principal
amounts set forth in Schedule A hereto of $75,000,000 aggregate principal amount
of the Operating Partnership's ___% Notes due 2004 (the "2004 Notes"), and ___%
Notes due 2007 (the "2007 Notes" and together with the 2004 Notes, the
"Securities"). The Securities are to be issued pursuant to an indenture, dated
as of March ___, 1997 (the "Indenture"), between the Operating Partnership and
Bank One, Columbus, N.A., as trustee (the "Trustee"). The term "Indenture," as
used herein, includes the Officer's Certificate (as defined in the Indenture)
establishing the form and terms of the Securities pursuant to Section 301 of the
Indenture.

The Operating Partnership and the Company understand that the
Underwriters propose to make a public offering of the Securities as soon as they
deem advisable after this Agreement has been executed and delivered.

<PAGE>

A registration statement on Form S-3 (No. 333-19879) and amendments
No. 1 and No. 2 thereto dated March 11, 1997 and March 20, 1997, respectively,
with respect to the Securities has (i) been prepared by the Operating
Partnership and the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act" or the "1933 Act"), and
the rules and regulations (the "Rules and Regulations" or the "1933 Act
Regulations") of the Securities and Exchange Commission (the "Commission")
promulgated thereunder for the offering from time to time of the Operating
Partnership's debt securities, including the Securities, and the Company's
equity and debt securities, in accordance with Rule 415 of the Rules and
Regulations (the "Shelf Securities"), (ii) been filed with the Commission under
the Securities Act and (iii) become effective under the Securities Act. Copies
of such registration statement and Amendment No. 1 thereto have been delivered
by the Operating Partnership and the Company to the Underwriters. The Indenture
has been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Such registration statement, as amended through the date of this
Agreement, is, on the one hand, and the prospectus constituting a part thereof
and each prospectus supplement relating to the offering of Securities to the
Underwriters for use (whether or not such prospectus supplement is required to
be filed by the Company pursuant to Rule 424(b) of the Rules and Regulations)
(the "Prospectus Supplement"), on the other hand, including all documents
incorporated therein by reference, as from time to time amended or supplemented
pursuant to the Securities Act, the Securities Exchange Act of 1934, as amended,
(the "Exchange Act" or the "1934 Act") and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), or otherwise, are referred
to herein as the "Registration Statement" and the "Prospectus," respectively;
PROVIDED, HOWEVER, that the Prospectus Supplement shall be deemed to have
supplemented the Prospectus only with respect to the offering of Shelf
Securities to which it relates; and PROVIDED FURTHER, that if any revised
prospectus shall be provided to the Underwriters by the Company for use in
connection with the offering of the Securities which differs from the prospectus
on file (whether or not such revised prospectus is required to be filed by the
company pursuant to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriters for such use. Any registration statement
filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to
as the "Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").

All references in this Agreement to financial statements and schedules
and other information which is "described," "disclosed," "contained," "included"
or "stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the 1934 Act, which is or is
deemed to

<PAGE>

be incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Operating Partnership elects to rely on Rule 434 under
the 1933 Act Regulations, all references to the Prospectus shall be deemed to
include, without limitation, the form of prospectus and the term sheet (the
"Term Sheet"), taken together, provided to the Underwriters by the Operating
Partnership in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus").

Section 1. REPRESENTATIONS AND WARRANTIES.

(a) REPRESENTATIONS AND WARRANTIES BY THE OPERATING PARTNERSHIP AND
THE COMPANY. The Operating Partnership and the Company jointly and severally
represent and warrant to the Underwriters as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agree with the
Underwriters, as follows:

(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. At the
respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto
became effective, and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not (taking into account any applicable prospectus
supplement) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Prospectus
nor any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued and at the Closing Time
included or will include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus or any amendments or supplements
thereto made in reliance upon and in conformity with information
contained in the last paragraph of the cover page of the Prospectus
Supplement, the first paragraph on the inside cover page of the
Prospectus Supplement and the third sentence of the fourth full
paragraph under the heading "Underwriting" in the Prospectus
Supplement and furnished to the Company in writing by any Underwriter
through Merrill Lynch expressly for use in the Prospectus Supplement.
The Prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable,
the Prospectus delivered to the Underwriters for use in connection
with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to
the extent permitted by Regulation S-T promulgated by the Commission
("Regulation S-T").

(ii) FORM S-3 REGISTRATION STATEMENT. The Operating
Partnership and the Company each meet the requirements for use of Form
S-3 under the 1933

<PAGE>

Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement or, in each case, any part
thereof has been issued and no proceeding for that purpose has been
instituted or is pending or, to the knowledge of the Operating
Partnership or the Company, is contemplated by the Commission or the
state securities authority of any jurisdiction and any request on the
part of the Commission for additional information has been complied
with. No order preventing or suspending the use of the Prospectus has
been issued and no proceeding for that purpose has been instituted or
is pending before or, to the knowledge of the Operating Partnership or
the Company, is contemplated by, the Commission or the state
securities authority of any jurisdiction.

(iii) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, when they became effective or at the time they
were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations, as applicable, and, when read together with the other
information in the Prospectus, at the date of the Prospectus and at
the Closing Time will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

(iv) INDEPENDENT ACCOUNTANTS. Ernst & Young LLP, the
accounting firm that certified the financial statements and supporting
schedules included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.

(v) FINANCIAL STATEMENTS. The financial statements
included or incorporated by reference in the Registration Statement
and the Prospectus, together with the related schedules and notes,
present fairly the financial position of the respective entity or
entities presented therein at the dates indicated, and the results of
their operations for the respective periods specified, and except as
otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis ("GAAP")
throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The financial information and data included in the
Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis
consistent with that of the audited financial statements incorporated
by reference in the Registration Statement. The pro forma financial
information included in the Registration Statement and the Prospectus
presents fairly the information shown therein, has been prepared in
accordance with the Commission's rules and guidelines

<PAGE>

with respect to pro forma financial statements and has been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein. Other than the financial
information and statements and supporting schedules included or
incorporated therein, no other historical or pro forma financial
information or supporting schedule is required by the 1933 Act or the
1933 Act Regulations to be included in the Registration Statement.

(vi) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change or, to the knowledge of the
Operating Partnership and the Company, any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, assets or business affairs of the
Operating Partnership, the Company and their respective subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Operating Partnership, the Company
or any of the Subsidiaries (as defined below), other than those in the
ordinary course of business, which are material with respect to the
Operating Partnership, the Company and the Subsidiaries considered as
one enterprise, or would result, upon consummation, in any inaccuracy
in the representations contained in Section 1(a)(v) above, (C) there
has been no casualty, loss or condemnation or other adverse event with
respect to any Community (as defined in the Prospectus), or any site
owned by the Company and intended for development as so defined in the
Prospectus (the "Development Sites"), that is material with respect to
the Operating Partnership, the Company and the Subsidiaries considered
as one enterprise, (D) except for regular quarterly dividends on the
Company's Common Stock, par value $.01 per share ("Common Stock"), in
amounts per share that are consistent with past practice, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock and (E) there has been
no material change in the capital stock or the partnership interests,
as applicable, of the Operating Partnership, the Company or any of the
Subsidiaries or any material change in the short-term debt or
long-term debt of the Operating Partnership, the Company or any
Subsidiary.

(vii) GOOD STANDING OF OPERATING PARTNERSHIP. The Operating
Partnership has been duly organized and is validly existing as a
limited partnership in good standing under the Delaware Revised
Uniform Limited Partnership Act, as amended (the "Delaware Act"), with
full partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or proposes
to engage as described in the Prospectus and to enter into and perform
its obligations under this Agreement. The Operating Partnership is
duly qualified or registered as a foreign partnership to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership, leasing or registration of property or the conduct of

<PAGE>

business, except where the failure to so qualify or register would not
result in, either singly or in the aggregate, a Material Adverse
Effect. The Operating Partnership and the Subsidiaries are the only
subsidiaries of the Company. Except as described below, neither the
Operating Partnership, the Company nor any of the Subsidiaries own any
shares of stock or any other equity securities of any corporation or
has any equity interest in any firm, partnership, association or other
entity.

(viii) GOOD STANDING OF THE COMPANY. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Maryland and has the corporate
power and authority to own, lease and operate its properties and to
conduct the business in which it is engaged or proposes to engage as
described in the Prospectus and to enter into and perform its
obligations under this Agreement. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not, either
singly or in the aggregate, result in a Material Adverse Effect.

(ix) GOOD STANDING OF PARTNERSHIPS. Evans Withycombe
Finance Partnership, L.P. (the "Financing Partnership") has been duly
organized and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware, the E.W. Chandler
L.P. (the "Chandler Partnership"), has been duly organized and is
validly existing as a limited partnership in good standing under the
laws of the State of Arizona, and McKinley Hill Partners-85, L.P.
("McKinley") has been duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of
California. Each of the Financing Partnership, the Chandler
Partnership and McKinley has full partnership power and authority to
own, lease and operate its properties and to conduct the business in
which it is engaged or proposes to engage as described in the
Prospectus. Each of the Financing Partnership, the Chandler
Partnership and McKinley is duly qualified or registered as a foreign
partnership and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership, leasing or registration of property or the conduct of
business, except where the failure to so qualify or register would
not, either singly or in the aggregate, result in a Material Adverse
Effect. Evans Withycombe Finance, Inc., a wholly owned subsidiary of
the Company, is the sole general partner of the Financing Partnership
and is the holder of a 1% general partnership interest therein, and
the Operating Partnership is the holder of the remaining 99%
partnership interest therein. The Operating Partnership owns 83.99%
of the limited partnership interests of the Chandler Partnership and
Evans Withycombe Management, Inc. (the "Management Company") owns
1.01% of the general partnership interests therein. The Operating
Partnership owns 99% of the partnership interests of McKinley and the
Company is the holder of the remaining 1% partnership interest
therein. All of the partnership interests of the Financing
Partnership, the Chandler Partnership and McKinley are validly issued
and fully paid and are free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.

<PAGE>

(x) GOOD STANDING OF THE SUBSIDIARIES. Each of the
Management Company (together with Evans Withycombe Finance, Inc., the
Chandler Partnership, McKinley and the Financing Partnership, the
"Subsidiaries"), and Evans Withycombe Finance, Inc. has been duly
organized and is validly existing as a corporation in good standing
under the laws of the state of its incorporation, with corporate power
and authority to own, lease and operate its properties and to conduct
the business in which it is engaged or proposes to engage as described
in the Prospectus. Each of the Management Company and Evans
Withycombe Finance, Inc. is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify, either singly or in the aggregate,
would not result in a Material Adverse Effect. All of the issued and
outstanding capital stock of each of the Management Company and Evans
Withycombe Finance, Inc. has been duly authorized and validly issued,
is fully paid and nonassessable and is free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, and
none of such outstanding shares of capital stock was issued in
violation of preemptive or similar rights of any securityholder of
such Subsidiary. The ownership of the shares of capital stock of each
of the Management Company and Evans Withycombe Finance, Inc. is as
described in the prospectus for the Company's initial public offering
dated August 10, 1994. All of the capital stock of Evans Withycombe
Finance, Inc. has been owned by the Company since the formation of
Evans Withycombe Finance, Inc. and such corporation is a "qualified
REIT subsidiary" as defined in Section 856(i)(2) of the Internal
Revenue Code of 1986, as amended (the "Code").

(xi) AUTHORIZATION OF DEBT SECURITIES. The Securities to be
purchased from the Operating Partnership have been duly authorized by
the Operating Partnership for issuance and sale to the Underwriters
pursuant to this Agreement. Such Securities, when issued and
authenticated in the manner provided for in the Indenture and
delivered by the Operating Partnership pursuant to this Agreement
against payment of the consideration set forth herein, will constitute
valid and legally binding obligations of the Operating Partnership,
enforceable against the Operating Partnership in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or by general equitable
principles.

(xii) OPERATING PARTNERSHIP UNITS. The Units issued by the
Operating Partnership, including, without limitation, the Units issued
to the Company, have been duly authorized for issuance by the
Operating Partnership to the holders thereof and are validly issued,
fully paid and nonassessable. Immediately after the Closing Time,
__________ Units will be issued and outstanding, and the Company will
be the sole general partner of the Operating Partnership and will be
the holder of __________ Units representing ____% of the outstanding
Units in the Operating Partnership, including the Company's 1% general

<PAGE>

partner interest therein. The _________ Units and any Common Shares
issued upon conversion of Units have been offered and sold in
compliance with all applicable laws, including, without limitation,
federal and state securities laws.

(xiii) DESCRIPTION OF THE SECURITIES AND THE INDENTURE. The
Securities and the Indenture will conform in all material respects to
the respective statements relating thereto contained in the Prospectus
and will be in substantially the respective forms filed or
incorporated by reference, as the case may be, as exhibits to the
Registration Statement.

(xiv) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized by the Operating Partnership and has been duly
qualified under the 1939 Act and, when duly executed and delivered by
the Operating Partnership and the Trustee, will constitute a valid and
binding agreement of the Operating Partnership, enforceable against
the Operating Partnership in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws relating to or
affecting creditor's rights generally or by general equitable
principles.

(xv) AUTHORIZATION OF AGREEMENT. This Agreement has been
duly and validly authorized, executed and delivered by the Operating
Partnership and the Company, and assuming due authorization, execution
and delivery by the Underwriters, is a valid and binding agreement of
each of the Operating Partnership and the Company, enforceable against
each of the Operating Partnership and the Company, in accordance with
its terms; PROVIDED, HOWEVER, that the enforceability of this
Agreement may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by
general equitable principles, and the unenforceability under certain
circumstances of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy or
prohibited by law.

(xvi) ABSENCE OF DEFAULTS AND CONFLICTS. (A) None of the
Operating Partnership, the Company, or any Subsidiary is in violation
of its charter, bylaws, certificate of limited partnership,
partnership agreement or other governing document, as the case may be,
and none of such entities is or will be in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to
which such entity is a party or by which such entity may be bound or
affected, or to which any of the property or assets of such entity is
subject (collectively, "Agreements and Instruments"), except for such
violations or defaults that would not result in a Material Adverse
Effect; (B) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in
the Registration Statement (including the issuance and sale of the
Securities and the use of proceeds from the sale of the Securities as
described in the Prospectus

<PAGE>

Supplement under the caption "Use of Proceeds") and compliance by each
of the Operating Partnership and the Company with its obligations
hereunder have been duly authorized by all necessary corporate or
partnership action on the part of the Operating Partnership and the
Company or any Subsidiary, as the case may be, and do not and will
not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Operating Partnership, the Company or any of the
Subsidiaries pursuant to, any Agreement or Instrument, nor will such
action result in any violation of the charter, bylaws, certificate of
limited partnership, partnership agreement or other governing
document, as the case may be, of such entity or any applicable law,
statute, rule, regulation, judgment, order, writ or administrative or
court decree. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Operating Partnership,
the Company or any of the Subsidiaries.

(xvii) ABSENCE OF PROCEEDINGS. There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the
Operating Partnership and the Company, threatened, against or
affecting the Operating Partnership, the Company or any Subsidiary, or
of which any of their respective property or assets is the subject,
which is required to be disclosed in the Registration Statement, other
than as disclosed therein, or which might result in a Material Adverse
Effect or which might materially and adversely affect the consummation
of the transactions contemplated by this Agreement or the performance
by the Operating Partnership or the Company of its obligations
hereunder. All pending legal or governmental proceedings to which the
Operating Partnership, the Company or any Subsidiary is a party or of
which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, are, considered in the
aggregate, not material to the earnings, assets, business affairs or
business prospects of the Operating Partnership, the Company and the
Subsidiaries considered as one enterprise and could not reasonably be
expected to result in a Material Adverse Effect. There are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents of the Operating Partnership, the
Company or any of the Subsidiaries which are required to be described
or referred to in the Registration Statement, the Prospectus or other
documents incorporated by reference therein or to be filed as exhibits
to the Registration Statement by the 1933 Act or by the 1933 Act
Regulations other than those described or referred to therein or filed
as exhibits thereto, and the descriptions thereof or references
thereto in the Registration Statement and the Prospectus are true and
correct in all material respects.

(xviii) TAX STATUS OF THE COMPANY. The Company has been and is
organized in conformity with the requirements for qualification as a
real estate

<PAGE>

investment trust ("REIT") under the Code, and its method of operation
has at all times enabled, and its proposed method of operation will
enable, the Company to satisfy the requirements for taxation as a REIT
under the Code.

(xix) POSSESSION OF INTELLECTUAL PROPERTY. The Operating
Partnership, the Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, the licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
the "Proprietary Rights") presently employed by them or necessary to
carry on the business now operated by them, and neither the Operating
Partnership, the Company nor any of the Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Proprietary Rights, or
of any facts which would render any Proprietary Rights invalid or
inadequate to protect the interests of the Operating Partnership, the
Company or any of the Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the
aggregate, would result in a Material Adverse Change.

(xx) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Operating
Partnership, the Company or any Subsidiary in connection with the
offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or securities laws of any state or other jurisdiction and
except for such as have been obtained.

(xxi) POSSESSION OF LICENSES AND PERMITS. Each of the
Operating Partnership, the Company and the Subsidiaries possesses, or
can acquire on reasonable terms, such certificates, licenses,
approvals, consents, authorizations or permits ("Governmental
Licenses") issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them; the Operating Partnership, the Company and the
Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and none of the
Operating Partnership, the Company or any Subsidiary has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.

<PAGE>

(xxii) ABSENCE OF LABOR DISPUTE. No material labor dispute
with the employees of the Operating Partnership, the Company or any of
the Subsidiaries exists or, to the knowledge of the Operating
Partnership, the Company or any of the Subsidiaries, is imminent; and
the Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal contractors which might be
expected to result in a Material Adverse Effect.

(xxiii) INVESTMENT COMPANY ACT. None of the Operating
Partnership, the Company or any Subsidiary is, or upon the issuance
and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will be,
an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms
are defined under the Investment Company Act of 1940, as amended (the
"1940 Act"), or is or will be required to be registered under the 1940
Act.

(xxiv) ENVIRONMENTAL LAWS. (A) Except as has been disclosed
in the Prospectus, the Communities, the properties managed by the
Management Company (the "Managed Properties") and any other real
property owned, occupied or operated by the Operating Partnership, the
Company or any Subsidiary, are presently operated in compliance with
all Environmental Laws (as defined below), except where a failure to
comply would not, either singly or in the aggregate, result in a
Material Adverse Effect.

(B) Except as has been disclosed in the Prospectus, there
are no Environmental Laws requiring any remediation, clean up,
repairs, construction or capital expenditures (other than normal
maintenance) with respect to the Communities, the Development Sites or
the Managed Properties which would have, either singly or in the
aggregate, a Material Adverse Effect.

(C) No notices of any violation or alleged violation of any
Environmental Laws relating to the Communities, the Managed Properties
or the Development Sites or their uses have been received by any of
the Operating Partnership, the Company, any Subsidiary or, to the best
knowledge of the Operating Partnership, and the Company, by any prior
owner, operator or occupant of such properties, except for such
violations which would not, either singly or in the aggregate, result
in a Material Adverse Effect, and (ii) there are no writs,
injunctions, decrees, orders or judgments outstanding, or any actions,
suits, claims, proceedings or investigations pending or, to the best
knowledge of the Operating Partnership and the Company, threatened,
relating to the ownership, use, maintenance or operation of the
Communities, the Managed Properties or the Development Sites.

(D) Except as has been disclosed in the Prospectus, all
material permits and licenses required under any Environmental Laws in
respect of the operations of the Communities or the Managed Properties
have been obtained,

<PAGE>

and such properties and the owners and operators thereof are in
compliance, in all material respects, with the terms and conditions of
such permits and licenses.

(E) All written reports of environmental surveys, audits,
investigations and assessments in the possession or control of the
Operating Partnership and the Company relating to the Communities and
the Development Sites (the "Environmental Reports") have been
disclosed or made available to the Underwriter or its counsel.

(F) Except as set forth in the Environmental Reports, no
Community, Managed Property or Development Site (i) is included or, to
the best knowledge of the Company and the Operating Partnership,
proposed for inclusion on the National Priorities List issued pursuant
to CERCLA (as defined below) by the United States Environmental
Protection Agency (the "EPA") or on the Comprehensive Environmental
Response, Compensation, and Liability Information System database
maintained by the EPA as a potential CERCLA removal, remedial or
response site or (ii) is included or, to the best knowledge of the
Company, proposed for inclusion on any similar list of potentially
contaminated sites pursuant to any other applicable Environmental Law
and none of the Operating Partnership, the Company or any Subsidiary
has received any written notice from the EPA or any other Governmental
Authority proposing the inclusion of any Community or Managed Property
on such list.

(G) Except as disclosed in the Environmental Reports, there
currently are no underground or above-ground storage tanks located on
or in any Community, Managed Property or Development Site.

(H) "Environmental Law" means all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders,
demands, approvals, authorizations and similar items of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial, administrative and
regulatory decrees, judgments and orders relating to the protection of
human health or the environment as in effect as of the date hereof,
including but not limited to those pertaining to reporting, licensing,
permitting, investigation and remediation of emissions, discharges,
releases or threatened releases of "Hazardous Materials," substances,
pollutants, contaminants or hazardous or toxic substances, materials
or wastes whether solid, liquid or gaseous in nature, into the air,
surface water, ground water or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of substances, pollutants, contaminants or hazardous or
toxic substances, materials, or wastes, whether solid, liquid or
gaseous in nature, including by way of illustration and not by way of
limitation, (x) the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Sections 9601 ET SEQ.) ("CERCLA"), the
Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 ET
SEQ.), the Clean Air Act (42 U.S.C. Sections 7401 ET SEQ.), the
Federal Water Pollution Control Act (33 U.S.C. Sections 1251), the

<PAGE>

Safe Drinking Water Act (42 U.S.C. Sections 300f ET SEQ.), the Toxic
Substances Control Act (15 U.S.C. Sections 2601 ET SEQ.), the
Endangered Species Act (16 U.S.C. Sections 1531 ET SEQ.), the
Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
Sections 11001 ET SEQ.), the Hazardous Materials Transportation Act,
as amended (49 U.S.C. Section 1801 ET SEQ.), the Clean Water Act, as
amended (33 U.S.C. Section 1251 ET SEQ.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. Section 136 ET SEQ.), and the
Occupational Safety and Health Act, as amended (29 U.S.C. Section 651
ET SEQ.), and (y) analogous state and local provisions.

(I) "Hazardous Material" means any chemical substance:

(i) the presence of which requires investigation
or remediation under any federal, state or local statute,
regulation, ordinance, order, action or policy, administrative
request or civil complaint under any of the foregoing or under
common law; or

(ii) which is defined as a "hazardous waste" or
"hazardous substance" under any federal, state or local statute,
regulation or ordinance or amendments thereto as in effect as of
the date hereof, or as hereafter amended, including, without
limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 ET SEQ.)
and or the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 ET SEQ.); or

(iii) which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and is regulated by any governmental
authority, agency, department, commission, board, agency or
instrumentality of the United States, or any state or any
political subdivision thereof having or asserting jurisdiction
over any of the Communities, the Managed Properties or the
Development Sites; or

(iv) the presence of which on any of the
Communities, the Managed Properties or the Development Sites
causes a nuisance upon such properties or to adjacent properties
or poses a hazard to the health or safety of persons on or about
any of the Communities, the Managed Properties or the Development
Sites; or

(v) the presence of which on adjacent properties
constitutes a trespass by any owner or operator of the
Communities, the Managed Properties, the Development Sites or any
Other Property; or

<PAGE>

(vi) which contains gasoline, diesel fuel or other
petroleum hydrocarbons, polychlorinated biphenyls (PCBs) or
asbestos or asbestos-containing materials or urea formaldehyde
foam insulation; or

(vii) radon gas.

(J) "Governmental Authority" shall mean any federal, state
or local governmental office, agency or authority having the duty or
authority to promulgate, implement or enforce any Environmental Law.

(xxv) TITLE TO PROPERTY. The Operating Partnership, the
Financing Partnership, the Chandler Partnership or McKinley has good
and marketable fee simple title to the land underlying each of the
Communities and good and marketable title to the improvements thereon
(in each case with title insurance thereon in full force and effect
and which is adequate in accordance with industry standards) and all
other assets that are required for the effective operation of such
Communities in the manner in which they are currently operated,
subject only to Permitted Exceptions (as herein defined); (B) all
liens, charges or encumbrances on or affecting any of the Communities
or the other property and assets of the Operating Partnership, the
Company or any of the Subsidiaries which are required to be disclosed
in the Prospectus are disclosed therein; (C) the Operating Partnership
or the Financing Partnership (or the Management Company as agent for
the Operating Partnership or the Financing Partnership) is the lessor
of all tenant leases at each of the Communities; (D) each of the
Communities complies in all material respects with all applicable
federal, state and local codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations
and laws relating to handicapped access to the Communities); (E) there
are in effect for the property and assets of the Operating
Partnership, the Company and the Subsidiaries insurance policies
covering risks and in amounts that are commercially reasonable for the
types of assets owned by them and that are consistent with the types
and amounts of insurance typically maintained by prudent owners of
similar assets, and none of the Operating Partnership, the Company or
any Subsidiary has received from any insurance company notice of any
material defects or deficiencies affecting the insurability of any
such assets or any notices of cancellation or intent to cancel any
such policies; (F) none of the Operating Partnership, the Company or
any of the Subsidiaries has knowledge of any pending or threatened
condemnation proceedings, zoning change, or other proceeding or action
that will materially adversely affect the size of, use of,
improvements on, construction on or access to the Communities; and (G)
none of the Operating Partnership, the Company nor any of the
Subsidiaries has received from any governmental authority notice of
any violation of any federal, state or municipal law, rule or
regulation (including relating to environmental matters) concerning
the Communities or any part thereof which has not heretofore been
cured, except where a failure to cure would not result in a Material
Adverse Effect. As used in this Agreement, "Permitted Exceptions"
means: (i) real estate taxes and assessments not yet delinquent; (ii)
covenants, restrictions, easements and

<PAGE>

other similar agreements, provided that the same are not violated by
existing improvements or the current use and operation of a Community;
(iii) zoning laws, ordinances and regulations, building codes, rules
and other governmental laws, regulations, rules and orders affecting
each Community, provided that the same are not violated by existing
improvements or the current use and operation of a Community; (iv) any
state of facts disclosed by the surveys relating to the Communities
previously provided to the Underwriters; (v) mortgage financing as
described in the Prospectus.

(xxvi) RIGHT OF FIRST REFUSAL. No person or entity has any
option or right of first refusal to purchase all or any part of any
Community or Development Site or any interest therein.

(xxvii) TAX RETURNS. Each of the Operating Partnership, the
Company and the Subsidiaries has filed all federal, state, local and
foreign income, franchise, sales and other tax returns which have been
required to be filed and has paid all taxes required to be paid and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except, in all cases,
for any such tax, assessment, fine or penalty that is being contested
in good faith through appropriate proceedings and as to which
appropriate reserves have been established.

(xxviii) REGULATION M. None of the Operating Partnership, the
Company, the Subsidiaries or any of their respective directors,
officers or controlling persons, has taken or will take, directly or
indirectly, any action resulting in a violation of Regulation M under
the 1934 Act, or designed to cause or result in, or that has
constituted or that reasonably might be expected to constitute, the
stabilization or manipulation of the price of any security of the
Operating Partnership or the Company to facilitate the sale or resale
of the Securities.

(xxix) REGISTRATION RIGHTS. There are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement other than AEW Partners, L.P. a
Delaware limited partnership, CIIF Associates II Limited Partnership,
a Delaware limited partnership, Stephen O. Evans and F. Keith
Withycombe, who have waived such rights, and there are no other
persons with registration or other similar rights to have any
securities otherwise registered by the Company under the 1933 Act,
except, in the latter case, holders of Units issued in connection with
the Company's purchase of the Ashton Apartments in Corona Hills,
California and Acacia Creek in Scottsdale, Arizona, Messrs. Evans and
Withycombe and the Continuing Investors (as defined in the Company's
initial public offering prospectus).

(xxx) BROKER'S FEES. Neither the Operating Partnership nor
the Company has incurred any liability for finder's or broker's fees
or agent's commissions (other than those payable to the Underwriters)
in connection with the

<PAGE>

execution and delivery of this Agreement, the offer and sale of the
Securities or the transactions contemplated hereby.

(xxxi) REGISTRATION AS BROKER. Neither the Operating
Partnership, the Company nor any Subsidiary is required to register as
a "broker" or "dealer" in accordance with the provisions of the 1934
Act or the rules and regulations promulgated thereunder.

(xxxii) COMPLIANCE WITH CUBA ACT. The Operating Partnership
has complied with, and is and will be in compliance with, the
provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida
statutes, and the rules and regulations thereunder (collectively,
"Cuba Act") or is exempt therefrom.

(xxxiii) INVESTMENT GRADE RATING. The Company has received an
investment grade rating of BBB- from Standard & Poor's Corporation and
Baa3 from Moody's Investors Service, Inc. with respect to prospective
issuances of unsecured debt.

SECTION 2. SALE AND DELIVERY TO THE UNDERWRITER; CLOSING.

(a) SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Operating Partnership agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Operating Partnership, at the prices set forth in Schedule B hereto
(which is a part hereof), the aggregate principal amount of Securities set forth
in Schedule A hereto, opposite the name of such Underwriter, plus any additional
principal amount of Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof. The initial public
offering price, the purchase price to be paid by the Underwriters for the
Securities, and the interest rate on the Securities are set forth on Schedule B
hereto.

(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Gibson, Dunn &
Crutcher LLP, 333 South Grand Avenue, Los Angeles, California 90071; or at such
other place as shall be agreed upon by the Underwriters and the Company, at
7:00 a.m. (Los Angeles time), on the third (fourth, if the pricing occurs after
4:30 p.m. Eastern Time on any given day) business day after the date hereof, or
such other time not later than seven business days after such date as shall be
agreed upon by the Underwriters and the Operating Partnership (such time and
date of payment and delivery being herein called the "Closing Time").

Payment shall be made to the Operating Partnership, by wire transfer
of immediately available funds or similar same day funds payable to the order of
the Operating Partnership against delivery to the Underwriters of certificates
for the Securities to be purchased by them. Certificates for the Securities
shall be in such denominations ($1,000 or integral multiples thereof) and
registered in such names as the Underwriters may request in

<PAGE>

writing at least one full business day before the Closing Time. It is
understood that each Underwriter has authorized the other Underwriter, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for Securities which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Securities to be
purchased by any Underwriter whose check has not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Securities will be made available for
examination and packaging by the Underwriters in the City of New York not later
than 10:00 a.m. (Eastern time) on the last business day prior to the Closing
Time.

SECTION 3. COVENANTS OF THE OPERATING PARTNERSHIP. Each of the
Operating Partnership and the Company, jointly and severally, covenants with
each Underwriter as follows:

(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
Subject to Section 3(b), the Operating Partnership or the Company will notify
the Underwriters immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement becomes effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of the
Prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or the initiation or threatening of any
proceedings for any of such purposes. The Operating Partnership or the Company,
as applicable, will promptly effect the filings necessary pursuant to Rule
424(b) and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Operating Partnership or the Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment. If the Operating Partnership or the Company elects to rely on Rule 434,
the Company will provide the Underwriters with copies of the form of Rule 434
Prospectus, in such number as the Underwriters may reasonably request, and file
or transmit for filing with the Commission the form of Prospectus complying with
Rule 434 of the 1933 Act in accordance with Rule 424(b) of the 1933 Act
Regulations by the close of business in New York on the business day immediately
succeeding the date of this Agreement.

(b) FILING OF AMENDMENTS. The Operating Partnership and the Company,
as applicable, will give the Underwriter notice of its intention to file or
prepare any amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Underwriters with copies of any

<PAGE>

such documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file any such documents to which the
Underwriters or counsel for the Underwriters shall reasonably object.

(d) DELIVERY OF REGISTRATION STATEMENT. The Operating Partnership
and the Company will deliver to the Underwriters and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Underwriters,
without charge, conformed copies of the Registration Statement as originally
filed and of each amendment thereto (excluding exhibits). The copies of the
Registration Statement and each amendment thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.

(e) DELIVERY OF PROSPECTUSES. The Operating Partnership has
delivered to the Underwriters, without charge, as many copies of the Prospectus
as the Underwriters reasonably requested, and the Operating Partnership hereby
consents to the use of such copies for purposes permitted by the 1933 Act. The
Operating Partnership will furnish to the Underwriters, without charge, during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as the Underwriters may reasonably request. The Prospectus and
any amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(f) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Operating
Partnership will comply with the 1933 Act and the 1933 Act Regulations, the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Operating Partnership and the Company,
to amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Operating Partnership or the Company, as
applicable, will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the

<PAGE>

Registration Statement or the Prospectus comply with such requirements, and the
Operating Partnership or the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters may
reasonably request.

(g) BLUE SKY QUALIFICATIONS. The Operating Partnership will use its
best efforts, in cooperation with the Underwriters, to qualify the Securities
for offering and sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Underwriters may designate;
PROVIDED, HOWEVER, that the Operating Partnership shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified, to file any general consent to service of process or to subject
itself to taxation. In each jurisdiction in which the Securities have been so
qualified, the Operating Partnership will file such statements and reports as
may be required by the laws of such jurisdiction to continue such qualification
in effect for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.

(h) RULE 158. The Operating Partnership will make generally
available to its security holders as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of each of
the Operating Partnership's fiscal quarter next following the "effective date"
(as defined in said Rule 158) of the Registration Statement.

(i) USE OF PROCEEDS. The Operating Partnership will use the net
proceeds received by it from the sale of the Securities in the manner specified
in the Prospectus under the heading "USE OF PROCEEDS."

(j) REIT QUALIFICATION. The Company has, since its formation,
operated in such a manner, and will continue to operate in such a manner, as to
qualify for taxation as a "real estate investment trust" under the Code.

(k) ACTION BY THE OPERATING PARTNERSHIP REGARDING PRICE OF
SECURITIES. Except for the authorization of actions permitted to be taken by
the Underwriters as contemplated herein or in the Prospectus, neither the
Operating Partnership nor the Company will (i) take, directly or indirectly, any
action designed to cause or to result in, or that might reasonably be expected
to constitute, the stabilization or manipulation of the price of any security of
the Operating Partnership or the Company to facilitate the sale or resale of the
Securities, (ii) sell, bid for or purchase the Securities or pay any person any
compensation for soliciting purchases of the Securities or (iii) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Operating Partnership or the Company.

(l) CUBA ACT. In accordance with the Cuba Act and without limitation
to the provisions of Sections 6 and 7 hereof, the Operating Partnership agrees
to indemnify and hold harmless the Underwriters from and against any and all
loss, liability, claim, damage and expense whatsoever (including fees and
disbursements of counsel), as incurred, arising out of any violation by the
Operating Partnership of the Cuba Act.

<PAGE>

(m) REPORTING REQUIREMENTS. The Operating Partnership and the
Company, during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, will file all documents required to be filed with
the Commission pursuant to the 1934 Act within the time periods required by the
1934 Act and the 1934 Act Regulations.

(n) REPRESENTATIONS AND WARRANTIES. Prior to the Closing Time, the
Operating Partnership and the Company will notify the Underwriters in writing
immediately if (i) any event occurs that renders any of the representations and
warranties of the Operating Partnership and the Company contained herein
inaccurate or incomplete in any material respect or (ii) with respect to the
representations and warranties of the Operating Partnership and the Company
contained herein that are limited to materiality of the Operating Partnership
and the Company, and the Subsidiaries considered as one enterprise, any matter
or event occurs that would render such representation or warranty inaccurate or
incomplete if given with respect to the Operating Partnership, the Company or
any Subsidiary on an individual basis.

SECTION 4. PAYMENT OF EXPENSES.

(a) EXPENSES. The Operating Partnership will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing (or reproduction) and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters,
including any transfer taxes or duties payable upon the sale of the Securities
to the Underwriters, (iii) the fees and other charges of the Operating
Partnership's counsel, accountants and other advisors, (iv) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(g) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing (or reproduction) and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto and of the Prospectus and any amendments or supplements thereto,
(vi) the printing (or reproduction) and delivery to the Underwriters of copies
of the Blue Sky Survey, (vii) the fees of the National Association of Securities
Dealers, Inc. ("NASD"), including the reasonable fees and other charges of
counsel for the Underwriter in connection with the NASD's review of the terms of
the proposed public offering of the Securities, if applicable and (viii) the
fees and expenses of any transfer agent or registrar for the Securities.

(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Operating Partnership shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and other charges of
counsel for the Underwriters.

SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Operating Partnership and the Company
contained in Section 1 hereof or in certificates of any partner of the Operating
Partnership or any officer of the Company or any

<PAGE>

Subsidiary delivered pursuant to the provisions hereof, to the performance by
the Operating Partnership and the Company of their respective obligations
hereunder, and to the following further conditions:

(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, shall have become
effective, and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters.
The Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
of the 1933 Act Regulations within the prescribed time period, and prior to the
Closing Time the Operating Partnership and the Company shall have provided
evidence satisfactory to the Underwriters of such timely filing, or a
post-effective amendment providing such information shall have been promptly
filed and declared effective in accordance with the requirements of the 1933 Act
Regulations. If the Operating Partnership or the Company has elected to rely
upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).

(b) OPINION OF COUNSEL FOR THE OPERATING PARTNERSHIP. At the Closing
Time, the Underwriters shall have received:

(i) The favorable opinion, dated as of the Closing Time, of
Gibson, Dunn & Crutcher LLP, counsel for the Operating Partnership and
the Company, in form and substance reasonably satisfactory to counsel
for the Underwriters, to the effect that:

(A) The Operating Partnership has been duly organized and
is validly existing as a limited partnership in good standing
under the Delaware Act. The Operating Partnership has full
partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or
proposes to engage as described in the Prospectus and to enter
into and perform its obligations under this Agreement.

(B) The Operating Partnership is duly qualified as a
foreign partnership to transact business and is in good standing
in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would
not have a Material Adverse Effect.

(C) The outstanding Units were duly authorized for issuance
by the Operating Partnership to the holders thereof and are
validly issued. The Company is the sole general partner of the
Operating Partnership and, immediately prior to the sale of the
Securities, is the

<PAGE>

holder of ________________ of the ____________ issued and
outstanding Units.

(D) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business
except where the failure to so qualify would not result in a
Material Adverse Effect.

(E) Each of Evans Withycombe Finance, Inc. and the
Financing Partnership has been duly organized and is validly
existing as a corporation or partnership in good standing under
the laws of the State of Delaware and McKinley is validly
existing as a partnership in good standing under the laws of the
State of California. Each of Evans Withycombe Finance, Inc., the
Financing Partnership, the Chandler Partnership and McKinley has
full corporate or partnership power and authority to own, lease
and operate its properties and to conduct the business in which
it is engaged or proposes to engage as described in the
Prospectus. Each of Evans Withycombe Finance, Inc., the
Financing Partnership, the Chandler Partnership and McKinley is
duly qualified or registered as a foreign corporation or
partnership to transact business and is in good standing in each
jurisdiction in which qualification to transact business is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
so qualify would not result in a Material Adverse Effect. All of
the issued shares of capital stock of Evans Withycombe Finance,
Inc. have been duly authorized and are validly issued, fully paid
and nonassessable and are owned of record by the Company to the
best knowledge of such counsel, free and clear of all liens,
charges and encumbrances. The partnership units of the Financing
Partnership have been authorized for issuance to Evans Withycombe
Finance, Inc. and the Operating Partnership and are validly
issued and fully paid, to the knowledge of such counsel, free and
clear of all liens, charges and encumbrances. To the best
knowledge of such counsel, with the exception of the 15% limited
partnership interest in the Chandler Partnership held by Carl
Hoffman, all of the partnership interests of the Chandler
Partnership and McKinley are owned by the Operating Partnership
and the Company, free and clear of all liens, charges and
encumbrances.

(F) This Agreement has been duly authorized, executed and
delivered by the Operating Partnership.

(G) To the knowledge of such counsel, there is no action,
suit or proceeding before or by any court or governmental agency
or

<PAGE>

body, domestic or foreign, now pending or threatened against the
Operating Partnership, the Company or any Subsidiary that is
required to be disclosed in the Registration Statement which is
not disclosed therein. To the knowledge of such counsel, there
are no contracts, indentures, mortgages, loan agreements, notes,
lease or other instruments of a character which are required to
be described or referred to in the Registration Statement or to
be filed as exhibits thereto by the 1933 Act or by the 1933 Act
Regulations, other than those described or referred to therein or
filed as exhibits thereto, and the descriptions thereof or
references thereto in the Registration Statement are correct and
accurate in all material respects.

(H) No consent, approval, authorization of any governmental
agency or authority or, to the knowledge of such counsel, no
order of any court, is required to be obtained by the Operating
Partnership, the Company or any Subsidiary in connection with the
offering, issuance or sale of the Securities under this
Agreement, except such as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws of any state or
other jurisdiction and except for such as have been obtained.

(I) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein by the Operating Partnership and the Company do not and
will not contravene any provision of the Delaware Act, the
Delaware General Corporation Law, California law or federal laws,
do not and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the Communities or any
other property or assets of the Operating Partnership, the
Company or any Subsidiary pursuant to any agreement or instrument
filed as an exhibit to the Registration Statement or to the
documents incorporated by reference into the Prospectus, nor has
any such action resulted or will such action result in any
violation of the charter, bylaws, certificate of limited
partnership, partnership agreement or other governing document,
as the case may be, of the Operating Partnership, the Financing
Partnership or Evans Withycombe Finance, Inc. or, to such
counsel's knowledge, any judgment, ruling, order, regulation or
administrative or court decree applicable to the business or
properties of such entities.

(J) The Securities to be purchased by the Underwriters from
the Operating Partnership have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement, and,
when issued and delivered by the Operating Partnership pursuant
to this Agreement against payment of the consideration, (i) will
be validly issued, fully paid and nonassessable, and (ii) no
holder of Securities is or will be

<PAGE>

subject to personal liability for the obligations of the
Operating Partnership solely by reason of being such a holder.

(K) The Indenture has been duly qualified under the 1939
Act;

(L) The Indenture has been duly executed and delivered by
the Operating Partnership and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitutes a
valid and binding agreement of the Operating Partnership,
enforceable against the Operating Partnership in accordance with
its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).

(M) The Securities are in the form contemplated by the
Indenture and, assuming that the Securities have been duly
authenticated by the Trustee in the manner described in its
certificate delivered to the Operating Partnership at the Closing
Time (which fact such counsel need not determine by an inspection
of the Securities), the Securities have been duly executed,
issued and delivered by the Operating Partnership and constitute
valid and binding obligations of the Operating Partnership,
enforceable against the Operating Partnership in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be
entitled to the benefits of the Indenture.

(N) The Securities and the Indenture conform in all
material respects to the descriptions thereof contained in the
Prospectus.

(O) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated before or threatened by the
Commission.

<PAGE>

(P) The Registration Statement, including any Rule 462(b)
Registration Statement and the Term Sheet, as applicable, the
Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration
Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting
schedules and other financial and related statistical data
included therein or omitted therefrom, as to which no opinion
need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act
Regulations.

(Q) The documents incorporated by reference in the
Prospectus (other than the financial statements and supporting
schedules and other financial and related statistical data
included therein or omitted therefrom, as to which no opinion
need be rendered), when they became effective or were filed with
the Commission, as the case may be, complied as to form in all
material respects with the requirements of the 1933 Act or the
1934 Act, as applicable, and the rules and regulations of the
Commission thereunder.

(R) The information in the Prospectus under "FEDERAL INCOME
TAX CONSIDERATIONS," to the extent that it constitutes matters of
law, summaries of legal matters, documents, proceedings or legal
conclusions, has been reviewed by such counsel and is correct in
all material respects.

(S) The Company has been and is organized in conformity
with the requirements for qualification as a REIT under the Code,
and its method of operation has at all times enabled, and its
proposed method of operation as described in the Prospectus and
as represented by management will enable, it to meet the
requirements for taxation as a REIT under the Code.

(T) None of the Operating Partnership, the Company or any
Subsidiary is an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined under the 1940 Act, or is or
will be required to be registered under the 1940 Act.

(U) Each of the Operating Partnership, the Financing
Partnership and the Chandler Partnership has at all times been
treated, and, since its acquisition by the Company, McKinley has
been treated, and each of them will be treated, for federal
income tax purposes as a partnership and not as an association
taxable as a corporation or publicly traded partnership.

<PAGE>

(V) Evans Withycombe Finance, Inc. has at all times been
treated, and will be treated, as a "qualified REIT subsidiary"
under Section 856(i) of the Code.

(W) To the best knowledge of such counsel, there are no
persons with registration or other similar rights to have any
securities of the Company registered pursuant to the Registration
Statement other than AEW Partners, L.P. a Delaware limited
partnership, CIIF Associates II Limited Partnership, a Delaware
limited partnership, Stephen O. Evans and F. Keith Withycombe,
who, to such counsel's knowledge, have waived such rights.

(ii) The favorable opinion, dated as of the Closing Time, of
Ballard Spahr Andrews & Ingersoll, counsel for the Operating Partnership
and the Company with respect to matters of Maryland law, in form and
substance reasonably satisfactory to counsel for the Underwriters, to the
effect that:

(A) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland.

(B) The Company has the full corporate power and corporate
authority to own, lease and operate its properties, to conduct
the business in which it is engaged or proposes to engage as
described in the Prospectus and to enter into and perform its
obligations under this Agreement.

(C) All of the issued and outstanding Common Shares have
been duly authorized and validly issued and are fully paid and
nonassessable and none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company arising under
the Maryland General Corporation Law, the charter or bylaws of
the Company or, to such counsel's knowledge, otherwise.

(D) The authorized capital stock of the Company conforms to
the description thereof incorporated by reference into the
Prospectus. Except for options under the 1994 Stock Option Plan
and Units of the Operating Partnership, there are (i) to such
counsel's knowledge no outstanding securities convertible into or
exchangeable for any shares of capital stock of the Company and
(ii) no outstanding options, rights (preemptive or otherwise) or
warrants to purchase or to subscribe for such shares or any other
securities of the Company pursuant to the Company's charter or
bylaws, or to such counsel's knowledge, any agreement or other
instrument to which the Company is a party or by which it is
bound.

<PAGE>

(E) The Company has duly authorized and reserved a
sufficient number of Common Shares for issuance upon redemption
of outstanding Units issued by the Operating Partnership as
contemplated by the Partnership Agreement and for issuance upon
the exercise of options under the 1994 Stock Option Plan.

(F) No consent, approval, authorization, order of or
qualification with any court or governmental agency or authority
or other entity is required to be obtained by the Operating
Partnership, the Company or any Subsidiary under the Maryland
General Corporation Law in connection with the offering, issuance
or sale of the Securities under this Agreement except for such as
have been obtained.

(G) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein do not and will not contravene any provision of the
Maryland General Corporation Law, nor has any such action
resulted or will such action result in any violation of the
charter or bylaws of the Company, or, to such counsel's
knowledge, any judgment, ruling, order, regulation or
administrative or court decree issued under or pursuant to the
Maryland General Corporation Law and applicable to the business
or properties of the Company.

(iii) The favorable opinion, dated as of the Closing Time, of
Latham & Watkins, counsel for the Underwriters, with respect to such
matters as the Underwriters may reasonably request.

(iv) In giving their opinions required by subsections (b)(i)
and (b)(iii), respectively, of this Section 5, Gibson, Dunn & Crutcher LLP
and Latham & Watkins shall each additionally state that nothing has come to
their attention that would lead them to believe that the Registration
Statement (except for financial statements and schedules and other
financial and related statistical data included or incorporated by
reference therein, as to which counsel need make no statement), at the time
it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus
(except for financial statements and schedules and other financial and
related statistical data included or incorporated by reference therein, as
to which counsel need make no statement), at the time the Prospectus was
issued (unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Operating Partnership and the Company
for use in connection with the offering of Securities which differs from
the Prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the date of such prospectus),
or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. In giving its opinion,

<PAGE>

Gibson, Dunn & Crutcher LLP and Latham & Watkins may rely as to matters of
Maryland law upon the opinion of Ballard Spahr Andrews & Ingersoll, which
opinions shall be in form and substance reasonably satisfactory to counsel
for the Underwriters. Each such opinion required by subsections (b)(i) and
(b)(iii) shall not state that it is to be governed or qualified by, or that
it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).

(c) CLOSING MATTERS. At the Closing Time, (i) the Registration
Statement and the Prospectus shall contain all statements that are required to
be stated therein in accordance with the 1933 Act and the 1933 Act Regulations
and in all material respects shall conform to the requirements of the 1933 Act
and the 1933 Act Regulations, and neither the Registration Statement nor the
Prospectus shall contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, (ii) the representations and
warranties in Section 1 hereof shall be true and correct with the same force and
effect as though expressly made at and as of the Closing Time, (iii) there shall
not have been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any Material Adverse Effect, whether or
not arising in the ordinary course of business, (iv) no action, suit or
proceedings at law or in equity shall be pending or, to the knowledge of the
Operating Partnership or the Company, threatened against such entity or any
Subsidiary before or by any court or governmental agency wherein an unfavorable
decision, ruling or finding might result in any Material Adverse Effect other
than as set forth in the Prospectus, (v) no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or, to the knowledge of
the Operating Partnership or the Company, threatened by the Commission or by the
state securities authority of any jurisdiction and (vi) the Underwriters shall
have received, at the Closing Time, a Certificate of the Chairman of the Board
and Chief Executive Officer and the chief financial or chief accounting officer
of the Company, in its individual capacity and as the general partner of the
Operating Partnership, dated as of the Closing Time, stating its compliance with
subparagraphs (i) through (v) of this subsection (c), and stating that each of
the Operating Partnership and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time. As used in this Section 5(d) the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Securities.

(d) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the Underwriters shall have received from Ernst & Young LLP a
letter dated such date, in form and substance reasonably satisfactory to the
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements, pro forma financial statements and pro forma and adjusted
financial statements and information of the Company and its affiliates and
certain financial information contained in the Registration Statement and the
Prospectus.

<PAGE>

(e) BRING-DOWN COMFORT LETTER. At the Closing Time, the Underwriters
shall have received from Ernst & Young LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section 5, except that the
specified date referred to shall be a date not more than five days prior to the
Closing Time.

(f) NO OBJECTION. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.

(g) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may reasonably request for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by Operating Partnership and the Company in connection
with the issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Underwriters and counsel
for the Underwriters.

SECTION 6. INDEMNIFICATION.

(a) Each of the Operating Partnership and the Company agrees, jointly
and severally, to indemnify and hold harmless the Underwriters and each person,
if any, who controls the Underwriters within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, as follows:

(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever for which indemnification is
provided under subsection (i) above, if (subject to Section 6(d)
below) such settlement is effected with the written consent of the
Operating Partnership and the Company; and

<PAGE>

(iii) against any and all expense whatsoever (including, the
fees and charges of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever for
which indemnification is provided under subsection (i) above, to the
extent that any such expense is not paid under subsection (i) or (ii)
above;

PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information contained in the last paragraph
on the front cover page, the first paragraph on the inside front cover page and
the third sentence of the fourth full paragraph in the section of the Prospectus
Supplement under the heading "UNDERWRITING" and furnished to the Operating
Partnership by any Underwriter expressly for use in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto); and PROVIDED FURTHER, that this indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
liabilities, claims, damages or expenses purchased Securities, or any person
controlling any Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Operating Partnership shall have furnished any such
amendments or supplements thereto, but excluding documents incorporated or
deemed to be incorporated by reference therein) was not sent or given by or on
behalf of any Underwriter to such person, if such is required by law, at or
prior to the written confirmation of the sale of such Securities to such person
and if the Prospectus (as so amended or supplemented, if applicable) would have
completely corrected the defect giving rise to such loss, liability, claim,
damage or expense, except that this proviso shall not be applicable if such
defect shall have been corrected in a document which is incorporated or deemed
to be incorporated by reference in the Prospectus.

(b) Each Underwriter severally agrees to indemnify and hold harmless
the Operating Partnership, the Company, the Company's directors, each of the
officers of the Company who signed the Registration Statement, and each person,
if any, who controls the Operating Partnership or the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section 6, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information contained in the last
paragraph on the front cover page, the first paragraph on the inside front cover
page and the third sentence of the fourth full paragraph in the section of the
Prospectus Supplement under the heading "UNDERWRITING" and furnished to the
Operating Partnership by such Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).

<PAGE>

(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have to the extent it is not materially prejudiced as
a result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. In the case
of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by the Underwriters and shall be
reasonably satisfactory to the indemnifying person(s), and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Operating Partnership and shall be reasonably
satisfactory to the Underwriters. An indemnifying party may participate at its
own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for the reasonable fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.

SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient (other than by
reason of the indemnified party not being entitled to indemnification in
accordance with the specific terms of Section 6 hereof) to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Operating
Partnership or the

<PAGE>

Company on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Operating Partnership or the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Operating Partnership and the
Company on the one hand and the Underwriters on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting expenses
but including any expenses reimbursed by the Underwriters) received by the
Operating Partnership and the Company and the total underwriting discount
received by the Underwriters, bear to the aggregate initial public offering
price of the Securities.

The relative fault of the Operating Partnership or the Company on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Operating Partnership or the Company or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

The Operating Partnership, the Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
discount received by it exceeds the amount of any damages which it has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.

No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

<PAGE>

For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, each person, if any, who controls the Operating
Partnership or the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, shall have the same rights to contribution as the
Operating Partnership or the Company, respectively.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of the general partner of the Operating
Partnership or the officers of the Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Underwriters or controlling person, or by or on
behalf of the Operating Partnership, the Company and shall survive delivery of
the Securities to the Underwriters.

SECTION 9. TERMINATION OF AGREEMENT.

(a) The Underwriters may terminate this Agreement, by notice to the
Operating Partnership and the Company, at any time at or prior to the Closing
Time (i) if there has been, since the date of this Agreement or since the
respective dates as of which information is given in the Registration Statement,
any Material Adverse Effect, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which is such as to make it, in the judgment of the Underwriters,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Operating
Partnership or Company has been suspended by the Commission or if trading
generally on either the New York Stock Exchange or the American Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
Exchanges or by order of the Commission or any other governmental authority, or
if a banking moratorium has been declared by either federal, New York or Arizona
authorities.

(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6 and 7
shall survive such termination and remain in full force and effect.

SECTION 10. DEFAULT BY ONE OF THE UNDERWRITERS OR THE OPERATING
PARTNERSHIP. If one of the Underwriters shall fail at the Closing Time to
purchase the Securities which it is obligated to purchase under this Agreement
(the "Defaulted Securities"), the other Underwriters shall have the right,
within 24 hours thereafter, to make arrangements for it, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, such arrangements have not been completed within such
24-hour period, then:

<PAGE>

(a) If the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, the non-defaulting
Underwriter shall be obligated to purchase the full amount thereof, or

(b) If the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.

In the event of any such default which does not result in a
termination of this Agreement, the Underwriters, the Operating Partnership or
the Company shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.

If the Operating Partnership or the Company shall fail at Closing Time
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
non-defaulting party; provided, however, that the provisions of Sections 4, 6
and 7 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Operating Partnership or the Company from liability,
if any, in respect of such default.

SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Merrill Lynch, Pierce,
Fenner & Smith Incorporated at Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, New York 10281-1201, attention of Equity
Capital Markets and notices to either the Operating Partnership or the Company
shall be directed to it at 6991 East Camelback Road, Suite A-200, Scottsdale,
Arizona 85251, attention of Stephen O. Evans, Chairman of the Board and Chief
Executive Officer.

SECTION 12. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Underwriters and the Operating Partnership, the Company
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Operating Partnership, the Company
and their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 hereof and their successors, heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the Underwriters, the Operating Partnership, the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal

<PAGE>

representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from the Underwriters shall be deemed to be a
successor by reason merely of such purchase.

SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 14. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.

<PAGE>

If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Operating Partnership a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, the Operating Partnership and the
Company in accordance with its terms.

Very truly yours,

EVANS WITHYCOMBE RESIDENTIAL, L.P.

By: Evans Withycombe Residential, Inc.,
General Partner

By
------------------------------------------
Stephen O. Evans,
Chairman of the Board and
Chief Executive Officer

EVANS WITHYCOMBE RESIDENTIAL, INC.

By
------------------------------------------
Stephen O. Evans,
Chairman of the Board and Chief
Executive Officer

<PAGE>

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
J.P. Morgan Securities Inc.

By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated

By
------------------------------------------
Name:
Title:

<PAGE>

SCHEDULE A

2004 NOTES

PRINCIPAL
AMOUNT OF
NAME OF UNDERWRITER 2004 NOTES
------------------- ----------

Merrill Lynch, Pierce, Fenner &
Smith Incorporated ............................................... $
----------
Goldman, Sachs & Co. ................................................
----------
J.P. Morgan Securities Inc. .........................................
----------
Total ...........................................................
$75,000,000
----------
----------

2007 NOTES

PRINCIPAL
AMOUNT OF
NAME OF UNDERWRITER 2007 NOTES
------------------- ----------

SCHEDULE A-1

<PAGE>

SCHEDULE B

1. The initial public offering price of the 2004 Notes and the 2007 Notes
shall be ______% and ______% of the principal amounts thereof,
respectively, plus accrued interest, if any, from the date of
issuance.

2. The purchase price to be paid by the Underwriters for the 2004 Notes
and the 2007 Notes shall be _____% and _____% of the principal amounts
thereof, respectively.

3. The interest rate on the 2004 Notes and 2007 Notes shall be ____% and
____% per annum, respectively.

SCHEDULE B-1

<PAGE>

EVANS WITHYCOMBE RESIDENTIAL, L.P.,

as Issuer

BANK ONE, COLUMBUS, NA,

as Trustee

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

Indenture

Dated as of ____________, 1997

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

Senior Debt Securities

<PAGE>

TABLE OF CONTENTS

ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION. . . . . 1
SECTION 101. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. . . . . . . . . . . .10
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. . . . . . . . . . .10
SECTION 104. ACTS OF HOLDERS . . . . . . . . . . . . . . . . . . . . . .11
SECTION 105. NOTICES, ETC., TO TRUSTEE AND ISSUER. . . . . . . . . . . .12
SECTION 106. NOTICE TO HOLDERS; WAIVER . . . . . . . . . . . . . . . . .13
SECTION 107. EFFECT OF HEADINGS AND TABLE OF CONTENTS. . . . . . . . . .14
SECTION 108. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . .14
SECTION 109. SEPARABILITY CLAUSE . . . . . . . . . . . . . . . . . . . .14
SECTION 110. BENEFITS OF INDENTURE . . . . . . . . . . . . . . . . . . .14
SECTION 111. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 112. LEGAL HOLIDAYS. . . . . . . . . . . . . . . . . . . . . . .14
SECTION 113. CONFLICT WITH TRUST INDENTURE ACT . . . . . . . . . . . . .14
SECTION 114. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 115. JUDGMENT CURRENCY . . . . . . . . . . . . . . . . . . . . .15
ARTICLE TWO SECURITIES FORMS . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 201. FORMS OF SECURITIES . . . . . . . . . . . . . . . . . . . .15
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION . . . . . .16
SECTION 203. SECURITIES ISSUABLE IN GLOBAL FORM. . . . . . . . . . . . .16
ARTICLE THREE THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . .17

<PAGE>

SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. . . . . . . . . . . .17
SECTION 302. CURRENCY; DENOMINATIONS . . . . . . . . . . . . . . . . . .20
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. . . . . . .20
SECTION 304. TEMPORARY SECURITIES. . . . . . . . . . . . . . . . . . . .22
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE . . . .25
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. . . . . .29
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS RESERVED . . . . . . .30
SECTION 308. PERSONS DEEMED OWNERS . . . . . . . . . . . . . . . . . . .32
SECTION 309. CANCELLATION. . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 310. COMPUTATION OF INTEREST . . . . . . . . . . . . . . . . . .33
ARTICLE FOUR SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . .33
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . .33
SECTION 402. APPLICATION OF TRUST FUNDS. . . . . . . . . . . . . . . . .34
ARTICLE FIVE REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 501. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . .35
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. . . . .36
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. . . . . . . . . . . . . . . . . .37
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM. . . . . . . . . . . . . .38
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES OR COUPONS . . . . . . . . . . . . . . . . . .39

<PAGE>

SECTION 506. APPLICATION OF MONEY COLLECTED. . . . . . . . . . . . . . .39
SECTION 507. LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . .39
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, IF ANY, INTEREST AND ADDITIONAL AMOUNTS. . . . .40
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. . . . . . . . . . . . .40
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. . . . . . . . . . . . . . .41
SECTION 511. DELAY OR OMISSION NOT WAIVER. . . . . . . . . . . . . . . .41
SECTION 512. CONTROL BY HOLDERS OF SECURITIES. . . . . . . . . . . . . .41
SECTION 513. WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . . . . . .41
SECTION 514. WAIVER OF USURY, STAY OR EXTENSION LAWS . . . . . . . . . .42
SECTION 515. UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . . . . .42
ARTICLE SIX THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 601. NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . . .42
SECTION 602. CERTAIN RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . .43
SECTION 603. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. . .44
SECTION 604. MAY HOLD SECURITIES . . . . . . . . . . . . . . . . . . . .44
SECTION 605. MONEY HELD IN TRUST . . . . . . . . . . . . . . . . . . . .44
SECTION 606. COMPENSATION AND REIMBURSEMENT. . . . . . . . . . . . . . .44
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY;
CONFLICTING INTERESTS . . . . . . . . . . . . . . . . . .45
SECTION 608. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR . . . . .45
SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. . . . . . . . . . .47

iii

<PAGE>

SECTION 610. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 611. APPOINTMENT OF AUTHENTICATING AGENT . . . . . . . . . . . .48
ARTICLE SEVEN HOLDERS' LIST AND REPORTS BY TRUSTEE AND ISSUER. . . . . . . .50
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS. . . . . . . .50
SECTION 702. REPORTS BY TRUSTEE. . . . . . . . . . . . . . . . . . . . .50
SECTION 703. REPORTS BY ISSUER . . . . . . . . . . . . . . . . . . . . .51
SECTION 704. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. .51
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE . . . . . . .52
SECTION 801. CONSOLIDATIONS AND MERGERS OF ISSUER AND SALES,
LEASES AND CONVEYANCE PERMITTED SUBJECT
TO CERTAIN CONDITIONS . . . . . . . . . . . . . . . . . .52
SECTION 802. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. . . . . . . . .52
SECTION 803. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL. . . . . . . .52
ARTICLE NINE SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . .53
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. . . . .53
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS . . . . . .54
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. . . . . . . . . . . .55
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES . . . . . . . . . . . . .55
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT . . . . . . . . . . . .55
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. . . . .55

<PAGE>

SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES . . . . . . . . . . . . .56
ARTICLE TEN COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,
INTEREST AND ADDITIONAL AMOUNTS . . . . . . . . . . . . .56
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . .56
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. . . . .58
SECTION 1004. [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . . .59
SECTION 1005. [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . . .59
SECTION 1006. EXISTENCE. . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 1007. MAINTENANCE OF PROPERTIES. . . . . . . . . . . . . . . . .59
SECTION 1008. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 1009. PAYMENT OF TAXES AND OTHER CLAIMS. . . . . . . . . . . . .60
SECTION 1010. PROVISION OF FINANCIAL INFORMATION . . . . . . . . . . . .60
SECTION 1011. STATEMENT AS TO COMPLIANCE . . . . . . . . . . . . . . . .60
SECTION 1012. ADDITIONAL AMOUNTS . . . . . . . . . . . . . . . . . . . .61
SECTION 1013. WAIVER OF CERTAIN COVENANTS. . . . . . . . . . . . . . . .61
ARTICLE ELEVEN REDEMPTION OF SECURITIES. . . . . . . . . . . . . . . . . . .62
SECTION 1101. APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . . .62
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. . . . . . . . . . .62
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. . . . .62
SECTION 1104. NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . .62
SECTION 1105. DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . .64

<PAGE>

SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE. . . . . . . . . . .64
SECTION 1107. SECURITIES REDEEMED IN PART. . . . . . . . . . . . . . . .65
ARTICLE TWELVE SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . .65
SECTION 1201. APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . . .65
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENT WITH SECURITIES . . .66
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. . . . . . . . .66
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS. . . . . . . . . . . . .66
SECTION 1301. APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . . .66
SECTION 1302. REPAYMENT OF SECURITIES. . . . . . . . . . . . . . . . . .66
SECTION 1303. EXERCISE OF OPTION . . . . . . . . . . . . . . . . . . . .67
SECTION 1304. WHEN SECURITIES PRESENTED FOR REPAYMENT
BECOME DUE AND PAYABLE. . . . . . . . . . . . . . . . . .67
SECTION 1305. SECURITIES REPAID IN PART. . . . . . . . . . . . . . . . .68
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . . .69
SECTION 1401. APPLICABILITY OF ARTICLE; ISSUER'S
OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. . . .69
SECTION 1402. DEFEASANCE AND DISCHARGE . . . . . . . . . . . . . . . . .69
SECTION 1403. COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . .69
SECTION 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. . . . . .70
SECTION 1405. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS . . .71

<PAGE>

ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES. . . . . . . . . . . . . .72
SECTION 1501. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. . . . . . . . .72
SECTION 1502. CALL, NOTICE AND PLACE OF MEETINGS . . . . . . . . . . . .73
SECTION 1503. PERSONS ENTITLED TO VOTE AT MEETINGS . . . . . . . . . . .73
SECTION 1504. QUORUM; ACTION . . . . . . . . . . . . . . . . . . . . . .73
SECTION 1505. DETERMINATION OF VOTING RIGHTS; CONDUCT
AND ADJOURNMENT OF MEETINGS . . . . . . . . . . . . . . .74
SECTION 1506. COUNTING VOTES AND RECORDING ACTION OF MEETINGS. . . . . .75
SECTION 1507. EVIDENCE OF ACTION TAKEN BY HOLDERS. . . . . . . . . . . .75
SECTION 1508. PROOF OF EXECUTION OF INSTRUMENTS. . . . . . . . . . . . .76
ARTICLE SIXTEEN SECURITIES IN FOREIGN CURRENCIES . . . . . . . . . . . . . .76
SECTION 1601. APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . . .76

vii

<PAGE>

Reconciliation and Tie between Trust Indenture Act of 1939 (the "TIA" or
"Trust Indenture Act") and Indenture, dated as of _____________, 1997

Trust Indenture Act Section Indenture Section
Sec. 310(a)(1) . . . . . . . . . . . . . . . . . . . . 607
(a)(2). . . . . . . . . . . . . . . . . . . . . 607
(b) . . . . . . . . . . . . . . . . . . . . . . 607, 608
Sec. 312(a). . . . . . . . . . . . . . . . . . . . . . 704
Sec. 312(c). . . . . . . . . . . . . . . . . . . . . . 701
Sec. 313(a). . . . . . . . . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . . . . . . . . . 702
Sec. 314(a). . . . . . . . . . . . . . . . . . . . . . 703
(a)(4). . . . . . . . . . . . . . . . . . . . . 1011
(c)(1). . . . . . . . . . . . . . . . . . . . . 102
(c)(2). . . . . . . . . . . . . . . . . . . . . 102
(c) . . . . . . . . . . . . . . . . . . . . . . 102
Sec. 315(b). . . . . . . . . . . . . . . . . . . . . . 601
Sec. 316(a) (last sentence). . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . . . . . . . . . 508
Sec. 317(a)(1) . . . . . . . . . . . . . . . . . . . . 503
(a)(2). . . . . . . . . . . . . . . . . . . . . 504
Sec. 318(a). . . . . . . . . . . . . . . . . . . . . . 113
(c) . . . . . . . . . . . . . . . . . . . . . . 113

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 Trust Indenture
Act, which provides that the provisions of Sections 310 to and including 317 of
the Trust Indenture Act are a part of and govern every qualified indenture,
whether or not physically contained therein.

viii

<PAGE>

INDENTURE, dated as of , 1997 between EVANS WITHYCOMBE
RESIDENTIAL, L.P., a Delaware limited partnership (the "Issuer"), having its
principal offices at 6991 East Camelback Road, Suite A-200, Scottsdale,
Arizona 85251 and Bank One, Columbus, N.A., a national banking association
organized under the laws of the State of Ohio, as Trustee hereunder (the
"Trustee"), having its Corporate Trust Office at 100 East Broad Street,
Columbus, Ohio 43215.

RECITALS OF THE ISSUER

The Issuer has resolved 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 principal amount, in one or more series, each to
bear interest at the rates or formulas, to mature at such times and to have such
other provisions as shall be fixed as hereinafter provided.

This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are deemed to be incorporated into this
Indenture and shall, to the extent applicable, be governed by such provisions.

All things necessary to make this Indenture a valid agreement of the
Issuer, 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 unless 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;

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

<PAGE>

(4) the words "herein," "hereof," "hereto" 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; and

(5) the word "or" is always used inclusively.

"Act," when used with respect to any Holder, has the meaning specified in
Section 104.

"Additional Amounts" means any additional amounts which are required by a
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Issuer in respect of certain taxes, assessments or
other governmental charges imposed on certain Holders and which are owing to
such Holders.

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

"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 611 to act on behalf of the Trustee to authenticate Securities of one
or more series.

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

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

"Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer.

"Board of Directors" means the board of directors of the General Partner or
any committee of that board duly authorized to act hereunder.

"Board Resolution" means a copy of one or more resolutions certified by the
Secretary or an Assistant Secretary of the General Partner 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
location referred to in this Indenture or in the Securities, means, unless
otherwise specified with respect to

<PAGE>

any Securities pursuant to Section 301, any day other than a Saturday or Sunday
or other 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.

"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.

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

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

"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation 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 Union 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 principal corporate trust 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 100 East
Broad Street, Columbus, Ohio 43215; provided that with respect to presentment,
transfer, exchange, registration or payment of Securities, "Corporate Trust
Office" means at the date hereof c/o the 1235 West Schrock Road, Attn:
Corporate Trust Operations, Columbus, Ohio 43271-0184.

"Corporation" means any corporation, limited liability company,
association, partnership, company and business trust.

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

"Custodian" has the meaning specified in Section 501.

"Debt" of any Person means, without duplication, any indebtedness of such
Person, whether or not contingent, in respect of (i) borrowed money evidenced
by bonds, notes, debentures or similar instruments, (ii) indebtedness secured
by any mortgage, pledge, lien, charge, encumbrance or any security interest
existing on property owned by such Person, (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 except any such balance that
constitutes an accrued expense or trade payable or (iv) any lease of property
by such Person as lessee which is reflected on such Person's consolidated
balance sheet as a capitalized lease in accordance with GAAP, and (v) to the
extent not otherwise included in (i) through (iv) above, any obligation by
such Person to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
indebtedness of another Person (other than such Person and its Subsidiaries).

<PAGE>

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

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

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

"ECU" means European Currency Units as defined and revised from time to
time by the Council of the European Community.

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

"European Community" means the European Economic Community.

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

"European Union" means the European Community, the European Coal and Steel
Community and the European Atomic Energy Community.

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

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"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 or by any recognized confederation or
association of such governments.

"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States applied on a consistent basis.

"General Partner" means Evans Withycombe Residential, Inc., a Maryland
corporation, as general partner of the Issuer.

"Government Obligations" means securities which are (i) direct obligations
of the United States 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 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 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 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

<PAGE>

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 any Registered Security, the Person in whose
name such Security is registered in the Security Register and, in the case of
any 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 a 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 be supplemented or
amended from time to time 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 a 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 1012, includes such
Additional Amounts.

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

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

"Issuer Request" and "Issuer Order" mean, respectively, a written request
or order signed in the name of the Issuer by the General Partner by its Chairman
of the Board, its President or a Vice President (whether or not designated by a
number or a word or words added before or after the title "vice president"), and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, of the General Partner, and delivered to the Trustee.

"Judgment Currency" has the meaning specified in Section 115.

"Legal Holiday" means a day that is not a Business Day.

<PAGE>

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

"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President (whether or not designated by a number
or a word or words added before or after the title "vice president") of the
General Partner and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of the General Partner, and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Issuer or who may be an employee of or other counsel for the Issuer and
who shall be 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 canceled by the Trustee or the
Security Registrar or delivered to the Trustee or the Security Registrar 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 Issuer) in trust or set aside and segregated in trust by the
Issuer (if the Issuer 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 provision theretofore satisfactory to the Trustee
has been made;

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

(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 Issuer;

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

<PAGE>

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 or calculation, 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 Issuer, 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 Security
pursuant to Section 301, and (iv) Securities owned by the Issuer or any other
obligor upon the Securities or any Affiliate of the Issuer 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 determination
or calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee knows to be so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the Issuer
or any other obligor upon the Securities or any Affiliate of the Issuer or of
such other obligor.

"Paying Agent" means any Person authorized by the Issuer to pay the
principal of (and premium and Additional Amounts, if any) or interest on any
Securities or coupons on behalf of the Issuer.

"Person" means any individual, Corporation, joint venture, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.

"Place of Payment," when used with respect to any Security, means the place
or places where the principal of (and premium and Additional Amounts, 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.

"Recourse Indebtedness" means Debt other than Secured Debt as to which the
liability of the obligor thereon is limited to its interest in the collateral
securing such Secured Debt, provided that no such Secured Debt shall constitute
Recourse Indebtedness by reason of provisions therein

<PAGE>

for imposition of full recourse liability on the obligor for certain wrongful
acts, environmental liabilities, or other customary exclusions from the scope of
so-called "non-recourse" provisions.

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

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

"Registered Security" shall mean any Security which is registered in the
Security Register.

"Regular Record Date" for the interest payable on any Interest Payment Date
on any Registered Security 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
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.

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

"Responsible Officer," when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.

"Secured Debt" means, without duplication, Debt that is secured by any
mortgage, lien, charge, encumbrance, trust deed, deed of trust, deed to secure
debt, security agreement, pledge, conditional sale or other title retention
agreement, capitalized lease, or other like agreement granting or conveying
security title to or a security interest in real property or other tangible
assets.

"Securities" 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 any series as to which such Person is not
Trustee.

<PAGE>

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

"Senior Executive Group" shall mean, collectively, those individuals
holding the offices of Chairman of the Board, President, Chief Executive
Officer, Chief Operating Officer, or any Executive Vice President of the General
Partner.

"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933, as amended) of the Issuer.

"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," when used with respect to any Security or any
installment of principal thereof or interest thereon or any Additional Amounts
with respect thereto, means 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, or such
Additional Amounts are due and payable.

"Subsidiary" means (i) any corporation, partnership, limited liability
company or other entity the majority of the shares of the non-voting capital
stock or other equivalent ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Issuer,
and the majority of the shares of the voting capital stock or other equivalent
ownership interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by the Issuer or by the Issuer and the General
Partner, any other Subsidiary, and/or one or more individuals of the Senior
Executive Group (or, in the event of death or disability of any of such
individuals, his/her respective legal representative(s)), or such individuals'
successors in office as an officer of the General Partner, and (ii) any other
entity (other than the General Partner) the accounts of which are consolidated
with the accounts of the Issuer.

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

"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; provided, however, that if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.

"United States" means 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 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

<PAGE>

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. Except as otherwise
expressly provided in this Indenture, upon any application or request by the
Issuer to the Trustee to take any action under any provision of this Indenture,
the Issuer shall furnish to the Trustee an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Indenture 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 (including certificates delivered
pursuant to Section 1011) 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 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 General Partner may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations of or 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

<PAGE>

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
General Partner stating that the information as to such factual matters is in
the possession of the Issuer, 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 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, but only 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, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee and
the Issuer and any agent of the Trustee or the Issuer, 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 in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.

(c) The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.

(d) The ownership, principal amount and serial numbers of Bearer
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same 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 reasonably acceptable to the Issuer,
wherever situated, if such certificate shall be deemed by the Issuer and the
Trustee to

<PAGE>

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 Issuer 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, principal amount and serial numbers of Bearer
Securities held by the Person so executing such instrument in writing and the
date of the commencement and the date of the termination of holding the same may
also be proved in any other manner which the Trustee deems sufficient.

(e) If the Issuer shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Issuer may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders of
Registered Securities entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Issuer shall have no
obligation to do so. 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 Registered Securities
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 Issuer in reliance
thereon, whether or not notation of such action is made upon such Security.

SECTION 105. NOTICES, ETC., TO TRUSTEE AND ISSUER. 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 a Holder or by the Issuer 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, or

(2) the Issuer 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 Issuer addressed to it
at the address of its principal office specified in the first

<PAGE>

paragraph of this Indenture or at any other address previously furnished in
writing to the Trustee by the Issuer.

SECTION 106. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for
notice of any event to Holders of Registered Securities by the Issuer or the
Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders of Registered Securities is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
of Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein. Any notice mailed to a Holder in the
manner herein prescribed shall be conclusively deemed to have been received by
such Holder, whether or not such Holder actually receives such notice.

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

Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 301, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in New York City and
in such other city or cities as may be specified in such Securities 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 notifications 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, waiver or
Act required or permitted under this Indenture shall be in the English language,
except that, if the Issuer so elects, 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

<PAGE>

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 Issuer 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 deemed 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, 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. GOVERNING LAW. This Indenture and the Securities and coupons
shall be governed by and construed in accordance with the laws of the State of
New York.

SECTION 112. 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, or the last date on which a Holder has the right to
exchange Securities of a series that are exchangeable, shall be a Legal Holiday
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or any Security or coupon other than a provision in any Security or
coupon that specifically states that such provision shall apply in lieu hereof),
payment of interest or any Additional Amounts or principal (and premium, if any)
need not be made at such Place of Payment on such date and such Securities need
not be exchanged on such date, but such payment may be made and such Securities
may be exchanged 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 or on such last day for exchange, 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 or last day for or exchange, as the case may
be.

SECTION 113. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with any duties under any required provision of
the Trust Indenture Act imposed hereon by Section 318(c) thereof, such required
provision shall control.

<PAGE>

SECTION 114. COUNTERPARTS. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

SECTION 115. JUDGMENT CURRENCY. The Issuer agrees, to the fullest extent
that it may effectively do so under applicable law, that (a) if for the purpose
of obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of, or premium or interest, if any, or Additional
Amounts on the Securities of any series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding that on which a final unappealable judgment is given and (b) its
obligations under this Indenture to make payments in the Required Currency
(i) shall not be discharged or satisfied by any tender, or any recovery pursuant
to any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable, and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Legal Holiday in The
City of New York.

ARTICLE TWO
SECURITIES FORMS

SECTION 201. FORMS OF SECURITIES. The Registered Securities, if any, of
each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms as shall be established in one or
more indentures supplemental hereto or approved from time to time by or pursuant
to a Board Resolution in accordance with Section 301, 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 Issuer 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.

<PAGE>

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.

(TRUSTEE)
as Trustee

By:
------------------------------------
Authorized Signatory

SECTION 203. SECURITIES ISSUABLE IN GLOBAL FORM. If Securities of or
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (9) 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
or any number of such Securities shall represent the aggregate amount of
Outstanding Securities of such series from time to time endorsed thereon and may
also provide 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 in such manner and by such Person or Persons as shall be
specified therein or in the Issuer Order to be delivered pursuant to Section 303
or 304.

Subject to the provisions of Section 303 and, if applicable, Section 304,
the Trustee shall deliver and redeliver any Security in permanent global form in
the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Issuer Order. If an Issuer Order pursuant to
Section 303 or 304 has been, or simultaneously is, delivered, any instructions
by the Issuer 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 Issuer and the Issuer 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 and
interest on, and any Additional Amounts in respect of, any Security in temporary
or permanent global form shall be made to the Person or Persons specified
therein.

<PAGE>

Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Issuer, the Trustee and any agent of the Issuer and the
Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a global Security (i) in the case of global Security
in registered form, the Holder of such global Security in registered form, or
(ii) in the case of a global Security in bearer form, the Person or Persons
specified pursuant to Section 301.

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 one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following:

(1) the title of the Securities of the series (which shall distinguish
the Securities of such series from all other series of Securities), and whether
such Securities are guaranteed by the General Partner or any of its subsidiaries
and, if such Securities are so guaranteed, the terms and conditions of such
guarantee;

(2) any limit upon the aggregate principal amount of the Securities of 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 the series pursuant to
Section 304, 305, 306, 906, 1107 or 1305);

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

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

(5) the rate or rates at which the Securities of 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 of twelve 30-day months;

(6) the place or places, if any, other than or in addition to the Borough
of Manhattan, New York City, where (i) the principal of (and premium, if any),
interest, if any, on, and

<PAGE>

Additional Amounts, if any, payable in respect of, the Securities of the series
shall be payable, (ii) any Registered Securities of the series may be
surrendered for registration of transfer or exchange and (iii) notices or
demands to or upon the Issuer in respect of the Securities of the series and
this Indenture may be served;

(7) the period or periods within 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 the Securities of
the series may be redeemed, as a whole or in part, at the option of the Issuer,
if the Issuer is to have such an option;

(8) the obligation, if any, of the Issuer to redeem, repay or purchase the
Securities of the series pursuant to any sinking fund or analogous provision or
at the option of a Holder thereof, upon the occurrence of certain events (such
as a change of control of the Issuer) or otherwise, 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 the Securities of
the series shall be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;

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

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

(11) if other than the principal amount thereof, the portion of the
principal amount of the Securities of 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;

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

(13) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of 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;

(14) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be payable,
at the election of the Issuer 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,

<PAGE>

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;

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

(16) any deletions from, modifications of or additions to the Events of
Default or covenants in this Indenture with respect to Securities of the series;

(17) whether the Securities of the series will be in certificated or
book-entry form and, if certificated, whether Securities of 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 the series may be
exchanged for Registered Securities of the series and vice versa (if permitted
by applicable laws and regulations), whether any Securities of the series are to
be issuable initially in temporary global form and whether any Securities of 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 the series are to be issuable as a
global Security, the identity of the depositary for such series;

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

(19) 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;

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

(21) if the Securities of 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;

<PAGE>

(22) whether and under what circumstances the Issuer will pay Additional
Amounts on the Securities of 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 Issuer will
have the option to redeem such Securities rather than pay such Additional
Amounts (and the terms of any such option);

(23) 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, if any, appertaining to
any Bearer Securities of the series shall be substantially identical except, in
the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution establishing the
series (subject to Section 303) and set forth in an Officers' Certificate or in
any indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.

If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the General Partner and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.

SECTION 302. CURRENCY; DENOMINATIONS. Unless otherwise provided as
contemplated by Section 301, the principal of, any premium and interest on and
any Additional Amounts with respect to the Securities shall be payable in
Dollars. Unless otherwise provided as contemplated by Section 301, Registered
Securities denominated in Dollars (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 denominated in Dollars (other than Bearer Securities issued in global
form, which may be of any denomination) shall be issuable in denominations of
$5,000 and any integral multiple thereof. Securities not denominated in Dollars
shall be issuable in such denominations as are established with respect to such
Securities in or pursuant to this Indenture.

SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Securities and any coupons appertaining thereto shall be executed on behalf of
the Issuer by the General Partner by its Chairman of the Board, its President or
one of its Vice Presidents (whether or not designated by a number or word or
words added before or after the title "Vice President"), under its corporate
seal reproduced thereon, and attested by its Secretary or one of its Assistant
Secretaries. 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 bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the General Partner
shall bind the Issuer, notwithstanding that

<PAGE>

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 Issuer may deliver the Securities of any series, together with
any coupon appertaining thereto, executed by the Issuer to the Trustee for
authentication, together with an Issuer Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Issuer 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. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and canceled.

If all 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 Issuer 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 stating that:

(a) the terms and the form or forms or terms of such Securities
and any coupons have been established in conformity with the provisions of
this Indenture; and

(b) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Issuer 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 Issuer in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute legal, valid and binding obligations of the Issuer, enforceable
in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and other similar laws of

<PAGE>

general applicability relating to or affecting the enforcement of
creditors' rights generally and to general equitable principles and will
entitle the Holders thereof to the benefits of this Indenture; and

(ii) an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the issuance of the
Securities have been complied with and that, to the best of the knowledge of the
signers of such certificate, no Event of Default with respect to any of the
Securities shall have occurred and be continuing.

If such form or terms have been so established, 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 an Officers' Certificate otherwise required
pursuant to Section 301 or an Issuer Order, or 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 certificates, 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 shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
or 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 signatory, 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 Issuer, and the Issuer 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 and sold by the
Issuer, 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 Issuer may execute, and upon Issuer
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

<PAGE>

determine, as conclusively evidenced by their execution of such Securities.
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 Issuer 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 Issuer 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 nonmatured coupons appertaining thereto), the Issuer 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 this
Indenture. 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 in or pursuant to a Board Resolution, this
Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company
("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, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).

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 Issuer shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Issuer. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Issuer'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 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

<PAGE>

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 for 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

<PAGE>

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 Issuer.

(c) Unless otherwise provided in or pursuant to a Board Resolution, this
Section 304(c) shall govern the exchange of temporary Securities issued in
global form 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 DTC for credit to the respective
accounts of the beneficial owners of such Securities (or to such other accounts
as they may direct).

Without unnecessary delay, but in any event not later than the Exchange
Date, the Issuer shall deliver to the Trustee definitive Securities, in
aggregate principal amount equal to the principal amount of such temporary
global Security, executed by the Issuer. On or after the Exchange Date, such
temporary global Security shall be surrendered by DTC to the Trustee, as the
Issuer'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 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
registered form or permanent global registered form, or any combination thereof,
as specified and as contemplated by Section 301, and, if any combination thereof
is so specified as requested by the beneficial owner thereof.

SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept at the Corporate Trust Office of the Trustee or

<PAGE>

in any office or agency of the Issuer 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 Issuer 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 Issuer 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 appointed "Security Registrar" for the purpose
of registering Registered Securities and transfers of Registered Securities on
such Security Register as herein provided. The Issuer shall have the right to
remove and replace from time to time the Security Registrar for any series of
Securities; provided that no such removal or replacement shall be effective
until a successor Security Registrar with respect to such series of Securities
shall have been appointed by the Issuer and shall have accepted such appointment
by the Issuer. 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 Issuer in a Place of Payment for that series, the Issuer shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions. Whenever any such Registered
Securities are so surrendered for exchange, the Issuer 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 by the applicable Board
Resolution and (subject to Section 303) set forth in the applicable Officers'
Certificate, or in any indenture supplemental hereto, delivered 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 Issuer 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 Issuer and the Trustee if there is furnished to them such security
or indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 1002,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like

<PAGE>

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 Issuer shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.

If provided as contemplated by Section 301, at the option of the Holder,
Registered Securities of such series may be exchanged for Bearer Securities upon
such terms and conditions as may be provided in or pursuant to this Indenture
with respect to such series. Whenever any Securities are so surrendered for
exchange, the Issuer 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 or approved by the Issuer or to a nominee of such
successor to DTC. If at any time DTC notifies the Issuer 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 Issuer
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 Issuer within 90 days after the Issuer
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 Issuer, in its sole discretion, determines at any time that all Outstanding
Securities (but not less than all) of any series issued or issuable in the form
of one or more global Securities shall no longer be represented by such global
Security or Securities, then the Issuer 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

<PAGE>

not later than the earliest day on which such interest may be so exchanged, the
Issuer 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 Issuer Order with respect thereto to the Trustee, as
the Issuer'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 Issuer, 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 Issuer or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Issuer 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 Issuer 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.

Except as otherwise provided in or pursuant to this Indenture, the Issuer
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 the date notice of redemption is given pursuant to 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

<PAGE>

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 Issuer, together with, in proper cases, such
security or indemnity as may be required by the Issuer or the Trustee to save
each of them or any agent of either of them harmless, the Issuer 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 Issuer 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 Issuer or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Issuer 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 Issuer 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, if any),
and 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 in 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 Issuer 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.

<PAGE>

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 Issuer,
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, as amended or supplemented, 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 RESERVED. Except as
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on and Additional Amounts with respect
to 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 Issuer maintained for such purpose pursuant to Section 1002;
provided, however, that each installment of interest on any Registered Security
may at the Issuer'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) wire 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.

<PAGE>

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 Issuer, at its election in each case, as
provided in clause (1) or (2) below:

(1) The Issuer 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 Issuer 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 Issuer 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 provided in this clause. 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 Issuer of such Special Record
Date and, in the name and at the expense of the Issuer, 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 Issuer, 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 therefore 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.

<PAGE>

(2) The Issuer 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 Issuer 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 Issuer, the Trustee and
any agent of the Issuer 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, if any), and (subject to
Sections 305 and 307) interest on and any Additional Amounts with respect to
such Registered Security and for all other purposes whatsoever, whether or not
such Registered Security be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer 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 Issuer, the Trustee and any agent of the Issuer or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
any payment with respect to payment thereof or on account thereof and for all
other purposes whatsoever, whether or not any payment with respect to such
Security or coupon be overdue, and neither the Issuer, the Trustee nor any agent
of the Issuer or the Trustee shall be affected by notice to the contrary.

No Holder of any beneficial interest in any global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such global Security, and such depositary may be treated by the Issuer, the
Trustee, and any agent of the Issuer or the Trustee as the owner of such global
Security for all purposes whatsoever. None of the Issuer, 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 Issuer, the Trustee, or any agent of the Issuer or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depository, as a Holder, with respect to such
global Security or impair, as between such depository and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depository (other its nominee) as
Holder of such global Security.

<PAGE>

SECTION 309. CANCELLATION. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it;
provided, however, where the Place of Payment is located outside of the United
States, the Paying Agent at such Place of Payment may cancel the Securities
surrendered to it for such purposes prior to delivering the Securities to the
Trustee. The Issuer may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Issuer 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 Issuer has not issued and sold, and
all Securities so delivered shall be promptly canceled by the Trustee. If the
Issuer shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. Canceled Securities and coupons held by the
Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Issuer, unless by an Issuer Order the
Issuer directs their return to it.

SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities 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 an Issuer Request cease to be of further effect with respect to any
series of Securities specified in such Issuer 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 1012), and the Trustee, upon receipt of an
Issuer Order, and at the expense of the Issuer, 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) appertaining to Bearer Securities surrendered in 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

<PAGE>

segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such Trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation; or

(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity
within one year, or

(iii) if redeemable at the option of the Issuer, 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 Issuer,

and the Issuer, 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 such 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, 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 to the Stated Maturity or Redemption Date, as the case may be;

(2) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and

(3) the Issuer 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 Issuer to the Trustee and any predecessor trustee under
Section 606, the obligations of the Issuer 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 and Government Obligations deposited
with the Trustee pursuant to Section 401 or Article 14 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 Issuer acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any), and any interest and Additional Amounts for whose payment such
money has or

<PAGE>

Government Obligations have been deposited with or received by the Trustee, but
such money and Government Obligations need not be segregated from other funds
except to the extent required by law.

ARTICLE FIVE
REMEDIES

SECTION 501. EVENTS OF DEFAULT. "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) unless such event is
specifically deleted or modified in or pursuant to the supplemental indenture or
Board Resolution establishing the terms of such series pursuant to this
Indenture:

(1) default in the payment of any interest upon or any Additional Amounts
payable in respect of any Security of 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, if any, on)
any Security of that series when it becomes due and payable at its Maturity; or

(3) default in the deposit of any sinking fund payment, when and as due by
the terms of any Security of that series; or

(4) default in the performance, or breach, of any covenant or warranty of
the Issuer in this Indenture with respect to any Security of that series (other
than a covenant or warranty a default in the performance or the breach of which
is elsewhere in this Section 501 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 Issuer by the Trustee or to the Issuer 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) a default under any evidence of Recourse Indebtedness of the Issuer,
or under any mortgage, indenture or other instrument of the Issuer (including a
default with respect to Securities of any series other than that series) under
which there may be issued or by which there may be secured any Recourse
Indebtedness of the Issuer (or by any Subsidiary, the repayment of which the
Issuer has guaranteed or for which the Issuer is directly responsible or liable
as obligor or guarantor), whether such indebtedness now exists or shall
hereafter be created, which default shall constitute a failure to pay an
aggregate principal amount exceeding $5,000,000 of such indebtedness when due
and payable after the expiration of any applicable grace period with respect
thereto and shall have resulted in such indebtedness in an aggregate principal
amount exceeding $5,000,000 becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable, without such
indebtedness having been

<PAGE>

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 Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities of
that series of a written notice specifying such default and requiring the Issuer
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 Issuer 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

(7) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(A) is for relief against the Issuer or any Significant Subsidiary in an
involuntary case,

(B) appoints a Custodian of the Issuer or any Significant Subsidiary or
for all or substantially all of either of its property, or

(C) orders the liquidation of the Issuer or any Significant Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or

(8) any other Event of Default provided in or pursuant to this Indenture
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 all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Issuer (and to the Trustee if given, or such lesser amount as may be provided
for in the Securities of such series, by the

<PAGE>

Holders), and upon any such declaration such principal or such lesser amount
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 not less than a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Issuer and
the Trustee, may rescind and annul such declaration and its consequences if:

(1) the Issuer has paid or deposited with the Trustee a sum sufficient to
pay in the currency or currency unit or composite currency in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series):

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

(B) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon and any Additional Amounts with
respect thereto at the rate or rates borne by or provided for in such
Securities,

(C) to the extent that payment of such interest or Additional Amounts
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, if any) or interest on, and
any Additional Amounts with respect to 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 Issuer 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, if
any, on) any Security of any series at its Maturity,

<PAGE>

then the Issuer 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, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, 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 Issuer 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 Issuer or any other obligor upon such Securities and any related
coupons and collect the monies adjudged or decreed to be payable in the manner
provided by law out of the property of the Issuer or any other obligor upon such
Securities and any related coupons 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 therein, 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 Issuer or any other obligor upon the Securities or the property of the
Issuer 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 Issuer for the payment of
overdue principal, premium, if any, or interest or Additional Amounts) 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, if any) and interest and Additional Amounts, if any,
owing and unpaid in respect of the Securities and any related coupons and to
file such other claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and

(ii) to collect and receive any monies of other property payable
or deliverable on any such claims and to distribute the same;

<PAGE>

and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of the Securities of such series and coupons to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.

Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.

SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES
OR COUPONS. All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the 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, 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, 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, if any), interest
and Additional Amounts, respectively;

THIRD: The balance, if any, to the Issuer.

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

<PAGE>

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 indemnity
reasonably satisfactory to the Trustee 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 or any Security 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,
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, 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 Stated Maturity or Maturities specified in such Security or coupon
(or, in the case of redemption, on the Redemption Date or, in the case of
repayment on the Repayment 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 Issuer, 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

<PAGE>

thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to each Holder 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 any
Holder may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by such Holder 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 and
any related coupons, provided that

(1) such direction shall not be in conflict with any rule of law or with
this Indenture or with the Securities of any series,

(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.

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, 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.

<PAGE>

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 Issuer
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 Issuer (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 25% 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, if any) or interest
or Additional Amounts, if any on 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 or, in the case of repayment, on or after the
Repayment Date).

ARTICLE SIX
THE TRUSTEE

SECTION 601. NOTICE OF DEFAULTS. Within 90 days after the occurrence of
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, 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 best 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

<PAGE>

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 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;

(2) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer 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;

(3) 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;

(4) the Trustee may consult with counsel and the written 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;

(5) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Securities of any series or any related coupons pursuant to this
Indenture, unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

(6) 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 Issuer, personally or by agent or attorney following reasonable notice to
the Issuer;

(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or counsel
and the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or counsel appointed with due care by it hereunder; and

(8) subject to the provisions of Section 602 hereof and Sections 315(a)
through 315(d) of the Trust Indenture Act, the Trustee shall not be charged with
knowledge of any Event

<PAGE>

of Default described in Section 501(4), (5), (6) or (7) hereof unless a
Responsible Officer of the Trustee shall have actual knowledge of such Event of
Default.

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.

Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.

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 Issuer, 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 and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Issuer
are true and correct, subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Issuer 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 Trustee or
the Issuer, 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 of
the TIA, may otherwise deal with the Issuer 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. Except as provided in Section 402 and
Section 1003, money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Issuer.

SECTION 606. COMPENSATION AND REIMBURSEMENT. The Issuer agrees:

(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by the Trustee 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 the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and

<PAGE>

counsel), except any such expense, disbursement or advance as 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 incurred without
gross negligence or willful misconduct on its own part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any its
powers or duties hereunder.

When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.

As security for the performance of the obligations of the Issuer 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, if any) or interest or any
Additional Amounts on particular Securities or any related 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 Issuer. If any
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 with respect to such series.

<PAGE>

(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
Issuer.

(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 Issuer or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or

(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Issuer 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 Issuer 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 similar situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities of
such series 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 Issuer, 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) and shall comply with the
applicable requirements of Section 609. 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 Issuer and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of
Section 609, become the successor Trustee with respect to the Securities of such
series and to that extent supersede the successor Trustee appointed by the
Issuer. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Issuer or the Holders of Securities and
accepted appointment in the manner provided in Section 609, 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.

<PAGE>

(f) The Issuer shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
Issuer 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 Issuer 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 Issuer, 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 Trustee's 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 Issuer 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 Issuer shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor

<PAGE>

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 or pursuant to Section 306 issued upon original issue, 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 Issuer. Wherever reference is made
in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certification 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 Issuer and 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

<PAGE>

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 Issuer. 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 Issuer. 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 provision
of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and shall give
notice of such appointment to all Holders of Securities of 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 provision of this Section.

The Issuer 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:

<PAGE>

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

(TRUSTEE)
as Trustee

By:
------------------------------------
Authenticating Agent

By:
------------------------------------
Authorized Signatory

If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the Issuer
wishes to have Securities of such series authenticated upon original issuance,
the Trustee, if so requested in writing (which writing need not be accompanied
by or contained in an Officers' Certificate by the Issuer), shall appoint in
accordance with this Section an Authenticating Agent having an office in a Place
of Payment designated by the Issuer with respect to such series of Securities.

ARTICLE SEVEN
HOLDERS' LIST AND REPORTS BY TRUSTEE AND ISSUER

SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS. Every Holder
of Securities or coupons, by receiving and holding the same, agrees with the
Issuer and the Trustee that neither the Issuer nor the Trustee nor an
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(c), 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.

(1) Within 60 days after December 31 of each year commencing with the
first December 31 following the first issuance of Securities pursuant to
Section 301, if required by Section 313(a) of the Trust Indenture Act, the
Trustee shall transmit, pursuant to Section 313(c) of the Trust Indenture Act, a
brief report dated as of such December 31 with respect to any of the events
specified in said Section 313(a) which may have occurred since the later of the
immediately preceding December 31 and the date of this Indenture.

(2) The Trustee shall transmit the reports required by Section 313(a) of
the Trust Indenture Act at the times specified therein.

<PAGE>

(3) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.

SECTION 703. REPORTS BY ISSUER. The Issuer will, pursuant to TIA
Section 314(a):

(1) file with the Trustee, within 15 days after the Issuer 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 Issuer may be required to file with the Commission pursuant
to Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer is not
required to file information, documents or reports pursuant to either of said
Sections, then it shall 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 Issuer 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 Issuer pursuant to Section 1010 and 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. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. In
accordance with TIA Section 312(a), the Issuer 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 of 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 Issuer 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 ISSUER AND SALES, LEASES AND
CONVEYANCE PERMITTED SUBJECT TO CERTAIN CONDITIONS. The Issuer may consolidate
with, or sell, lease or convey all or substantially all of its assets to, or
merge with or into, any other Corporation, provided that (i) the Issuer shall be
the continuing Corporation, or the successor Corporation (if other than the
Issuer) formed by or resulting from any such consolidation or merger or which
shall have received the transfer of such assets shall be organized and existing
under the laws of the United States or a State thereof and shall expressly
assume the due and punctual payment of the principal of (and premium, if any)
and interest (including all Additional Amounts, if any) on all the Securities,
and the due and punctual performance and observance of all of the covenants and
conditions in this Indenture; and (ii) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Issuer or any Subsidiary as a result thereof as having been incurred by the
Issuer 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
such 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 Corporation, such successor Corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
Corporation, shall be relieved of any further obligation under this Indenture
and the Securities. Such successor Corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of the Issuer, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Issuer and delivered to the Trustee; and, upon the order of
such successor Corporation, instead of the Issuer, 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 Issuer to the Trustee for
authentication, and any Securities which such successor Corporation 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
charges 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 corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.

<PAGE>

ARTICLE NINE
SUPPLEMENTAL INDENTURES

SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without
the consent of any Holders of Securities, the Issuer, 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 Issuer and the
assumption by any such successor of the covenants of the Issuer herein and in
the Securities; or

(2) to add to the covenants of the Issuer 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 Issuer; 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 or
interest on or any Additional Amounts with respect to 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

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(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, provided 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 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
that any such action shall not adversely affect the interests of the Holders
of Securities of such series and any related coupons or any other series of
Securities in any material respect.

SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Issuer and the Trustee, the Issuer, 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, if any,
on) or any installment of principal of or interest on or any Additional Amounts
with respect to, 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 payable upon the redemption thereof, or change any
obligation of the Issuer to pay Additional Amounts pursuant to Section 1012
(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 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 premium or interest on, or any
Additional Amounts with respect to any Security 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),

(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

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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 1013, 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 solely 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. As a condition to
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
(subject to TIA Section 315) 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
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities of each series to
which such supplemental indenture applies that theretofore were or thereafter
are 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 Issuer shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Issuer, to any such supplemental indenture may be

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prepared and executed by the Issuer and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES. Promptly after the
execution by the Issuer and the Trustee of any supplemental indenture pursuant
to the provisions of Section 902, the Issuer 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, IF ANY, INTEREST AND
ADDITIONAL AMOUNTS. The Issuer 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, 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 any Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1012 in respect
of principal of (or premium, 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 Issuer, 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 Issuer 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 Issuer 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 Issuer will maintain: (A) in the
Borough of Manhattan, New York City, an office or agency where any Securities of
that series may be presented or surrendered for payment, where any Securities of
that series may be surrendered for registration of transfer, where Securities of
that series may be surrendered for exchange, where notices and demands to or
upon the Issuer 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 1012), provided, however, that if the Securities of that series are
listed on the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the Issuer

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will maintain a Paying Agent for the Securities of that series in Luxembourg 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 on 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
Registered 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 Issuer in respect of the Securities of
that series and this Indenture may be served. The Issuer 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 Issuer 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 1012) at the offices
specified in the Security in London, England, and the Issuer hereby appoints the
same as its agent to receive such respective presentations, surrenders, notices
and demands, and the Issuer 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 or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Issuer 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 amounts owing with respect to any Bearer
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
payable on Securities of such series pursuant to Section 1012) shall be made at
the office of the designated agent of the Issuer's Paying Agent in the Borough
of Manhattan, New York City, if (but only if) payment in Dollars of the full
amount of such principal, premium, interest or Additional Amounts, as the case
may be, at all offices or agencies outside the United States maintained for the
purpose by the Issuer in accordance with this Indenture, is illegal or
effectively precluded by exchange controls or other similar restrictions.

The Issuer may from time to time designate one or more other offices or
agencies where the Securities of one or more series 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 designations or rescission
shall in any manner relieve the Issuer 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 Issuer 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 Issuer hereby designates as a Place of Payment for each series of Securities
the office or agency of the Issuer in the Borough of Manhattan, New York City,
and initially appoints the Trustee at its Corporate Trust Office as Paying Agent
in such city and as its agent to receive all such presentations, surrenders,
notices and demands.

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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 Issuer
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
Issuer 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, 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, 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 Issuer shall have one or more Paying Agents for any series of
Securities and any related coupons, it will, before each due date of the
principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, 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 or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Issuer will promptly notify the Trustee of its action
or failure so to act.

The Issuer 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,
if any) or interest on Securities or Additional Amounts in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the Issuer (or any other
obligor upon the Securities) in the making of any such payment of principal (and
premium, if any) or interest or Additional Amounts; and

(3) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.

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

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the Trustee upon the same trusts as those upon which such sums were held by the
Issuer 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 Issuer, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series or any
related coupon and remaining unclaimed for two years after such principal (and
premium, if any), interest or Additional Amounts have become due and payable
shall be paid to the Issuer upon Issuer Request or (if then held by the Issuer)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment of such principal of (and premium, 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 Issuer 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 Issuer 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 Issuer.

SECTION 1004. [intentionally omitted]

SECTION 1005. [intentionally omitted]

SECTION 1006. EXISTENCE. Subject to Article Eight, the Issuer will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights and franchises; provided, however, that the Issuer
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 Issuer and that the loss thereof is not
disadvantageous in any material respect to the Holders.

SECTION 1007. MAINTENANCE OF PROPERTIES. The Issuer will cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Issuer 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 Issuer or any Subsidiary from selling or otherwise disposing of for
value any of their properties.

SECTION 1008. INSURANCE. The Issuer will, and will cause each of its
Subsidiaries to, maintain insurance coverage on its property against loss or
damage with financially sound and reputable insurance companies in amounts
and covering such contingencies that are customary for similarly situated
companies in its industry.

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SECTION 1009. PAYMENT OF TAXES AND OTHER CLAIMS. The Issuer will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Issuer 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
Issuer or any Subsidiary; provided, however, that the Issuer 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 1010. PROVISION OF FINANCIAL INFORMATION. Whether or not the
Issuer is subject to Section 13 or 15(d) of the Exchange Act and for so long as
any Securities are outstanding, the Issuer will, to the extent permitted under
the Exchange Act, file with the Commission the annual reports, quarterly reports
and other documents which the Issuer would have been required to file with the
Commission pursuant to such Section 13 or 15(d) (the "Financial Statements") if
the Issuer 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 Issuer
would have been required so to file such documents if the Issuer were so
subject.

The Issuer 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 Issuer would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
if the Issuer were subject to such Sections, and (ii) file with the Trustee
copies of the annual reports, quarterly reports and other documents which the
Issuer would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Issuer were subject to such Sections, and
(y) if filing such documents by the Issuer 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 1011. STATEMENT AS TO COMPLIANCE. The Issuer shall deliver to the
Trustee, within 120 days after the end of each fiscal year, a written statement
(which need not be contained in or accompanied by an Officers' Certificate)
signed by the principal executive officer, the principal financial officer or
the principal accounting officer of the General Partner acting in its capacity
as the sole general partner of the Issuer, stating that:

(1) a review of the activities of the Issuer during such year and of its
performance under this Indenture has been made under his or her supervision, and

(2) to the best of his or her knowledge, based on such review, (a) the
Issuer has complied with all the conditions and covenants imposed on it under
this Indenture throughout such year, or, if there has been a default in the
fulfillment of any such condition or covenant, specifying each such default
known to him or her and the nature and status thereof, and (b) no event has
occurred and is continuing which is, or after notice or lapse of time or both
would become, an Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him or her and the nature and
status thereof.

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SECTION 1012. ADDITIONAL AMOUNTS. If any Securities of a series provide
for the payment of Additional Amounts, the Issuer will pay to the Holder of any
Security of such series or any coupon appertaining thereto Additional Amounts as
may be specified as contemplated by Section 301. Whenever in this Indenture
there is mentioned, in any context except in the case of Section 502(1), the
payment of the principal of or any premium 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 interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Issuer shall furnish to
the Trustee and the Paying Agent, if other than the Trustee, 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 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 Issuer will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. If 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 Issuer covenants to indemnify the Trustee and any
Paying Agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them or
in reliance on any Officers' Certificate furnished pursuant to this Section or
in reliance on the Issuer's not furnishing such an Officers' Certificate.

SECTION 1013. WAIVER OF CERTAIN COVENANTS. The Issuer may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1006 to 1011, inclusive, 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,

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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 Issuer and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

ARTICLE ELEVEN
REDEMPTION OF SECURITIES

SECTION 1101. APPLICABILITY OF ARTICLE. Securities of any series which
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by
Section 301 for Securities of any series) in accordance with this Article.

SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the
Issuer to redeem any Securities shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of the Issuer of less
than all of the Securities of any series, the Issuer 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 Issuer 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 Issuer 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. Failure to give such notice

<PAGE>

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, the notice which
relates to such Security shall state 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 Issuer, 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 redemption
on this Redemption Date pursuant to Section 305 or otherwise, the last date, as
determined by the Issuer, on which such exchanges may be made,

<PAGE>

(10) the CUSIP number or the Euroclear or CEDEL reference numbers of such
Security, if any, and

(11) if applicable, that a Holder of Securities who desires to convert
Securities for redemption 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.

A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.

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

SECTION 1105. DEPOSIT OF REDEMPTION PRICE. At least one Business Day prior
to any Redemption Date, the Issuer shall deposit with the Trustee or with a
Paying Agent (or, if the Issuer 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 and Additional Amounts
with respect thereto, 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 Issuer 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 Issuer at the Redemption Price, together with accrued interest and
Additional Amounts, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
that, except as otherwise provided, 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.

<PAGE>

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 Issuer 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 upon presentation and
surrender of those coupons at an office or agency located outside the United
States (except as otherwise provided in Section 1002).

If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, 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 Registered Security which
is to be redeemed only in part (pursuant to the provisions of this Article)
shall be surrendered at a Place of Payment therefor (with, if the Issuer or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Issuer and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) and the Issuer shall execute
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge a new Registered 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. If a Security in global form is so
surrendered, the Issuer shall execute, and the Trustee shall authenticate and
deliver to the depositary for such Security in global form as shall be specified
in the Issuer Order with respect thereto to the Trustee, without service charge,
a new Security in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Security in global form 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.

<PAGE>

SECTION 1202. SATISFACTION OF SINKING FUND PAYMENT WITH SECURITIES. The
Issuer may, in satisfaction of all or any part of any mandatory sinking fund
payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any Securities previously called for
redemption) together in the case of any Bearer Securities of such series with
all unmatured coupons appertaining thereto and (2) apply as a credit Securities
of such series which have been redeemed either at the election of the Issuer
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, or
which have otherwise been acquired by the Issuer; 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 fund payment date for Securities of any series, the
Issuer 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 Issuer 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
Issuer 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.

ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS

SECTION 1301. APPLICABILITY OF ARTICLE. Repayment of Securities of any
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.

SECTION 1302. REPAYMENT OF SECURITIES. Securities of any series subject
to repayment in whole or in part at the option of the Holders thereof will,
unless otherwise provided in the terms of such Securities, be repaid at a price
equal to the principal amount thereof, together with interest, if any, thereon
accrued to the Repayment Date specified in or pursuant to terms of such
Securities. The Issuer covenants that at least one Business Day prior to the
Repayment Date

<PAGE>

it will deposit with the Trustee or with a Paying Agent (or, if the Issuer is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in 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 Issuer 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., 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 denominations 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 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
Issuer.

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 Issuer on the Repayment Date therein specified,
and on and after such Repayment Date (unless the Issuer shall default in

<PAGE>

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 Issuer, 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 Issuer 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 Issuer 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 Issuer shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge and at the expense of the Issuer, 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.

<PAGE>

ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1401. APPLICABILITY OF ARTICLE; ISSUER'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, 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 Issuer may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.

SECTION 1402. DEFEASANCE AND DISCHARGE. Upon the Issuer's exercise of the
above option applicable to this Section 1402 with respect to any Securities of
or within a series, the Issuer 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 Issuer 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 Issuer, 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,
if any) and interest and Additional Amounts, if any, on such Securities and any
coupons appertaining thereto when such payments are due and any right of such
Holder to exchange such Securities for other Securities, (B) the Issuer'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 1012 (but only to the extent that the
Additional Amounts payable with respect to such Securities exceed the amount
deposited in respect of such Additional Amounts pursuant to Section 1404 below),
(C) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and (D) this Article. Subject to compliance with this Article Fourteen, the
Issuer 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 Issuer's exercise of the
option in Section 1401 applicable to this Section 1403 with respect to any
Securities of or within a series, the Issuer shall be released from its
obligations under Sections 1006 to 1011, inclusive, and, if specified pursuant
to Section 301, its obligations under any other covenant, with respect to such

<PAGE>

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 any such 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 Issuer may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
such other covenant or by reason of reference in any such Section or such other
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a default or an Event of Default under
Section 501(4) or 501(8) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.

SECTION 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:

(a) The Issuer 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, if any) and interest, if any,
on such Securities and any coupons appertaining thereto, money in an amount, or
(3) a combination thereof, any case, 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, 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.

<PAGE>

(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 Issuer is a party or by which it
is bound.

(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 and, with respect to defeasance only, 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 Issuer shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Issuer 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 not 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 Issuer 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 Issuer 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.

(g) 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 Issuer
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

<PAGE>

payment, either directly or through any Paying Agent (including the Issuer
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 thereon in respect of principal (and premium, 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, in or pursuant to this Indenture or any Security 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 Foreign Currency 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, if any), and interest, if any, on and Additional Amounts, if any, with
respect to 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 Foreign Currency in effect (as nearly as feasible) at the time
of the Conversion Event.

The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposit
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, subject to
Section 606, the Trustee shall deliver or pay to the Issuer from time to time
upon Issuer 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.

<PAGE>

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, New York City, 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 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 Issuer, pursuant to a Board Resolution, or any
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
Issuer 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, New York City, 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 Issuer 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 the reconvening of 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 to 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

<PAGE>

reconvening of any adjournment 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 persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting; 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
actions 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

<PAGE>

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 canceled by the
Issuer of by Holders of Securities as provided in Section 1502(b), in which case
the Issuer or the Holders of Securities of 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 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 Issuer 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

<PAGE>

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 and 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 Issuer,
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.

ARTICLE SIXTEEN
SECURITIES IN FOREIGN CURRENCIES

SECTION 1601. APPLICABILITY OF ARTICLE. Whenever this Indenture provides
for (i) any action by, or the determination of any of the rights of Holders of
Securities of any series in which not all of such Securities are denominated in
the same currency, or (ii) any distribution to Holders of Securities, in the
absence of any provision to the contrary in the form of Security of any
particular series or pursuant to this Indenture or the Securities, any amount in
respect of any Security denominated in a currency other than Dollars shall be
treated for any such action or distribution as that amount of Dollars that could
be obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such action, determination of rights for distribution (or, if there shall be no
applicable record date, such other date reasonably proximate to the date of such
action, determination of rights or distribution) as the Issuer may specify in a
written notice to the Trustee or, in the absence of such written notice, as the
Trustee may determine.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

EVANS WITHYCOMBE RESIDENTIAL, L.P.
By: Evans Withycombe Residential, Inc.
as General Partner

By:
-------------------------------
Name
Title:

[SEAL]

Attest:

- -----------------------------------
Name:
Title:

BANK ONE, COLUMBUS, N.A.
as Trustee

By:
-------------------------------
Name
Title:

[SEAL]

Attest:

- -----------------------------------
Name:
Title:

S-1

<PAGE>

STATE OF __________)
) ss:
COUNTY OF _________)

On the ____ day of _____________ 1997, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he/she resides at ______________, ______________________, that he/she is
__________________ of EVANS WITHYCOMBE RESIDENTIAL, INC., the general partner
of EVANS WITHYCOMBE RESIDENTIAL, L.P., one of the parties described in and which
executed the foregoing instrument, and that he/she signed his/her name thereto
by authority of the Board of Directors.

(Notarial Seal)

---------------------------------------
Notary Public
COMMISSION EXPIRES

STATE OF __________)
) ss:
COUNTY OF _________)

On the __ day of ______________ 1997, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
he/she resides at __________, that he/she signed his/her name thereto by
authority of the Board of directors.

(Notarial Seal)

---------------------------------------
Notary Public
COMMISSION EXPIRES

S-2

<PAGE>

EXHIBIT A

FORMS OF CERTIFICATION

A-1

<PAGE>

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 2.165-12(c)(1)(v) are herein referred to a "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 Evans Withycombe Residential, Inc. or its agent that
such financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986,
amended, and the regulations thereunder), or (iii) are owned by United States or
foreign financial institution(s) 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, in addition, if the owner is a United States or
foreign financial institution described in clause (iii) above (whether or not
also described in clause (i) or (ii)), this is to further certify that such
financial institution 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 your 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 Operating
Procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.

This certificate excepts and does not relate to U.S. [ ] of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and

A-2

<PAGE>

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 (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 Signatory)
Name:
Title:

A-3

<PAGE>

EXHIBIT A-2

FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A.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 the U.S. 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 Evans Withycombe
Residential, Inc. or its agent that such financial institution will 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
United States or foreign financial institution(s) 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, to the further effect, that 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.

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 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

A-4

<PAGE>

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
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)

By:
------------------------------------

A-5

<PAGE>

[LETTERHEAD]

March 19, 1997

Evans Withycombe Residential, Inc.
6991 East Camelback Road
Suite A200
Scottsdale, Arizona 85251

Re: Evans Withycombe Residential, Inc. (the "Company") - Registration
Statement on Form S-3 (Registration No. 333-19879) pertaining to (a)
$125,000,000 maximum aggregate initial offering price of the Company's
(i) shares of preferred stock, par value $.01 per share ("Preferred
Stock"); (ii) shares of common stock, par value $.01 per share
("Common Stock"), (iii) warrants to purchase shares of Preferred Stock
or shares of Common Stock ("Warrants"); and (iv) unconditional
guaranties ("Guaranties") of unsecured non-convertible debt securities
(the "OP Debt Securities") of Evans Withycombe Residential, L.P. (the
"Operating Partnership"); and (b) $200,000,000 maximum initial
offering price of the Operating Partnership's Debt Securities
----------------------------------------------------------------------

Ladies and Gentlemen:

In connection with the registration of shares of Preferred Stock, shares of
Common Stock, Warrants and Guaranties (collectively the "Securities") under the
Securities Act of 1933, as amended (the "Act") by the Company on Form S-3,
Registration No. 333-19879) filed with the Securities and Exchange Commission
(the "Commission") on or about January 16, 1997, as amended by Amendment No. 1
filed with the Commission on or about March 11, 1997 and Amendment No. 2 filed
or to be filed with the Commission on or about March 19, 1997 (collectively the
"Registration Statement"), you have requested our opinion with respect to the
matter set forth below.

We have acted as special Maryland corporate counsel for the Company in
connection with the matters described herein. In our capacity as special
Maryland corporate counsel to the Company, we have reviewed and are familiar
with the charter of the Company (the "Charter") consisting of Articles of
Amendment and Restatement of the Company filed with the State Department of
Assessments and Taxation of Maryland (the "Department") on August 11, 1994, the

<PAGE>

Evans Withycombe Residential, Inc.
March 19, 1997
Page 2

Amended and Restated Bylaws of the Company duly adopted by the Board of
Directors of the Company on August 10, 1994 (the "Bylaws") and certain
resolutions adopted and actions taken by the Board of Directors of the Company
(the "Board of Directors") on or before the date hereof and in full force and
effect on the date hereof. We have also examined other documents, corporate and
other records of the Company and certificates of public officials and officers
of the Company including, without limitation, a status certificate of recent
date issued by the Department to the effect that the Company is duly
incorporated and existing under the laws of the State of Maryland, and a
Certificate of Officers of the Company of recent date to the effect that, among
other things, the Charter and Bylaws of the Company and the Resolutions and
actions by the Board of Directors which we have examined are true, correct and
complete, have not been rescinded or modified and are in full force and effect
on the date of such certificate. We have also made such further legal and
factual examinations as we have deemed necessary or appropriate to provide a
basis for the opinion set forth below.

In reaching the opinions set forth below, we have assumed the following:
(a) each person executing any instrument, document or agreement on behalf of
any party (other than the Company) is duly authorized to do so; (b) each
natural person executing any instrument, document or agreement is legally
competent to do so; (c) all documents submitted to us as originals are
authentic; all documents submitted to us as certified, facsimile or
photostatic copies conform to the original document; all signatures on all
documents submitted to us for examination are genuine; and all public records
reviewed are accurate and complete; (d) the resolutions adopted and to be
adopted, and the actions taken and to be taken by the Board of Directors
including, but not limited to, the adoption of all resolutions and the taking
of all action necessary to authorize the issuance and sale of the Securities
in accordance with the procedures set forth in paragraphs 1, 2, 3 and 4
below, have occurred or will occur at duly called meetings at which a quorum
of the incumbent directors of the Company were or are present and acting
throughout, or by unanimous written consent of all incumbent directors, all
in accordance with the Charter and Bylaws of the Company and applicable law;
(e) the number of shares of Preferred Stock and the number of shares of
Common Stock to be offered and sold under the Registration Statement,
together with the number of shares of Preferred Stock and the number of
shares of Common Stock issuable upon exercise of the Warrants, will not, in
the aggregate, exceed the number of shares of Preferred Stock, and the number
of shares of Common Stock, respectively, authorized in the Charter of the
Company, less the number of shares of Preferred Stock and the number of
shares of Common Stock, respectively, authorized and reserved for issuance
and issued and outstanding on

<PAGE>

Evans Withycombe Residential, Inc.
March 19, 1997
Page 3

the date on which the Securities are authorized, the date on which the
Securities are issued and delivered, the date on which the Warrants are
exercised and the date on which shares of Preferred Stock and shares of
Common Stock, respectively, are issued pursuant to exercise of Warrants; (f)
none of the terms of any Security to be established subsequent to the date
hereof, nor the issuance and delivery of such Security nor the compliance by
the Company with the terms of such Security will violate any applicable law
or will conflict with, or result in a breach or violation of, the Charter or
Bylaws of the Company, or any instrument or agreement to which the Company is
a party or by which the Company is bound or any order or decree of any court,
administrative or governmental body having jurisdiction over the Company; and
(g) none of the Securities, and none of the shares of Preferred Stock or
shares of Common Stock issuable upon exercise of the Warrants, will be issued
in violation of the provisions of Article V, Section 2 of the Charter of the
Company entitled "REIT Related Restrictions and Limitations on the Equity
Shares."

Based on the foregoing, and subject to the assumptions and qualifications
set forth herein, it is our opinion that:

1. Upon: (a) designation by the Board of Directors of one or more
classes of Preferred Stock to distinguish each such class from other then
outstanding classes of Preferred Stock; (b) setting by the Board of Directors of
the number of shares of Preferred Stock to be included in each such class; (c)
establishment by the Board of Directors of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption of each such class of Preferred Stock;
(d) filing by the Company with the Department of Articles Supplementary setting
forth a description of each such class of Preferred Stock, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption as set by the Board of Directors and a statement that the Preferred
Stock has been classified by the Board of Directors under the authority
contained in the Charter, and the acceptance for record by the Department of
such Articles Supplementary; and (e) due authorization by the Board of Directors
of a designated number of shares of Preferred Stock for issuance at a minimum
price or value of consideration to be set by the Board of Directors, all
necessary corporate action on the part of the Company will have been taken to
authorize the issuance and sale of such shares of Preferred Stock and when such
shares of Preferred Stock are issued and delivered against payment, in money or
property, of the consideration therefor as set by the Board of

<PAGE>

Evans Withycombe Residential, Inc.
March 19, 1997
Page 4

Directors, such shares of Preferred Stock will be validly issued, fully paid and
non-assessable.

2. Upon due authorization by the Board of Directors of a designated
number of shares of Common Stock for issuance at a minimum price or value of
consideration to be set by the Board of Directors, all necessary corporate
action on the part of the Company will have been taken to authorize the
issuance and sale of such shares of Common Stock, and when such Common Shares
are issued and delivered against payment, in money or property, of the
consideration therefor as set by the Board of Directors, such shares of
Common Stock will be validly issued, fully paid and non-assessable.

3. Upon (a) designation and titling by the Board of Directors of the
Warrants, (b) setting by the Board of Directors of the number of Warrants to be
issued, (c) establishment by the Board of Directors of the terms, conditions and
provisions of the Warrants, (d) due authorization by the Board of Directors of
the Warrants for issuance at a minimum price or value of consideration to be set
by the Board of Directors; (e) reservation and due authorization by the Board of
Directors of the shares of Common Stock and the shares of Preferred Stock of the
Company issuable upon exercise of such Warrants in accordance with the
procedures set forth in paragraphs 1 and 2 above, at a minimum price or value of
consideration to be set by the Board of Directors, all necessary corporate
action on the part of the Company will have been taken to authorize the issuance
and sale of the Warrants, and when such Warrants are issued and delivered
against payment, in money or property, of the consideration therefor as set by
the Board of Directors, such Warrants will constitute duly authorized and valid
issued and outstanding Warrants of the Company.

4. Upon (a) establishment by the Board of Directors of the terms,
conditions and provisions of any OP Debt Securities; (b) approval and
authorization by the Board of Directors of an indenture under which such OP Debt
Securities are to be issued and such amendments and supplemental indentures as
may be adopted from time to time (collectively and "Indenture"); (c) due
authorization by the Board of Directors of such OP Debt Securities for issuance
by the Operating Partnership at a minimum price or value of consideration to be
set by the Board of Directors; and (d) due authorization by the Board of
Directors of a designated number or amount of Guaranties for issuance by the
Company at a minimum price or value of consideration to be set by the Board of
Directors, all necessary corporate action on the part of the Company will have
been taken to authorize such Guaranties.

<PAGE>

Evans Withycombe Residential, Inc.
March 19, 1997
Page 5

We consent to the filing of this opinion as an exhibit to the Registration
Statement and further consent to the filing of this opinion as an exhibit to
applications to the securities commissioners of the various states of the United
States for registration of the Securities. We also consent to the
identification of our firm as Maryland counsel to the Company in the section of
the Prospectus (which is a part of the Registration Statement) entitled "Legal
Matters."

This opinion is limited to the present corporate laws of the State of
Maryland and we express no opinion with respect to the laws of any other
jurisdiction. Furthermore, the opinions presented in this letter are limited to
the matters specifically set forth herein and no other opinion shall be inferred
beyond the matters expressly set forth herein.

The opinions set forth in this letter are rendered as of the date hereof
and are necessarily limited to laws now in effect and facts and circumstances
presently existing and brought to our attention. We assume no obligation to
supplement this opinion if any applicable law is changed after the date hereof
or if we become aware of any facts of circumstances which now exist or which
occur or arise in the future and may change the opinions expressed herein after
the date hereof.

The opinions expressed in this letter are solely for your use and the use
of your securities counsel, Gibson, Dunn & Crutcher in connection with the
filing of the Registration Statement and the rendering of opinions by Gibson,
Dunn & Crutcher in connection therewith, and may not be relied upon by any other
person, or by you or Gibson, Dunn & Crutcher for any other purpose, without our
prior written consent.

Very truly yours,

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in
Amendment No. 2 to the Registration Statement (Form S-3 No. 333-19879) and
related Prospectus and Prospectus Supplement of Evans Withycombe Residential,
Inc. and Evans Withycombe Residential, L.P. for the registration of various
securities described therein and to the incorporation by reference therein of
our report dated January 31, 1997, with respect to the consolidated financial
statements and schedule of Evans Withycombe Residential, Inc. included in its
Annual Report (Amendment No. 2 to Form 10-K/A) for the year ended December
31, 1996, and our report dated January 31, 1997, with respect to the
consolidated financial statements and schedule of Evans Withycombe
Residential, L.P. included in its Registration Statement (Amendment No. 2 to
Form 10/A) for the year ended December 31, 1996, filed with the Securities
and Exchange Commission.

ERNST & YOUNG LLP

Phoenix, Arizona
March 19, 1997

<PAGE>

Registration No.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

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

BANK ONE, COLUMBUS, N.A.

Not Applicable 31-4148768
(State of Incorporation (I.R.S. Employer
if not a national bank) Identification No.)

100 East Broad Street, Columbus, Ohio 43271-0181
(Address of trustee's principal (Zip Code) executive offices)

Ted Kravits
c/o Bank One Trust Company, NA
100 East Broad Street
Columbus, Ohio 43271-0181
(614) 248-2566
(Name, address and telephone number of agent for service)

EVANS WITHYCOMBE RESIDENTIAL, L.P.
(Exact name of obligor as specified in its charter)

Delaware 86-0766007

(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)

6991 East Camelback Road, Suite A-200
Scottsdale, Arizona 85251
(Address of principal executive (Zip Code)
offices)

$75,000,000 NOTES DUE 2004
$50,000,000 NOTES DUE 2007
(Title of the Indenture securities)

<PAGE>

GENERAL

1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.

Comptroller of the Currency, Washington, D.C.

Federal Reserve Bank of Cleveland, Cleveland, Ohio

Federal Deposit Insurance Corporation, Washington, D.C.

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

(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

The trustee is authorized to exercise corporate trust powers.

2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

The obligor is not an affiliate of the trustee.

16. LIST OF EXHIBITS
LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY
AND QUALIFICATION. (EXHIBITS IDENTIFIED IN PARENTHESES, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS EXHIBITS HERETO.)

Exhibit 1 - A copy of the Articles of Association of the trustee as now in
effect.

Exhibit 2 - A copy of the Certificate of Authority of the trustee to commence
business, see Exhibit 2 to Form T-1, filed in connection with Form S-3
relating to Wheeling-Pittsburgh Corporation 9 3/8% Senior Notes due 2003,
Securities and Exchange Commission File No. 33-50709.

Exhibit 3 - A copy of the Authorization of the trustee to exercise corporate
trust powers, see Exhibit 3 to Form T-1, filed in connection with Form S-3
relating to Wheeling-Pittsburgh Corporation 9 3/8% Senior Notes due 2003,
Securities and Exchange Commission File No. 33-50709.

Exhibit 4 - A copy of the Bylaws of the trustee as now in effect.

<PAGE>

Exhibit 5 - Not applicable.

Exhibit 6 - The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939, as amended.

Exhibit 7 - Report of Condition of the trustee as of the close of business on
December 31, 1996, published pursuant to the requirements of the Comptroller of
the Company.

Exhibit 8 - Not applicable.

Exhibit 9 - Not applicable.
Items 3 through 15 are not answered pursuant to General Instruction B which
requires responses to Item 1, 2 and 16 only, if the obligor is not in default.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, Bank One, Columbus, NA, a national banking association
organized under the National Banking Act, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in Columbus, Ohio on March 7, 1997.

Bank One, Columbus, NA

By: /S/ TED KRAVITS
---------------
Ted Kravits
Authorized Signer

<PAGE>

Exhibit 1

BANK ONE, COLUMBUS, NATIONAL ASSOCIATION
ARTICLES OF ASSOCIATION

For the purpose of organizing an association to carry on the business of
banking under the laws of the United States, the following Articles of
Association are entered into:

FIRST. The title of this Association shall be BANK ONE, COLUMBUS, NATIONAL
ASSOCIATION.

SECOND. The main office of the Association shall be in Columbus, County of
Franklin, State of Ohio. The general business of the Association shall be
conducted at its main office and its branches.

THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five Directors, the exact number of
Directors within such minimum and maximum limits to be fixed and determined from
time-to-time by resolution of the shareholders at any annual or special meeting
thereof, provided, however, that the Board of Directors, by resolution of a
majority thereof, shall be authorized to increase the number of its members by
not more than two between regular meetings of the shareholders. Each Director,
during the full term of his directorship, shall own, as qualifying shares, the
minimum number of shares of either this Association or of its parent bank
holding company in accordance with the provisions of applicable law. Unless
otherwise provided by the laws of the United States, any vacancy in the Board of
Directors for any reason, including an increase in the number thereof, may be
filled by action of the Board of Directors.

-4-

<PAGE>

FOURTH. The annual meeting of the shareholders for the election of
Directors and the transaction of whatever other business may be brought before
said meeting shall be held at the main office of this Association or such other
place as the Board of Directors may designate, on the day of each year specified
therefor in the By-Laws, but if no election is held on that day, it may be held
on any subsequent business day according to the provisions of law; and all
elections shall be held according to such lawful regulations as may be
prescribed by the Board of Directors.

FIFTH. The authorized amount of capital stock of this Association shall be
2,073,750 shares of common stock of the par value of Ten Dollars ($10) each; but
said capital stock may be increased or decreased from time-to-time, in
accordance with the provisions of the laws of the United States.

No holder of shares of the capital stock of any class of the
Association shall have the preemptive or preferential right of subscription to
any share of any class of stock of this Association, whether now or hereafter
authorized or to any obligations convertible into stock of this Association,
issued or sold, nor any right of subscription to any thereof other than such, if
any, as the Board of Directors, in its discretion, may from time-to-time
determine and at such price as the Board of Directors may from time-to-time fix.
This Association, at any time and from time-to-time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders.

SIXTH. The Board of Directors shall appoint one of its members President
of the Association, who shall be Chairman of the Board, unless the Board
appoints another director to be the Chairman. The Board of Directors shall have
the power to appoint one or more Vice Presidents and to appoint a Secretary and
such other officers and employees as may be required to transact the business of
this Association.

-5-

<PAGE>

The Board of Directors shall have the power to define the duties of
the officers and employees of this Association; to fix the salaries to be paid
to them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of this
Association shall be made; to manage and administer the business and affairs of
this Association; to make all By-Laws that it may be lawful for them to make;
and generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.

SEVENTH. The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Columbus, Ohio, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of this Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.

EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.

NINTH. The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than 10 percent of the stock of
this Association, may call a special meeting of shareholders at any time.
Unless otherwise provided by the laws of the United States, a notice of the
time, place and purpose of every annual and special meeting of the shareholders
shall be given by first-class mail, postage prepaid, mailed at least ten days
prior to the date of such meeting to each shareholder of record at his address
as shown upon the books of this Association.

-6-

<PAGE>

TENTH. Every person who is or was a Director, officer or employee of the
Association or of any other corporation which he served as a Director, officer
or employee at the request of the Association as part of his regularly assigned
duties may be indemnified by the Association in accordance with the provisions
of this paragraph against all liability (including, without limitation,
judgments, fines, penalties and settlements) and all reasonable expenses
(including, without limitation, attorneys' fees and investigative expenses) that
may be incurred or paid by him in connection with any claim, action, suit or
proceeding, whether civil, criminal or administrative (all referred to hereafter
in this paragraphs as "Claims") or in connection with any appeal relating
thereto in which he may become involved as a party or otherwise or with which he
may be threatened by reason of his being or having been a Director, officer or
employee of the Association or such other corporation, or by reason of any
action taken or omitted by him in his capacity as such Director, officer or
employee, whether or not he continues to be such at the time such liability or
expenses are incurred, provided that nothing contained in this paragraph shall
be construed to permit indemnification of any such person who is adjudged guilty
of, or liable for, willful misconduct, gross neglect of duty or criminal acts,
unless, at the time such indemnification is sought, such indemnification in such
instance is permissible under applicable law and regulations, including
published rulings of the Comptroller of the Currency or other appropriate
supervisory or regulatory authority, and provided further that there shall be no
indemnification of directors, officers, or employees against expenses,
penalties, or other payments incurred in an administrative proceeding or action
instituted by an appropriate regulatory agency which proceeding or action
results in a final order assessing civil money penalties or requiring
affirmative action by an individual or individuals n the form of payments to the
Association. Every person who may be indemnified under the provisions of this
paragraph and who has been wholly successful on the merits with respect to any
Claim shall be entitled to indemnification as of right. Except as provided in
the preceding sentence, any indemnification under this paragraph shall be at the
sole discretion of the Board of Directors and shall be made only if the Board of
Directors or the Executive Committee acting by a quorum consisting of

-7-

<PAGE>

Directors who are not parties to such Claim shall find or if independent legal
counsel (who may be the regular counsel of the Association) selected by the
Board of Directors or Executive Committee whether or not a disinterested quorum
exists shall render their opinion that in view of all of the circumstances then
surrounding the Claim, such indemnification is equitable and in the best
interests of the Association. Among the circumstances to be taken into
consideration in arriving at such a finding or opinion is the existence or
non-existence of a contract of insurance or indemnity under which the
Association would be wholly or partially reimbursed for such indemnification,
but the existence or non-existence of such insurance is not the sole
circumstance to be considered nor shall it be wholly determinative of whether
such indemnification shall be made. In addition to such finding or opinion, no
indemnification under this paragraph shall be made unless the Board of Directors
or the Executive Committee acting by a quorum consisting of Directors who are
not parties to such Claim shall find or if independent legal counsel (who may be
the regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that the Director, officer or employee acted in good faith in what
he reasonably believed to be the best interests of the Association or such other
corporation and further in the case of any criminal action or proceeding, that
the Director, officer or employee reasonably believed his conduct to be lawful.
Determination of any Claim by judgment adverse to a Director, officer or
employee by settlement with or without Court approval or conviction upon a plea
of guilty or of NOLOCONTENDERE or its equivalent shall not create a presumption
that a Director, officer or employee failed to meet the standards of conduct set
forth in this paragraph. Expenses incurred with respect to any Claim may be
advanced by the Association prior to the final disposition thereof upon receipt
of an undertaking satisfactory to the Association by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he is
entitled to indemnification under this paragraph. The rights of indemnification
provided in this paragraph shall be in addition to any rights to which any
Director, officer or employee may otherwise be entitled by contract or as a
matter of law.

-8-

<PAGE>

Every person who shall act as a Director, officer or employee of this
Association shall be conclusively presumed to be doing so in reliance upon the
right of indemnification provided for in this paragraph.

ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.

-9-

<PAGE>

Exhibit 4

BY-LAWS
OF
BANK ONE, COLUMBUS, NATIONAL ASSOCIATION

ARTICLE I
MEETING OF SHAREHOLDERS

SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the Shareholders
of the Bank for the election of Directors and for the transaction of such
business as may properly come before the meeting shall be held at its main
banking house, or other convenient place duly authorized by the Board of
Directors, on the third Monday of January of each year, or on the next
succeeding banking day, if the day fixed falls on a legal holiday. If from any
cause, an election of directors is not made on the day fixed for the regular
meeting of shareholders or, in the event of a legal holiday, on the next
succeeding banking day, the Board of Directors shall order the election to be
held on some subsequent day, as soon thereafter as practicable, according to the
provisions of law; and notice thereof shall be given in the manner herein
provided for the annual meeting. Notice of such annual meeting shall be given
by or under the direction of the Secretary or such other officer as may be
designated by the Chief Executive Officer by first-class mail, postage prepaid,
to all shareholders of record of the Bank at their respective addresses as shown
upon the books of the Bank mailed not less than ten days prior to the date fixed
for such meeting.

SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of this
Bank may be called at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
this Bank. The notice of any special meeting of the shareholders called by the
Board of Directors, stating the time, place and purpose of the meeting, shall be
given by or under the direction of the Secretary, or such other officer as is
designated by the Chief Executive Officer, by first-class mail, postage prepaid,
to all shareholders of

-10-

<PAGE>

record of the Bank at their respective addresses as shown upon the books of the
Bank, mailed not less than ten days prior to the date fixed for such meeting.
Any special meeting of shareholders shall be conducted and its proceedings
recorded in the manner prescribed in these By-Laws for annual meetings of
shareholders.

SECTION 1.03. SECRETARY OF SHAREHOLDERS' MEETING. The Board of Directors may
designate a person to be the Secretary of the meetings of shareholders. In the
absence of a presiding officer, as designated in these By-Laws, the Board of
Directors may designate a person to act as the presiding officer. In the event
the Board of Directors fails to designate a person to preside at a meeting of
shareholders and a Secretary of such meeting, the shareholders present or
represented shall elect a person to preside and a person to serve as Secretary
of the meeting.

The Secretary of the meetings of shareholders shall cause the returns made
by the judges and election and other proceedings to be recorded in the minute
book of the Bank. The presiding officer shall notify the directors-elect of
their election and to meet forthwith for the organization of the new board.

The minutes of the meeting shall be signed by the presiding officer and the
Secretary designated for the meeting.

SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many
as three shareholders to be judges of the election, who shall hold and conduct
the same, and who shall, after the election has been held, notify, in writing
over their signatures, the secretary of the shareholders' meeting of the result
thereof and the names of the Directors elected; provided, however, that upon
failure for any reason of any judge or judges of election, so appointed by the
directors, to serve, the presiding officer of the meeting shall appoint other
shareholders or their proxies to fill the vacancies. The judges of election at
the request of the chairman of the

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<PAGE>

meeting, shall act as tellers of any other vote by ballot taken at such meeting,
and shall notify, in writing over their signatures, the secretary of the Board
of Directors of the result thereof.

SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall have
the right to vote the number of shares of record in his name for as many persons
as there are Directors to be elected, or to cumulate such shares as provided by
Federal Law. In deciding all other questions at meetings of shareholders, each
shareholder shall be entitled to one vote on each share of stock of record in
his name. Shareholders may vote by proxy duly authorized in writing. All
proxies used at the annual meeting shall be secured for that meeting only, or
any adjournment thereof, and shall be dated, and if not dated by the
shareholder, shall be dated as of the date of receipt thereof. No officer or
employee of this Bank may act as proxy.

SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of shareholders, but shareholders present at any meeting and consti- tuting less
than a quorum may, without further notice, adjourn the meeting from time to time
until a quorum is obtained. A majority of the votes cast shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.

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<PAGE>

ARTICLE II
DIRECTORS

SECTION 2.01. MANAGEMENT OF THE BANK. The business of the Bank shall be
managed by the Board of Directors. Each director of the Bank shall be the
beneficial owner of a substantial number of shares of BANC ONE CORPORATION and
shall be employed either in the position of Chief Executive Officer or active
leadership within his or her business, professional or community interest which
shall be located within the geographic area in which the Bank operates, or as an
executive officer of the Bank. A director shall not be eligible for nomination
and re-election as a director of the Bank if such person's executive or
leadership position within his or her business, professional or community
interests which qualifies such person as a director of Bank terminates. The age
of 70 is the mandatory retirement age as a director of the Bank. When a
person's eligibility as director of the Bank terminates, whether because of
change in share ownership, position, residency or age, within 30 days after such
termination, such person shall submit his resignation as a director to be
effective at the pleasure of the Board provided, however, that in no event shall
such person be nominated or elected as a director. Provided, however, following
a person's retirement or resignation as a director because of the age
limitations herein set forth with respect to election or re-election as a
director, such person may, in special or unusual circumstances, and at the
discretion of the Board, be elected by the directors as a Director Emeritus of
the Bank for a limited period of time. A Director Emeritus shall have the right
to participate in board meetings but shall be without the power to vote and
shall be subject to re-election by the Board at its organizational meeting
following the Bank's annual meeting of shareholders.

SECTION 2.02. QUALIFICATIONS. Each director shall have the qualification
prescribed by law. No person elected a director may exercise any of the powers
of his office until he has taken the oath of such office.

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<PAGE>

SECTION 2.03. TERM OF OFFICE/VACANCIES. A director shall hold office until the
annual meeting for the year in which his term expires and until his successor
shall be elected and shall qualify, subject, however, to his prior death,
resignation, or removal from office. Whenever any vacancy shall occur among the
directors, the remaining directors shall constitute the directors of the Bank
until such vacancy is filled by the remaining directors, and any director so
appointed shall hold office for the unexpired term of his or her successor.
Notwithstanding the foregoing, each director shall hold office and serve at the
pleasure of the Board.

SECTION 2.04. ORGANIZATION MEETING. The directors elected by the share-
holders shall meet for organization of the new board at the time fixed by the
presiding officer of the annual meeting. If at the time fixed for such meeting
there is no quorum present, the Directors in attendance may adjourn from time to
time until a quorum is obtained. A majority of the number of Directors elected
by the shareholders shall constitute a quorum for the transaction of business.

SECTION 2.05. REGULAR MEETINGS. The regular meetings of the Board of Directors
shall be held on the third Monday of each calendar month excluding March and
July, which meeting will be held at 4:00 p.m. When any regular meeting of the
Board falls on a holiday, the meeting shall be held on such other day as the
Board may previously designate or should the Board fail to so designate, on such
day as the Chairman of the Board of President may fix. Whenever a quorum is not
present, the directors in attendance shall adjourn the meeting to a time not
later than the date fixed by the Bylaws for the next succeeding regular meeting
of the Board.

SECTION 2.06. SPECIAL MEETINGS. Special meetings of the Board of Directors
shall be held at the call of the Chairman of the Board or President, or at the
request of two or more Directors. Any special meeting may be held at such place
in Franklin County, Ohio, and at such time as may be fixed in the call. Written
or oral notice shall be given to each Director not later than the day next
preceding the day on which special meeting is to be held, which notice may be
waived in writing.

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<PAGE>

The presence of a Director at any meeting of the Board shall be deemed a waiver
of notice thereof by him. Whenever a quorum is not present the Directors in
attendance shall adjourn the special meeting from day to day until a quorum is
obtained.

SECTION 2.07. QUORUM. A majority of the Directors shall constitute a quorum at
any meeting, except when otherwise provided by law; but a lesser number may
adjourn any meeting, from time-to-time, and the meeting may be held, as
adjourned, without further notice. When, however, less than a quorum as herein
defined, but at least one-third and not less than two of the authorized number
of Directors are present at a meeting of the Directors, business of the Bank may
be transacted and matters before the Board approved or disapproved by the
unanimous vote of the Directors present.

SECTION 2.08. COMPENSATION. Each member of the Board of Directors shall
receive such fees for, and transportation expenses incident to, attendance at
Board and Board Committee Meetings and such fees for service as a Director
irrespective of meeting attendance as from time to time are fixed by resolution
of the Board; provided, however, that payment hereunder shall not be made to a
Director for meetings attended and/or Board service which are not for the Bank's
sole benefit and which are concurrent and duplicative with meetings attended or
board service for an affiliate of the Bank for which the Director receives
payment; and provided further, that payment hereunder shall not be made in the
case of any Director in the regular employment of the Bank or of one of its
affiliates.

SECTION 2.09. EXECUTIVE COMMITTEE. There shall be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all powers of the Board that may
lawfully be delegated. The Executive Committee shall also exercise the powers
of the Board of Directors in accordance with the Provisions of the "Employees
Retirement Plan" and the "Agreement and Declaration of Trust" as the same now

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<PAGE>

exist or may be amended hereafter. The Executive Committee shall consist of not
fewer than four board members, including the Chairman of the Board and President
of the Bank, one of whom, as hereinafter required by these By-laws, shall be the
Chief Executive Officer. The other members of the Committee shall be appointed
by the Chairman of the Board or by the President, with the approval of the Board
and shall continue as members of the Executive Committee until their successors
are appointed, provided, however, that any member of the Executive Committee may
be removed by the Board upon a majority vote thereof at any regular or special
meeting of the Board. The Chairman or President shall fill any vacancy in the
Committee by the appointment of another Director, subject to the approval of the
Board of Directors. The regular meetings of the Executive Committee shall be
held on a regular basis as scheduled by the Board of Directors. Special
meetings of the Executive Committee shall be held at the call of the Chairman or
President or any two members thereof at such time or times as may be designated.
In the event of the absence of any member or members of the Committee, the
presiding member may appoint a member or members of the Board to fill the place
or places of such absent member or members to serve during such absence. Not
fewer than three members of the Committee must be present at any meeting of the
Executive Committee to constitute a quorum, provided, however that with regard
to any matters on which the Executive Committee shall vote, a majority of the
Committee members present at the meeting at which a vote is to be taken shall
not be officers of the Bank and, provided further, that if, at any meeting at
which the Chairman of the Board and President are both present, Committee
members who are not officers are not in the majority, then the Chairman of the
Board or President, which ever of such officers is not also the Chief Executive
Officer, shall not be eligible to vote at such meeting and shall not be
recognized for purposes of determining if a quorum is present at such meeting.
When neither the Chairman of the Board nor President are present, the Committee
shall appoint a presiding officer. The Executive Committee shall keep a record
of its proceedings and report its proceedings and the action taken by it to the
Board of Directors.

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<PAGE>

SECTION 2.10 COMMUNITY REINVESTMENT ACT AND COMPLIANCE POLICY COMMITTEE. There
shall be a standing committee of the Board of Directors known as the Community
Reinvestment Act and Compliance Policy Committee the duties of which shall be,
at least once in each calendar year, to review, develop and recommend policies
and programs related to the Bank's Community Reinvestment Act Compliance and
regulatory compliance with all existing statutes, rules and regulations
affecting the Bank under state and federal law. Such Committee shall provide
and promptly make a full report of such review of current Bank policies with
regard to Community Reinvestment Act and regulatory compliance in writing to the
Board, with recommendations, if any, which may be necessary to correct any
unsatisfactory conditions. Such Committee may, in its discretion, in fulfilling
its duties, utilize the Community Reinvestment Act officers of the Bank, Banc
One Ohio Corporation and Banc One Corporation and may engage outside Community
Reinvestment Act experts, as approved by the Board, to review, develop and
recommend policies and programs as herein required. The Community Reinvestment
Act and regulatory compliance policies and procedures established and the
recommendations made shall be consistent with, and shall supplement, the
Community Reinvestment Act and regulatory compliance programs, policies and
procedures of Banc One Corporation and Banc One Ohio Corporation. The Community
Reinvestment Act and Compliance Policy Committee shall consist of not fewer than
four board members, one of whom shall be the Chief Executive Officer and a
majority of whom are not officers of the Bank. Not fewer than three members of
the Committee, a majority of whom are not officers of the Bank, must be present
to constitute a quorum. The Chairman of the Board or President of the Bank,
whichever is not the Chief Executive Officer, shall be an ex officio member of
the Community Reinvestment Act and Compliance Policy Committee. The Community
Reinvestment Act and Compliance Policy Committee, whose chairman shall be
appointed by the Boad, shall keep a record of its proceedings and report its
proceedings and the action taken by it to the Board of Directors.

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<PAGE>

SECTION 2.11. TRUST COMMITTEES. There shall be two standing Committees known
as the Trust Management Committee and the Trust Examination Committee appointed
as hereinafter provided.

SECTION 2.12. OTHER COMMITTEES. The Board of Directors may appoint such
special committees from time to time as are in its judgment necessary in the
interest of the Bank.

-18-

<PAGE>

ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES

SECTION 3.01. OFFICERS AND MANAGEMENT STAFF.

(a) The officers of the Bank shall include a President, Secretary and
Security Officer and may include a Chairman of the Board, one or more
Vice Chairmen, one or more Vice Presidents (which may include one or
more Executive Vice Presidents and/or Senior Vice Presidents) and one
or more Assistant Secretaries, all of whom shall be elected by the
Board. All other officers may be elected by the Board or appointed in
writing by the Chief Executive Officer. The salaries of all officers
elected by the Board shall be fixed by the Board. The Board from
time-to-time shall designate the President or Chairman of the Board to
serve as the Bank's Chief Executive Officer.

(b) The Chairman of the Board, if any, and the President shall be elected
by the Board from their own number. The President and Chairman of the
Board shall be re-elected by the Board annually at the organizational
meeting of the Board of Directors following the Annual Meeting of
Shareholders. Such officers as the Board shall elect from their own
number shall hold office from the date of their election as officers
until the organization meeting of the Board of Directors following the
next Annual Meeting of Shareholders, provided, however, that such
officers may be relieved of their duties at any time by action of the
Board in which event all the powers incident to their office shall
immediately terminate.

(c) Except as provided in the case of the elected officers who are members
of the Board, all officers, whether elected or appointed, shall hold
office at the pleasure of the Board. Except as otherwise limited by
law or these By-laws, the Board assigns to Chief Executive Officer
and/or his

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<PAGE>

designees the authority to appoint and dismiss any elected or
appointed officer or other member of the Bank's management staff and
other employees of the Bank, as the person in charge of and
responsible for any branch office, department, section, operation,
function, assignment or duty in the Bank.

(d) The management staff of the Bank shall include officers elected by the
Board, officers appointed by the Chief Executive Officer, and such
other persons in the employment of the Bank who, pursuant to written
appointment and authorization by a duly authorized officer of the
Bank, perform management functions and have management responsi-
bilities. Any two or more offices may be held by the same person
except that no person shall hold the office of Chairman of the Board
and/or President and at the same time also hold the office of
Secretary.

(e) The Chief Executive Officer of the Bank and any other officer of the
Bank, to the extent that such officer is authorized in writing by the
Chief Executive Officer, may appoint persons other than officers who
are in the employment of the Bank to serve in management positions and
in connection therewith, the appointing officer may assign such title,
salary, responsibilities and functions as are deemed appropriate by
him, provided, however, that nothing contained herein shall be
construed as placing any limitation on the authority of the Chief
Executive Officer as provided in this and other sections of these
By-Laws.

SECTION 3.02. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Bank
shall have general and active management of the business of the Bank and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. Except as otherwise prescribed or limited by these By-Laws, the Chief
Executive Officer shall have full right, authority and power to control all
personnel, including elected and appointed officers, of the Bank, to employ or
direct the

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<PAGE>

employment of such personnel and officers as he may deem necessary, including
the fixing of salaries and the dismissal of them at pleasure, and to define and
prescribe the duties and responsibility of all Officers of the Bank, subject to
such further limitations and directions as he may from time-to-time deem proper.
The Chief Executive Officer shall perform all duties incident to his office and
such other and further duties, as may, from time-to-time, be required of him by
the Board of Directors or the shareholders. The specification of authority in
these By-Laws wherever and to whomever granted shall not be construed to limit
in any manner the general powers of delegation granted to the Chief Executive
Officer in conducting the business of the Bank. The Chief Executive Officer or,
in his absence, the Chairman of the Board or President of the Bank, as
designated by the Chief Executive Officer, shall preside at all meetings of
shareholders and meetings of the Board. In the absence of the Chief Executive
Officer, such officer as is designated by the Chief Executive Officer shall be
vested with all the powers and perform all the duties of the Chief Executive
Officer as defined by these By-Laws. When designating an officer to serve in
his absence, the Chief Executive Officer shall select an officer who is a member
of the Board of Directors whenever such officer is available.

SECTION 3.03. POWERS OF OFFICERS AND MANAGEMENT STAFF. The Chief Executive
Officer, the Chairman of the Board, the President, and those officers so
designated and authorized by the Chief Executive Officer are authorized for an
on behalf of the Bank, and to the extent permitted by law, to make loans and
discounts; to purchase or acquire drafts, notes, stock, bonds, and other
securities for investment of funds held by the Bank; to execute and purchase
acceptances; to appoint, empower and direct all necessary agents and attor-
neys; to sign and give any notice required to be given; to demand payment and/or
to declare due for any default any debt or obligation due or payable to the Bank
upon demand or authorized to be declared due; to foreclose any mortgages, to
exercise any option, privilege or election to forfeit, terminate, extend or
renew any lease; to authorize and direct any proceedings for the collection of
any money or for the enforcement

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<PAGE>

of any right or obligation; to adjust, settle and compromise all claims of every
kind and description in favor of or against the Bank, and to give receipts,
releases and discharges therefor; to borrow money and in connection therewith to
make, execute and deliver notes, bonds or other evidences of indebtedness; to
pledge or hypothe- cate any securities or any stocks, bonds, notes or any
property real or personal held or owned by the Bank, or to rediscount any notes
or other obli- gations held or owned by the Bank, to employ or direct the
employment of all personnel, including elected and appointed officers, and the
dismissal of them at pleasure, and in furtherance of and in addition to the
powers hereinabove set forth to do all such acts and to take all such
proceedings as in his judgment are necessary and incidental to the operation of
the Bank.

Other persons in the employment of the Bank, including but not limited to
officers and other members of the management staff, may be authorized by the
Chief Executive Officer, or by an officer so designated and authorized by the
chief Executive Officer, to perform the powers set forth above, subject, how-
ever, to such limitations and conditions as are set forth in the authorization
given to such persons.

SECTION 3.04. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control of
the records of the Bank and, subject to the direction of the Chief Executive
Officer, shall undertake other duties and functions usually performed by a
corporate secretary. Other officers may be designated by the Chief Executive
Officer or the Board of Directors as Assistant Secretary to perform the duties
of the Secretary.

SECTION 3.05. EXECUTION OF DOCUMENTS. The Chief Executive Officer, Chairman of
the Board, President, any officer being a member of the Bank's management staff
who is also a person in charge of and responsible for any department within the
Bank and any other officer to the extent such officer is so designated and
authorized by the Chief Executive Officer, the Chairman of the

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<PAGE>

Board, the President, or any other officer who is a member of the Bank's
management staff who is in charge of and responsible for any department within
the Bank, are hereby authorized on behalf of the Bank to sell, assign, lease,
mortgage, transfer, deliver and convey any real or personal property now or
hereafter owned by or standing in the name of the Bank or its nominee, or held
by this Bank as collateral security, and to execute and deliver such deeds,
contracts, leases, assignments, bills of sale, transfers or other papers or
documents as may be appropriate in the circumstances; to execute any loan
agreement, security agreement, commitment letters and financing statements and
other documents on behalf of the Bank as a lender; to execute purchase orders,
documents and agreements entered into by the Bank in the ordinary course of
business, relating to purchase, sale, exchange or lease of services, tangible
personal property, materials and equipment for the use of the Bank; to execute
powers of attorney to perform specific or general functions in the name of or on
behalf of the Bank; to execute promissory notes or other instruments evidencing
debt of the Bank; to execute instruments pledging or releasing securities for
public funds, documents submitting public fund bids on behalf of the Bank and
public fund contracts; to purchase and acquire any real or personal property
including loan portfolios and to execute and deliver such agreements, contracts
or other papers or documents as may be appropriate in the circumstances; to
execute any indemnity and fidelity bonds, proxies or other papers or documents
of like or different character necessary, desirable or incidental to the conduct
of its banking business; to execute and deliver settlement agreements or other
papers or documents as may be appropriate in connection with a dismissal
authorized by Section 3.01(c) of these By-laws; to execute agreements,
instruments, documents, contracts or other papers of like or difference
character necessary, desirable or incidenal to the conduct of its banking
business; and to execute and deliver partial releases from and discharges or
assignments of mortgages, financing statements and assignments or surrender of
insurance policies, now or hereafter held by this Bank.

The Chief Executive Officer, Chairman of the Board, President, any officer
being a member of the Bank's management staff who is also a person in charge of

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<PAGE>

and responsible for any department within the Bank, and any other officer of the
Bank so designated and authorized by the Chief Executive Officer, Chairman of
the Board, President or any officer who is a member of the Bank's management
staff who is in charge of and responsible for any department within the Bank are
authorized for and on behalf of the Bank to sign and issue checks, drafts, and
certificates of deposit; to sign and endorse bills of exchange, to sign and
countersign foreign and domestic letters of credit, to receive and receipt for
payments of principal, interest, dividends, rents, fees and payments of every
kind and description paid to the Bank, to sign receipts for property acquired by
or entrusted to the Bank, to guarantee the genuineness of signatures on
assignments of stocks, bonds or other securities, to sign certifications of
checks, to endorse and deliver checks, drafts, warrants, bills, notes,
certificates of deposit and acceptances in all business transactions of the
Bank.

Other persons in the employment of the Bank and of its subsidiaries,
including but not limited to officers and other members of the management staff,
may be authorized by the Chief Executive Officer, Chairman of the Board,
President or by an officer so designated by the Chief Executive Officer,
Chairman of the Board, or President to perform the acts and to execute the
documents set forth above, subject, however, to such limitations and conditions
as are contained in the authorization given to such person.

SECTION 3.06. PERFORMANCE BOND. All officers and employees of the Bank shall
be bonded for the honest and faithful performance of their duties for such
amount as may be prescribed by the Board of Directors.

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<PAGE>

ARTICLE IV
TRUST DEPARTMENT

SECTION 4.01. TRUST DEPARTMENT. Pursuant to the fiduciary powers granted to
this Bank under the provisions of Federal Law and Regulations of the Comptroller
of the Currency, there shall be maintained a separate Trust Department of the
Bank, which shall be operated in the manner specified herein.

SECTION 4.02. TRUST MANAGEMENT COMMITTEE. There shall be a standing Committee
known as the Trust Management Committee, consisting of at least five members, a
majority of whom shall not be officers of the Bank. The Committee shall consist
of the Chairman of the Board who shall be Chairman of the Committee, the
President, and at least three other Directors appointed by the Board of
Directors and who shall continue as members of the Committee until their
successors are appointed. Any vacancy in the Trust Management Committee may be
filled by the Board at any regular or special meeting. In the event of the
absence of any member or members, such Committee may, in its discretion, appoint
members of the Board to fill the place of such absent members to serve during
such absence. Three members of the Committee shall constitute a quorum. Any
member of the Committee may be removed by the Board by a majority vote at any
regular or special meeting of the Board. The Committee shall meet at such times
as it may determine or at the call of the Chairman, or President or any two
members thereof.

The Trust Management Committee, under the general direction of the Board of
Directors, shall supervise the policy of the Trust Department which shall be
formulated and executed in accordance with Law, Regulations of the Comptroller
of the Currency, and sound fiduciary principles.

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<PAGE>

SECTION 4.03. TRUST EXAMINATION COMMITTEE. There shall be a standing Commit-
tee known as the Trust Examination Committee, consisting of three directors
appointed by the Board of Directors and who shall continue as members of the
committee until their successors are appointed. Such members shall not be
active officers of the Bank. Two members of the Committee shall constitute a
quorum. Any member of the Committee may be removed by the Board by a majority
vote at any regular or special meeting of the Board. The Committee shall meet
at such times as it may determine or at the call of two members thereof.

This Committee shall, at least once during each calendar year and within
fifteen months of the last such audit, or at such other time(s) as may be
required by Regulations of the Comptroller of the Currency, make suitable audits
of the Trust Department or cause suitable audits to be made by auditors
responsible only to the Board of Directors, and at such time shall ascertain
whether the Department has been administered in accordance with Law, Regulations
of the Comptroller of the Currency and sound fiduciary principles.

The Committee shall promptly make a full report of such audits in writing
to the Board of Directors of the Bank, together with a recommendation as to what
action, if any, may be necessary to correct any unsatisfactory condition. A
report of the audits together with the action taken thereon shall be noted in
the Minutes of the Board of Directors and such report shall be a part of the
records of this Bank.

SECTION 4.04. MANAGEMENT. The Trust Department shall be under the management
and supervision of an officer of the Bank or of the trust affiliate of the Bank
designated by and subject to the advice and direction of the Chief Executive
Officer. Such officer having supervisory responsibility over the Trust
Department shall do or cause to be done all things necessary or proper in
carrying on the business of the Trust Department in accordance with provisions
of law and applicable regulations.

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<PAGE>

SECTION 4.05. HOLDING OF PROPERTY. Property held by the Trust Department may
be carried in the name of the Bank in its fiduciary capacity, in the name of
Bank, or in the name of a nominee or nominees.

SECTION 4.06. TRUST INVESTMENTS. Funds held by the Bank in a fiduciary
capacity awaiting investment or distribution shall not be held uninvested or
undistributed any longer than is reasonable for the proper management of the
account and shall be invested in accordance with the instrument establishing a
fiduciary relationship and local law. Where such instrument does not specify
the character or class of investments to be made and does not vest in the Bank
any discretion in the matter, funds held pursuant to such instrument shall be
invested in any investment which corporate fiduciaries may invest under local
law.

The investments of each account in the Trust Department shall be kept
separate from the assets of the Bank, and shall be placed in the joint custody
or control of not less than two of the officers or employees of the Bank or of
the trust affiliate of the Bank designated for the purpose by the Trust
Management Committee.

SECTION 4.07. EXECUTION OF DOCUMENTS. The Chief Executive Officer, Chairman of
the Board, President, any officer of the Trust Department, and such other
officers of the trust affiliate of the Bank as are specifically designated and
authorized by the Chief Executive Officer, the President, or the officer in
charge of the Trust Department, are hereby authorized, on behalf of this Bank,
to sell, assign, lease, mortgage, transfer, deliver and convey any real property
or personal property and to purchase and acquire any real or personal property
and to execute and deliver such agreements, contracts, or other papers and
documents as may be appropriate in the circumstances for property now or
hereafter owned by or standing in the name of this Bank, or its nominee, in any
fiduciary capacity, or in the name of any principal for whom this Bank may now
or hereafter be acting under a power of attorney, or as agent and to execute and
deliver partial releases from

-27-

<PAGE>

any discharges or assignments or mortgages and assignments or surrender of
insurance policies, to execute and deliver deeds, contracts, leases,
assignments, bills of sale, transfers or such other papers or documents as may
be appropriate in the circumstances for property now or hereafter held by this
Bank in any fiduciary capacity or owned by any principal for whom this Bank may
now or hereafter be acting under a power of attorney or as agent; to execute and
deliver settlement agreements or other papers or documents as may be appropriate
in connection with a dismissal authorized by Section 3.01(c) of these By-laws;
provided that the signature of any such person shall be attested in each case by
any officer of the Trust Department or by any other person who is specifically
authorized by the Chief Executive Officer, the President or the officer in
charge of the Trust Department.

The Chief Executive Officer, Chairman of the Board, President, any officer
of the Trust Department and such other officers of the trust affiliate of the
Bank as are specifically designated and authorized by the Chief Executive
Officer, the President, or the officer in charge of the Trust Department, or any
other person or corporation as is specifically authorized by the Chief Executive
Officer, the President or the officer in charge of the Trust Department, are
hereby authorized on behalf of this Bank, to sign any and all pleadings and
papers in probate and other court proceedings, to execute any indemnity and
fidelity bonds, trust agreements, proxies or other papers or documents of like
or different character necessary, desirable or incidental to the appointment of
the Bank in any fiduciary capacity and the conduct of its business in any
fiduciary capacity; also to foreclose any mortgage, to execute and deliver
receipts for payments of principal, interest, dividends, rents, fees and
payments of every kind and description paid to the Bank; to sign receipts for
property acquired or entrusted to the Bank; also to sign stock or bond
certificates on behalf of this Bank in any fiduciary capacity and on behalf of
this Bank as transfer agent or registrar; to guarantee the genuineness of
signatures on assignments of stocks, bonds or other securities, and to
authenticate bonds, debentures, land or lease trust certificates or other forms
of security issued pursuant to any indenture under which this Bank now or
hereafter is acting as

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<PAGE>

Trustee. Any such person, as well as such other persons as are specifically
authorized by the Chief Executive Officer or the officer in charge of the Trust
Department, may sign checks, drafts and orders for the payment of money executed
by the Trust Department in the course of its business.

SECTION 4.08. VOTING OF STOCK. The Chairman of the Board, President, any
officer of the Trust Department, any officer of the trust affiliate of the Bank
and such other persons as may be specifically authorized by Resolution of the
Trust Management Committee or the Board of Directors, may vote shares of stock
of a corporation of record on the books of the issuing company in the name of
the Bank or in the name of the Bank as fiduciary, or may grant proxies for the
voting of such stock of the granting if same is permitted by the instrument
under which the Bank is acting in a fiduciary capacity, or by the law applicable
to such fiduciary account. In the case of shares of stock which are held by a
nominee of the Bank, such shares may be voted by such person(s) authorized by
such nominee.

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<PAGE>

ARTICLE V
STOCKS AND STOCK CERTIFICATES

SECTION 5.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of the
Board, the President, or a Vice President (which signature may be engraved,
printed or impressed), and shall be signed manually by the Secretary, or any
other officer appointed by the Chief Executive Officer for that purpose.

In case any such officer who has signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such before such
certificate is issued, it may be issued by the Bank with the same effect as if
such officer had not ceased to be such at the time of its issue. Each such
certificate shall bear the corporate seal of the Bank, shall recite on its fact
that the stock represented thereby is transferable only upon the books of the
Bank properly endorsed and shall recite such other information as is required by
law and deemed appropriate by the Board. The corporate seal may be facsimile
engraved or printed.

SECTION 5.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall
be transferable only upon the stock transfer books of the Bank and except as
hereinafter provided, no transfer shall be made or new certificates issued
except upon the surrender for cancellation of the certificate or certificates
previously issued therefor. In the case of the loss, theft, or destruction of
any certificate, a new certificate may be issued in place of such certificate
upon the furnishing of any affidavit setting forth the circumstances of such
loss, theft, or destruction and indemnity satisfactory to the Chairman of the
Board, the President, or a Vice President. The Board of Directors, or the Chief
Executive Officer, may authorize the issuance of a new certificate therefor
without the furnishing of indemnity. Stock Transfer Books, in which all
transfers of stock shall be recorded, shall be provided.

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<PAGE>

The stock transfer books may be closed for a reasonable period and under
such conditions as the Board of Directors may at any time determine for any
meeting of shareholders, the payment of dividends or any other lawful purpose.
In lieu of closing the transfer books, the Board may, in its discretion, fix a
record date and hour constituting a reasonable period prior to the day
designated for the holding of any meeting of the shareholders or the day
appointed for the payment of any dividend or for any other purpose at the time
as of which shareholders entitled to notice of and to vote at any such meeting
or to receive such dividend or to be treated as shareholders for such other
purpose shall be determined, and only shareholders of record at such time shall
be entitled to notice of or to vote at such meeting or to receive such dividends
or to be treated as shareholders for such other purpose.

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<PAGE>

ARTICLE VI
MISCELLANEOUS PROVISIONS

SECTION 6.01. SEAL. The impression made below is an impression of the seal
adopted by the Board of Directors of BANK ONE, COLUMBUS, NATIONAL ASSOCIATION.
The Seal may be affixed by any officer of the Bank to any document executed by
an authorized officer on behalf of the Bank, and any officer may certify any
act, proceedings, record, instrument or authority of the Bank.

SECTION 6.02. BANKING HOURS. Subject to ratification by the Executive
Committee, the Bank and each of its Branches shall be open for business on such
days and during such hours as the Chief Executive Officer of the Bank shall,
from time to time, prescribe.

SECTION 6.03. MINUTE BOOK. The organization papers of this Bank, the Articles
of Association, the returns of the judges of elections, the By-Laws and any
amendments thereto, the proceedings of all regular and special meetings of the
shareholders and of the Board of Directors, and reports of the committees of the
Board of Directors shall be recorded in the minute book of the Bank. The
minutes of each such meeting shall be signed by the presiding Officer and
attested by the secretary of the meetings.

SECTION 6.04. AMENDMENT OF BY-LAWS. These By-Laws may be amended by vote of a
majority of the Directors.

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<PAGE>

EXHIBIT 6

Securities and Exchange Commission
Washington, D.C. 20549

CONSENT

The undersigned, designated to act as Trustee under the Indenture for Evans
Withycombe Residential, L.P. described in the attached Statement of Eligibility
and Qualification, does hereby consent that reports of examinations by Federal,
State, Territorial, or District Authorities may be furnished by such authorities
to the Commission upon the request of the Commission.

This Consent is given pursuant to the provision of Section 321(b) of the Trust
Indenture Act of 1939, as amended.

Bank One, Columbus, NA

Dated: March 7, 1997
By: /s/ TED KRAVITS
-----------------
Ted Kravits
Authorized Signer

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<PAGE>

Federal Financial Institutions Examination Council

Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Expires March 31, 1999

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

Please refer to page i, /1/
Table of Contents, for
[LOGO] the required disclosure
of estimated burden.

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

CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES - FFIEC 031

(961231)
REPORT AT THE CLOSE OF BUSINESS DECEMBER 31, 1996 -----------
(RCRI 9999)

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

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

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

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

I, Richard D. Nadler, Controller
------------------------------------------------------------------------------
Name and Title of Officer Authorized to Sign Report

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

/s/ R.D. Nadler
- --------------------------------------------------------------------------------
Signature of Officer authorized to Sign Report

1/30/97
- --------------------------------------------------------------------------------
Date of Signature

The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions NOTE: These instructions may in
some cases differ from generally accepted accounting principles

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

/s/ [Illegible]
- --------------------------------------------------------------------------------
Director (Trustee)

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

FOR BANKS SUBMITTING HARD COPY REPORT FORMS:

STATE MEMBER BANKS: Return the original and one copy to the appropriate
Federal Reserve District Bank.

STATE NONMEMBER BANKS: Return the original only in the SPECIAL RETURN ADDRESS
ENVELOPE PROVIDED. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Systems, 2127 Espey Court Suite 204, Crofton, MD 21114

NATIONAL BANKS: Return the original only in the SPECIAL RETURN ADDRESS
ENVELOPE PROVIDED. If express mail is used in lieu of the special return
address envelope, return the original only the to the FDIC, c/o Quality Data
Systems, 2127 Systems, 2127 Espey Court Suite 204, Crofton, MD 21114

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

FDIC Certificate Number ------------------
(RCRI 9050)

Banks should affix the address label in this space.

Bank One, Columbus, National Association
---------------------------------------------------
Legal Title of Bank (TEXT 9010)

100 East Broad Street
---------------------------------------------------
City (TEXT 9130)

Columbus OH 43271
---------------------------------------------------
State Abbrev. (TEXT 9200) ZIP Code (TEXT 9220)

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

<PAGE>

FFIEC 031
Page i

/2/

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

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

TABLE OF CONTENTS

SIGNATURE PAGE Cover

REPORT OF INCOME

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

Schedule RI-A--Changes in Equity Capital................................... RI-4

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

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

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

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

DISCLOSURE OF ESTIMATED BURDEN

The estimated average burden associated with this information collection is
32.2 hours per respondent and is estimated to vary from 15 to 230 hours per
response, depending on individual circumstances. Burden estimates include the
form, and completing the information collection, but exclude the time for
compiling and maintaining business records in the normal course of a
respondent's activities. Comments concerning the accuracy of this burden
estimate and suggestions for reducing this burden should be directed to the
Office of Information and Regulatory Affairs, Office of Management and
Budget. Washington, D.C. 20503, and to one of the following:

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

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

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

REPORT OF CONDITION

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

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

Schedule RC-B--Securities............................................ RC-3, 4, 5

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

Schedule RC-D--Trading Assets and Liabilities
(to be completed only by selected banks)................................. RC-8

Schedule RC-E--Deposit Liabilities................................. RC-9, 10, 11

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

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

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

Schedule RC-I--Selected Assets and Liabilities of IBFs ................... RC-13

Schedule RC-K--Quarterly Averages......................................... RC-13

Schedule RC-L--Off-Balance Sheet items............................ RC-14, 15, 16

Schedule RC-M--Memoranda.............................................. RC-17, 18

Schedule RC-N--Past Due and Nonaccrual
Loans, Leases, and Other Asset...................................... RC-19, 20

Schedule RC-O--Other Data for Deposit Insurance Assessments........... RC-21, 22

Schedule RC-R--Regulatory Capital .................................... RC-23, 24

Optional Narrative Statement Concerning the Amounts Reported in
the Reports of Condition and Income..................................... RC-25

Special Report (TO BE COMPLETED BY ALL BANKS)

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

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

<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96
Address: 100 East Broad Street ST-BK: 39-1580 FFIEC 031
City, State Zip: Columbus, OH 43271-1066 Page RI-1
FDIC Certificate No.: 06559

CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1996-DECEMBER 31, 1996

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

SCHEDULE RI--INCOME STATEMENT

<TABLE>
I480
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income:
a. Interest and fee income on loans:
(1) In domestic offices:
(a) Loans secured by real estate ................................................ 4011 115,602 1.a.(1)(a)
(b) Loans to depository institutions ............................................ 4019 92 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers ......... 4024 930 1.a.(1)(c)
(d) Commercial and industrial loans ............................................. 4012 79,834 1.a.(1)(d)
(e) Acceptances of other banks .................................................. 4026 0 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures:
(1) Credit cards and related plans .......................................... 4054 449,921 1.a.(1)(f)(1)
(2) Other ................................................................... 4055 96,758 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions ...................... 4056 2 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political
subdivisions in the U.S.:
(1) Taxable obligations ..................................................... 4503 158 1.a.(1)(h)(1)
(2) Tax-exempt obligations .................................................. 4504 1,075 1.a.(1)(h)(2)
(i) All other loans in domestic offices ......................................... 4058 8,970 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs ................... 4059 0 1.a.(2)
b. Income from lease financing receivables:
(1) Taxable leases .................................................................. 4505 70,449 1.b.(1)
(2) Tax-exempt leases ............................................................... 4307 67 1.b.(2)
c. Interest income on balances due from depository institutions:(1)
(1) In domestic offices ............................................................. 4105 5 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs ................... 4106 0 1.c.(2)
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency and corporation obligations.. 4027 21,966 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities .............................. ........................... 4506 1 1.d.(2)(a)
(b) Tax-exempt securities ....................................................... 4507 2,771 1.d.(2)(b)
(3) Other domestic debt securities .............................................. 3657 628 1.d.(3)
(4) Foreign debt securities ..................................................... 3658 214 1.d.(4)
(5) Equity securities (including investments in mutual funds) ................... 3659 229 1.d.(5)
e. Interest income from trading assets ....................... ......................... 4069 1.e.
</TABLE>

- ------------
1) Includes interest income on time certificates of deposit not held for
trading.

<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96
Address: 100 East Broad Street ST-BK: 39-1580 FFIEC 031
City, State Zip. Columbus, OH 43271-1066 Page RI-2
FDIC Certificate No.: 06559
SCHEDULE RI--CONTINUED

<TABLE>
Dollar Amounts in Thousands Year-to-date
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
l. Interest income (continued) RIAD Bil Mil Thou
f. Interest income on federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs ............................. 4020 14,116 1.f.
g. Total interest income (sum of items 1.a through 1.f) ................ 4107 863,788 1.g.
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) .............. 4508 1,317 2.a.(1)(a)
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) ................... 4509 53,152 2.a.(1)(b)(1)
(2) Other savings deposits .................................. 4511 25,261 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more ........ 4174 6,248 2.a.(1)(b)(3)
(4) All other time deposits ................................. 4512 60,099 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement
subsidiaries, and IBFs .......................................... 4172 33,767 2.a.(2)
b. Expense of federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs ........................ 4180 79,224 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading
liabilities, and other borrowed money ............................... 4185 54,028 2.c.
d. Interest on mortgage indebtedness and obligations under capitalized
leases .............................................................. 4072 373 2.d.
e. Interest on subordinated notes and debentures ....................... 4200 11,704 2.e.
f. Total interest expense (sum of items 2.a through 2.e) ............... 4073 325,173 2.f.
-------------------------
3. Net interest income (item 1.g minus 2.f) ............................... RIAD 4074 538,615 3.
-------------------------
4. Provisions:
-------------------------
a. Provision for loan and lease losses ................................. RIAD 4230 292,629 4.a.
b. Provision for allocated transfer risk ............................... RIAD 4243 0 4.b.
-------------------------
5. Noninterest income:
a. Income from fiduciary activities .................................... 4070 37,418 5.a.
b. Service charges on deposit accounts in domestic of offices .......... 4080 39,518 5.b.
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d) .............................................. A220 0 5.c.
d. Other foreign transaction gains (losses) ............... 4076 1,981 5.d.
e. Not applicable
f. Other noninterest income:
(1) Other fee income ................................................ 5407 279,551 5.f.(1)
(2) All other noninterest income* ................................. 5408 100,816 5.f.(2)
-------------------------
g. Total noninterest income (sum of items 5.a through 5.f) ............ RIAD 4079 459,284 5 g
6. a. Realized gains (losses) on held-to-maturity securities .............. RIAD 3521 (49) 6.a.
b. Realized gains (losses) on available-for-sale securities ............ RIAD 3196 9 6.b.
-------------------------
7. Noninterest expense:
a. Salaries and employee benefits ...................................... 4135 151,416 7.a.
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest) .... 4217 26,832 7.b.
c. Other noninterest expense* .......................................... 4092 482,880 7.c.
-------------------------
d. Total noninterest expense (sum of items 7.a through 7.c) ............ RIAD 4093 661,128 7.d.
-------------------------
8. Income (loss) before income taxes and extraordinary items and other
-------------------------
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) RIAD 4301 44,102 8.
9. Applicable income taxes (on item 8) ........................... RIAD 4302 12,711 9.
-------------------------
10. Income (loss) before extraordinary items and other adjustments (item 8
-------------------------
minus 9) ............................................................... RIAD 4300 31,391 10.
-------------------------
</TABLE>

- ----------------
*Describe on Schedule RI-E--Explanations.

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-SK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RI-3
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

Schedule RI--Continued

<TABLE>
<CAPTION>
Year-to-date
-------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
11. Extraordinary items and other adjustments:
a. Extraordinary items and other adjustments, gross of income taxes* 4310 0 11.a.
b. Applicable income taxes (on item 11.a)* ..................... ..... 4315 0 11.b.
---------------------------
c. Extraordinary items and other adjustments, net of income taxes
(item 11.a minus 11.b) ............................................ RIAD 4320 0 11.c.
12. Net income (loss) (sum of items 10 and 11.c) ......................... RIAD 4340 31,391 12.
---------------------------

I481 < -
-------------
Year-to-date
-------------
Memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after
August 7, 1986, that is not deductible for federal income tax purposes .......................... 4513 190 M.1.
2. Income from the sale and servicing of mutual funds and annuities in domestic offices
(included in Schedule RI, item 8) ............................................................... 8431 1,857 M.2.
3. -4. Not applicable
5. Number of full-time equivalent employees on payroll at end of current period (round to Number
nearest whole number) ........................................................................... 4150 3,561 M.5.
6 Not applicable
7. If the reporting bank has restated its balance sheet as a result of applying push down MM DD YY
accounting this calendar year, report the date of the bank's acquisition ........................ 9106 00/00/00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments)
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, items 5.c): Bil Mil Thou

a. Interest rate exposures ...................................................................... 8757 0 M.8.a.
b. Foreign exchange exposures ................................................................... 8758 0 M.8.b.
c. Equity security and index exposures .......................................................... 8759 0 M.8.c.
d. Commodity and other exposures ................................................................ 8760 0 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income ................................................... 8761 (36) M.9.a.
b. Net (increase) decrease to interest expense .................................................. 8762 (2,261) M.9.b.
c. Other (noninterest) allocations .............................................................. 8763 (307) M.9.c.
10. Credit losses on off-balance sheet derivatives (see instructions) ............................... A251 0 M.10.
------------------------
</TABLE>
- ----------------
Describe on Schedule RI-E--Explanations.

<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-SK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RI-4
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>
Schedule RI-A--Changes in Equity Capital

Indicate decreases and losses in parentheses.
<TABLE>
<CAPTION>

---------
I483 < -
------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
1. Total equity capital originally reported in the December 31, 1995, Reports of Condition
and Income ..................................................................................... 3215 501,192 1.
2. Equity capital adjustments from amended Reports of Income, net* ................................ 3216 (10,104) 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) ........................... 3217 491,088 3.
4. Net income (loss) (must equal Schedule RI, item 12) ............................................ 4340 31,391 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net ............................. 4346 0 5.
6. Changes incident to business combinations, net ................................................. 4356 0 6.
7. LESS: Cash dividends declared on preferred stock ............................................... 4470 0 7.
8. LESS: Cash dividends declared on common stock .................................................. 4460 16,000 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions for
this schedule) ............................................................................... 4411 0 9.
10. Corrections of material accounting errors from prior years* (see instructions for this schedule) 4412 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities ............... 8433 (4,665) 11.
12. Foreign currency translation adjustments ....................................................... 4414 0 12.
13. Other transactions with parent holding company* (not included in items 5, 7, or 8 above) ....... 4415 173,594 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal
Schedule RC, item 28) ........................................................................ 3210 675,408 14.
------------------

</TABLE>

- ---------------------------
*Describe on Schedule RI-E--Explanations.

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

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

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

----------------------------------------
I486 < -
-------
(Column A) (Column B)
Charge-offs Recoveries
----------------------------------------
Calendar year-to-date
----------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile) ........................................ 4651 3,364 4661 2,014 1.a.
b. To non-U.S. addressees (domicile) .................................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of other banks:
a. To U.S. banks and other U.S. depository institutions ................. 4653 0 4663 0 2.a.
b. To foreign banks ..................................................... 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other loans to farmers ...... 4655 21 4665 21 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) ........................................ 4645 2,744 4617 826 4.a.
b. To non-U.S. addressees (domicile) .................................... 4646 0 4618 0 4.b.
5. Loans to individuals for household, family, and other personal
expenditures:
a. Credit cards and related plans ....................................... 4656 196,606 4666 21,147 5.a.
b. Other (includes single payment, installment, and all student loans) .. 4657 23,926 4667 13,861 5.b.
6. Loans to foreign governments and official institutions ................... 4643 0 4627 0 6.
7. All other loans .......................................................... 4644 435 4628 755 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile) ........................................ 4658 2,109 4668 425 8.a.
b. Of non-U.S. addressees (domicile) .................................... 4659 0 4669 0 8.b.
9. Total (sum of items 1 through 8) ......................................... 4635 229,205 4605 39,049 9.
----------------------------------------

</TABLE>

6
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12 31 96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RI-5
City, State Zip: Columbus, OH 43271-1066
FDIC. Certificate No.: 06559
</TABLE>

SCHEDULE RI-B--Continued

PART I. Continued

<TABLE>
<CAPTION>
----------------------------------------
(Column A) (Column B)
Charge-offs Recoveries
----------------------------------------
Memoranda Calendar year-to-date
----------------------------------------

Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

1-3. Not applicable
4. Loans to finance commercial real estate, construction, and land
development activities (not secured by real estate) included in
Schedule RI-B, part I, items 4 and 7, above ........................... 5409 0 5410 253 M.4.
5. Loans secured by real estate in domestic offices (included in
Schedule RI-B, part I, item 1, above):
a. Construction and land development .................................. 3582 241 3583 158 M.5.a.
b. Secured by farmland ................................................ 3584 0 3585 4 M.5.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit .................. 5411 1,112 5412 28 M.5.c.(1)
(2) All other loans secured by 1-4 family residential properties ... 5413 1,871 5414 899 M.5.c.(2)
d. Secured by multifamily (5 or more) residential properties .......... 3588 0 3589 500 M.5.d.
e. Secured by nonfarm nonresidential properties ....................... 3590 140 3591 425 M.5.e.
----------------------------------------
</TABLE>

PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES

<TABLE>
<CAPTION>
-------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Balance originally reported in the December 31, 1995, Reports of Condition and Income ...... 3124 152,121 1.
2. Recoveries (must equal part I, item 9, column B above) ...................................... 4605 39,049 2.
3. LESS: Charge-offs (must equal part I, item 9, column A above) .............................. 4635 229,205 3.
4. Provision for loan and lease losses (must equal Schedule RI, item 4.a) ...................... 4230 292,629 4.
5. Adjustments* (see instructions for this schedule) .......................................... 4815 0 5.
6. Balance end of current period (sum of items 1 through 5) (must equal Schedule RC,*
item 4.b) .................................................................................. 3123 254,594 6.
-------------------
</TABLE>

- ---------------------------------
*Describe on Schedule RI-E--Explanations.

SCHEDULE RI-C--APPLICABLE INCOME TAXES BY TAXING AUTHORITY

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

<TABLE>
<CAPTION>
----------
1489 < -
-------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Federal .................................................................................... 4780 11,332 1.
2. State and local ............................................................................ 4790 1,379 2.
3. Foreign .................................................................................... 4795 0 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b) ......... 4770 12,711 4.
------------------------------
5. Deferred portion of item 4 ............................. RIAD 4772 32,024 5.
------------------------------------------------------
</TABLE>

7
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12 31 96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RI-6
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: O6559

</TABLE>

SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS

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

PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS

<TABLE>
<CAPTION>
2492
---------------
Year-to-date
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries,
and IBFs:
a. Interest income booked ..................................................................... 4837 144 1.a.
b. Interest expense booked .................................................................... 4838 33,767 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and
IBFs (item 1.a minus 1.b) .................................................................. 4839 (33,623) 1.c.
2. Adjustments for booking location of international operations:
a. Net interest income attributable to international operations booked at domestic offices .... 4840 0 2.a.
b. Net interest income attributable to domestic business booked at foreign offices ............ 4841 0 2.b.
c. Net booking location adjustment (item 2.a minus 2.b) ....................................... 4842 0 2.c.
3. Noninterest income and expense attributable to international operations:
a. Noninterest income attributable to international operations ................................ 4097 0 3.a.
b. Provision for loan and lease losses attributable to international operations ............... 4235 0 3.b.
c. Other noninterest expense attributable to international operations ......................... 4239 0 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a minus
3.b and 3.c) ............................................................................... 4843 0 3.d.
4. Estimated pretax income attributable to international operations before capital allocation
adjustment (sum of items 1.c, 2.c. and 3.d) ................................................... 4844 (33,623) 4.
5. Adjustment to pretax income for internal allocations to international operations to reflect
the effects of equity capital on overall bank funding costs ................................... 4845 0 5.
6. Estimated pretax income attributable to international operations after capital allocation
adjustment (sum of items 4 and 5) ............................................................. 4846 (33,623) 6.
7. Income taxes attributable to income from international operations as estimated in item 6 ...... 4797 (11,768) 7.
8. Estimated net income attributable to international operations (item 6 minus 7) ................ 4341 (21,855) 8.
---------------------

Memoranda
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
1. Intracompany interest income included in item 1.a above ....................................... 4847 0 M.1.
2. Intracompany interest expense included in item 1.b above ...................................... 4848 0 M.2.
---------------------
</TABLE>

PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS
REQUIRED BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS

<TABLE>
<CAPTION>
---------------
Year-to-date
---------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest income booked at IBFs ................................................................ 4849 0 1.
2. Interest expense booked at IBFs ............................................................... 4850 0 2.
3. Noninterest income attributable to international operations booked at domestic offices
(excluding IBFs):
a. Gains (losses) and extraordinary items ..................................................... 5491 0 3.a.
b. Fees and other noninterest income .......................................................... 5492 0 3.b.
4. Provision for loan and lease losses attributable to international operations booked at domestic
offices (excluding IBFs) ...................................................................... 4852 0 4.
5. Other noninterest expense attributable to international operations booked at domestic offices
(excluding IBFs) .............................................................................. 4853 0 5.
---------------------
</TABLE>

8
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12 31 96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RI-7
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RI-E--EXPLANATIONS

SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.

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

<TABLE>
<CAPTION>
-----
I495 < -
------------
Year-to-date
------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2))
Report amounts that exceed 10% of Schedule RI, item 5.f.(2):
a. Net gains on other real estate owned ..................................................... 5415 0 1.a.
b. Net gains on sales of loans............................................................... 5416 0 1.b.
c. Net gains on sales of premises and fixed assets........................................... 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 5.f.(2):
---------
d. TEXT 4461 Card Processing Income 4461 80,192 1.d.
----------------------------------------------------------------------------------------
e. TEXT 4462 Installment Loan Servicing Income 4462 11,141 1.e.
----------------------------------------------------------------------------------------
f. TEXT 4463 4463 1.f.
----------------------------------------------------------------------------------------
2. Other noninterest expense (from Schedule RI, item 7.c):
a. Amortization expense of intangible assets................................................. 4531 6,539 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net losses on other real estate owned..................................................... 5418 0 2.b.
c. Net losses on sales of loans.............................................................. 5419 0 2.c.
d. Net losses on sales of premises and fixed assets.......................................... 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 7.c.
---------
e. TEXT 4464 Data Processing 4464 127,687 2.e.
----------------------------------------------------------------------------------------
f. TEXT 4467 4467 2.f.
----------------------------------------------------------------------------------------
g. TEXT 4468 4468 2.g.
----------------------------------------------------------------------------------------
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable
income tax effect (from Schedule RI, item 11.b) (itemize and describe all extraordinary
items and other adjustments):
-----------
a. (1) TEXT 4469 4469 3.a.(1)
-------------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4486 3.a.(2)
----------- ----------------------
b. (1) TEXT 4487 4487 3.b.(1)
-------------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4488 3.b.(2)
----------- ----------------------
c. (1) TEXT 44869 4489 3.c.(1)
-------------------------------------------------------------------------------------
(2) Applicable income tax effect RIAD 4491 3.a.(2)
----------- ----------------------
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2)
(itemize and describe all adjustments):
---------
a. TEXT 4492 Equity Capital Adjustment from Amended Call Report 4492 (10,104) 4.a.
----------------------------------------------------------------------------------------
b. TEXT 4493 4493 4.b.
----------------------------------------------------------------------------------------
5. Cumulative effect of changes in accounting principles from prior years
(from Schedule RI-A, item 9) (itemize and describe all changes in accounting principles):
---------
a. TEXT 4494 4494 5.a.
----------------------------------------------------------------------------------------
b. TEXT 4495 4495 5.b.
----------------------------------------------------------------------------------------
6. Corrections of material accounting errors from prior years (from Schedule RI-A. item 10)
(itemize and describe all corrections):
---------
a. TEXT 4496 4496 6.a.
----------------------------------------------------------------------------------------
b. TEXT 4497 4497 6.b.
----------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12 31 96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RI-E
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No: 06559
</TABLE>

SCHEDULE RI-E--CONTINUED

<TABLE>
<CAPTION>
Year-to-date
------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13)
(itemize and describe all such transactions):
---------
a. TEXT 4498 Capital Contribution 4498 173,594 7.a.
----------------------------------------------------------------------------------------
b. TEXT 4499 4499 7.b.
----------------------------------------------------------------------------------------
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, item 5)
(itemize and describe all adjustments):
---------
a. TEXT 4521 4521 8.a.
----------------------------------------------------------------------------------------
b. TEXT 4522 4522 8.b.
----------------------------------------------------------------------------------------
9. Other explanations (the space below is provided for the bank to briefly describe, at its I498 I499 < -
option, any other significant items affecting the Report of Income): ------------------
No comment (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>

10
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12 31 96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-1
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1996

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

SCHEDULE RC--BALANCE SHEET

<TABLE>
<CAPTION>
--------
C400 (-
--------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSET
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) .................................. 0081 843,296 1.a.
b. Interest-bearing balances(2) ............................................................ 0071 5 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) .............................. 1754 35,729 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ............................ 1773 622,046 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold ...................................................................... 0276 340,096 3.a.
b. Securities purchased under agreements to resell ......................................... 0277 0 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 8,523,564 4.a.
b. LESS: Allowance for loan and lease losses ................... RCFD 3223 254,594 4.b.
c. LESS: Allocated transfer risk reserve ....................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) ..................................... 2125 8,268,970 4.d.
5. Trading assets (from Schedule RC-D) ........................................................ 3545 0 5.
6. Premises and fixed assets (including capitalized leases) ................................... 2145 65,094 6.
7. Other real estate owned (from Schedule RC-M) ............................................... 2150 6,543 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) ... 2130 2,436 8.
9. Customers' liability to this bank on acceptances outstanding ............................... 2155 5,730 9.
10. Intangible assets (from Schedule RC-M) ..................................................... 2143 34,111 10.
11. Other assets (from Schedule RC-F) .......................................................... 2160 450,453 11.
12. Total assets (sum of items 1 through 11) ................................................... 2170 10,674,509 12.
--------------------
- ---------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>

11
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12 31 96 ST-BK. 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-2
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC--CONTINUED

<TABLE>
<CAPTION>
---------------------
Dollar Amounts in Thousands Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E,
part I) ............................................................................... RCON 2200 4,560,222 13.a.
---------------------------
(1) Noninterest-bearing(1) ............................... RCON 6631 1,705,451 13.a.(1)
(2) Interest-bearing ..................................... RCON 6636 2,854,771 13.a.(2)
---------------------------
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E,
part II) .............................................................................. RCFN 2200 1,143,910 13.b.
---------------------------
(1) Noninterest-bearing .................................. RCFN 6631 0 13.b.(1)
(2) Interest-bearing ..................................... RCFN 6636 1,143,910 13.b.(2)
---------------------------
14. Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased ............................................................... RCFD 0278 2,063,655 14.a.
b. Securities sold under agreements to repurchase ........................................ RCFD 0279 0 14.b.
15. a. Demand notes issued to the U.S. Treasury .............................................. RCON 2840 43,633 15.a.
b. Trading liabilities (from Schedule RC-D) .............................................. RCFD 3548 0 15.b.
16. Other borrowed money:
a. With a remaining maturity of one year or less ......................................... RCFD 2332 1,341,487 16.a.
b. With a remaining maturity of more than one year ....................................... RCFD 2333 403,824 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ........................... RCFD 2910 3,878 17.
18. Bank's liability on acceptances executed and outstanding ................................. RCFD 2920 5,730 18.
19. Subordinated notes and debentures ........................................................ RCFD 3200 264,328 19.
20. Other liabilities (from Schedule RC-G) ................................................... RCFD 2930 168,434 20.
21. Total liabilities (sum of items 13 through 20) .......................................... RCFD 2948 9,999,101 21.

22. Limited-life preferred stock and related surplus ......................................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ............................................ RCFD 3838 0 23.
24. Common stock ............................................................................. RCFD 3230 20,738 24.
25. Surplus (exclude all surplus related to preferred stock) ................................. RCFD 3839 280,950 25.
26. a. Undivided profits and capital reserves ................................................ RCFD 3632 376,654 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ............... RCFD 8434 (2,934) 26.b.
27. Cumulative foreign currency translation adjustments ...................................... RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) ........................................ RCFD 3210 675,408 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22,
and 28) .................................................................................. RCFD 3300 10,674,509 29.
---------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the Number
most comprehensive level of auditing work performed for the bank by independent external -------------
auditors as of any date during 1995 ................................................................. RCFD 6724 N A M.1.

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

- -------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>

12
<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96
Address: 100 East Broad Street ST-BK: 39-1580 FFIEC 031
City, State Zip: Columbus, OH 43271-1066 Page RC-3
FDIC Certificate No. 06559

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

Exclude assets held for trading.

<TABLE>
<CAPTION>
-------
C405
--------------------------------------
(Column A) (Column B)
Consolidated Domestic
Bank 0ffices
--------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and
coin ....................................................................... 0022 734,399 1.
a. Cash items in process of collection and unposted debits ................. 0020 672,636 1.a.
b. Currency and coin ....................................................... 0080 61,763 1.b.
2. Balances due from depository institutions in the U.S. ...................... 0082 42,462 2.
a. U.S. branches and agencies of foreign banks (including their IBFs) ...... 0083 0 2.a.
b. Other commercial banks in the U.S. and other depository institutions
in the U.S. (including their IBFs) ...................................... 0085 42,462 2.b.
3. Balances due from banks in foreign countries and foreign central banks ..... 0070 3,263 3.
a. Foreign branches of other U.S. banks .................................... 0073 0 3.a
b. Other banks in foreign countries and foreign central banks .............. 0074 3,263 3.b.
4. Balances due from Federal Reserve Banks .................................... 0090 63,177 0090 63,177 4.
5. Total (sum of items 1 through 4) (total of column A must equal
Schedule RC, sum of items l.a and 1.b) ..................................... 0010 843,301 0010 843,301 5.
--------------------------------------

</TABLE>

-----------------
Memorandum Dollar Amounts in Thousands RCON Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Noninterest-bearing balances due from commercial banks in the U.S. (included
in item 2, column B above) ................................................. 0050 42,462 M.1.
----------------

</TABLE>

Schedule RC-B--Securities

Exclude assets held for trading.

<TABLE>
<CAPTION> -------
C410
--------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
--------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value(1)
--------------------------------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. U.S. Treasury securities ......... 0211 0 0213 0 1286 359,538 1287 354,164 1.
2. U.S. Government agency
and corporation obligations .....
(exclude mortgage-backed
securities):
a. Issued by U.S. Government
agencies(2) .................. 1289 0 1290 0 1291 0 1293 0 2.a.
b. Issued by U.S.
Government-sponsored
agencies(3) .................. 1294 0 1295 0 1297 87,647 1296 87,318 2.b.
--------------------------------------------------------------------------------

</TABLE>

- ------------
1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.

2) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.

3) Includes obligations (other than mortgage-backed securities) issued by the
Farm Credit System, the Federal Home Loan Bank System, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association, the
Financing Corporation, Resolution Funding Corporation, the Student Loan
Marketing Association, and the Tennessee Valley Authority.

<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96
Address: 100 East Broad Street ST-BK: 39-1580 FFIEC 031
City, State Zip: Columbus, OH 43271-1066 Page RC-4
FDIC Certificate No. 06559

Schedule RC-B--Continued

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
--------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Amortized Cost Fair Value Amortized Cost Fair Value(1)
--------------------------------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3. Securities issued by states and
political subdivisions in the U.S.:
a. General obligations ........... 1676 12,079 1677 16,081 1678 0 1679 0 3.a.
b. Revenue obligations ........... 1681 12,635 1686 10,143 1690 845 1691 863 3.b.
c. Industrial development and
similar obligations ........... 1694 7,783 1695 7,806 1696 0 1697 0 3.c.
4. Mortgage-backed
securities (MBS):
a. Pass-through securities:
(1) Guaranteed by GNMA ....... 1698 0 1699 0 1701 41,935 1702 41,969 4.a.(1)
(2) Issued by FNMA and FHLMC . 1703 0 1705 0 1706 110,145 1707 111,114 4.a.(2)
(3) Other pass-through
securities ............... 1709 482 1710 470 1711 5,579 1713 5,714 4.a.(3)
b. Other mortgage-backed
securities (include CMOs,
REMICs, and stripped MBS):
(1) Issued or guaranteed by
FNMA, FHLMC, or GNMA ...... 1714 0 1715 0 1716 16,583 1717 16,602 4.b.(1)
(2) Collateralized
by MBS issued or
guaranteed by FNMA, FHLMC,
or GNMA ................... 1718 0 1719 0 1731 0 1732 0 4.b.(2)
(3) All other mortgage-
backed securities ........ 1733 0 1734 0 1735 0 1736 0 4.b.(3)
5. Other debt securities:
a. Other domestic debt
securities .................... 1737 0 1738 0 1739 445 1741 459 5.a.
b. Foreign debt securities ....... 1742 2,750 1743 2,750 1744 0 1746 0 5.b.
6. Equity securities:
a. Investments in mutual funds 1747 0 1748 0 6.a.
b. Other equity securities with
readily determinable fair
values ........................ 1749 0 1751 0 6.b.
c. All other equity
securities(1) ................. 1752 3,843 1753 3,843 6.c.
7. Total (sum of items 1 through 6)
(total of column A must equal
Schedule RC, item 2.a) (total of
column D must equal Schedule RC,
item 2.b) ........................ 1754 35,729 1771 37,250 1772 626,560 1773 622,046 7.

</TABLE>

(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.

<PAGE>

<TABLE>
<CAPTION>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-5
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559

Schedule RC-B--Continued

Memoranda C412
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------- -------------------
<S> <C> <C>
1. Pledged securities (2)........... ............................................................. 0416 631,720 M.1.
2. Maturity and repricing data for debt securities (2),(3),(4) (excluding those in
nonaccrual status):
a. Fixed rate debt securities with a remaining maturity of:
(i) Three months or less ................................. ....... ......................... 0343 2,338 M.2.a.(1)
(2) Over three months through 12 months .................... ............................... 0344 6,223 M.2.a.(2)
(3) Over one year through five years ....................................................... 0345 185,632 M.2.a.(3)
(4) Over five years ........................................................................ 0346 382,638 M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1) through 2.a.(4) ...... 0347 576,831 M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of:
(1) Quarterly or more frequently ........................................................... 4544 75,940 M.2.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ........................ 4545 565 M.2.b.(2)
(3) Every five years or more frequently, but less frequently than annually ................. 4551 0 M.2.b.(3)
(4) Less frequently than every five years .................................................. 4552 596 M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4)) .. 4553 77,101 M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total
debt securities from Schedule RC-B, sum of items 1 through 5, columns A and D, minus
nonaccrual debt securities included in Schedule RC-N, item 9, column C) ...................... 0393 653,932 M.2.c.
3. Not applicable
4. Held-to-maturity debt securities restructured and in compliance with modified terms (included
in Schedule RC-B, items 3 through 5, column A, above) .......................................... 5365 0 M.4.
5. Not applicable
6. Floating rate debt securities with a remaining maturity of one year or less (2),(4) (included
in Memorandum items 2.b.(1) through 2.b.(4) above) ............................................. 5519 39,228 M.6.
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or
trading securities during the calendar year-to-date (report the amortized cost at date of
sale or transfer) .............................................................................. 1778 0 M.7.
8. High-risk mortgage securities (included in the held-to-maturity and available-for-sale
accounts in Schedule RC-B, item 4.b):
a. Amortized cost .............................................................................. 8780 0 M.8.a.
b. Fair value.............,..................................................................... 8781 0 M.8.b.
9. Structured notes (included in the held-to-maturity and available-for-sale accounts in
Schedule RC-B, items 2, 3, and 5):
a. Amortized cost............................................................................... 8782 0 M.9.a.
b. Fair value .................................................................................. 8783 0 M.9.b.
</TABLE>

(2) Includes held-to-maturity securities at amortized cost and available-for-
sale securities at fair value.
(3) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(4) Memorandum items 2 and 6 are not applicable to savings banks that must
complete supplemental Schedule RC-J.

15
<PAGE>

<TABLE>
<CAPTION>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 03
Address: 100 East Broad Street Page RC-6
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559

Schedule RC-C--Loans and Lease Financing Receivables

Part I. Loans and Leases

Do not. deduct the allowance for loan and lease losses from amounts
reported in this schedule. Report total loans and leases, net of unearned C415
income. Exclude assets held for trading. (Column A) (Column B)
Consolidated Domestic
Bank Offices
------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- --------------------------------------------------------------------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate ........................................... 1410 1,315,343 1.
a. Construction and land development ................................... 1415 151,272 1.a.
b. Secured by farmland (including farm residential and other
improvements) ....................................................... 1420 5,457 1.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit ................... 1797 239,383 1.c.(1)
(2) All other loans secured by 1-4 family residential properties:
(a) Secured by first liens ...................................... 5367 211,751 1.c.(2)(a
(b) Secured by junior liens ..................................... 5368 182,617 1.c.(2)(b
d. Secured by multifamily (5 or more) residential properties ........... 1460 23,415 1.d.
e. Secured by nonfarm nonresidential properties ........................ 1480 501,448 1.e.
2. Loans to depository institutions:
a. To commercial banks in the U.S. ..................................... 1505 2,750 2.a.
(1) To U.S. branches and agencies of foreign banks .................. 1506 0 2.a.(1)
(2) To other commercial banks in the U.S. ........................... 1507 2,750 2.a.(2)
b. To other depository institutions in the U.S. ........................ 1517 1,517 1517 1,517 2.b.
c. To banks in foreign countries ....................................... 1510 0 2.c.
(1) To foreign branches of other U.S. banks ......................... 1513 0 2.c (1)
(2) To other banks in foreign countries ............................. 1516 0 2.c.(2)
3. Loans to finance agricultural production anc other loans to farmers .... 1590 14,027 1590 14,027 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) ....................................... 1763 819,276 1763 819,276 4.a.
b. To non-U.S. addressees (domicile) ................................... 1764 0 1764 0 4.b.
5. Acceptances of other banks:
a. Of U.S. banks ....................................................... 1756 0 1756 0 5.a.
b. Of foreign banks......... ........................................... 1757 0 1757 0 5.b.
6. Loans to individuals for household, family, and other personal
expenditures (i.e., consumer loans) (includes purchased paper) ......... 1975 4,918,304 6.
a. Credit cards and related plans (includes check credit and other
revolving credit plans) ............................................. 2008 3,962,115 6.a.
b. Other (includes single payment, installment, and all student loans) . 2011 956,189 6.b.
7. Loans to foreign governments and official institutions (including
foreign central banks) ................................................. 2081 13 2081 13 7.
8. Obligations (other than securities and leases) of states and political
subdivisions in the U.S. (includes nonrated industrial development
obligations) ........................................................... 2107 22,773 2107 22,773 8.
9. Other loans ............................................................ 1563 215,481 9.
a. Loans for purchasing or carrying securities (secured and unsecured) . 1545 9,107 9.a.
b. All other loans (exclude consumer loans) ........ ................... 1564 206,374 9.b.
10. Lease financing receivables (net of unearned income) ................... 2165 1,214,732 10.
a. Of U.S. addressees (domicile) ................ ...................... 2182 1,214,732 10.a.
b. Of non-U.S. addressees (domicile) ................................... 2183 0 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above ........ 2123 652 2123 652 11.
12. Total loans and leases, net of unearned income (sum of items 1
through 10 minus item 11) (total of column A must equal
Schedule RC, item 4.a) ................................................. 2122 8,523,564 2122 8,523,564 12.

</TABLE>
16

<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-7
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-C--CONTINUED

PART I. CONTINUED

<TABLE>
<CAPTION>
----------------------------------------
(Column A) (Column B)
Consolidated Domestic
Memoranda Bank Offices
------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Commercial paper included in Schedule RC-C, part I, above ................. 1496 0 1496 0 M.1.

2. Loans and leases restructured and in compliance with modified terms
(included in Schedule RC-C, part I, above and not reported as past due
or nonaccrual in Schedule RC-N, Memorandum item 1):
a. Loans secured by real estate:
(1) To U.S. addressees (domicile) ..................................... 1687 0 M.2.a.(1)
(2) To non-U.S. addressees (domicile) ................................. 1689 0 M.2.a.(2)
b. All other loans and all lease financing receivables (exclude loans to
individuals for household, family, and other personal expenditures) .... 8691 0 M.2.b.
c. Commercial and industrial loans to and lease financing receivables
of non-U.S. addressees (domicile) included in Memorandum item 2.b
above .................................................................. 8692 0 M.2.c.
3. Maturity and repricing data for loans and leases(1) (excluding those in
nonaccrual status):
a. Fixed rate loans and leases with a remaining maturity of:
(1) Three months or less ............................................... 0348 145,027 M.3.a.(1)
(2) Over three months through 12 months ................................ 0349 205,706 M.3.a.(2)
(3) Over one year through five years ................................... 0356 1,770,565 M.3.a.(3)
(4) Over five years .................................................... 0357 633,855 M.3.a.(4)
(5) Total fixed rate loans and leases (sum of Memorandum
items 3.a.(1) through 3.a.(4)) ..................................... 0358 2,755,153 M.3.a.(5)
b. Floating rate loans with a repricing frequency of:
(1) Quarterly or more frequently ....................................... 4554 4,931,993 M.3.b.(1)
(2) Annually or more frequently, but less frequently than quarterly .... 4555 738,636 M.3.b.(2)
(3) Every five years or more frequently, but less frequently than
annually ........................................................... 4561 60,013 M.3.b.(3)
(4) Less frequently than every five years .............................. 4564 15,437 M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum items 3.b.(1)
through 3.b.(4)) ................................................... 4567 5,746,079 M.3.b.(5)
c. Total loans and leases (sum of Memorandum items 3.a.(5) and
3.b.(5)) (must equal the sum of total loans and leases, net, from
Schedule RC-C, part I, item 12, plus unearned income from
Schedule RC-C, part I, item 11, minus total nonaccrual loans and
leases from Schedule RC-N, sum of items 1 through 8, column C) ......... 1479 8,501,232 M.3.c.
d. Floating rate loans with a remaining maturity of one year or less
(included in Memorandum items 3.b.(1) through 3.b.(4) above) ........... A246 1,718,410 M.3.d.
4. Loans to finance commercial real estate, construction, and land
development activities (not secured by real estate) included in
Schedule RC-C, part I, items 4 and 9, column A, page RC-6 (2) ............. 2746 50,438 M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I,
above) ....................................,...,........................... 5369 1,000,000 M.5.
------------------
6. Adjustable rate closed-end loans secured by first liens on 1-4 family RCON Bil Mil Thou
residential properties (included in Schedule RC-C, part I, item 1.c.(2)(a), ------------------
column B, page RC-6) ...................................................... 5370 22,175 M.6.
----------------------------------------
</TABLE>

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

17
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-8
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-D--TRADING ASSETS AND LIABILITIES

Schedule RC-D is to be completed only by banks with $1 billion or more in
total assets or with $2 billion or more in par/notional amount of off-balance
sheet derivative contracts (as reported in Schedule RC-L, items 14.a through
14.e, columns A through D).

<TABLE>
<CAPTION>
-------
C420
-------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
1. U.S. Treasury securities in domestic offices ............................................... RCON 3531 0 1.
2. U.S. Government agency and corporation obligations in domestic offices (exclude mortgage-
backed securities) .......................................................................... RCON 3532 0 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices .... RCON 3533 0 3.
4. Mortgage-backed securities (MBS) in domestic offices:
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA ..................... RCON 3534 0 4.a.
b. Other mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA
(include CMOs, REMICs, and stripped MBS) ................................................. RCON 3535 0 4.b.
c. All other mortgage-backed securities ....................................................... RCON 3536 0 4.c.
5. Other debt securities in domestic offices .................................................. RCON 3537 0 5.
6. Certificates of deposit in domestic offices ................................................ RCON 3538 0 6.
7. Commercial paper in domestic offices ....................................................... RCON 3539 0 7.
8. Bankers acceptances in domestic offices .................................................... RCON 3540 0 8.
9. Other trading assets in domestic offices .........................................,......... RCON 3541 0 9.
10. Trading assets in foreign offices ......................................................... RCFN 3542 0 10.
11. Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity
contracts:
a. In domestic offices ...................................................................... RCON 3543 0 11.a.
b. In foreign offices ....................................................................... RCFN 3544 0 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5) ......... RCFD 3545 0 12.
--------------------------

--------------------------
LIABILITIES Bil Mil Thou
--------------------------
13. Liability for short positions .............................................................. RCFD 3546 0 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and equity
contracts .................................................................................. RCFD 3547 0 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b) ..... RCFD 3548 0 15.
--------------------------
</TABLE>

<PAGE>
<TABLE>
<S> <C>
Legal Title of. Bank: BANK ONE. COLUMBUS, NA Call Date: 12/31/96 ST-BK 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-9
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-E--DEPOSIT LIABILITIES

PART I. DEPOSITS IN DOMESTIC OFFICES
<TABLE>
<CAPTION>
--------
C425
- ---------------------------------------------------------------------------------------------------------------------------
Nontransaction
Transaction Accounts Accounts
------------------------------------------------------------------
(Column A) (Column B) (Column C)
Total transaction Memo: Total Total
accounts (including) demand deposits nontransaction
total demand (included in accounts
deposits) column A) (including MMDAs)
-------------------------------------------------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations .......... 2201 1,182,321 2240 1,116,571 2346 2,740,254 1.
2. U.S. Government ...................................... 2202 7,431 2280 7,431 2520 0 2.

3. States and political subdivisions in the U.S. ........ 2203 55,632 2290 53,068 2530 30,482 3.
4. Commercial banks in the U.S. ......................... 2206 486,527 2310 486,527 2550 15,721 4.
5. 0ther depository institutions in the U.S. ............ 2207 11,223 2312 11,223 2349 0 5.

6. Banks in foreign countries ........................... 2213 11,507 2320 11,507 2236 0 6.
7. Foreign governments and official institutions
including foreign central banks) .................... 2216 0 2300 0 2377 0 7.
8. Certified and official checks ........................ 2330 19,124 2330 19,124 8.
9. Total (sum of items 1 through 8) (sum of
columns A and C must equal Schedule RC,
item 13.a) ........................................... 2215 1,773,765 2210 1,705,451 2385 2,786,457 9.
-------------------------------------------------------------------

</TABLE>
Memoranda
<TABLE>
<CAPTION>
------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C):
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts ......................... 6835 227,960 M.1.a.
b. Total brokered deposits ..................................................................... 2365 3,283 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
(1) Issued in denominations of less than $100,000 ........................................... 2343 227 M.1.c.(1)
(2) Issued either in denominations of $100,000 or in denominations greater than
$100,000 and participated out by the broker in shares of $100,000 or less................ 2344 2,350 M.1.c.(2)
d. Maturity data for brokered deposits:
(1) Brokered deposits issued in denominations of less than $100,000 with a remaining
maturity of one year or less (included in Memorandum item 1.c.(1) above) ............... A243 221 M.1.d.(1)
(2) Brokered deposits issued in denominations of $100,000 or more with a remaining
maturity of one year or less (included in Memorandum item 1.b above) .................... A244 906 M.1.d.(2)

e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S.
reported in item 3 above which are secured or collateralized as required under state law)........ 5590 84,231 M.1.e.
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d
must equal item 9, column C above):
a. Savings deposits:
(1) Money market deposit accounts (MMDAs) ............................................... 6810 1,307,301 M.2.a.(1)
(2) 0ther savings deposits (excludes MMDAs) .................................................. 0352 459,528 M.2.a.(2)

b. Total time deposits of less than $100,000 ...................................................... 6648 915,613 M.2.b.

c. Time certificates of deposit of $100,000 or more ............................................... 6645 104,015 M.2.c.
d. Open-account time deposits of $100,000 or more ................................................. 6646 0 M.2.d.
3. All NOW accounts (included in column A above) ................................................... 2398 68,314 M.3.
------------------
4. Not applicable

</TABLE>
19
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-10
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-E--CONTINUED

PART I. CONTINUED

Memoranda (continued)

Dollar Amounts in Thousands RCON Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Maturity and repricing data for time deposits of less than $100,000 (sum of
Memorandum items 5.a. (1) through 5.b. (3) must equal Memorandum item 2.b above): (1)
a. Fixed rate time deposits of less than $100,000 with a remaining maturity of:

(1) Three months or less ................................................................... A225 178,380 M.5.a.(1)
(2) Over three months through 12 months .................................................... A226 261,205 M.5.a.(2)
(3) Over one year .......................................................................... A227 476,028 M.5.a.(3)

b. Floating rate time deposits of less than $100,000 with a repricing frequency of:
(1) Quarterly or more frequently ........................................................... A228 0 M.5.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ........................ A229 0 M.5.b.(2)
(3) Less frequently than annually .......................................................... A230 0 M.5.b.(3)

c. Floating rate time deposits of less than $100,000 with a remaining maturity of
one year or less (included in Memorandum items 5.b.(1) through 5.b.(3) above) .............. A231 0 M.5.c.
6. Maturity and repricing data for time deposits of $100,000 or more (i.e., time certificates
of deposit of $100,000 or more and open-account time deposits of $100,000 or more)
(sum of Memorandum items 6.a.(1) through 6.b.(4) must equal the sum of Memorandum
items 2.c and 2.d above):(1)

a. Fixed rate time deposits of $100,000 or more with a remaining maturity of:
(1) Three months or less ................................................................... A232 47,124 M.6.a.(1)
(2) Over three months through 12 months .................................................... A233 29,285 M.6.a.(2)
(3) Over one year through five years ....................................................... A234 11,405 M.6.a.(3)
(4) Over five years ....................................................................... A235 16,201 M.6.a.(4)

b. Floating rate time deposits of $100,000 or more with a repricing frequency of:
(1) Quarterly or more frequently ........................................................... A236 0 M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ........................ A237 0 M.6.b.(2)
(3) Every five years or more frequently, but less frequently than annually ................. A238 0 M.6.b.(3)
(4) Less frequently than every five years ................................ ................. A239 0 M.6.b.(4)
c. Floating rate time deposits of $100,000 or more with a remaining maturity of
one year or less (included in Memorandum items 6.b.(1) through 6.b.(4) above) .............. A240 0 M.6.c.
-----------------------
- ------------
(1) Memorandum items 5 and 6 are not applicable to savings banks that must complete supplemental Schedule RC-J.
</TABLE>
20

<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031

Address: 100 East Broad Street Page RC-11
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-E--CONTINUED

PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFs)

---------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- ------ ------------
<S> <C> <C> <C>

Deposits of:
l. Individuals, partnerships, and corporations .................................................... 2621 614,277 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks) ................................. 2623 529,633 2.
3. Foreign banks (including U.S. branches and agencies of foreign banks, including their IBFs) .... 2625 0 3.
4. Foreign governments and official institutions (including foreign central banks) ................ 2650 0 4.
5. Certified and official checks .................................................................. 2330 0 5.
6. All other deposits ............................................................................. 2668 0 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b) ........................... 2200 1,143,910 7.
-------------------------
</TABLE>

Memorandum
<TABLE>
<CAPTION>
---------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- ------ ------------
<S> <C> <C> <C>

1. Time deposits with a remaining maturity of one year or less (included in Part II, item 7 above) A245 0 M.1.
-------------------------
</TABLE>

SCHEDULE RC-F--OTHER ASSETS

<TABLE>
<CAPTION>
--------------
C430
------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- --------- ------------
<S> <C> <C> <C>

1. Income earned, not collected on loans .......................................................... RCFD 2164 64,750 1.
2. Net deferred tax assets(1) ..................................................................... RCFD 2148 0 2.
3. Excess residential mortgage servicing fees receivable .......................................... RCFD 5371 0 3.
4. Other (itemize and describe amounts that exceed 25% of this item) .............................. RCFD 2168 385,703 4.
a. TEXT 3549 Cash Surrender Value - COLI RCFD 3549 137,741 4.a.
b. TEXT 3550 RCFD 3550 4.b.
c. TEXT 3551 RCFD 3551 4.c.

5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11) ............................. RCFD 2160 450,453 5.
-----------------------
</TABLE>

Memorandum

<TABLE>
<CAPTION>
------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- --------- ------------
<S> <C> <C> <C>
1. Deferred tax assets disallowed for regulatory capital purposes .................................. RCFD 5610 0 M.1.
-----------------------
</TABLE>

SCHEDULE RC-G--OTHER LIABILITIES

<TABLE>
<CAPTION>
--------------
C435
------------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- --------- ------------
<S> <C> <C> <C>

1. a. Interest accrued and unpaid on deposits in domestic offices(2) .............................. RCON 3645 22,566 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable) ................... RCFD 3646 20,007 1.b.
2. Net deferred tax liabilities(1) ................................................................ RCFD 3049 101,585 2.
3. Minority interest in consolidated subsidiaries ................................................. RCFD 3000 0 3.
4. 0ther (itemize and describe amounts that exceed 25% of this item) .............................. RCFD 2938 24,276 4.
a. TEXT 3552 Deferred Fees Received on Swaps RCFD 3552 21,241 4.a.
b. TEXT 3553 RCFD 3553 4.b.
c. TEXT 3554 RCFD 3554 4.c.
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20) ............................ RCFD 2930 168,434 5.
</TABLE>

- ---------------
1. See discussion of deferred income taxes in Glossary entry on "income taxes."
2. For savings banks, include "dividends" accrued and unpaid on deposits.
21

<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031

Address: 100 East Broad Street Page RC-1
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES

<TABLE>
<CAPTION>
------------
C440
----------------------
Domestic Offices
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- ------- ------------
<S> <C> <C> <C>

1. Customers' liability to this bank on acceptances outstanding ................................... 2155 5,730 1.
2. Bank's liability on acceptances executed and outstanding ....................................... 2920 5,730 2.
3. Federal funds sold and securities purchased under agreements to resell ......................... 1350 340,096 3.
4. Federal funds purchased and securities sold under agreements to repurchase ................... 2800 2,063,655 4.
5. Other borrowed money ........................................................................... 3190 1,745,311 5.
EITHER
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs .................... 2163 N/A 6.
OR
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs .................... 2941 1,141,708 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries, and
IBFs) ......................................................................................... 2192 10,671,759 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement subsidiaries, and
IBFs) ......................................................................................... 3129 8,854,642 9.
------------------------
</TABLE>

ITEMS 10-17 INCLUDE HELD-TO-MATURITY AND AVAILABLE-FOR-SALE SECURITIES IN
DOMESTIC OFFICES.

10. U.S. Treasury securities ..................................................................... 1779 354,164 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed
securities) .................................................................................. 1785 87,318 11.
12. Securities issued by states and political subdivisions in the U.S. ........................... 1786 33,360 12.
13. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ........................................ 1787 153,083 13.a.(1)
(2) Other pass-through securities ....................................................... 1869 6,196 13.a.(2)
b. 0ther mortgage-backed securities (include CMOs, REMICs, and stripped MBS):
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ........................................ 1877 16,602 13.b.(1)
(2) All other mortgage-backed securities ................................................ 2253 0 13.b.(2)
14. Other domestic debt securities ............................................................... 3159 459 14.
15. Foreign debt securities ...................................................................... 3160 0 15.
16. Equity securities:
a. Investments in mutual funds ............................................................... 3161 0 16.a.
b. Other equity securities with readily determinable fair values ............................. 3162 0 16.b.
c. All other equity securities ............................................................... 3169 3,843 16.c.
17. Total held-to-maturity and available-for-sale securities (sum of items 10 through 16) ........ 3170 655,025 17.
----------------------
</TABLE>

Memorandum (to be completed only by banks with IBFs and other "foreign"
offices)

<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- -------------------------------------------------------------------------------------------------- ------- ------------
<S> <C> <C> <C>
EITHER
1. Net due from the IBF of the domestic offices of the reporting bank ........................... 3051 N/A M.1.
OR
2. Net due to the IBF of the domestic offices of the reporting bank ............................. 3059 N/A M.2.
----------------------
</TABLE>

<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-13
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFS
To be completed only by banks with IBFs and other "foreign" offices.

<TABLE>
<CAPTION>
----------
C445
---------------------
Dollar Amounts in Thousands RCFN Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- ---------------------
<S> <C> <C>

1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12) ................. 2133 N/A 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I,
item 12, column A) ................................. .. ........................................ 2076 N/A 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4,
column A) ...................................................................................... 2077 N/A 3.
4. Total IBF liabilities (component of Schedule RC, item 21) ...................................... 2898 N/A 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E,
part II, items 2 and 3) ......................... ... .. ....................................... 2379 N/A 5.
6. 0ther IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5, and 6) ..... 2381 N/A 6.
-------------------------
</TABLE>

SCHEDULE RC-K--QUARTERLY AVERAGES(1)

<TABLE>
<CAPTION>
---------
C445
-----------------------
Dollar Amounts in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------- -----------------------
<S> <C> <C>
ASSETS

1. Interest-bearing balances due from depository institutions ............................... RCFD 3381 1,449 1.
2. U.S. Treasury securities and U.S. Government agency and corporation obligations(2) ....... RCFD 3382 462,100 2.
3. Securities issued by states and political subdivisions in the U.S.(2) .................... RCFD 3383 2,829 3.

4. a. Other debt securities(2) .............................................................. RCFD 3647 6,223 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal Reserve stock).. RCFD 3648 3,844 4.b.
5. Federal funds sold and securities purchased under agreements to resell in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs .............. RCFD 3365 227,861 5.
6. Loans:
a. Loans in domestic offices:
(1) Total loans ..................................................................... RCON 3360 6,947,912 6.a.(1)
(2) Loans secured by real estate .................................................... RCON 3385 1,334,155 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers ............. RCON 3386 12,435 6.a.(3)
(4) Commercial and industrial loans ................................................. RCON 3387 903,137 6.a.(4)
(5) Loans to individuals for household, family, and o her personal expenditures... RCON 3388 4,463,369 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs ........... RCFN 3360 0 6.b.
7. Trading assets .......................................................................... RCFD 3401 0 7.
8. Lease financing receivables (net of unearned income) .................................... RCFD 3484 1,112,431 8.
9. Total assets(4) ..................-,.......,............................................. RCFD 3368 9,803,098 9.
LIABILITIES
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS accounts,
and telephone and preauthorized transfer accounts) (exclude demand deposits) ............ RCON 3485 55,729 10.
11. Nontransaction accounts in domestic offices:
a. Money market deposit accounts (MMDAs) ........................................... RCON 3486 1,307,151 11.a.
b. Other savings deposits ............................................................... RCON 3487 765,006 11.b.
c. Time certificates of deposit of $100,000 or more ..................................... RCON 3345 228,172 11.c.
d. All other time deposits .............................................................. RCON 3469 910,855 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs . RCFN 3404 785,357 12.
13. Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs ............. RCFD 3353 2,060,984 13.
14. Other borrowed money .................................................................... RCFD 3355 1,276,976 14.
---------------------------
</TABLE>
- ------------------------------
(1) For all items, banks have the option of reporting either (1) an
average of daily figures for the quarter, or (2) an average of weekly
figures (i.e., the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on
amortized cost.
(3) Quarterly averages for all equity securities should be based on
historical cost.
(4) The quarterly average for total assets should reflect all debt
securities (not held for trading) at amortized cost, equity securities with
readily determinable fair values at the lower of cost or fair value, and
equity securities without readily determinable fair values at historical
cost.

<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-14
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-L--OFF-BALANCE SHEET ITEMS

Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume
indicators and not necessarily as measures of risk.

<TABLE>
<CAPTION>
---------
C460
-------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------- -------------------
<S> <C> <C>
1. Unused commitments:
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home equity
lines...................................................................................... 3814 345,337 1.a.
b. Credit card lines ........................................................................ 3815 18,605,259 1.b.
c. Commercial real estate, construction, and land development:
(1) Commitments to fund loans secured by real estate ...................................... 3616 87,135 1.c.(1)
(2) Commitments to fund loans not secured by real estate .................................. 6550 20,573 1.c.(2)
d. Securities underwriting ................................................................... 3617 0 1.d.
e. Other unused commitments .................................................................. 3818 2,095,009 1.e.
2. Financial standby letters of credit and foreign office guarantees ............................ 3819 511,988 2.
a. Amount of financial standby letters of credit conveyed to others RCFD 3820 173,376 2.a.
3. Performance standby letters of credit and foreign office guarantees .......................... 3821 112,524 3.
a. Amount of performance standby letters of credit conveyed to others RCFD 3822 42,516 3.a.
4. Commercial and similar letters of credit ..................................................... 3411 47,722 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by the
reporting bank ............................................................................... 3428 0 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting
(nonaccepting) bank .......................................................................... 3429 0 6.
7. Securities borrowed .......................................................................... 3432 0 7.
8. Securities lent (including customers' securities lent where the customer is indemnified
against loss by the reporting bank) .......................................................... 3433 0 8.
9. Loans transferred (i.e., sold or swapped) with recourse that have been treated as sold for
Call Report purposes:
a. FNMA and FHLMC residential mortgage loan pools:
(1) Outstanding principal balance of mortgages transferred as of the report date ......... 3650 0 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................. 3651 0 9.a.(2)
b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools:
(1) Outstanding principal balance of mortgages transferred as of the report date ......... 3652 0 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................. 3653 0 9.b.(2)
c. Farmer Mac agricultural mortgage loan pools.
(1) Outstanding principal balance of mortgages transferred as of the report date ......... 3654 0 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................. 3555 0 9.c.(2)
d. Small business obligations transferred with recourse under Section 208 of the
Riegle Community Development and Regulatory Improvement Act of 1994:
(1) Outstanding principal balance of small business obligations transferred
as of the report date ................................................................ A249 0 9.d.(1)
(2) Amount of retained recourse on these obligations as of the report date ............... A250 0 9.d.(2)
10. When-issued securities:
a. Gross commitments to purchase ............................................................ 3434 0 10.a.
b. Gross commitments to sell ................................................................ 3435 0 10.b.
11. Spot foreign exchange contracts .............................................................. 8765 10,493 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) (itemize and
describe each component of this item over 25% of Schedule RC, item 28, "Total equity
capital") .................................................................................... 3430 0 12.

a. TEXT 3555 RCFD 3555 12.a.

b. TEXT 3556 RCFD 3556 12.b.

c. TEXT 3557 RCFD 3557 12.c.

d. TEXT 3558 RCFD 3558 12.d.
</TABLE>

24
<PAGE>

<TABLE>
<S> <C> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-15
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-L--CONTINUED

<TABLE>
<CAPTION>
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------- ------- --------------
<S> <C> <C> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives) (itemize and
describe each component of this item over 25% of Schedule RC, Item 28, "Total equity capital") 5591 141,011 13.
-----------
a. TEXT 5592 RCFD 5592 13 a.
---------------------------------------------------------------------
b. TEXT 5593 RCFD 5593 13.b.
---------------------------------------------------------------------
c. TEXT 5594 RCFD 5594 13.c.
---------------------------------------------------------------------
d. TEXT 5595 RCFD 5595 13.d.
--------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------
61
-----------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
- ------------------------------------------ Contracts Contracts Contracts Other Contracts
Off-balance Sheet Derivatives ----------------- ----------------- ----------------- -----------------
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou
<S> <C> <C> <C> <C> <C>
- ------------------------------------------ ----------------- ----------------- ----------------- -----------------
14. Gross amounts (e.g., notional
amounts) (for each column, sum of
items 14.a through 14.e must equal
sum of items 15, 16.a, and 16.b):
----------------- ----------------- ----------------- -----------------
a. Futures contracts ................. 0 0 0 0 14.a.
----------------- ----------------- ----------------- -----------------
RCFD 8693 RCFD 8694 RCFD 8695 RCFD 8696
----------------- ----------------- ----------------- -----------------
b. Forward contracts ................. 1,400,000 45,511 0 0 14.b.
----------------- ----------------- ----------------- -----------------
RCFD 8697 RCFD 8698 RCFD 8699 RCFD 8700
----------------- ----------------- ----------------- -----------------
c. Exchange-traded option contracts:
----------------- ----------------- ----------------- -----------------
(1) Written options .................. 0 0 0 0 14.c.(1)
----------------- ----------------- ----------------- -----------------
RCFD 8701 RCFD 8702 RCFD 8703 RCFD 8704
----------------- ----------------- ----------------- -----------------
(2) Purchased options ................ 0 0 0 0 14.c.(2)
----------------- ----------------- ----------------- -----------------
RCFD 8705 RCFD 8706 RCFD 8707 RCFD 8708
----------------- ----------------- ----------------- -----------------
d. Over-the-counter option contracts:
----------------- ----------------- ----------------- -----------------
(1) Written options .................. 755,397 0 0 0 14.d.(1)
----------------- ----------------- ----------------- -----------------
RCFD 8709 RCFD 8710 RCFD 8711 RCFD 8712
----------------- ----------------- ----------------- -----------------
(2) Purchased options ................ 930,397 0 0 0 14.d.(2)
----------------- ----------------- ----------------- -----------------
RCFD 8713 RCFD 8714 RCFD 8715 RCFD 8716
----------------- ----------------- ----------------- -----------------
e. Swaps ............................. 17,113,573 0 0 0 14.e.
----------------- ----------------- ----------------- -----------------
RCFD 3450 RCFD 3826 RCFD 8719 RCFD 8720
----------------- ----------------- ----------------- -----------------
15. Total gross notional amount of
derivative contracts held for trading. 400,000 0 0 0 15.
----------------- ----------------- ----------------- -----------------
RCFD A126 RCFD A127 RCFD 8723 RCFD 8724
----------------- ----------------- ----------------- -----------------

16. Total gross notional amount of
derivative contracts held for
purposes other than trading:
----------------- ----------------- ----------------- -----------------
a. Contracts marked to market ........ 174,737 45,511 0 0 16.a.
----------------- ----------------- ----------------- -----------------
RCFD 8725 RCFD 8726 RCFD 8727 RCFD 8728
----------------- ----------------- ----------------- -----------------
b. Contracts not marked to market .... 19,624,630 0 0 0 16.b.
----------------- ----------------- ----------------- -----------------
RCFD 8729 RCFD 8730 RCFD 6731 RCFD 8732
----------------- ----------------- ----------------- -----------------

</TABLE>

<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-16
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-L--CONTINUED

<TABLE>

Memoranda Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------- -----------------
<S> <C> <C>
1.-2. Not applicable
3. Unused commitments with an original maturity exceeding one year that are reported in
Schedule RC-L, items l.a through l.e, above (report only the unused portions of commitments
that are fee paid or otherwise legally binding) ............................................... 3833 1,532,774 M.3.
a. Participations in commitments with an original maturity
exceeding one year conveyed to others ............................. RCFD 3834 229,509 M.3.4.
4. To be completed only by banks with $1 billion or more in total assets:
Standby letters of credit and foreign office guarantees (both financial and performance) issued
to non-U.S. addressees (domicile) included in Schedule RC-L, items 2 and 3, above ............. 3377 732 M.4.
5. Installment loans to individuals for household, family, and other personal expenditures that
have been securitized and sold without recourse (with servicing retained), amounts outstanding
by type of loan:
a. Loans to purchase private passenger automobiles (to be completed for the
September report only) ..................................................................... 2741 N/A M.5.a.
b. Credit cards and related plans (TO BE COMPLETED QUARTERLY) ................................. 2742 3,351,121 M.5.b.
c. All other consumer installment credit (including mobile home loans) (to be completed for
the September report only) ................................................................. 2743 N/A M.5.c.
-----------------
</TABLE>
26
<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-17
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-M--MEMORANDA
<TABLE>
<CAPTION>
---------
C465
------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------- ---- -------------
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
shareholders, and their related interests as of the report date:
a. Aggregate amount of all extensions of credit to all executive officers, directors, principal
shareholders, and their related interests .................................................... 6164 258,466 1.a.
b. Number of executive officers, directors, and principal shareholders to whom the amount of
all extensions of credit by the reporting bank (including extensions of credit to
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number
----------------------
of total capital as defined for this purpose it. agency regulations. RCFD 6165 3 1.b.
----------------------
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches
and agencies of foreign banks(1) (included in Schedule RC, items 3.a and 3.b) ................. 3405 0 2.
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
(include both retained servicing and purchased servicing):
a. Mortgages serviced under a GNMA contract ..................................................... 5500 0 4.a.
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer......................................................... 5501 0 4.b.(1)
(2) Serviced without recourse to servicer ..................................................... 5502 0 4.b.(2)
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract .................................................. 5503 0 4.c.(1)
(2) Serviced under a special option contract .................................................. 5504 0 4.c.(2)
d. Mortgages serviced under other servicing contracts ........................................... 5505 0 4.d.
5. To be completed only by banks with $1 billion or more in total assets:
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must
equal Schedule RC, item 9):

a. U.S. addressees (domicile) ................................................................... 2103 5,730 5.a.
b. Non-U.S. addressees (domicile) ............................................................... 2104 0 5.b.
6. Intangible assets:
a. Mortgage servicing rights .................................................................... 3164 0 6.a.
b. Other identifiable intangible assets:
(1) Purchased credit card relationships ...................................................... 5506 20,100 6.b.(1)
(2) All other identifiable intangible assets ................................................. 5507 2,327 6.b.(2)
c. Goodwill ..................................................................................... 3163 11,684 6.c.

d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10) ....................... 2143 34,111 6.d.
e. Amount of intangible assets (included in item 6.b.(2) above) that have been grandfathered or
are otherwise qualifying for regulatory capital purposes ...................................... 6442 0 6.e.
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to
redeem the debt ................................................................................. 3295 0 7.
------------------

- -----
1. Do not report federal funds sold and securities purchased under agreements to resell with other
commercial banks in the U.S. in this item.
</TABLE>

27
<PAGE>
<TABLE>

<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-17
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559

SCHEDULE RC-M--CONTINUED
-----------------------
Dollar Amounts in Thousands Bil Mil Thou
- -------------------------------------------------------------------------------------------- -----------------------
<S> <C> <C> <C>
8. a. Other real estate owned:
(1) Direct and indirect investments in real estate ventures ......................... RCFD 5372 0 8.a.(1)
(2) All other real estate owned:
(a) Construction and land development in domestic offices ....................... RCON 5508 0 8.a.(2)(a)
(b) Farmland in domestic offices ................................................ RCON 5509 0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices ....................... RCON 5510 272 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices .......... RCON 5511 0 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices ....................... RCON 5512 6,271 8.a.(2)(e)
(f) In foreign offices .......................................................... RCFN 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7) ...... RCFD 2150 6,543 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures ......................... RCFD 5374 0 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies ... RCFD 5375 2,436 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8) ....... RCFD 2130 2,436 8.b.(3)
c. Total assets of unconsolidated subsidiaries and associated companies ................ RCFD 5376 47,831 8.c.
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, "Perpetual preferred stock and related surplus" ............................... RCFD 3778 0 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include
proprietary, private label, and third party products):
a. Money market funds .................................................................. RCON 6441 12,613 10.a.
b. Equity securities funds ............................................................. RCON 8427 11,817 10.b.
c. Debt securities funds ............................................................... RCON 8428 3,814 10.c.
d. 0ther mutual funds .................................................................. RCON 8429 0 10.d.
e. Annuities ........................................................................... RCON 8430 42,625 10.e.
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above) .................,,....,...,............................................. RCON 8784 27,619 10.f.
-----------------------
</TABLE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
---------------------
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interbank holdings of capital instruments (to be completed for the December report only):
a. Reciprocal holdings of banking organizations' capital instruments ................... 3836 0 M.1.a.
b. Nonreciprocal holdings of banking organizations' capital instruments ................ 3837 0 M.1.b.
---------------------
</TABLE>
28

<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Page RC-19
Address: 100 East Broad Street
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559

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

The FFIEC regards the information reported in C470 < -
all of Memorandum item 1, in items 1 through 10, ---------------------------------------------------------------
column A, and in Memorandum items 2 through 4, (Column A) (Column B) (Column C)
column A, as confidential. Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
---------------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile) ................ 1245 1246 4,589 1247 11,931 1.a.
b. To non-U.S. addressees (domicile) ............ 1248 1249 0 1250 0 1.b.
2. Loans to depository institutions and acceptances
of other banks:
a. To U.S. banks and other U.S. depository
institutions ................................. 5377 5378 0 5379 0 2.a.
b. To foreign banks ............................ 5380 5381 0 5382 0 2.b.

3. Loans to finance agricultural production and
other loans to farmers .......................... 1594 1597 0 1563 42 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) ................ 1251 1252 11,185 1253 4,651 4.a.
b. To non-U.S. addressees (domicile) ............ 1254 1255 0 1256 0 4.b.
5. Loans to individuals for household, family, and
other personal expenditures:
a. Credit cards and related plans ............... 5383 5384 89,969 5385 0 5.a.
b. Other (includes single payment, installment,
and all student loans) ....................... 5386 5387 9,147 5388 3,910 5.b.
6. Loans to foreign governments and official
institutions ....................,................ 5389 5390 0 5391 0 6.
7. All other loans ................................. 5459 5460 280 5461 66 7.
8. Lease financing receivables:
a. Of U.S. addressees (domicile) ................ 1257 1258 0 1259 2,384 8.a.
b. Of non-U.S. addressees (domicile) ............ 1271 1272 0 1791 0 8.b.
9. Debt securities and other assets (exclude other
real estate owned and other repossessed assets) . 3505 3506 0 3507 0 9.
</TABLE>

Amounts reported in items 1 through 8 above include guaranteed and
unguaranteed portions of past due and nonaccrual loans and eases.
Report in item 10 below certain guaranteed loans and leases that
have already been included in the amounts reported in items 1
through 6.

<TABLE>
<CAPTION>
------------------------------------------------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10. Loans and leases reported in items 1
through 8 above which are wholly or partially
guaranteed by the U.S. Government ............... 5612 5613 5,277 5614 1,023 10.
a. Guaranteed portion of loans and leases
included in item 10 above .................... 5615 5616 5,277 5617 602 10.a.
</TABLE>

<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Page RC-21
Address: 100 East Broad Street
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-N--CONTINUED

<TABLE>
<CAPTION>
C473 < -
----------------------------------------------------------------
(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
Memoranda accruing accruing
---------------------------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Restructured loans and leases included in
Schedule RC-N, items 1 through 8, above (and not
reported in Schedule RC-C, part I, Memorandum
item 2) ........................................ 1658 1659 0 1661 0 M.1.
2. Loans to finance commercial real estate,
construction, and land development activities
(not secured by real estate) included in
Schedule RC-N, items 4 and 7, above ............ 6558 6559 185 6560 0 M.2.
---------------------------------------------------------------
RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
3. Loans secured by real estate in domestic offices ---------------------------------------------------------------
(included in Schedule RC-N, item 1, above):
a. Construction and land development ............ 2759 2769 1,447 3492 2,407 M.3.a.
b. Secured by farmland .......................... 3493 3494 0 3495 0 M.3.b.
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by
1-4 family residential properties and
extended under lines of credit .......... 5398 5399 1,183 5400 0 M.3.c.(1)
(2) All other loans secured by 1-4 family
residential properties .................. 5401 5402 1,662 5403 6,183 M.3.c.(2)

d. Secured by multifamily (5 or more) residential
properties ............................. 3499 3500 69 3501 0 M.3.d.
e. Secured by nonfarm nonresidential properties . 3502 3503 228 3504 3,341 M.3.e.
---------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------
(Column A) (Column B)
Past due 30 Past due 90
through 89 days days or more
-----------------------------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou
-----------------------------------------
<S> <C> <C> <C> <C> <C>
4. Interest rate, foreign exchange rate, and other
commodity and equity contracts:
a. Book value of amounts carried as assets ...... 3522 3528 0 M.4.a.
b. Replacement cost of contracts with a
positive replacement cost .................... 3529 3530 0 M.4.b.
</TABLE>
30

<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date 12/31/96 ST-BK 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-21
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No : 06559
</TABLE>

SCHEDULE RC-0--OTHER DATA FOR DEPOSIT INSURANCE ASSESSMENTS

<TABLE>
<CAPTION>
---------------------
C475
---------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------- ------ ------------
<S> <C> <C> <C>

1. Unposted debits (see instructions):
a. Actual amount of all unposted debits .................................................... 0030 0 1.a.
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits ................................. 0031 N/A 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits(1) .................... 0032 N/A 1.b.(2)
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits .................................................... 3510 0 2.a.
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits ................................ 3512 N/A 2.b.(1)
(2) Actual amount of unposted credits to time and savings deposits(1) ................... 3514 N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total
deposits in domestic offices) ............ .................................................. 3520 0 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in Puerto
Rico and U.S. territories and possessions (not included in total deposits):
a. Demand deposits of consolidated subsidiaries ............................................ 2211 14,576 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries ............................... 2351 10,319 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries ................... 5514 0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions:
a. Demand deposits in insured branches (included in Schedule RC-E, Part II) ................ 2229 0 5.a.
b. Time and savings deposits(1) in insured branches (included in Schedule RC-E, Part II) ... 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches
(included in Schedule RC-G, item 1.b) .................................................. 5515 0 5.c.
---------------------

---------------------
Item 6 is not applicable to state nonmember banks that have not been authorized by the
Federal Reserve to act as pass-through correspondents.
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on
behalf of its respondent depository institutions that are also reflected as deposit liabilities
of the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, item 4 or 5,
column B) .............................................................................. 2314 0 6.a.
b. Amount reflected in time and savings deposits(1) (included in Schedule RC-E, Part I,
item 4 or 5, column A or C, but not column B) ........................................... 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1)
a. Unamortized premiums .................................................................... 5516 0 7.a.
b. Unamortized discounts ................................................................... 5517 0 7.b.
- ----------------------------------------------------------------------------------------------------------------------------------
8. To be completed by banks with "Oakar deposits."
Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)(3) of
the Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction Worksheet(s)) ... 5518 N/A 8.
- ----------------------------------------------------------------------------------------------------------------------------------
9. Deposits in lifeline accounts .............................................................. 5596 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in total
deposits in domestic offices) .............................................................. 8432 0 10.
---------------------
</TABLE>

- ---------------
(1) For FDIC insurance assessment purposes, "time and savings deposits" consists
of nontransaction accounts and all transaction accounts other than demand
deposits.

31
<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-21
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No : 06559
</TABLE>

SCHEDULE RC-0--CONTINUED

<TABLE>
<CAPTION>
---------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- ------------------------------------------------------------------------------------------------- ------ ------------
<S> <C> <C> <C>

11. Adjustments to demand deposits in domestic offices reported in Schedule RC-E for
certain reciprocal demand balances:
a. Amount by which demand deposits would be reduced if reciprocal demand balances
between the reporting bank and savings associations were reported on a net basis
rather than a gross basis in Schedule RC-E ............................................. 8785 0 11.a.
b. Amount by which demand deposits would be increased if reciprocal demand balances
between the reporting bank and U.S. branches and agencies of foreign banks were
reported on a gross basis rather than a net basis in Schedule RC-E ..................... A181 0 11.c.
c. Amount by which demand deposits would be reduced if cash items in process of
collection were included in the calculation of net reciprocal demand balances between
the reporting bank and the domestic offices of U.S. banks and savings associations
in Schedule RC-E ....................................................................... A182 0 11.e.
---------------------
</TABLE>

Memoranda (to be completed each quarter except as noted)

1. Total deposits in domestic offices of the bank (sum of Memorandum items 1.a.(1) and
1.b.(1) must equal Schedule RC, item 13.a):
a. Deposit accounts of $100,000 or less:
(1) Amount of deposit accounts of $100,000 or less ..................................... 2702 2,409,318 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less (to be Number
completed for the June report only) ................ RCON 3779 N/A M.1.a.(2)
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than $100,000 ................................... 2710 2,150,904 M.1.b.(1)
Number
(2) Number of deposit accounts of more than $100,000 ... RCON 2772 4,001
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the
number of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2)
above by $100,000 and subtracting the result from the amount of deposit accounts of
more than $100,000 reported in Memorandum item 1.b.(1) above.

Indicate in the appropriate box at the right whether your bank has a method or
procedure for determining a bearer estimate of uninsured deposits than the YES NO
estimate described above ................................................................ 6861 X M.2.a
RCON Bil Mil Thou
b. If the box marked YES has been checked, report the estimate of uninsured deposits ------ -------------
determined by using your bank's method or procedure ..................................... 5597 N/A M.2.b.
---------------------
- -------------------------------------------------------------------------------------------------------------------------
Person to whom questions about the Reports of Condition and Income should be directed: C477

</TABLE>
<TABLE>
<S> <C>
John J. Dible, Sr. Regulatory Analyst (614) 248-8592
- ------------------------------------------------------------------ ----------------------------------------------------
Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902)
</TABLE>

32
<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-23
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No. 06559
</TABLE>

SCHEDULE RC-R--REGULATORY CAPITAL

This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30,
1995, must complete items 2 through 9 and Memoranda items 1 and 2. Banks
with assets of less than $1 billion must complete items 1 through 3 below or
Schedule RC-R in its entirety, depending on their response to item 1 below.

<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------
NOTE: All banks are required to complete items 2 and 3 below. --------------------------------------------
See optional worksheet for items 3.a through 3.f. (Column A) (Column B)
- ------------------------------------------------------------------- Subordinated Debt(1) Other
Dollar Amounts in Thousands and Intermediate Limited-Life
- ---------------------------------------------------------------------------- Term Preferred Stock Capital Instruments
2. Subordinated debt(1) and other limited life capital instruments (original ---------------------- -------------------
weighted average maturity of at least five years) with a remaining RCFD Bil Mil Thou RCFD Bil Mil Thou
maturity of: ---------------------- -------------------
a. One year or less .... ................................................ 3780 0 3786 0 2.a.
b. Over one year through two years ...................................... 3781 0 3787 0 2.b.
c. Over two years through three years ................................... 3782 0 3788 0 2.c.
d. Over three years through four years .................................. 3783 0 3789 0 2.d.
e. Over four years through five years ................................... 3784 0 3790 0 2.e.
f. Over five years ...................................................... 3785 264,328 3791 0 2.f.
---------------------- -------------------
</TABLE>

<TABLE>
<S> <C> <C>
3. Amounts used in calculating regulatory capital ratios (report amounts -------------------
determined by the bank for its own internal regulatory capital analyses RCFD Bil Mil Thou
consistent with applicable capital standards): -------------------
a. Tier 1 capital ............................................................................ 8274 664,361 3.a.
b. Tier 2 capital ............................................................................ 6275 390,567 3.b.
c. Total risk-based capital ............................................................... 3792 1,054,928 3.c.
d. Excess allowance for loan and lease losses ................................................ A222 128,355 3.d.
e. Risk-weighted assets (net of all deductions, including excess allowance) .................. A223 9,970,758 3.e.
f. "Average total assets" (net of all assets deducted from Tier 1 capital)(2) ................ A224 9,789,117 3.f.
-------------------
</TABLE>

<TABLE>
<S> <C> <C> <C>
--------------------------------------------
(Column A) (Column B)
Items 4-9 and Memoranda items 1 and 2 are to be completed Assets Credit Equiv-
by banks that answered NO to item 1 above and Recorded alent Amount
by banks with total assets of $1 billion or more. on the of Off-Balance
Balance Sheet Sheet Items(3)
----------------------- ------------------
4. Assets and credit equivalent amounts of off-balance sheet items RCFD Bil Mil Thou RCFD Bil Mil Thou
assigned to the zero percent risk category: ----------------------- ------------------
a. Assets recorded on the balance sheet;
(1) Securities issued by, other claims on, and claims unconditionally
guaranteed by, the U.S. Government and its agencies and
other OECD central governments .................................... 3794 409,929 4.a.(1)
(2) All other ......................................................... 3795 128,784 4.a.(2)
b. Credit equivalent amount of off-balance sheet items ................... 3796 1,224 4.b.
---------------------------------------------
</TABLE>

- ---------------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.

33
<PAGE>

<TABLE>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NJ Call Date: 12/31/96 ST-BK: 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-24
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
</TABLE>

SCHEDULE RC-R--CONTINUED

<TABLE>
<CAPTION>
-----------------------------------------
(Column A) (Column B)
Assets Credit Equiv-
Recorded alent Amount
on the of Off-Balance
Balance Sheet Sheet Items(1)
------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou
- ------------------------------------------------------------------------------- ------------------ ------------------
<S> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items
assigned to the 20 percent risk category:
a. Assets recorded on the balance sheet:
(1) Claims conditionally guaranteed by the U.S. Government and
its agencies and other OECD central governments .................. 3798 175,964 5.a.(1)
(2) Claims collateralized by securities issued by the U.S. Government
and its agencies and other OECD central governments; by
securities issued by U.S. Government-sponsored agencies; and
by cash on deposit ................................................ 3799 0 5.a.(2)
(3) All other ......................................................... 3800 1,321,303 5.a.(3)
b. Credit equivalent amount of off-balance sheet items ................... 3801 616,533 5.b.
6. Assets and credit equivalent amounts of off-balance sheet items
assigned to the 50 percent risk category:
a. Assets recorded on the balance sheet .................................. 3802 355,538 6.a.
b. Credit equivalent amount of off-balance sheet items ................... 3803 124,353 6.b.
7. Assets and credit equivalent amounts of off-balance sheet items
assigned to the 100 percent risk category:
a. Assets recorded on the balance sheet .................................. 3804 8,542,099 7.a.
b. Credit equivalent amount of off-balance sheet items ................... 3805 908,290 7.b.
8. On-balance sheet asset values excluded from the calculation of the
risk-based capital ratio(2) .............................................. 3806 (4,514) 8.
9. Total assets recorded on the balance sheet (sum of
items 4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal Schedule RC,
item 12 plus items 4.b and 4.c) .......................................... 3807 10,929,103 9.
-------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Memoranda ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Current credit exposure across all off-balance sheet derivative contracts covered by the
risk-based capital standards ........................................................... 8764 252,532 M.1.
-------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------
With a remaining maturity of
-----------------------------------------------------------------------
(Column A) (Column B) (Column C)
One year or less Over one year Over five years
through five years
------------------------------------------------------------------------
2. Notional principal amounts of RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou
off-balance sheet derivative contracts(3): ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
a. Interest rate contracts ............... 3809 7,061,681 8766 6,390,288 8767 1,458,064 M.2.a.
b. Foreign exchange contracts ............ 3812 909 8769 0 8770 0 M.2.b.
c. Gold contracts ........................ 8771 0 8772 0 8773 0 M.2.c.
d. Other precious metals contracts ....... 8774 0 8775 0 8776 0 M.2.d.
e. 0ther commodity contracts ............. 8777 0 8778 0 8779 0 M.2.e.
f. Equity derivative contracts ........... A000 0 A001 0 A002 0 M.2.f.
------------------------------------------------------------------------
</TABLE>

- -----------------------
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Include the difference between the fair value and the amortized cost of
available-for-sale securities in item 8 and report the amortized cost of
these securities in items 4 through 7 above. Item 8 also includes
on-balance sheet asset values (or portions thereof) of off-balance sheet
interest rate, foreign exchange rate, and commodity contracts and those
contracts (e.g., futures contracts) not subject to risk-based capital.
Exclude from item 8 margin accounts and accrued receivables not included
in the calculation of credit equivalent amounts of off-balance sheet
derivatives as well as any portion of the allowance for loan and lease
losses in excess of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or
less and all futures contracts.

34
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK; 39-1580 FFIEC 031
Address: 100 East Broad Street Page RC-25
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559

</TABLE>
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on December 31, 1996

BANK ONE, COLUMBUS, NA Columbus Ohio
- ------------------------------ --------------------------- ------------------
Legal Title of Bank City State

The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along
with the publicly available data in the Reports of Condition and Income, in
response to any request for individual bank report data. However, the
information reported in column A and in all of Memorandum item 1 of Schedule
RC-N is regarded as confidential and will not be released to the public.
BANKS CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE
STATEMENT DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL
BANK CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS
IN SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE
MADE PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks
choosing not to make a statement may check the "No comment" box below and
should make no entries of any kind in the space provided for the narrative
statement; i.e., DO NOT. enter in this space such phrases as "No statement,"
"Not applicable," "N/A," "No comment," and "None."

The optional statement must be entered on this sheet. The statement should
not exceed 100 words. Further, regardless of the number of words, the
statement must not exceed 750 characters, including punctuation, indentation,
and standard spacing between words and sentences. If any submission should
exceed 750 characters, as defined, it will be truncated to 750 characters with
no notice to the submitting bank and the truncated statement will appear as
the bank's statement both on agency computerized records and in computer-file
releases to the public.

All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.

If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.

The optional narrative statement will appear in agency records and in release
to the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.

- --------------------------------------------------------------------------------
No comment / / (RCON 6979) C471 C472

BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)

For regulatory purposes, the Bank defers the recognition of certain excess
income relating to securitized loan sales until cash is received. The
effect of this accounting method has decreased net income for the current
year $38,078,000 and decreased retained earnings on a cumulative basis
$146,976,000.

/s/ ILLEGIBLE 1-31-97
-------------------------------------- ------------------
Signature of Executive Officer of Bank Date of Signature

35
<PAGE>

Legal Title of Bank: BANK ONE, COLUMBUS, NA Call Date: 12/31/96 ST-BK: 39-1580
Address: 100 East Broad Street
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No. 06559

THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF BANK OMB No. For OCC: 1557-0081
OMB No For FDIC: 3064-0052
OMB No. For Federal Reserve: 7100-0036
Expiration Date: 3/31/99

PLACE LABEL HERE SPECIAL REPORT
(Dollar Amounts in Thousands)

- --------------------------------------------------------------------------------
CLOSE OF BUSINESS FDIC Certificate Number
DATE C-700
12/31/96 06559
- --------------------------------------------------------------------------------
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
- --------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242, but does
not constitute a part of the Report of Condition. With each Report of
Condition, these Laws require all banks to furnish a report of all loans or
other extensions of credit to their executive officers made since the date of
the previous Report of Condition. Data regarding individual loans or other
extensions of credit are not required. If no such loans or other extensions
of credit were made during the period, insert "none" against subitem (a).
(Exclude the first $15,000 of indebtedness of each executive officer under
bank credit card plan.) See Sections 215.2 and 215.3 of Title 12 of the Code
of Federal Regulations (Federal Reserve Board Regulation O) for the
definitions of "executive officer" and "extension of credit," respectively.
Exclude loans and other extensions of credit to directors and principal
shareholders who are not executive officers.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
---------------------
a. Number of loans made to executive officers since the previous Call Report date .............. RCFD 3561 2 a.
---------------------
b. Total dollar amount of above loans (in thousands of dollars) ................................ RCFD 3562 65 b.
---------------------
c. Range of interest charged on above loans
---------------------------------------------------
(example: 9 3/4% 9.75) ......................................... RCFD 7701 9.25 % to RCFD 7702 9.25 % c.
---------------------------------------------------

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

- ------------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT DATE (Month, Day, Year)

- ------------------------------------------------------------------------------------------------------------------------
NAME AND TITLE OF PERSON TO WHOM INQUIRIES MAY BE DIRECTED (TEXT 8903) AREA CODE/PHONE NUMBER/EXTENSION
(TEXT 8904)

John J. Dible, Sr. Regulatory Analyst (614) 248-8592
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

FDIC 8040/53 (6-95)