<SUBMISSION>
<ACCESSION-NUMBER>0000950153-02-000825
<TYPE>S-3
<PUBLIC-DOCUMENT-COUNT>7
<FILING-DATE>20020501
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>MERITAGE CORP
<CIK>0000833079
<ASSIGNED-SIC>1531
<IRS-NUMBER>860611231
<STATE-OF-INCORPORATION>MD
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3
<ACT>33
<FILE-NUMBER>333-87398
<FILM-NUMBER>02630678
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>6613 N SCOTTSDALE RD
<STREET2>STE 200
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85250
<PHONE>6029988700
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>6613 NORTH SCOTTSDALE ROAD
<STREET2>SUITE200
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85250
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>MONTEREY HOMES CORP
<DATE-CHANGED>19970113
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>EMERALD MORTGAGE INVESTMENTS CORP
<DATE-CHANGED>19900502
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>HOMEPLEX MORTGAGE INVESTMENTS CORP
<DATE-CHANGED>19920703
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>p66504s-3.htm
<DESCRIPTION>FORM S-3
<TEXT>
<HTML>
<HEAD>
<TITLE>s-3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on May&nbsp;1, 2002</FONT></B>
</DIV>

<DIV align="right">
<B><FONT size="2">Registration Statement
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>
</DIV>

<DIV align="center">
<B>Washington, DC 20549</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="5">Form S-3</FONT></B>

<DIV align="center">
<B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">Meritage Corporation</FONT></B>

<P align="center">
<B><FONT size="2">Co-Registrants are listed on the following
page</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact Name of Registrant as Specified in Its
Charter)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">Maryland<BR>
	 </FONT></B><I><FONT size="2">(State or Other Jurisdiction of<BR>
	Incorporation or Organization)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">6613 North Scottsdale Road<BR>
	Suite&nbsp;200<BR>
	Scottsdale, Arizona 85250<BR>
	(480)&nbsp;998-8700<BR>
	 </FONT></B><I><FONT size="2">(Address, Including Zip Code, and
	Telephone Number, Including Area Code, of Registrant&#146;s
	Principal Executive Offices)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">86-0611231<BR>
	 </FONT></B><I><FONT size="2">(I.R.S. Employer Identification
	Number)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">Larry W. Seay</FONT></B>

<DIV align="center">
<B><FONT size="2">Chief Financial Officer and Vice
President&nbsp;&#151; Finance</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">6613 North Scottsdale Road</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Suite&nbsp;200</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Scottsdale, Arizona 85250</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(480)&nbsp;998-8700</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name, Address, Including Zip Code, and
Telephone Number,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">Including Area Code, of Agent for
Service)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2">Copies to:</FONT></I></B>

<P align="center">
<B><FONT size="2">Steven D. Pidgeon</FONT></B>

<DIV align="center">
<B><FONT size="2">John W. Dorris</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Snell &#38; Wilmer L.L.P.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">One Arizona Center</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">400 East Van Buren Street</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Phoenix, Arizona 85004</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(602)&nbsp;382-6000</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Approximate date of commencement of proposed
sale to the public: </FONT></B><FONT size="2">From time to time
after the effective date of this Registration Statement, as
determined by the registrant in light of market conditions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If the only securities being registered on this
form are being offered pursuant to dividend or interest
reinvestment plans, please check the following
box.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the securities being registered on this
form are to be offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If this form is filed to register additional
securities for an offering pursuant to Rule&nbsp;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 for the same
offering.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If this form is a post-effective amendment filed
pursuant to Rule&nbsp;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.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="10"></TD>
</TR>

<TR>
	<TD colspan="10" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="10"></TD>
</TR>

<TR>
	<TD colspan="10" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Title of Each Class of</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Amount to be</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Offering Price Per</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Aggregate Offering</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Securities to be Registered</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Registered(1)(2)</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Unit(1)(2)</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Price(1)(2)</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Registration Fee</FONT></B></TD>
</TR>

<TR>
	<TD colspan="10"></TD>
</TR>

<TR>
	<TD colspan="10" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Debt Securities(3)(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock, par value $0.01 per share(4)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Preferred Stock(4)(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Warrants(4)(7)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Guarantees(3)(8)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$300,000,000
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">100%
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$300,000,000
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$27,600
	</FONT></TD>
</TR>

<TR>
	<TD colspan="10" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD colspan="10" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">We will determine the proposed maximum offering
	price per unit from time to time in connection with issuances of
	securities registered hereunder. The proposed maximum aggregate
	offering price has been estimated solely for the purpose of
	calculating the registration fee pursuant to Rule&nbsp;457(o)
	under the Securities Act of 1933, as amended.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Not applicable pursuant to General
	Instruction&nbsp;II.D of Form&nbsp;S-3 under the Securities Act
	of 1933.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">There is being registered hereunder an
	indeterminate principal amount of Debt Securities of Meritage
	Corporation as may be offered or sold from time to time by us.
	If any debt securities are issued at an original issue discount,
	then the offering price shall be in such greater principal
	amount as shall result in an aggregate initial offering price
	not to exceed $300,000,000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes such indeterminate amount of securities
	of Meritage Corporation as may be issued upon conversion of or
	exchange for, as the case may be, any other securities
	registered hereunder.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">There is being registered hereunder an
	indeterminate number of shares of our Common Stock as may be
	sold from time to time by us.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">There is being registered hereunder an
	indeterminate number of shares of Preferred Stock as may be sold
	from time to time by us.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">There is being registered hereunder an
	indeterminate number of warrants to purchase Common Stock,
	Preferred Stock and Debt Securities as may be sold from time to
	time by us.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The Debt Securities issued by Meritage
	Corporation may be accompanied by a Guarantee issued by one or
	more of the Co-Registrants. Pursuant to Rule&nbsp;457(n), no
	separate fee is payable with respect to the guarantees being
	registered hereby.
	</FONT></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;
<B><FONT size="2">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&nbsp;8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as
the Commission, acting pursuant to said Section&nbsp;8(a), may
determine.</FONT></B>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">ABOUT THIS PROSPECTUS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">DESCRIPTION OF MERITAGE CORPORATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">DESCRIPTION OF DEBT SECURITIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">DESCRIPTION OF CAPITAL STOCK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">DESCRIPTION OF WARRANTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#015">POWER OF ATTORNEY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">Exhibit Index</A></TD></TR>
<TR><TD colspan="9"><A HREF="p66504ex4-1.txt">EX-4.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="p66504ex4-2.txt">EX-4.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="p66504ex5-1.txt">EX-5.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="p66504ex12-1.txt">EX-12.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="p66504ex23-1.txt">EX-23.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="p66504ex25-1.txt">EX-25.1</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">TABLE OF CO-REGISTRANTS</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Jurisdiction of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Incorporation or</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">I.R.S. Employer</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name of Co-Registrant</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Organization</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Identification No.</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Monterey Homes Arizona, Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-0844800</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Paseo Crossing, LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-1006497</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Monterey Homes Construction, Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-0844802</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Paseo Construction, LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-0863537</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Homes of Arizona, Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-1013006</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Homes Construction, Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-1021464</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">MTH-Texas GP, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-0875148</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">MTH-Texas LP, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-0875147</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legacy/ Monterey Homes L.P.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">91-1832213</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Homes of Northern California,
	Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">California</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-0917765</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hancock-MTH Builders, Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-1028847</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hancock-MTH Communities, Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86-1028848</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legacy Operating Company, L.P.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Texas</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75-2929259</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hulen Park Venture, LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Texas</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75-2771799</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Holdings, L.L.C.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">Texas</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">N.A.</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<FONT size="2" color="#E8112D">The information in this
prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.</FONT><FONT size="2"> <BR>
</FONT>
</TD></TR></TABLE>

<P align="center">
<B><FONT size="2" color="#E8112D">SUBJECT TO COMPLETION, DATED
MAY&nbsp;1, 2002</FONT></B>

<P align="left">
<B><FONT size="2">PROSPECTUS</FONT></B>

<P align="center">
<B><FONT size="6">Meritage Corporation</FONT></B>

<P align="center">
<B><FONT size="2">$300,000,000</FONT></B>

<P align="center">
<B><FONT size="4">Debt Securities</FONT></B>

<P align="center">
<B><FONT size="4">Common Stock</FONT></B>

<P align="center">
<B><FONT size="4">Preferred Stock</FONT></B>

<P align="center">
<B><FONT size="4">Warrants</FONT></B>

<P align="center">
<B><FONT size="4">Guarantees</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under this prospectus, we may sell a variety of
securities. We will provide specific terms of these securities
in supplements to this prospectus. You should read this
prospectus and any supplement to this prospectus carefully
before you invest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our common stock is listed on the New York Stock
Exchange under the symbol &#147;MTH.&#148; We will list any
common stock issued pursuant to a prospectus supplement, subject
to notice of issuance, on the New York Stock Exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>See &#147;Risk Factors,&#148; which begin on page&nbsp;2, for
a discussion of certain factors that should be considered in
evaluating an investment in our securities.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or passed upon the adequacy or accuracy of
this prospectus. Any representation to the contrary is a
criminal offense.</FONT></B>

<P align="center">
<FONT size="2">The date of this prospectus is
May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002.
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">We have not authorized anyone to provide you
with any information other than the information incorporated by
reference or provided in this prospectus or any prospectus
supplement. We are not making an offer of these securities in
any state or other jurisdiction where the offer is not
permitted. You should not assume that the information in this
prospectus, any prospectus supplement or any document
incorporated or deemed to be incorporated by reference in this
prospectus is accurate as of any date other than the date of
that document.</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Forward-Looking Statements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">About this Prospectus
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Description of Meritage Corporation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Risk Factors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of Earnings to Fixed Charges and Ratio of
	Earnings to Combined Fixed Charges and Preferred Stock Dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Use of Proceeds
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Plan of Distribution
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Description of Debt Securities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Description of Capital Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Description of Warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legal Matters
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Experts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Where You Can Find More Information
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Incorporation of Certain Information by<BR>
	Reference
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "FORWARD-LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">FORWARD-LOOKING STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of the matters discussed in this
prospectus or incorporated herein may constitute forward-looking
statements within the meaning of Section&nbsp;27A of the
Securities Act of 1933 and Section&nbsp;21E of the Securities
Exchange Act of 1934. In general, &#147;forward-looking
statements&#148; can be identified by use of words such as
&#147;expect,&#148; &#147;believe,&#148; &#147;estimate,&#148;
&#147;project,&#148; &#147;forecast,&#148;
&#147;anticipate,&#148; &#147;plan&#148; and similar
expressions. Our forward-looking statements may address such
matters as, but are not limited to, projections of revenue,
income or loss, anticipated benefits of acquisitions, capital
expenditures, plans for future operations, financing needs, the
impact of changes in interest rates, projected job growth and
economic conditions in our housing markets, plans relating to
our new products or services, potential business and real
property acquisitions and new or planned development projects,
as well as assumptions related to the foregoing. Important
factors currently known to management that could cause actual
results to differ materially from those in forward-looking
statements include those factors described under the caption
&#147;Risk Factors&#148; and other statements in this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Forward-looking statements express expectations
of future events. All forward-looking statements are inherently
uncertain as they are based on various expectations and
assumptions concerning future events and they are subject to
numerous known and unknown risks and uncertainties which could
cause actual events or results to differ materially from those
projected. Our past performance or past or present economic
conditions in our housing markets are not indicative of future
performance or conditions. Due to these inherent uncertainties,
current or potential investors in our securities are urged not
to place undue reliance on forward-looking statements. In
addition, we undertake no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of anticipated or unanticipated events or changes to
projections over time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See Meritage&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2001 and
Meritage&#146;s other filings with the Securities and Exchange
Commission, or SEC, for a further discussion of risks and
uncertainties applicable to our business.
</FONT>

<!-- link1 "ABOUT THIS PROSPECTUS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">ABOUT THIS PROSPECTUS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus is part of a registration
statement that we filed with the SEC utilizing a
&#147;shelf&#148; registration process. Under this shelf
process, we may sell any combination of the securities described
in this prospectus in one or more offerings up to an aggregate
initial offering price of $300,000,000. This prospectus provides
you with a general description of the securities we may offer.
Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the
terms of that offering and the securities being sold in that
offering. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with
additional information described under the heading &#147;Where
You Can Find More Information.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any statements in this prospectus or in any
accompanying prospectus supplement concerning the provisions of
any document are not complete. In each instance, reference is
made to the copy of that document filed or incorporated or
deemed to be incorporated by reference as an exhibit to the
registration statement of which this prospectus is a part or
otherwise filed with the SEC. Each statement concerning the
provisions of any document is qualified in its entirety by
reference to the document so filed.
</FONT>

<!-- link1 "DESCRIPTION OF MERITAGE CORPORATION" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF MERITAGE CORPORATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a leading designer and builder of
single-family homes in the rapidly growing Sunbelt states of
Texas, Arizona and California. We focus on providing a broad
range of first-time, move-up and luxury homes to our targeted
customer base. We and our predecessors have operated in Arizona
since 1985, in Texas since 1987 and in Northern California since
1989. To expand our presence in Arizona, in 2001 we acquired
Hancock Communities, another well-established homebuilder that
serves the first-time and move-up markets in the Phoenix area.
We operate in Texas under the Legacy Homes name, in Arizona as
</FONT>

<P align="center"><FONT size="2">1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">Monterey Homes, Meritage Homes and Hancock
Communities, and in Northern California as Meritage Homes. At
December&nbsp;31, 2001, we were actively selling homes in 74
communities, with base prices ranging from $90,000 to $820,000.
Information about our active communities is provided through our
Internet web site at <I>www.meritagehomes.com</I>. The
information on our website is not considered part of this
prospectus.
</FONT>
</DIV>

<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our future operating results and financial
condition depend on our ability to successfully design, develop,
construct and sell homes that satisfy dynamic customer demand
patterns. Inherent in this process are factors that we must
successfully manage to achieve favorable future operating
results and financial condition. These operating and financial
factors, along with many other factors, could affect the price
of our securities. You should carefully consider the following
potential risks and uncertainties before investing in our
securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Homebuilding Industry Factors.
</FONT></I><FONT size="2">The homebuilding industry is cyclical
and is significantly affected by changes in economic and other
conditions, such as employment levels, availability of
financing, interest rates, and consumer confidence. These
factors can negatively affect the demand for and pricing of our
homes. Homebuilders are also subject to various risks, many of
which are outside their control, including delays in
construction schedules, cost overruns, changes in governmental
regulations, increases in real estate taxes and other local
government fees, and availability and cost of land, materials,
and labor. Although the principal raw materials used in the
homebuilding industry generally are available from a variety of
sources, the materials are subject to periodic price
fluctuations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The homebuilding industry is also subject to the
potential for significant variability and fluctuations in real
estate availability and values. Write-downs of our land
inventories could occur if market conditions deteriorate and
these write-downs could be material in amount. Write-downs may
also occur if we purchase land at higher prices during stronger
economic cycles and the value of that land subsequently declines
during slower economic cycles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Fluctuations in Operating Results.
</FONT></I><FONT size="2">We historically have experienced, and
expect to continue to experience, variability in home sales and
net earnings on a quarterly basis. As a result of such
variability, our historical performance may not be a meaningful
indicator of future results. Factors that contribute to this
variability include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">timing of home deliveries and land sales;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our ability to acquire additional land or options
	for additional land on acceptable terms;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">conditions of the real estate market in areas
	where we operate and of the general economy;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the cyclical nature of the homebuilding industry,
	changes in prevailing interest rates and the availability of
	mortgage financing;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">costs and availability of materials and labor; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">delays in construction schedules due to strikes,
	adverse weather, acts of God, reduced subcontractor availability
	and governmental restrictions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest Rates and Mortgage Financing.
</FONT></I><FONT size="2">In general, housing demand is
adversely affected by increases in interest rates and housing
costs and the unavailability of mortgage financing. Most of our
buyers finance their home purchases through third-party lenders
providing mortgage financing. If mortgage interest rates
increase and, consequently, the ability of prospective buyers to
finance home purchases is adversely affected, home sales, gross
margins and cash flow may also be adversely affected and the
impact may be material. Our homebuilding activities also depend
upon the availability and costs of mortgage financing for buyers
of homes owned by potential customers, as those customers
(move-up buyers) often need to sell their existing residences
before they purchase our homes. Any reduction of financing
availability could adversely affect home sales.
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Changes in federal income tax laws may also
affect demand for new homes. Various proposals have been
publicly discussed to limit mortgage interest deductions and to
limit the exclusion of gain from the sale of a principal
residence. Enactment of such proposals may have an adverse
effect on the homebuilding industry in general. No meaningful
prediction can be made whether any such proposals will be
enacted and, if enacted, the particular form such laws would
take.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Competition. </FONT></I><FONT size="2">The
homebuilding industry is highly competitive. We compete for
sales in each of our markets with national, regional and local
developers and homebuilders, existing home resales and, to a
lesser extent, condominiums and rental housing. If we are unable
to successfully compete, our financial results and growth could
suffer. Some of our competitors have significantly greater
financial resources or lower costs than we do. Competition among
both small and large residential homebuilders is based on a
number of interrelated factors, including location, reputation,
amenities, design, quality and price. Competition is expected to
continue and become more intense, and there may be new entrants
in the markets in which we currently operate and in markets we
may enter in the future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Lack of Geographic Diversification.
</FONT></I><FONT size="2">We have operations in Texas, Arizona
and Northern California. Our lack of geographic diversification
could adversely affect us if the homebuilding business in our
current markets should decline, since there may not be a
balancing opportunity in stronger markets in other geographic
regions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Additional Financing; Limitations.
</FONT></I><FONT size="2">The homebuilding industry is capital
intensive and requires significant up-front expenditures to
acquire land and begin development. Accordingly, we incur
substantial indebtedness to finance our homebuilding activities.
We may be required to seek additional capital in the form of
equity or debt financing from a variety of potential sources,
including bank financing and securities offerings. Also, lenders
are increasingly requiring developers and homebuilders to invest
significant amounts of equity in a project both in connection
with origination of new loans as well as the extension of
existing loans. The high level of our indebtedness could have
important consequences to our securityholders, including the
following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our ability to obtain additional financing for
	working capital, capital expenditures, acquisitions or general
	corporate purposes may be impaired;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">we must use a substantial portion of our cash
	flow from operations to pay interest and principal on our
	indebtedness, which will reduce the funds available for other
	purposes, such as capital expenditures;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">we have a higher level of indebtedness than some
	of our competitors, which may put us at a competitive
	disadvantage and reduce our flexibility in planning for, or
	responding to, changing conditions in our industry, including
	increased competition; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">we are more vulnerable to economic downturns and
	adverse developments in our business.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect to obtain the money to pay our expenses
and to pay the principal and interest on our indebtedness from
cash flow from operations. Our ability to meet our expenses thus
depends on our future performance, which will be affected by
financial, business, economic and other factors. We will not be
able to control many of these factors, such as economic
conditions in the markets where we operate and pressure from
competitors. We cannot be certain that our cash flow will be
sufficient to allow us to pay principal and interest on our
debt, and meet our other obligations. If we do not have enough
money, we may be required to refinance all or part of our
existing debt, sell assets or borrow more money. We cannot
guarantee that we will be able to do so on terms acceptable to
us, if at all. In addition, the terms of existing or future debt
agreements may restrict us from pursuing any of these
alternatives.
</FONT>

<P align="center"><FONT size="2">3
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operating and Financial Limitations.
</FONT></I><FONT size="2">The covenants under our existing
senior notes indenture and credit facilities impose significant
operating and financial restrictions on us. These restrictions
will limit our ability, among other things, to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">incur additional indebtedness;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">pay dividends or make other distributions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">repurchase our stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">make investments;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">sell assets;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">enter into agreements restricting our
	subsidiaries&#146; ability to pay dividends;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">enter into transactions with affiliates; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">consolidate, merge or sell all or substantially
	all of our assets.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the indenture for our existing
senior notes requires us to maintain a minimum consolidated
tangible net worth and our existing credit facilities require us
to maintain other specified financial ratios. These covenants
may adversely affect our ability to finance our future
operations or capital needs or to pursue available business
opportunities. A breach of these covenants or our inability to
maintain the required financial ratios could result in a default
on our indebtedness. If a default occurs, the relevant lenders
could declare the indebtedness, together with accrued interest
and other fees, to be immediately due and payable and proceed
against any collateral securing that indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Government Regulations; Environmental
Conditions.</FONT></I><FONT size="2"> Regulatory requirements
could cause us to incur significant liabilities and costs and
could restrict our business activities. We are subject to local,
state, and federal statutes and rules regulating certain
developmental matters, as well as building and site design. We
are subject to various fees and charges of governmental
authorities designed to defray the cost of providing certain
governmental services and improvements. We may be subject to
additional costs and delays or may be precluded entirely from
building projects because of &#147;no growth&#148; or &#147;slow
growth&#148; initiatives, building permit ordinances, building
moratoriums, or similar government regulations that could be
imposed in the future due to health, safety, welfare, or
environmental concerns. We must also obtain licenses, permits
and approvals from government agencies to engage in certain
activities, the granting or receipt of which are beyond our
control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are also subject to a variety of local, state
and federal statutes, ordinances, rules and regulations
concerning the protection of health and the environment.
Environmental laws or permit restrictions may result in project
delays, may cause substantial compliance and other costs and may
prohibit or severely restrict development in certain
environmentally sensitive regions or geographic areas.
Environmental regulations can also have an adverse impact on the
availability and price of certain raw materials such as lumber.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Recent Acquisition.</FONT></I><FONT size="2">
During 2001, we acquired Hancock Communities. We cannot
guarantee that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the Hancock business will be integrated
	successfully with our existing business;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the market and financial synergies we anticipate
	will be achieved in our expected time frame, or at all;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the combined companies will not lose key
	employees, management, suppliers or subcontractors; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">we can successfully manage new housing lines that
	were previously managed by Hancock or new lines planned for the
	future.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Future Expansion.</FONT></I><FONT size="2"> We
may continue to consider growth or expansion of our operations
in our current markets or in other areas of the country. Our
expansion into new or existing markets could have a material
adverse effect on our cash flows or profitability. The
magnitude, timing and nature of any future
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">expansion will depend on a number of factors,
including suitable acquisition candidates, the negotiation of
acceptable terms, our financial capabilities, and general
economic and business conditions. New acquisitions may result in
the incurrence of additional debt. Acquisitions also involve
numerous risks, including difficulties in the assimilation of
the acquired company&#146;s operations, the incurrence of
unanticipated liabilities or expenses, the diversion of
management&#146;s attention from other business concerns, risks
of entering markets in which we have limited or no direct
experience and the potential loss of key employees of the
acquired company.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Dependence on Key
Personnel.</FONT></I><FONT size="2"> Our success largely depends
on the continuing services of certain key employees, including
Steve Hilton and John Landon, and our continued favorable
development depends on our ability to attract and retain
qualified personnel. We do not have employment agreements with
certain key officers and the loss of their services could harm
our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Dependence on
Subcontractors.</FONT></I><FONT size="2"> We conduct our
construction operations only as a general contractor. Virtually
all architectural and construction work is performed by
unaffiliated third-party subcontractors. As a consequence, we
depend on the continued availability of and satisfactory
performance by these subcontractors for the design and
construction of our homes. We cannot assure you that there will
be sufficient availability of and satisfactory performance by
these unaffiliated third-party subcontractors. In addition,
inadequate subcontractor resources could have a material adverse
affect on our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Inflation.</FONT></I><FONT size="2"> We, like
other homebuilders, may be adversely affected during periods of
high inflation, mainly because of higher land and construction
costs. Also, higher mortgage interest rates may significantly
affect the affordability of mortgage financing to prospective
buyers. Inflation also increases our cost of financing,
materials and labor, and could cause our financial results or
growth to decline. We attempt to pass cost increases on to our
customers through higher sales prices. To date, inflation has
not had a material adverse effect on our results of operations;
however, inflation could impact our future operating results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Natural Disasters.</FONT></I><FONT size="2">
We have significant homebuilding operations in Texas and
Northern California. Some of our markets in Texas occasionally
experience severe weather conditions, such as tornadoes or
hurricanes. Northern California has experienced a significant
number of earthquakes, flooding, landslides and other natural
disasters in recent years. We do not insure against some of
these risks. These occurrences could damage or destroy our homes
under construction or our building lots, which may result in
losses that exceed our insurance coverage. We could also suffer
significant constructions delays or substantial fluctuations in
the pricing or availability of building materials. Any of these
events could cause a decrease in our revenue, cash flow and
earnings.
</FONT>

<!-- link1 "RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">RATIO OF EARNINGS TO FIXED CHARGES</FONT></B>

<DIV align="center">
<B><FONT size="2">AND</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">RATIO OF EARNINGS TO COMBINED FIXED
CHARGES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">AND PREFERRED STOCK DIVIDENDS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth Meritage&#146;s
ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividends for each of
the periods indicated:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of Earnings to Fixed Charges
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.66x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.00x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.28x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.65x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.60x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of Earnings to Combined Fixed Charges and
	Preferred Stock Dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.66x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.00x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.28x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.65x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.60x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ratio of earnings to fixed charges and ratio
of earnings to combined fixed charges and preferred stock
dividends are identical because Meritage had no outstanding
preferred stock during such periods. For the purposes of these
calculations, &#147;earnings&#148; consist of earnings before
income taxes and extraordinary items plus fixed charges less
capitalized interest. &#147;Fixed charges&#148; consist of
interest expense including
</FONT>

<P align="center"><FONT size="2">5
</FONT>

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<DIV align="left">
<FONT size="2">amortization of deferred debt costs, one-half of
rent expense, which is deemed to be representative of an
interest factor, and capitalized interest. See Exhibit&nbsp;12.1
to the registration statement containing this prospectus for a
calculation of ratio of earnings to fixed charges and ratio of
earnings to combined fixed charges and preferred stock dividends
for the periods presented.
</FONT>
</DIV>

<!-- link1 "USE OF PROCEEDS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless we otherwise specify in the applicable
prospectus supplement, the net proceeds we receive from the sale
of the securities offered by this prospectus and the
accompanying prospectus supplement will be used for general
corporate purposes. General corporate purposes may include the
development of new residential properties, the repayment of
debt, land acquisitions and possible acquisitions of other
homebuilders. The net proceeds may be invested temporarily or
applied to repay short-term debt until they are used for their
stated purpose.
</FONT>

<!-- link1 "PLAN OF DISTRIBUTION" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center">
<B><FONT size="2">PLAN OF DISTRIBUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may sell the securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">through underwriters or dealers;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">through agents; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">directly to purchasers.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The securities may be sold 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 prevailing market prices or at negotiated prices. We
will describe in a prospectus supplement the particular terms of
the offering of the securities, including the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the names of any underwriters or agents;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the purchase price and the proceeds we will
	receive from the sale;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any discounts and other items constituting
	underwriters&#146; or agents&#146; compensation;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any initial public offering price and any
	discounts or concessions allowed or re-allowed or paid to
	dealers;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any securities exchanges on which the applicable
	securities may be listed; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other information we think is important.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we use underwriters in the sale, the
underwriters will acquire the securities for their own account.
The underwriters may resell the securities 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 prevailing market prices or at negotiated prices.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The securities may be offered to the public
through underwriting syndicates represented by managing
underwriters or by underwriters without a syndicate. The
obligations of the underwriters to purchase the securities will
be subject to certain conditions. The underwriters will be
obligated to purchase all the securities of the series offered
if any of the securities are purchased. The underwriters may
change from time to time any initial public offering price and
any discounts or concessions allowed or re-allowed or paid to
dealers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may sell securities through agents or dealers
designated by us. Any agent or dealer involved in the offer or
sale of the securities for which this prospectus is delivered
will be named, and any commissions payable by us to that agent
or dealer will be set forth, in the prospectus supplement.
Unless indicated in the prospectus supplement, the agents will
agree to use their reasonable efforts to solicit purchases for
the period of their appointment and any dealer will purchase
securities from us as principal and may resell
</FONT>

<P align="center"><FONT size="2">6
</FONT>

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<DIV align="left">
<FONT size="2">those securities at varying prices to be
determined by the dealer. We also may sell securities directly
to investors. In this case, no underwriters or agents would be
involved.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Underwriters, dealers and agents that participate
in the distribution of the securities may be underwriters as
defined in the Securities Act, and any discounts or commissions
received by them from us and any profit on the resale of the
securities by them may be treated as underwriting discounts and
commissions under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may have agreements with the underwriters,
dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act, or
to contribute with respect to payments which the underwriters,
dealers or agents may be required to make.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Underwriters, dealers and agents may engage in
transactions with, or perform services for, us or our
subsidiaries in the ordinary course of their businesses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to facilitate the offering of the
securities, any underwriters or agents involved in the offering
of those securities may engage in transactions that stabilize,
maintain or otherwise affect the price of the securities.
Specifically, the underwriters or agents may overallot in
connection with the offering, creating a short position in the
offered securities for their own account. In addition, to cover
over allotments or to stabilize the price of the securities, the
underwriters or agents may bid for, and purchase, the securities
in the open market. Finally, in any offering of the securities
through a syndicate of underwriters, the underwriting syndicate
may reclaim selling concessions allotted to an underwriter or a
dealer for distributing the securities in the offering if the
syndicate repurchases previously distributed securities in
transactions to cover syndicate short positions, in
stabilization transaction or otherwise. Any of these activities
may stabilize or maintain the market price of the securities
above independent market levels. The underwriters or agents are
not required to engage in these activities, and may end any of
these activities at any time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Some or all of the securities may be new issues
of securities with no established trading market. Any
underwriter to which securities are sold by us for public
offering and sale may make a market in such securities, but will
not be obligated to do so, and may discontinue any market making
at any time without notice. We cannot and will not give any
assurances as to the liquidity of the trading market for any of
our securities.
</FONT>

<!-- link1 "DESCRIPTION OF DEBT SECURITIES" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF DEBT SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus describes certain general terms
and provisions of our debt securities. When we offer to sell a
particular series of debt securities, we will describe the
specific terms of the series in a supplement to this prospectus.
We will also indicate in the applicable prospectus supplement
whether the general terms and provisions described in this
prospectus apply to a particular series of debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified in a supplement to
this prospectus, the debt securities will be the direct,
unsecured obligations of Meritage Corporation and will rank
equally with all of its other unsecured and unsubordinated
indebtedness. Meritage Corporation&#146;s payment obligations
under any series of debt securities may be guaranteed by one or
more co-registrants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The debt securities will be issued under an
indenture between us and a bank or trust company, as trustee. We
have summarized select portions of the indenture below. The
summary is not complete. The form of the indenture has been
filed as an exhibit to the registration statement and you should
read the indenture for provisions that may be important to you.
Capitalized terms used in the summary have the meaning specified
in the indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">When we refer to &#147;we,&#148; &#147;our&#148;
and &#147;us&#148; in this section, we mean Meritage Corporation
unless the context otherwise requires or as otherwise expressly
stated.
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of each series of debt securities will
be established by or pursuant to a resolution of our board of
directors and set forth or determined in the manner provided in
an officers&#146; certificate or by a supplemental indenture.
The particular terms of each series of debt securities will be
described in a prospectus supplement relating to that series,
including any pricing supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may issue an unlimited amount of debt
securities under the indenture that may be in one or more series
with the same or various maturities, at par, at a premium, or at
a discount. We will set forth in a prospectus supplement,
including any pricing supplement, relating to any series of debt
securities being offered, the aggregate principal amount and the
following terms of the debt securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the title of the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the price or prices (expressed as a percentage of
	the principal amount) at which we will sell the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any limit on the aggregate principal amount of
	the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the date or dates on which we will pay the
	principal on the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the rate or rates (which may be fixed or
	variable) per annum or the method used to determine the rate or
	rates (including any commodity, commodity index, stock exchange
	index or financial index) at which the debt securities will bear
	interest, the date or dates from which interest will accrue, the
	date or dates on which interest will commence and be payable and
	any regular record date for the interest payable on any interest
	payment date;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the trustee for the series of debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">whether the debt securities rank as senior debt
	securities, senior subordinated debt securities or subordinated
	debt securities, or any combination thereof;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the form and terms of any guarantee of any debt
	securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any depositories, interest rate calculation
	agents or other agents with respect to the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">whether, the ratio at which and the terms and
	conditions upon which, if any, the debt securities will be
	convertible into or exchangeable for our common stock or our
	other securities or securities of another person;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the place or places where principal of, premium,
	if any, and interest, if any, on the debt securities will be
	payable or the method of payment, if by wire transfer, mail or
	by other means;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the terms and conditions upon which we may redeem
	the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any obligation we have to redeem or purchase the
	debt securities pursuant to any sinking fund or analogous
	provisions or at the option of a holder of debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the dates, if any, on which, and the price or
	prices at which, we will repurchase debt securities at the
	option of the holders of debt securities and other detailed
	terms and provisions of these repurchase obligations;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the denominations in which the debt securities
	will be issued, if other than denominations of $1,000 and any
	integral multiple thereof;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">whether the debt securities will be issued in
	bearer or fully registered form (and if in fully registered
	form, whether the debt securities will be issuable, in whole or
	in part, as global debt securities);
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the portion of principal amount of the debt
	securities payable upon declaration of acceleration of the
	maturity date, if other than the principal amount;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the currency of denomination of the debt
	securities;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">8
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the designation of the currency, currencies or
	currency units in which payment of principal of, premium and
	interest on the debt securities will be made;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if payments of principal of, premium or interest
	on the debt securities will be made in one or more currencies or
	currency units other than that or those in which the debt
	securities are denominated, the manner in which the exchange
	rate with respect to these payments will be determined;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the manner in which the amounts of payment of
	principal of, or premium or interest on the debt securities will
	be determined, if these amounts may be determined by reference
	to an index based on a currency or currencies other than that in
	which the debt securities are denominated or designated to be
	payable or by reference to a commodity, commodity index, stock
	exchange index or financial index;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any provisions relating to any security provided
	for the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any addition to or change in the events of
	default described in this prospectus or in the indenture with
	respect to the debt securities and any change in the
	acceleration provisions described in this prospectus or in the
	indenture with respect to the debt securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any addition to, change in or deletion from, the
	covenants described in this prospectus or in the indenture with
	respect to the debt securities; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other terms of the debt securities, which may
	modify, supplement or delete any provision of the indenture as
	it applies to that series.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the indenture does not limit our
ability to issue subordinated debt securities. Any subordination
provisions of a particular series of debt securities will be set
forth in the officers&#146; certificate or supplemental
indenture related to that series of debt securities and will be
described in the relevant prospectus supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may issue debt securities that provide for an
amount less than their stated principal amount to be due and
payable upon declaration of acceleration of their maturity
pursuant to the terms of the indenture. We will provide you with
information on the federal income tax considerations and other
special considerations applicable to any of these debt
securities in the applicable prospectus supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we denominate the purchase price of any of the
debt securities in a foreign currency or currencies or a foreign
currency unit or units, or if the principal of and any premium
and interest on any series of debt securities is payable in a
foreign currency or currencies or a foreign currency unit or
units, we will provide you with information on the restrictions,
elections, general tax considerations, specific terms and other
information with respect to that issue of debt securities and
such foreign currency or currencies or foreign currency unit or
units in the applicable prospectus supplement.
</FONT>

<P align="left">
<B><FONT size="2">Transfer and Exchange</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each debt security will be represented by either
one or more global securities registered in the name of The
Depository Trust Company, as depositary, or a nominee (we will
refer to any debt security represented by a global debt security
as a &#147;book-entry debt security&#148;), or a certificate
issued in definitive registered form (we will refer to any debt
security represented by a certificated security as a
&#147;certificated debt security&#148;) as set forth in the
applicable prospectus supplement. Except as set forth under the
heading &#147;Global Debt Securities and Book-Entry System&#148;
below, book-entry debt securities will not be issuable in
certificated form.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Certificated Debt
Securities.</FONT></I><FONT size="2"> You may transfer or
exchange certificated debt securities at any office we maintain
for this purpose in accordance with the terms of the indenture.
No service charge will be made for any transfer or exchange of
certificated debt securities, but we may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection with a transfer or exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may effect the transfer of certificated debt
securities and the right to receive the principal of, premium
and interest on certificated debt securities only by
surrendering the certificate representing those
</FONT>

<P align="center"><FONT size="2">9
</FONT>

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<DIV align="left">
<FONT size="2">certificated debt securities and either
reissuance by us or the trustee of the certificate to the new
holder or the issuance by us or the trustee of a new certificate
to the new holder.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Global Debt Securities and Book-Entry
System.</FONT></I><FONT size="2"> Each global debt security
representing book-entry debt securities will be deposited with,
or on behalf of, the depositary, and registered in the name of
the depositary or a nominee of the depositary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The depositary has indicated it intends to follow
the following procedures with respect to book-entry debt
securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ownership of beneficial interests in book-entry
debt securities will be limited to persons that have accounts
with the depositary for the related global debt security, which
we refer to as participants, or persons that may hold interests
through participants. Upon the issuance of a global debt
security, the depositary will credit, on its book-entry
registration and transfer system, the participants&#146;
accounts with the respective principal amounts of the book-entry
debt securities represented by the global debt security
beneficially owned by such participants. The accounts to be
credited will be designated by any dealers, underwriters or
agents participating in the distribution of the book-entry debt
securities. Ownership of book-entry debt securities will be
shown on, and the transfer of those ownership interests will be
effected only through, records maintained by the depositary for
the related global debt security (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 the securities in definitive form.
These laws may impair the ability to own, transfer or pledge
beneficial interests in book-entry debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">So long as the depositary for a global debt
security, or its nominee, is the registered owner of that global
debt security, the depositary or its nominee, as the case may
be, will be considered the sole owner or holder of the
book-entry debt securities represented by the global debt
security for all purposes under the indenture. Except as
described below, beneficial owners of book-entry debt securities
will not be entitled to have securities registered in their
names, will not receive or be entitled to receive physical
delivery of a certificate in definitive form representing
securities and will not be considered the owners or holders of
those securities under the indenture. Accordingly, each person
beneficially owning book-entry debt securities must rely on the
procedures of the depositary for the related global debt
security and, if that person is not a participant, on the
procedures of the participant through which that person owns its
interest, to exercise any rights of a holder under the indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We understand, however, that under existing
industry practice, the depositary will authorize the persons on
whose behalf it holds a global debt security to exercise certain
rights of holders of debt securities, and the indenture provides
that we, the trustee and our respective agents will treat as the
holder of a debt security the persons specified in a written
statement of the depositary with respect to that global debt
security for purposes of obtaining any consents or directions
required to be given by holders of the debt securities pursuant
to the indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will make payments of principal of, and
premium and interest on, book-entry debt securities to the
depositary or its nominee, as the case may be, as the registered
holder of the related global debt security. We, the trustee and
any other agent of ours or agent of the trustee will not have
any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests in a global debt security or for maintaining,
supervising or reviewing any records relating to beneficial
ownership interests.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect that the depositary, upon receipt of
any payment of principal of, premium or interest on a global
debt security, will immediately credit participants&#146;
accounts with payments in amounts proportionate to the
respective amounts of book-entry debt securities held by each
participant as shown on the records of such depositary. We also
expect that payments by participants to owners of beneficial
interests in book-entry debt securities held through those
participants will be governed by standing customer instructions
and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered
in &#147;street name,&#148; and will be the responsibility of
those participants.
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will issue certificated debt securities in
exchange for each global debt security if the depositary is at
any time unwilling or unable to continue as depositary or ceases
to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, or Exchange Act, and a successor
depositary registered as a clearing agency under the Exchange
Act is not appointed by us within 90&nbsp;days. In addition, we
may at any time and in our sole discretion determine not to have
the book-entry debt securities of any series represented by one
or more global debt securities and, in that event, will issue
certificated debt securities in exchange for the global debt
securities of that series. Global debt securities will also be
exchangeable by the holders for certificated debt securities if
an event of default with respect to the book-entry debt
securities represented by those global debt securities has
occurred and is continuing. Any certificated debt securities
issued in exchange for a global debt security will be registered
in such name or names as the depositary shall instruct the
trustee. We expect that such instructions will be based upon
directions received by the depositary from participants with
respect to ownership of book-entry debt securities relating to
such global debt security.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have obtained the foregoing information
concerning the depositary and the depositary&#146;s book-entry
system from sources we believe to be reliable, but we take no
responsibility for the accuracy of this information.
</FONT>

<P align="left">
<B><FONT size="2">Change of Control</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless we state otherwise in the applicable
prospectus supplement, the debt securities will not contain any
provisions that may afford holders of the debt securities
protection in the event we undergo a change in control or in the
event of a highly leveraged transaction (whether or not such
transaction results in a change in control) that could adversely
affect holders of debt securities.
</FONT>

<P align="left">
<B><FONT size="2">Covenants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will set forth in the applicable prospectus
supplement any restrictive covenants applicable to any issue of
debt securities.
</FONT>

<P align="left">
<B><FONT size="2">Consolidation, Merger and Sale of
Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may not consolidate with or merge with or
into, or convey, transfer or lease all or substantially all of
our properties and assets to, any person, which we refer to as a
successor person, unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">we are the surviving corporation or the successor
	person (if other than Meritage Corporation) is a corporation
	organized and validly existing under the laws of any U.S.
	domestic jurisdiction and expressly assumes our obligations on
	the debt securities and under the indenture;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">immediately after giving effect to the
	transaction, no event of default, and no event which, after
	notice or lapse of time, or both, would become an event of
	default, shall have occurred and be continuing under the
	indenture; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">certain other conditions that may be set forth in
	the applicable prospectus supplement are met.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Events of Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise stated in the applicable
prospectus supplement, event of default means, with respect to
any series of debt securities, any of the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">default in the payment of any interest upon any
	debt security of that series when it becomes due and payable,
	and continuance of that default for a period of 30&nbsp;days
	(unless the entire amount of the payment is deposited by us with
	the trustee or with a paying agent prior to the expiration of
	the 30-day period);
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">default in the payment of principal of or premium
	on any debt security of that series when due and payable at
	maturity, upon redemption or otherwise;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">11
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an event of default as defined in the debt
	securities of that series or our failure to comply with any of
	our other agreements in the debt securities of that series or
	the indenture with respect to that series, which default
	continues uncured for a period of 60&nbsp;days after we receive
	written notice from the trustee or we and the trustee receive
	written notice from the holders of not less than a majority in
	principal amount of the outstanding debt securities of that
	series as provided in the indenture;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">certain events of bankruptcy, insolvency or
	reorganization; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other event of default provided with respect
	to debt securities of that series which is described in the
	applicable prospectus supplement accompanying this prospectus.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No event of default with respect to a particular
series of debt securities (except as to certain events of
bankruptcy, insolvency or reorganization) necessarily
constitutes an event of default with respect to any other series
of debt securities. The occurrence of an event of default may
constitute an event of default under our bank credit agreements
in existence from time to time. In addition, the occurrence of
certain events of default or an acceleration under the indenture
may constitute an event of default under certain of our other
indebtedness outstanding from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If an event of default with respect to debt
securities of any series at the time outstanding occurs and is
continuing, then the trustee or the holders of not less than a
majority in principal amount of the outstanding debt securities
of that series may, by a notice in writing to us (and to the
trustee if given by the holders), declare to be due and payable
immediately the principal (or, if the debt securities of that
series are discount securities, that portion of the principal
amount as may be specified in the terms of that series) of and
accrued and unpaid interest, if any, on all debt securities of
that series. In the case of an event of default resulting from
certain events of bankruptcy, insolvency or reorganization, the
principal (or such specified amount) of and accrued and unpaid
interest, if any, on all outstanding debt securities will become
and be immediately due and payable without any declaration or
other act on the part of the trustee or any holder of
outstanding debt securities. At any time after a declaration of
acceleration with respect to debt securities of any 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 a
majority in principal amount of the outstanding debt securities
of that series may rescind and annul the acceleration if all
events of default, other than the non-payment of accelerated
principal and interest, if any, with respect to debt securities
of that series, have been cured or waived as provided in the
indenture. We refer you to the prospectus supplement relating to
any series of debt securities that are discount securities for
the particular provisions relating to acceleration of a portion
of the principal amount of such discount securities upon the
occurrence of an event of default.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture provides that the trustee will be
under no obligation to exercise any of its rights or powers
under the indenture at the request of any holder of outstanding
debt securities, unless the trustee receives indemnity
satisfactory to it against any loss, liability or expense.
Subject to certain rights of the trustee, the holders of a
majority in principal amount of the outstanding debt securities
of any series will 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 debt securities of that series.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless stated otherwise in the applicable
prospectus supplement, no holder of any debt security of any
series will have any right to institute any proceeding, judicial
or otherwise, with respect to the indenture or for the
appointment of a receiver or trustee, or for any remedy under
the indenture, unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">that holder has previously given to the trustee
	written notice of a continuing event of default with respect to
	debt securities of that series; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the holders of at least 25% in principal amount
	of the outstanding debt securities of that series have made
	written request, and offered reasonable indemnity, to the
	trustee to institute the proceeding as trustee, and the trustee
	has not received from the holders of a majority in principal
	amount of the outstanding debt securities of that series a
	direction inconsistent with that request and has failed to
	institute the proceeding within 60&nbsp;days.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">12
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, the holder of any
debt security will have an absolute and unconditional right to
receive payment of the principal of, premium and any interest on
that debt security on or after the due dates expressed in that
debt security and to institute suit for the enforcement of
payment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture requires us, within 90&nbsp;days
after the end of our fiscal year, to furnish to the trustee a
statement as to compliance with the indenture. The indenture
provides that the trustee may withhold notice to the holders of
debt securities of any series of any default or event of default
(except in payment on any debt securities of that series) with
respect to debt securities of that series if it in good faith
determines that withholding notice is in the interest of the
holders of those debt securities.
</FONT>

<P align="left">
<B><FONT size="2">Modification and Waiver</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may modify and amend the indenture without
notice to or the consent of the holders:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to establish additional series of securities
	permitted under the indenture;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to cure any ambiguity, defect or inconsistency;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to evidence the assumption of a successor
	corporation of our obligations under the indenture;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to comply with any requirements of the SEC or the
	Trust Indenture Act;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to provide for uncertificated securities in
	addition to or in place of certificated securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to add, change or eliminate any other provisions
	of the indenture so long as that change does not apply to any
	then existing series of debt securities or modify the rights of
	the holder of any such security with respect to that provision;
	or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">make any change that does not adversely affect in
	any material respect the interests of the securityholders of any
	series.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may modify and amend the indenture with the
consent of the holders of at least a majority in principal
amount of the outstanding debt securities of each series
affected by the modifications or amendments. We may not make any
modification or amendment without the consent of the holders of
each affected debt security then outstanding if that amendment
will:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce the amount of debt securities whose
	holders must consent to an amendment or waiver;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce the rate of or extend the time for payment
	of interest (including default interest) on any debt security;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce the principal of or premium on or change
	the fixed maturity of any debt security or reduce the amount of,
	or postpone the date fixed for, the payment of any sinking fund
	or analogous obligation with respect to any series of debt
	securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce the principal amount of discount
	securities payable upon acceleration of maturity;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">waive a default in the payment of the principal
	of, premium or interest on any debt security (except a
	rescission of acceleration of the debt securities of any series
	by the holders of at least a majority in aggregate principal
	amount of the then outstanding debt securities of that series
	and a waiver of the payment default that resulted from such
	acceleration);
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">make the principal of or premium or interest on
	any debt security payable in currency other than that stated in
	the debt security;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">make any change to certain provisions of the
	indenture relating to, among other things, the right of holders
	of debt securities to receive payment of the principal of,
	premium and interest on those debt securities and to institute
	suit for the enforcement of any such payment and to waivers or
	amendments; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">waive a redemption payment with respect to any
	debt security.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">13
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except for certain specified provisions, the
holders of at least a majority in principal amount of the
outstanding debt securities of any series may on behalf of the
holders of all debt securities of that series waive our
compliance with provisions of the indenture. The holders of a
majority in principal amount of the outstanding debt securities
of any series may on behalf of the holders of all the debt
securities of such series waive any past default under the
indenture with respect to that series and its consequences,
except a default in the payment of the principal of, premium or
any interest on any debt security of that series or in respect
of a covenant or provision which cannot be modified or amended
without the consent of the holder of each outstanding debt
security of the series affected; provided, however, that the
holders of a majority in principal amount of the outstanding
debt securities of any series may rescind an acceleration and
its consequences, including any related payment default that
resulted from the acceleration.
</FONT>

<P align="left">
<B><FONT size="2">Defeasance of Debt Securities and Certain
Covenants in Certain Circumstances</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Legal Defeasance.</FONT></I><FONT size="2">
The indenture provides that, unless otherwise provided by the
terms of the applicable series of debt securities, we may be
discharged from any and all obligations in respect of the debt
securities of any series (except for certain obligations to
register the transfer or exchange of debt securities of such
series, to replace stolen, lost or mutilated debt securities of
such series, and to maintain paying agencies and certain
provisions relating to the treatment of funds held by paying
agents). We will be so discharged upon the deposit with the
trustee, in trust, of money and/or U.S.&nbsp;government
obligations or, in the case of debt securities denominated in a
single currency other than U.S.&nbsp;dollars, foreign government
obligations, that, through the payment of interest and principal
in accordance with their terms, will provide money in an amount
sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay and discharge each
installment of principal, premium and interest on and any
mandatory sinking fund payments in respect of the debt
securities of that series on the stated maturity of those
payments in accordance with the terms of the indenture and those
debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This discharge may occur only if, among other
things, we have delivered to the trustee an opinion of counsel
stating that we have received from, or there has been published
by, the United States Internal Revenue Service a ruling or,
since the date of execution of the indenture, there has been a
change in the applicable United States federal income tax law,
in either case to the effect that, and based thereon such
opinion shall confirm that, the holders of the debt securities
of that series will not recognize income, gain or loss for
United States federal income tax purposes as a result of the
deposit, defeasance and discharge and will be subject to United
States federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if the
deposit, defeasance and discharge had not occurred.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Defeasance Of Certain
Covenants.</FONT></I><FONT size="2"> The indenture provides
that, unless otherwise provided by the terms of the applicable
series of debt securities, upon compliance with certain
conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">we may omit to comply with the covenant described
	under the heading &#147;Consolidation, Merger and Sale of
	Assets&#148; and certain other covenants set forth in the
	indenture, as well as any additional covenants which may be set
	forth in the applicable prospectus supplement; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any omission to comply with those covenants will
	not constitute a default or an event of default with respect to
	the debt securities of that series, or covenant defeasance.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The conditions include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">depositing with the trustee money and/or U.S.
	government obligations or, in the case of debt securities
	denominated in a single currency other than U.S. dollars,
	foreign government obligations, that, through the payment of
	interest and principal in accordance with their terms, will
	provide money in an amount sufficient in the opinion of a
	nationally recognized firm of independent public accountants to
	pay and discharge each installment of principal of, premium and
	interest on and any mandatory sinking fund payments in respect
	of the debt securities of that series on the stated maturity of
	those payments in accordance with the terms of the indenture and
	those debt securities; and
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">14
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">delivering to the trustee an opinion of counsel
	to the effect that the holders of the debt securities of that
	series will not recognize income, gain or loss for United States
	federal income tax purposes as a result of the deposit and
	related covenant defeasance and will be subject to United States
	federal income tax on the same amounts and in the same manner
	and at the same times as would have been the case if the deposit
	and related covenant defeasance had not occurred.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Covenant Defeasance And Events Of
Default.</FONT></I><FONT size="2"> In the event we exercise our
option to effect covenant defeasance with respect to any series
of debt securities and the debt securities of that series are
declared due and payable because of the occurrence of any event
of default, the amount of money and/or U.S.&nbsp;government
obligations or foreign government obligations on deposit with
the trustee will be sufficient to pay amounts due on the debt
securities of that series at the time of their stated maturity
but may not be sufficient to pay amounts due on the debt
securities of that series at the time of the acceleration
resulting from the event of default. However, we shall remain
liable for those payments.
</FONT>

<P align="left">
<B><FONT size="2">Guarantees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our payment obligations under any series of debt
securities may be guaranteed by one or more of the
co-registrants. The terms of any such guarantee will be set
forth in the applicable prospectus supplement.
</FONT>

<!-- link1 "DESCRIPTION OF CAPITAL STOCK" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF CAPITAL STOCK</FONT></B>

<P align="left">
<B><FONT size="2">Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are authorized to issue up to 50,000,000
shares of common stock, $0.01 par value per share, of which
11,411,480&nbsp;shares were outstanding as of April&nbsp;26,
2002 (of which 1,637,926&nbsp;shares were held in treasury).
These amounts reflect a 2-for-1 stock split in the form of a
stock dividend which Meritage effected on April&nbsp;26, 2002 to
stockholders of record at the close of business on
April&nbsp;12, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All the outstanding shares of common stock are
fully paid and nonassessable and entitled to participate equally
and ratably in dividends and in distributions available for the
common stock on liquidation. We do not intend to declare cash
dividends in the foreseeable future. Earnings are expected to be
retained to finance the continuing development of the business.
Future cash dividends, if any, will depend upon our financial
condition, results of operations, capital requirements,
compliance with debt covenants of existing indebtedness and
credit facilities, as well as other factors considered relevant
by our board of directors. Each share is entitled to one vote
for the election of directors and upon all other matters on
which the common stockholders vote. Holders of common stock do
not have preemptive rights and are not entitled to cumulative
votes in the election of directors.
</FONT>

<P align="left">
<B><FONT size="2">Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not currently authorized to issue
preferred stock. We will need to obtain stockholder approval to
authorize the issuance of preferred stock. We anticipate that
the board of directors will have the authority to determine the
terms of our preferred stock without further stockholder
approval. The preferred stock, if authorized by our
stockholders, will be issued in one or more series with the
designations, rights, preferences and limitations determined by
our board of directors, including the consideration to be
received for the preferred stock, the number of shares
comprising each series, dividend rates, redemption provisions,
liquidation preferences, mandatory retirement provisions,
conversion rights and voting rights.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we issue preferred stock with voting rights,
it could make it more difficult for a third party to acquire
control of Meritage and could adversely affect the rights of
holders of common stock. Preferred stockholders typically are
entitled to satisfaction in full of specified dividend and
liquidation rights before any payment of dividends or
distribution of assets on liquidation can be made to holders of
common stock. Also, any voting rights granted to our preferred
stock may dilute the voting rights of our common stock. Under
some circumstances, control of Meritage would shift from the
holders of common stock to the holders of preferred stock with
voting rights. Certain fundamental matters requiring stockholder
approval
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<DIV align="left">
<FONT size="2">(such as mergers, sale of assets and certain
amendments to our articles of incorporation) may require
approval by the separate vote of the holders of preferred stock
in addition to any required vote of the common stock.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Transfer Agent</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The transfer agent and registrar for our common
stock is Mellon Investor Services, LLC.
</FONT>

<!-- link1 "DESCRIPTION OF WARRANTS" -->
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<P align="center">
<B><FONT size="2">DESCRIPTION OF WARRANTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may issue warrants for the purchase of common
stock, preferred stock or debt securities. Warrants may be
issued independently or together with our common stock,
preferred stock or debt securities and may be attached to or
separate from any offered securities. Each series of warrants
will be issued under a separate warrant agreement to be entered
into between us and a bank or trust company, as warrant agent.
The warrant agent will act solely as our agent in connection
with the warrants and will not have any obligation or
relationship of agency or trust for or with any holders or
beneficial owners of warrants. A copy of the warrant agreement
will be filed with the SEC in connection with any offering of
warrants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The prospectus supplement relating to a
particular issue of warrants to purchase common stock, preferred
stock or debt securities will describe the terms of those
warrants, including the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the title of the warrants;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the offering price for the warrants, if any;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the aggregate number of the warrants;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the designation and terms of the common stock,
	preferred stock or debt securities that may be purchased upon
	exercise of the warrants;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, the designation and terms of the
	securities that the warrants are issued with and the number of
	warrants issued with each security;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, the date from and after which the
	warrants and any securities issued with them will be separately
	transferable;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, the principal amount of debt
	securities that may be purchased upon exercise of a warrant and
	the price at which the debt securities may be purchased upon
	exercise;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, the number of shares of common
	stock or preferred stock that may be purchased upon exercise of
	a warrant and the price at which the shares may be purchased
	upon exercise;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the dates on which the right to exercise the
	warrants will commence and expire;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, the minimum or maximum amount of
	the warrants that may be exercised at any one time;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">whether the warrants represented by the warrant
	certificates or debt securities that may be issued upon exercise
	of the warrants will be issued in registered or bearer form;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">information relating to book-entry procedures, if
	any;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the currency or currency units in which the
	offering price, if any, and the exercise price are payable;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, a discussion of material United
	States federal income tax considerations;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">anti-dilution provisions of the warrants, if any;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">redemption or call provisions applicable to the
	warrants, if any;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">16
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any additional terms of the warrants, including
	terms, procedures and limitations relating to the exchange and
	exercise of the warrants; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other information we think is important about
	the warrants.
	</FONT></TD>
</TR>

</TABLE>

<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Snell &#38; Wilmer L.L.P., our outside counsel,
will issue an opinion regarding the validity of the offered
securities. If counsel for any underwriters passes on legal
matters in connection with an offering made by this prospectus,
we will name that counsel in the accompanying prospectus
supplement.
</FONT>

<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of Meritage
as of December&nbsp;31, 2001 and 2000, and for each of the years
in the three-year period ended December&nbsp;31, 2001, have been
incorporated by reference herein in reliance upon the report of
KPMG LLP, independent accountants, incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing.
</FONT>

<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
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<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We file annual, quarterly and special reports,
proxy statements and other information with the SEC. Our SEC
filings are available to the public over the Internet at the
SEC&#146;s web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC&#146;s public reference
room at 450&nbsp;Fifth Street, N.W., Washington, D.C.&nbsp;20549.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Please call the SEC at 1-800-SEC-0330 for further
information on the operations of the public reference rooms.
<B>If you would like to request any documents, please do so five
days before you make your investment decision.</B> Our common
stock is listed on the New York Stock Exchange. Our reports,
proxy statements and other information can also be inspected at
the offices of the New York Stock Exchange, 20&nbsp;Broad
Street, New York, New York&nbsp;10005.
</FONT>

<!-- link1 "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center">
<B><FONT size="2">INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The SEC allows us to &#147;incorporate by
reference&#148; the information contained in the documents we
file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We
incorporate by reference any future filings we make with the SEC
under Sections&nbsp;13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 after the date of this prospectus and until
we sell all the securities covered by this prospectus, other
than portions of these documents that are either
(i)&nbsp;described in paragraphs&nbsp;(i), (k)&nbsp;and
(l)&nbsp;of Item&nbsp;402 of Regulation&nbsp;S-K promulgated by
the SEC or (ii)&nbsp;furnished under Item&nbsp;9 of a Current
Report on Form&nbsp;8-K. We also specifically incorporate by
reference the following documents, which we have already filed
with the SEC:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;our Annual
	Report on Form&nbsp;10-K for the year ended December&nbsp;31,
	2001; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;our definitive
	Proxy Statement dated April&nbsp;2, 2002.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any information contained in this prospectus or
in any document incorporated or deemed to be incorporated by
reference in this prospectus will be deemed to have been
modified or superseded to the extent that a statement contained
in this prospectus, in any other document we subsequently file
with the SEC that also is incorporated or deemed to be
incorporated by reference in this prospectus or in the
applicable prospectus supplement modifies or supersedes the
original statement. Any statement so modified or superseded will
not be deemed, except as so modified or superseded, to be a part
of this prospectus.
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We encourage you to read our periodic and current
reports. We think these reports provide additional information
about our company which prudent investors will find important.
You may request a copy of these filings as well as any future
filings incorporated by reference, at no cost, by calling us or
by writing to us at our principal executive offices at the
following address: Meritage Corporation, 6613&nbsp;North
Scottsdale Road, Suite&nbsp;200, Scottsdale, Arizona 85250,
Attention: Investor Relations. Our telephone number is
(877)&nbsp;400-7888.
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<DIV align="left">
<FONT size="2"> <HR size="1" width="100%" align="left" noshade>
</FONT>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="center">
<HR size="1" width="21%" align="center" noshade>

<P align="center">
<B><FONT size="2"> PROSPECTUS</FONT></B>

<P align="center">
<HR size="1" width="21%" align="center" noshade>

<P align="center">
<B><FONT size="5">MERITAGE CORPORATION</FONT></B>

<P align="center">
<B><FONT size="4">Debt Securities</FONT></B>

<DIV align="center">
<B><FONT size="4">Common Stock</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Preferred Stock</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Warrants</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Guarantees</FONT></B>
</DIV>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">PART II.</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Other Expenses of Issuance and
	Distribution.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the estimated
expenses, other than underwriting discounts and other expenses
associated with offerings of particular securities, in
connection with the issuance and distribution of the securities
being registered.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">SEC registration fee
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legal fees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">125,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounting fees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Trustees&#146; fees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Printing fees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Miscellaneous
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">178,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All amounts are estimated except for the SEC
registration fee.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Indemnification of Directors and
	Officers.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the provisions of the Maryland General
Corporation Law, a corporation&#146;s articles may, with certain
exceptions, include any provision expanding or limiting the
liability of its directors and officers to the corporation or
its stockholders for money damages, but may not include any
provision that restricts or limits the liability of its
directors or officers to the corporation or its stockholders to
the extent that (i)&nbsp;it is proved that the person actually
received an improper benefit or profit in money, property, or
services for the amount of the benefit or profit in money,
property, or services actually received; or (ii)&nbsp;a judgment
or other final adjudication adverse to the person is entered in
a proceeding based on a finding in the proceeding that the
person&#146;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. Meritage&#146;s charter
contains a provision limiting the personal liability of officers
and directors to Meritage and its stockholders to the fullest
extent permitted under Maryland law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the provisions of the Maryland
General Corporation Law permit a corporation to indemnify its
present and former directors and officers, among others, against
liability incurred, unless it is established that (i)&nbsp;the
act or omission of the director or officer 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, or
(ii)&nbsp;the director or officer actually received an improper
personal benefit in money, property, or services, or
(iii)&nbsp;in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or
omission was unlawful. Meritage&#146;s charter provides that it
will indemnify its directors, officers and others so designated
by the board of directors to the full extent allowed under
Maryland law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liability arising
under the Securities Act may be permitted to directors, officers
or persons controlling Meritage pursuant to the foregoing
provisions, Meritage has been informed that in the opinion of
the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Exhibits.</FONT></I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Underwriting Agreement relating to debt
	securities.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.2*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Underwriting Agreement relating to common
	stock.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.3*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Underwriting Agreement relating to
	preferred stock.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.4*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Underwriting Agreement relating to
	warrants.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amendment to Articles of Incorporation
	(incorporated by reference to Exhibit&nbsp;3.1 of Form&nbsp;10-Q
	for the quarterly period ended September&nbsp;30, 1998).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Restated Articles of Incorporation (incorporated
	by reference Exhibit 3.2 of Form&nbsp;10-Q for the quarterly
	period ended September&nbsp;30, 1998).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Amended and to Restated Bylaws (incorporated by
	reference to Exhibit&nbsp;3.3 of Form&nbsp;S-3 #333-58793).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Indenture, between Meritage Corporation
	and Wells Fargo Bank, National Association.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Debt Security.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Specimen of Common Stock Certificate.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Certificate of Designation of Preferred
	Stock.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Certificate of Preferred Stock.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.4*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Form of Warrant Agreement (including form of
	warrant certificate).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Opinion of Snell &#38; Wilmer L.L.P. as to the
	legality of securities to be issued.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">12.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Statement re: Computation of Ratio of Earnings to
	Fixed Charges and Ratio of Earnings to Combined Fixed Charges
	and Preferred Stock Dividends of Meritage Corporation.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Consent of Independent Auditors.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Consent of Snell &#38; Wilmer L.L.P. (included in
	Exhibit&nbsp;5.1).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Powers of Attorney (see signature page).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">25.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Statement of Eligibility under the Trust
	Indenture Act of 1939 on Form T-1 of Wells Fargo Bank,
	Minnesota, National Association.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed by amendment or incorporated by
	reference in the event of an offering of the specified
	securities.
	</FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="9%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Undertakings.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To file, during
	any period in which offers or sales are being made, a
	post-effective amendment to this registration statement;
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To include
	any prospectus required by Section&nbsp;10(a)(3) of the
	Securities Act of 1933;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Notwithstanding the
	foregoing, any increase or decrease in volume of securities
	offered (if the total dollar value of securities offered would
	not exceed that which was registered) and any deviation from the
	low or high end of the estimated maximum offering range may be
	reflected in the form of prospectus filed with the Commission
	pursuant to Rule&nbsp;424(b) if, in the aggregate, the changes
	in volume and price represent no more than 20&nbsp;percent
	change in the maximum aggregate offering price set forth in the
	&#147;Calculation of Registration Fee&#148; table in this
	registration statement; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To include any
	material information with respect to the plan of distribution
	not previously disclosed in this registration statement or any
	material change to such information in this registration
	statement;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-2
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<I><FONT size="2">provided, however,</FONT></I><FONT size="2">
that the undertakings set forth in paragraphs (i) and (ii) above
do not apply if the registration statement is on Form&nbsp;S-3,
Form&nbsp;S-8 or Form&nbsp;F-3 and 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
Commission by the registrant pursuant to Section&nbsp;13 or
Section&nbsp;15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
	herein, and the offering of such securities at that time shall
	be deemed to be the initial <I>bona fide</I> offering thereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, for
	purposes of determining any liability under the Securities Act
	of 1933, each filing of the registrant&#146;s annual report
	pursuant to Section&nbsp;13(a) or Section&nbsp;15(d) of the
	Securities Exchange Act of 1934 (and where applicable, each
	filing of an employee benefit plan&#146;s annual report pursuant
	to Section&nbsp;15(d) or the Securities 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 <I>bona fide</I>
	offering thereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, 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&nbsp;430A and contained in a form of prospectus filed by
	the registrant pursuant to Rule&nbsp;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.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, for
	purposes 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
	the such securities at that time shall be deemed to be the
	initial <I>bona fide</I> offering thereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To file an
	application for the purpose of determining the eligibility of
	the trustee to act under subsection&nbsp;(a) of Section&nbsp;310
	of the Trust Indenture Act in accordance with the rules and
	regulations prescribed by the Commission under
	Section&nbsp;305(b)(2) of the Act.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrants
pursuant to the provisions described in this registration
statement above, or otherwise, we 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 us of expenses incurred or paid by a director, officer or
controlling person of us in the successful defense of any
action, suit or proceeding) is asserted against us by such
director, officer or controlling person in connection with the
securities registered, we will, unless in the opinion of our
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 Act and will be governed by the final
adjudication of such issue.
</FONT>

<P align="center"><FONT size="2">II-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form&nbsp;S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Scottsdale, State of
Arizona, on April&nbsp;30, 2002.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">MERITAGE CORPORATION
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="2%"></TD>
	<TD width="58%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">/s/ LARRY W. SEAY <BR>
	 <HR size="1" align="left" noshade>
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Name: Larry W. Seay
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="7%"></TD>
	<TD width="53%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">Title:</FONT></TD>
	<TD align="left">
	<FONT size="2">Chief Financial Officer and
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Vice President-Finance
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following direct and indirect subsidiaries of
the registrant may guarantee the Offered Debt Securities and are
co-registrants under this registration statement.
</FONT>

<P align="left">
<B><FONT size="2">Name of Co-Registrant</FONT></B>

<P align="left">
<FONT size="2">Monterey Homes Arizona, Inc.
</FONT>

<DIV align="left">
<FONT size="2">Meritage Paseo Crossing, LLC(1)
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Monterey Homes Construction, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Paseo Construction, LLC(2)
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Homes of Arizona, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Homes Construction, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">MTH-Texas GP, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">MTH-Texas LP, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Legacy/ Monterey Homes L.P.(3)
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Homes of Northern California, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Hancock-MTH Builders, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Hancock-MTH Communities, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Legacy Operating Company, L.P.(3)
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Hulen Park Venture, LLC(4)
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Holdings, L.L.C.(4)
</FONT>
</DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Executed by Monterey Homes Arizona, Inc., as sole
	member
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Executed by Monterey Homes Construction, Inc., as
	sole member
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Executed by MTH-Texas GP, Inc., as general partner
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Executed by MTH-Texas GP, Inc., as general
	partner of Legacy/ Monterey Homes L.P., its sole member
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">as Guarantors
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="2%"></TD>
	<TD width="58%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">/s/ LARRY W. SEAY <BR>
	 <HR size="1" align="left" noshade>
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<FONT size="2">Larry W. Seay
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">Chief Financial Officer and</FONT></I></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">Vice President-Finance</FONT></I></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "POWER OF ATTORNEY" -->
<DIV align="left"><A NAME="015"></A></DIV>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints
Steven&nbsp;J. Hilton, John&nbsp;R. Landon and Larry&nbsp;W.
Seay, and each of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this registration
statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully and to all intents
and purposes as he might or could do in person hereby ratifying
and confirming all that said attorneys-in-fact and agents, or
his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ STEVEN J. HILTON<BR>
	<HR size="1" noshade>Steven J. Hilton
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Co-Chairman, Co-Chief Executive Officer and
	Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ JOHN R. LANDON<BR>
	<HR size="1" noshade>John R. Landon
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Co-Chairman, Co-Chief Executive Officer and
	Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ LARRY W. SEAY<BR>
	<HR size="1" noshade>Larry W. Seay
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chief Financial Officer and Vice
	President-Finance (Principal Financial Officer and Principal
	Accounting Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ RICHARD T. MORGAN<BR>
	<HR size="1" noshade>Richard T. Morgan
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Vice President
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ WILLIAM W. CLEVERLY<BR>
	<HR size="1" noshade>William W. Cleverly
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ ROBERT G. SARVER<BR>
	<HR size="1" noshade>Robert G. Sarver
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ C. TIMOTHY WHITE<BR>
	<HR size="1" noshade>C. Timothy White
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ RAYMOND OPPEL<BR>
	<HR size="1" noshade>Raymond Oppel
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ PETER L. AX<BR>
	<HR size="1" noshade>Peter L. Ax
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">ON BEHALF OF THE FOLLOWING LISTED
CO-REGISTRANTS:</FONT></B>

<P align="left">
<FONT size="2">Monterey Homes Arizona, Inc.
</FONT>

<DIV align="left">
<FONT size="2">Monterey Homes Construction, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Homes Arizona, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Homes Construction, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Meritage Homes of Northern California, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Hancock-MTH Builders, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Hancock-MTH Communities, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">MTH-Texas GP, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">MTH-Texas LP, Inc.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ STEVEN J. HILTON<BR>
	<HR size="1" noshade>Steven J. Hilton
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Co-Chairman, Co-Chief Executive Officer and
	Director (Principal Executive Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ JOHN R. LANDON<BR>
	<HR size="1" noshade>John R. Landon
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Co-Chairman, Co-Chief Executive Officer and
	Director (Principal Executive Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ LARRY W. SEAY<BR>
	<HR size="1" noshade>Larry W. Seay
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chief Financial Officer and Vice
	President-Finance (Principal Financial Officer and Principal
	Accounting Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">ON BEHALF OF THE FOLLOWING LIMITED PARTNERSHIP
AND LIMITED LIABILITY COMPANY CO-REGISTRANTS:</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name of Co-Registrant</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">General Partner or Sole Member of Co-Registrant</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Paseo Crossing, LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">Monterey Homes Arizona, Inc.</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Paseo Construction, LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">Monterey Homes Construction, Inc.</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legacy/ Monterey Homes L.P.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">MTH-Texas GP, Inc.</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legacy Operating Company, L.P.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">MTH-Texas GP, Inc.</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hulen Park Venture, LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">Legacy/ Monterey Homes L.P.</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meritage Holdings, L.L.C
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">Legacy/ Monterey Homes L.P.</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ STEVEN J. HILTON<BR>
	<HR size="1" noshade>Steven J. Hilton
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Co-Chairman, Co-Chief Executive Officer and
	Director of each: Monterey Homes Arizona, Inc., Monterey Homes
	Construction, Inc. and MTH-Texas GP, Inc.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ JOHN R. LANDON<BR>
	<HR size="1" noshade>John R. Landon
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Co-Chairman, Co-Chief Executive Officer and
	Director of each: Monterey Homes Arizona, Inc., Monterey Homes
	Construction, Inc. and MTH-Texas GP, Inc.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ LARRY W. SEAY<BR>
	<HR size="1" noshade>Larry W. Seay
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chief Financial Officer and Vice
	President&nbsp;&#151; Finance of each: Monterey Homes Arizona,
	Inc., Monterey Homes Construction, Inc. and MTH-Texas GP, Inc.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">April&nbsp;30, 2002
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Exhibit Index" -->
<DIV align="left"><A NAME="016"></A></DIV>

<P align="center">
<B><FONT size="2">Exhibit&nbsp;Index</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.1*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Underwriting Agreement relating to debt
	securities.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.2*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Underwriting Agreement relating to common
	stock.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.3*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Underwriting Agreement relating to
	preferred stock.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.4*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Underwriting Agreement relating to
	warrants.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amendment to Articles of Incorporation
	(incorporated by reference to Exhibit&nbsp;3.1 of Form&nbsp;10-Q
	for the quarterly period ended September&nbsp;30, 1998).
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.1.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Restated Articles of Incorporation (incorporated
	by reference Exhibit&nbsp;3.2 of Form&nbsp;10-Q for the
	quarterly period ended September&nbsp;30, 1998).
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Bylaws (incorporated by
	reference to Exhibit&nbsp;3.3 of Form&nbsp;S-3 #333-58793).
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Indenture, between Meritage Corporation
	and Wells Fargo Bank, National Association.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.1.1*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Debt Security.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Specimen of Common Stock Certificate.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.3*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Certificate of Designation of Preferred
	Stock.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.3.1*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Certificate of Preferred Stock.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.4*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Warrant Agreement (including form of
	warrant certificate).
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">5.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of Snell&nbsp;&#38; Wilmer L.L.P. as to
	the legality of securities to be issued.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">12.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Statement re: Computation of Ratio of Earnings to
	Fixed Charges of Meritage Corporation and Ratio of Earnings to
	Combined Fixed Charges and Preferred Stock Dividends.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">23.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Independent Auditors.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">23.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Snell&nbsp;&#38; Wilmer L.L.P.
	(included in Exhibit&nbsp;5.1).
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">24.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Powers of Attorney (see signature page).
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">25.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Statement of Eligibility under the Trust
	Indenture Act of 1939 on Form&nbsp;T-1 of Wells Fargo Bank,
	Minnesota, National Association.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed by amendment or incorporated by
	reference in the event of an offering of the specified
	securities.
	</FONT></TD>
</TR>

</TABLE>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>3
<FILENAME>p66504ex4-1.txt
<DESCRIPTION>EX-4.1
<TEXT>
<PAGE>

                                                                     EXHIBIT 4.1



                              MERITAGE CORPORATION


                                       AND


                     WELLS FARGO BANK, NATIONAL ASSOCIATION


                                   AS TRUSTEE


   GUARANTEED TO THE EXTENT SET FORTH THEREIN BY THE GUARANTORS NAMED HEREIN.


                                     FORM OF

                                    INDENTURE


                        DATED AS OF _______________, 2002
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             PAGE
<S>                                                                          <C>
ARTICLE 1   DEFINITIONS AND INCORPORATION BY REFERENCE ....................    1

   Section 1.01   Certain Definitions .....................................    1
   Section 1.02   Other Definitions .......................................    4
   Section 1.03   Incorporation by Reference of Trust Indenture Act .......    5
   Section 1.04   Rules of Construction ...................................    5

ARTICLE 2   THE SECURITIES ................................................    5

   Section 2.01   Unlimited in Amount, Issuable in Series,
                   Form and Dating ........................................    5
   Section 2.02   Execution and Authentication ............................    8
   Section 2.03   Registrar and Paying Agent ..............................    8
   Section 2.04   Paying Agent to Hold Money in Trust .....................    9
   Section 2.05   Securityholder Lists ....................................    9
   Section 2.06   Transfer and Exchange ...................................   10
   Section 2.07   Replacement Securities ..................................   10
   Section 2.08   Outstanding Securities ..................................   10
   Section 2.09   Temporary Securities ....................................   11
   Section 2.10   Cancellation ............................................   11
   Section 2.11   Defaulted Interest ......................................   11
   Section 2.12   Special Record Dates ....................................   12
   Section 2.13   Global Securities .......................................   12
   Section 2.14   CUSIP Numbers ...........................................   13

ARTICLE 3   REDEMPTION ....................................................   14

   Section 3.01   Notices to Trustee ......................................   14
   Section 3.02   Selection of Securities to be Redeemed ..................   14
   Section 3.03   Notice of Redemption ....................................   15
   Section 3.04   Effect of Notice of Redemption ..........................   16
   Section 3.05   Deposit of Redemption Price .............................   16
   Section 3.06   Securities Redeemed or Purchased in Part ................   16

ARTICLE 4   COVENANTS .....................................................   16

   Section 4.01   Payment of Securities ...................................   16
   Section 4.02   Maintenance of Office or Agency .........................   17
   Section 4.03   Reports .................................................   17
   Section 4.04   Compliance Certificate ..................................   17
   Section 4.05   Taxes ...................................................   18
   Section 4.06   Stay, Extension and Usury Laws ..........................   18
   Section 4.07   Calculation of Original Issue Discount ..................   19

ARTICLE 5   SUCCESSORS ....................................................   19

   Section 5.01   When Company May Merge, Etc. ............................   19
   Section 5.02   Successor Person Substituted ............................   20

ARTICLE 6   DEFAULTS AND REMEDIES .........................................   20
</TABLE>


                                      -i-
<PAGE>
                                TABLE OF CONTENTS
                                   (CONTINUED)


<TABLE>
<CAPTION>
                                                                             PAGE
<S>                                                                          <C>
   Section 6.01   Events of Default .......................................   20
   Section 6.02   Acceleration ............................................   21
   Section 6.03   Other Remedies ..........................................   22
   Section 6.04   Waiver of Past Defaults .................................   22
   Section 6.05   Control by Majority .....................................   22
   Section 6.06   Limitation on Suits .....................................   23
   Section 6.07   Rights of Holders to Receive Payment ....................   23
   Section 6.08   Collection Suit by Trustee ..............................   23
   Section 6.09   Trustee May File Proofs of Claim ........................   24
   Section 6.10   Priorities ..............................................   24
   Section 6.11   Undertaking for Costs ...................................   25

ARTICLE 7   TRUSTEE .......................................................   25

   Section 7.01   Duties of Trustee .......................................   25
   Section 7.02   Rights of Trustee .......................................   26
   Section 7.03   Individual Rights of Trustee ............................   27
   Section 7.04   Trustee's Disclaimer ....................................   27
   Section 7.05   Notice of Defaults ......................................   27
   Section 7.06   Reports by Trustee to Holders ...........................   27
   Section 7.07   Compensation and Indemnity ..............................   28
   Section 7.08   Replacement of Trustee ..................................   28
   Section 7.09   Successor Trustee by Merger, Etc. .......................   30
   Section 7.10   Eligibility; Disqualification ...........................   30
   Section 7.11   Preferential Collection of Claims Against Company .......   30

ARTICLE 8   SATISFACTION AND DISCHARGE; DEFEASANCE ........................   30

   Section 8.01   Satisfaction and Discharge ..............................   30
   Section 8.02   Option to Effect Legal Defeasance or
                   Covenant Defeasance ....................................   31
   Section 8.03   Legal Defeasance and Discharge ..........................   31
   Section 8.04   Covenant Defeasance .....................................   32
   Section 8.05   Conditions to Legal or Covenant Defeasance ..............   32
   Section 8.06   Deposited Money and Government Securities to be
                   Held in Trust; Other Miscellaneous Provisions ..........   33
   Section 8.07   Repayment to Company ....................................   34
   Section 8.08   Reinstatement ...........................................   34

ARTICLE 9   SUPPLEMENTS, AMENDMENTS AND WAIVERS ...........................   35

   Section 9.01   Without Consent of Holders ..............................   35
   Section 9.02   With Consent of Holders .................................   35
   Section 9.03   Revocation and Effect of Consents .......................   36
   Section 9.04   Notation on or Exchange of Securities ...................   37
   Section 9.05   Trustee to Sign Amendments, Etc. ........................   37

ARTICLE 10  GUARANTEES ....................................................   37
</TABLE>


                                      -ii-
<PAGE>
                                TABLE OF CONTENTS
                                   (CONTINUED)


<TABLE>
<CAPTION>
                                                                             PAGE
<S>                                                                          <C>
   Section 10.01  Guarantee ...............................................   37

ARTICLE 11  MISCELLANEOUS .................................................   37

   Section 11.01  Indenture Subject to Trust Indenture Act ................   37
   Section 11.02  Notices .................................................   38
   Section 11.03  Communication by Holders With Other Holders .............   39
   Section 11.04  Certificate and Opinion as to Conditions Precedent ......   39
   Section 11.05  Statements Required in Certificate or Opinion ...........   39
   Section 11.06  Rules by Trustee and Agents .............................   40
   Section 11.07  Legal Holidays ..........................................   40
   Section 11.08  No Recourse Against Others ..............................   40
   Section 11.09  Counterparts ............................................   40
   Section 11.10  Governing Law ...........................................   40
   Section 11.11  Submission to Jurisdiction; Service of Process;
                   Waiver of Jury Trial ...................................   40
   Section 11.12  Severability ............................................   41
   Section 11.13  Effect of Headings, Table of Contents, Etc. .............   41
   Section 11.14  Successors and Assigns ..................................   41
   Section 11.15  No Interpretation of Other Agreements ...................   41
</TABLE>


                                     -iii-
<PAGE>
                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
TRUST INDENTURE
  ACT SECTION                                                INDENTURE SECTION
  -----------                                                -----------------

<S>                                                         <C>
  310 (a) (1) ...........................................                  7.10
      (a) (2) ...........................................                  7.10
      (a) (3) ...........................................                  N.A.
      (a) (4) ...........................................                  N.A.
      (a) (5) ...........................................                  7.10
      (b) ...............................................      7.03; 7.08; 7.10
      (c) ...............................................                  N.A.
      311 (a) ...........................................                  7.11
      (b) ...............................................                  7.11
      (c) ...............................................                  N.A.
      312 (a) ...........................................                  2.05
      (b) ...............................................                 11.03
      (c) ...............................................                 11.03
      313 (a) ...........................................                  7.06
      (b) (1) ...........................................                  N.A.
      (b) (2) ...........................................                  7.06
      (c) ...............................................           7.06; 11.02
      (d) ...............................................                  7.06
      314 (a) ...........................................    4.03; 10.02; 11.05
      (b) ...............................................                  N.A.
      (c) (1) ...........................................                 11.04
      (c) (2) ...........................................                 11.04
      (c) (3) ...........................................                  N.A.
      (d) ...............................................                  N.A.
      (e) ...............................................                 11.05
      (f) ...............................................                  N.A.
      315 (a) ...........................................     7.01(b)(ii), 7.02
      (b) ...............................................     7.02, 7.05; 10.02
      (c) ...............................................         7.01(a), 7.02
      (d) ...............................................         7.01(d), 7.02
      (e) ...............................................                  6.11
      316 (a) (last sentence) ...........................               2.13(f)
      (a) (1) (A) .......................................                  6.05
      (a) (1) (B) .......................................                  6.04
      (a) (2) ...........................................                  N.A.
      (b) ...............................................                  6.07
      (c) ...............................................            2.12; 9.03
      317 (a) (1) .......................................                  6.08
      (a) (2) ...........................................                  6.09
      (b) ...............................................                  2.04
      318 (a) ...........................................                 11.01
      (b) ...............................................                  N.A.
      (c) ...............................................                 11.01*
</TABLE>

----------

N.A. means not applicable.

*  THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE.
<PAGE>
            INDENTURE dated as of _______________, 2002 by and among Meritage
Corporation, a Maryland corporation, (the "Company"), the guarantors listed on
Schedule 1 hereto (herein called the "Guarantors") and Wells Fargo Bank,
National Association as Trustee (the "Trustee").

            The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures, notes
or other evidences of indebtedness to be issued in one or more series (the
"Securities"), as herein provided, up to such principal amount as may from time
to time be authorized in or pursuant to one or more resolutions of the Board of
Directors or by supplemental indenture.

            Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of each series of the
Securities:

                                   ARTICLE 1
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

SECTION 1.01 Certain Definitions.

            "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 purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, however, that beneficial ownership of 10% or
more of the Voting Securities of a Person shall be deemed to be a controlling
interest in such Person. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.

            "Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.

            "Board of Directors" means, with respect to any Person, the board of
directors of such Person (or, if such Person is a limited liability company, the
board of managers of such Person) or similar governing body or any authorized
committee thereof.

            "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or pursuant to authorization by the Board of Directors
and to be in full force and effect on the date of such certification (and
delivered to the Trustee, if appropriate).

            "Business Day" means any day other than a Legal Holiday.

            "Closing Date" means the date on which the Securities of a
particular series were originally issued under this Indenture.

            "Commission" means the Securities and Exchange Commission.
<PAGE>
            "Company" means the party named as such above until a successor
replaces it pursuant to this Indenture and thereafter means the successor.

            "Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer and
delivered to the Trustee.

            "Company Request" means a written request signed in the name of the
Company by a Chairman of the Board, a Chief Executive Officer, a President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.

            "Corporate Trust Office" shall mean the corporate trust office of
the Trustee, which shall initially be Wells Fargo Bank, National Association,
707 Wilshire Blvd., 17th Floor, Los Angeles, CA 90017.

            "Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.

            "Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depositary for such series by the Company,
which Depositary shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depositary" as used with
respect to the Securities of any series shall mean the Depositary with respect
to the Securities of such series.

            "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.

            "GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are applicable to the circumstances as of
the Closing Date.

            "Global Security" shall mean a Security issued to evidence all or a
part of any series of Securities that is executed by the Company and
authenticated and delivered by the Trustee to a Depositary or pursuant to such
Depositary's instructions, all in accordance with this Indenture and pursuant to
Section 2.01, which shall be registered as to principal and interest in the name
of such Depositary or its nominee.

            "Guarantee" means the guarantee by any Guarantor of the obligations
under this Indenture.

            "Holder" or "Securityholder" means a Person in whose name a Security
is registered in the register of Securities kept by the Registrar.

            "Indenture" means this Indenture, as amended or supplemented from
time to time.


                                       2
<PAGE>
            "Interest" when used with respect to an Original Issue Discount
Security that by its terms bears interest only after maturity, means interest
payable after maturity.

            "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 stated maturity or by
declaration of acceleration, call for redemption or otherwise.

            "Officer" means, with respect to any Person, a Chairman of the
Board, a Chief Executive Officer, a President, the Chief Financial Officer, any
Vice-President, the Treasurer, the Controller, the Secretary, any Assistant
Treasurer or any Assistant Secretary of such Person.

            "Officers' Certificate" means a certificate signed by two or more
Officers, one of whom must be the principal executive officer, principal
financial officer or principal accounting officer of the Company that meets the
requirements of Section 11.05 hereof.

            "Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company or the
Trustee.

            "Original Issue Discount Security" means any Security which provides
that an amount less than its principal amount is due and payable upon
acceleration after an Event of Default.

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

            "principal" of a Security means the principal amount due on the
stated maturity of the Security plus the premium, if any, on the Security.

            "Securities" means the Securities authenticated and delivered under
this Indenture.

            "Securities Act" means the Securities Act of 1933, as amended from
time to time.

            "stated maturity" when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.

            "Subsidiary" means, with respect to any specified Person: (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such


                                       3
<PAGE>
Person or (b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).

            "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA provided, however, that in the event the TIA; is amended after
such date, "TIA" means, to the extent required by such amendment, the Trust
Indenture Act, as amended.

            "Trust Officer" when used with respect to the Trustee, means any
officer with direct responsibility for the administration of this Indenture and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

            "Trustee" means the party named as such above until a successor
becomes such pursuant to this Indenture and thereafter means or includes each
party who is then a trustee hereunder, and if at any time there is more than one
such party, "Trustee" as used with respect to the Securities of any series means
the Trustee with respect to Securities of that series. If Trustees with respect
to different series of Securities are trustees under this Indenture, nothing
herein shall constitute the Trustees co-trustees of the same trust, and each
Trustee shall be the trustee of a trust separate and apart from any trust
administered by any other Trustee with respect to a different series of
Securities.

            "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that is 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 U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. 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 U.S. Government Obligation evidenced by such
depository receipt.

SECTION 1.02 Other Definitions.

<TABLE>
<CAPTION>
            Term                                                     Defined in Section
            ----                                                     ------------------
<S>                                                                  <C>
      "Bankruptcy Law"...........................................           6.01
      "Custodian"................................................           6.01
      "Event of Default".........................................           6.01
      "Legal Holiday"............................................          11.07
      "Paying Agent".............................................           2.03
      "Place of Payment".........................................           2.01
      "redemption price".........................................           3.03
      "Registrar"................................................           2.03
</TABLE>


                                       4
<PAGE>
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.

            Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:

            "indenture securities" means the Securities.

            "indenture securityholder" means a Securityholder.

            "indenture to be qualified" means this Indenture.

            "indenture trustee" or "institutional trustee" means the Trustee.

            "obligor" on the Securities means the Company and any Guarantor and
any successor obligor on the Securities.

            All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.

SECTION 1.04 Rules of Construction.

            Unless the context otherwise requires:

                        (i)   a term has the meaning assigned to it;

                        (ii)  an accounting term not otherwise defined has the
                              meaning assigned to it in accordance with GAAP;

                        (iii) "or" is not exclusive;

                        (iv)  words in the singular include the plural, and in
                              the plural include the singular;

                        (v)   provisions apply to successive events and
                              transactions; and

                        (vi)  references to sections of or rules under the
                              Securities Act shall be deemed to include
                              substitute, replacement of successor sections or
                              rules adopted by the SEC from time to time.

                                   ARTICLE 2
                                 THE SECURITIES

SECTION 2.01 Unlimited in Amount, Issuable in Series, Form and Dating.

                        The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more series.


                                       5
<PAGE>
There shall be established in or pursuant to a Board Resolution or an Officers'
Certificate pursuant to authority granted under a Board Resolution or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:

                  (a) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);

                  (b) any limit upon the aggregate principal amount of
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 this Article 2);

                  (c) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which the Securities of the series will
be issued;

                  (d) the date or dates on which the principal of the Securities
of the series is payable;

                  (e) the rate or rates that may be fixed or variable at which
the Securities of the series shall bear interest, if any, or the manner in which
such rate or rates shall be determined, the date or dates from which such
interest shall accrue, the interest payment dates on which such interest shall
be payable and the record dates for the determination of Holders to whom
interest is payable;

                  (f) the place or places where the principal of, premium, if
any, and any interest, if any, on Securities of the series shall be payable or
the method of such payment, if by wire transfer, mail or by other means, if
other than as provided herein;

                  (g) the price or prices at which (if any), the period or
periods within which (if any) and the terms and conditions upon which (if other
than as provided herein) Securities of the series may be redeemed, in whole or
in part, at the option, or as an obligation, of the Company;

                  (h) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the series, in whole or in part, pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof and the price
or prices at which and the period and periods within which and the terms and
conditions upon which Securities of the series shall be redeemed, purchased or
repaid pursuant to such obligation;

                  (i) the dates, if any, on which, and the price or prices at
which, the Securities of the series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such
repurchase obligations;

                  (j) if other than denominations of $1,000 and any multiple
thereof, the denominations in which Securities of the series shall be issuable;


                                       6
<PAGE>
                  (k) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02
hereof;

                  (l) any addition to, change in or deletion from the covenants
set forth in Articles 4 or 5 that applies to Securities of the series;

                  (m) any addition to, changes in or deletion from the Events of
Default with respect to the Securities of a particular series and any change in
the right of the Trustee or the requisite Holders of such Securities to declare
the principal amount thereof due and payable pursuant to Section 6.02 hereof;

                  (n) the Trustee for the series of Securities;

                  (o) the forms of the Securities of the series in bearer or
fully registered form (and, if in fully registered form, whether the Securities
will be issuable, in whole or in part, as Global Securities);

                  (p) the terms and conditions, if any, upon which such Global
Security or Securities may be exchanged in whole or in part for other individual
Securities, and the Depositary for such Global Security and Securities;

                  (q) the provisions, if any, relating to any security provided
for the Securities of the series;

                  (r) any other terms of the series (which terms may modify,
supplement or delete any provision of this Indenture with respect to
such series; provided, however, that no such term may modify or delete any
provision hereof if imposed by the TIA; and provided, further, that any
modification or deletion of the rights, duties or immunities of the Trustee
hereunder shall have been consented to in writing by the Trustee).

                  (s) the terms and conditions, if any, upon which the
Securities of the series shall be exchanged for or converted into other
securities of the Company or securities of another person;

                  (t) any depositories, interest rate calculation agents or
other agents with respect to Securities of such series if other than those
appointed herein;

                  (u) whether the Securities rank as senior Securities, senior
subordinated Securities or subordinated Securities or any combination thereof
and the terms of any such subordination;

                  (v) the form and terms of any guarantee of any Securities of
the series.

            All Securities of any series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution or Officers' Certificate or in any such indenture
supplemental hereto.


                                       7
<PAGE>
            The principal of and any interest on the Securities shall be payable
at the office or agency of the Company designated in the form of Security for
the series (each such place herein called the "Place of Payment"); provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as such address shall
appear in the register of Securities referred to in Section 2.03 hereof.

            Each Security shall be in one of the forms approved from time to
time by or pursuant to a Board Resolution or Officers' Certificate, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution or Officers' Certificate, the Company shall
deliver to the Trustee the Board Resolution or Officers' Certificate by or
pursuant to which such form of Security has been approved, which Board
Resolution or Officers' Certificate shall have attached thereto a true and
correct copy of the form of Security that has been approved by or pursuant
thereto.

            The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Security shall be dated the date of
its authentication.

SECTION 2.02 Execution and Authentication.

            One or more Officers shall sign the Securities for the Company by
manual or facsimile signature.

            If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.

            A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.

            The Trustee shall authenticate Securities for original issue upon
receipt of a Company Order.

            The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.

SECTION 2.03 Registrar and Paying Agent.

            The Company shall maintain an office or agency where Securities of a
particular series may be presented for registration of transfer or for exchange
(the "Registrar") and an office or agency where Securities of that series may be
presented for payment (a "Paying Agent"). The Registrar for a particular series
of Securities shall keep a register of the Securities of that series and of
their registration of transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional paying agents for each series of
Securities. The term "Paying Agent" includes any additional paying agent. The
Company may change any


                                       8
<PAGE>
Paying Agent, Registrar or co-Registrar without prior notice to any
Securityholder. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture.

            If the Company fails to maintain a Registrar or Paying Agent for any
series of Securities, the Trustee shall act as such. The Company or any of its
Affiliates may act as Paying Agent, Registrar or co-Registrar.

            The Company hereby appoints the Trustee the initial Registrar and
Paying Agent for each series of Securities unless another Registrar or Paying
Agent, as the case may be, is appointed prior to the time Securities of that
series are first issued.

SECTION 2.04 Paying Agent to Hold Money in Trust.

            Whenever the Company has one or more Paying Agents it will, prior to
each due date of the principal of or interest on, any Securities, deposit with a
Paying Agent a sum sufficient to pay the principal or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.

            The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent will hold in trust for the benefit of
the Securityholders of the particular series for which it is acting, or the
Trustee, all money held by the Paying Agent for the payment of principal or
interest on the Securities of such series, and that such Paying Agent will
notify the Trustee of any Default by the Company or any other obligor of the
series of Securities in making any such payment and 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. If
the Company or an Affiliate acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Securityholders of the particular
series for which it is acting all money held by it as Paying Agent. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon so doing, the Paying Agent (if other than the Company or an
Affiliate of the Company) shall have no further liability for such money. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Securities.

SECTION 2.05 Securityholder Lists.

            The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders, separately by series, and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders, separately by series, relating to such interest
payment date or request, as the case may be.


                                       9
<PAGE>
SECTION 2.06 Transfer and Exchange.

            Where Securities of a series are presented to the Registrar or a
co-Registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same series of other authorized
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall issue and the Trustee shall
authenticate Securities at the Registrar's request.

            No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.09, 2.13, 3.06 or 9.04).

            The Company need not issue, and the Registrar or co-Registrar need
not register the transfer or exchange of, (i) any Security of a particular
series during a period beginning at the opening of business 15 days before the
day of any selection of Securities of that series for redemption under Section
3.02 and ending at the close of business on the day of selection, or (ii) any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security of that series being redeemed in part.

SECTION 2.07 Replacement Securities.

            If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security of same series if the Company's and the Trustee's
requirements are met. The Trustee or the Company may require an indemnity bond
to be furnished which is sufficient in the judgment of both to protect the
Company, the Trustee, and any Agent from any loss which any of them may suffer
if a Security is replaced. The Company or the Trustee may charge such Holder for
its expenses in replacing a Security.

            Every replacement Security is an obligation of the Company and shall
be entitled to all the benefit of the Indenture equally and proportionately with
any and all other Securities of the same series.

SECTION 2.08 Outstanding Securities.

            The Securities of any series outstanding at any time are all the
Securities of that series authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation, and those described in this
Section as not outstanding.

            If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.

            If Securities are considered paid under Section 4.01, they cease to
be outstanding and interest on them ceases to accrue.


                                       10
<PAGE>
            Except as set forth in Section 2.09 hereof, a Security does not
cease to be outstanding because the Company or an Affiliate holds the Security.

            For each series of Original Issue Discount Securities, the principal
amount of such Securities that shall be deemed to be outstanding and used to
determine whether the necessary Holders have given any request, demand,
authorization, direction, notice, consent or waiver shall be the principal
amount of such Securities that could be declared to be due and payable upon
acceleration upon an Event of Default as of the date of such determination. When
requested by the Trustee, the Company shall advise the Trustee of such amount,
showing its computations in reasonable detail.

SECTION 2.09 Temporary Securities.

            Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities.

            Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture.

SECTION 2.10 Cancellation.

            The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return such
canceled Securities to the Company at the Company's written request. The Company
may not issue new Securities to replace Securities that it has paid or that have
been delivered to the Trustee for cancellation.

SECTION 2.11 Defaulted Interest.

            If the Company fails to make a payment of interest on any series of
Securities, the Company shall pay such defaulted interest plus (to the extent
lawful) any interest payable on the defaulted interest, in any lawful manner. It
may elect to pay such defaulted interest, plus any such interest payable on it,
to the Persons who are Holders of such Securities on which the interest is due
on a subsequent special record date. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each such
Security and the date of the proposed payment. The Company shall fix or cause to
be fixed any such record date and payment date for such payment; provided,
however, that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before
any such record date, the Company shall mail to Securityholders affected thereby
a notice that states the record date, payment date, and amount of such interest
to be paid.


                                       11
<PAGE>
SECTION 2.12 Special Record Dates.

                  (a) The Company may, but shall not be obligated to, set a
record date for the purpose of determining the identity of Holders entitled to
consent to any supplement, amendment or waiver permitted by this Indenture. If a
record date is fixed, the Holders of Securities of that series outstanding on
such record date, and no other Holders, shall be entitled to consent to such
supplement, amendment or waiver or revoke any consent previously given, whether
or not such Holders remain Holders after such record date. No consent shall be
valid or effective for more than 90 days after such record date unless consents
from Holders of the principal amount of Securities of that series required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.

                  (b) The Company may, but shall not be obligated to, fix any
day as a record date for the purpose of determining the Holders of any series of
Securities entitled to join in the giving or making of any notice of Default,
any declaration of acceleration, any request to institute proceedings or any
other similar direction. If a record date is fixed, the Holders of Securities of
that series outstanding on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided, however, that
no such action shall be effective hereunder unless taken on or prior to the date
90 days after such record date.

SECTION 2.13 Global Securities.

                  (a) Terms of Securities. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a series shall be issued in whole or in part in the form of one or
more Global Securities and the Depositary for such Global Security or
Securities.

                  (b) Transfer and Exchange. Notwithstanding any provisions to
the contrary contained in Section 2.06 of this Indenture and in addition
thereto, any Global Security shall be exchangeable pursuant to Section 2.06 of
this Indenture for securities registered in the names of Holders other than the
Depositary for such Security or its nominee only if (i) such Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depositary within 90 days of such event or (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as the Depositary shall direct in writing in
an aggregate principal amount equal to the principal amount of the Global
Security with like tenor and terms.

            Except as provided in this paragraph (b) of this Section, a Global
Security may not be transferred except as a whole by the Depositary with respect
to such Global Security to a nominee of such Depositary, by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such a
successor Depositary.


                                       12
<PAGE>
                  (c) Legend. Any Global Security issued hereunder shall bear a
legend in substantially the following form:

                  "Unless this certificate is presented by an authorized
            representative of The Depository Trust Company, a New York
            corporation ("DTC"), New York, New York, to the issuer or its agent
            for registration of transfer, exchange or payment, and any
            certificate issued is registered in the name of Cede & Co. or such
            other name as may be requested by an authorized representative of
            DTC (and any payment is made to Cede & Co. or such other entity as
            may be requested by an authorized representative of DTC), ANY
            TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
            ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
            & Co. has an interest herein."

                  "Transfer of this Global Security shall be limited to
            transfers in whole, but not in part, to nominees of DTC or to a
            successor thereof or such successor's nominee and limited to
            transfers made in accordance with the restrictions set forth in the
            Indenture referred to herein."

                  (d) Acts of Holders. The Depositary, as a Holder, may appoint
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under this Indenture.

                  (e) Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.01 hereof,
payment of the principal of and interest, if any, on any Global Security shall
be made to the Person specified therein.

                  (f) Consents, Declaration and Directions. Except as provided
in paragraph (e) of this Section, the Company, the Trustee and any Agent shall
treat a Person as the Holder of such principal amount of outstanding Securities
of such series represented by a Global Security as shall be specified in a
written statement of the Depositary with respect to such Global Security, for
purposes of obtaining any consents, declarations or directions required to be
given by the Holders pursuant to this Indenture.

SECTION 2.14 CUSIP Numbers.

            The Company in issuing any series of Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on such Securities or as contained in any notice and
that reliance may be placed only on the other identification numbers printed on
such Securities, and any such action relating to such notice shall not be
affected by any defect in or


                                       13
<PAGE>
omission of such numbers in such notice. The Company shall promptly notify the
Trustee of any change in the "CUSIP" numbers.

                                   ARTICLE 3
                                   REDEMPTION

SECTION 3.01 Notices to Trustee.

            If the Company elects to redeem Securities of any series pursuant to
any optional redemption provisions thereof, it shall furnish to the Trustee at
least 30 days, but not more than 60 days before a redemption date, an Officer's
Certificate which shall specify (i) the provisions of such Security or this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Securities of that series to be redeemed and
(iv) the redemption price.

            If the Company elects to reduce the principal amount of Securities
of any series to be redeemed pursuant to mandatory redemption provisions
thereof, it shall notify the Trustee of the amount of, and the basis for, any
such reduction. If the Company elects to credit against any such mandatory
redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with such notice.

SECTION 3.02 Selection of Securities to be Redeemed.

            If less than all the Securities of any series are to be redeemed, or
purchased in an offer to purchase at any time, the Trustee shall select the
Securities of that series to be redeemed or purchased as follows: (1) if the
Securities of such series are listed on any national securities exchange, in
compliance with the requirements of the principal national securities exchange
on which the Securities of that series are listed, or, (2) if the Securities of
that series are not listed on a national securities exchange, on a pro rata
basis, by lot or by such other method as the Trustee deems fair and appropriate.
In the event of a partial redemption or purchase by lot, the particular
Securities to be redeemed or purchased will be selected not less than 30 nor
more than 60 days prior to the redemption or purchase date by the Trustee from
Securities of that series outstanding and not previously called for redemption.

            The Trustee shall notify the Company promptly in writing of the
Securities or portions of Securities to be called for redemption or purchase
and, in the case of any Securities selected for partial redemption or purchase,
the principal amount thereof to be redeemed or purchased. Except as otherwise
provided as to any particular series of Securities, Securities and portions
thereof that the Trustee selects shall be in amounts equal to the minimum
authorized denomination for Securities of the series to be redeemed or purchased
or any integral multiple thereof, except that if all of the Securities of the
series are to be redeemed or purchased, the entire outstanding amount of the
Securities of the series held by such Holder, even if not equal to the minimum
authorized denomination for the Securities of that series, shall be redeemed or
purchased. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.


                                       14
<PAGE>
SECTION 3.03 Notice of Redemption.

            Except as otherwise provided as to any particular series of
Securities, at least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Securities
are to be redeemed.

            The notice shall identify the Securities of the series to be
redeemed and shall state:

                        (1) the redemption date;

                        (2) the redemption price fixed in accordance with the
      terms of the Securities of the series to be redeemed, plus accrued
      interest, if any, to the date fixed for redemption (the "redemption
      price");

                        (3) if any Security is being redeemed in part, the
      portion of the principal amount of such Security to be redeemed and that,
      after the redemption date, upon surrender of such Security, a new Security
      or Securities in principal amount equal to the unredeemed portion will be
      issued upon cancellation of the original Securities;

                        (4) the name and address of the Paying Agent;

                        (5) that Securities called for redemption must be
      surrendered to the Paying Agent to collect the redemption price;

                        (6) that, unless the Company defaults in payment of the
      redemption price, interest on Securities called for redemption ceases to
      accrue on and after the redemption date;

                        (7) the CUSIP number, if any, of the Securities to be
      redeemed;

                        (8) the paragraph of the Securities and/or the section
      of the Indenture pursuant to which the Securities called for redemption
      are being redeemed; and

                        (9) that no representation is made as to the correctness
      or accuracy of the CUSIP number, if any, listed in such notice or printed
      on the Securities.

            At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense, provided, however, that the
Company shall have delivered to the Trustee, at least 6 Business Days prior to
the date on which notice is to be given, an Officers' Certificate requesting
that the Trustee give such notice and setting forth the information to be stated
in such notice as provided in the preceding paragraph. The notice mailed in the
manner herein provided shall be conclusively presumed to have been duly given
whether or not the Holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice of the Holder of any Security
shall not affect the validity of the proceeding for the redemption of any other
Security.


                                       15
<PAGE>
SECTION 3.04 Effect of Notice of Redemption.

            Subject to the subordination provisions of any series of Securities,
once notice of redemption is mailed in accordance with Section 3.03 hereof,
Securities called for redemption become due and payable on the redemption date
for the redemption price. Upon surrender to the Paying Agent, such Securities
will be paid at the Redemption Price.

SECTION 3.05 Deposit of Redemption Price.

            On or before 10:00 a.m., New York City time, on the redemption or
purchase date, the Company shall deposit with the Trustee or Paying Agent (or,
if the Company or any Affiliate is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption or purchase price of all
Securities called for redemption on that date other than Securities that have
previously been delivered by the Company to the Trustee for cancellation. The
Paying Agent shall return to the Company any money not required for that
purpose.

            If the Company complies with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest shall cease to
accrue on the Securities (or the portions thereof) called for redemption or
purchase. If a Security is redeemed or purchased on or after an interest record
date but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Securities were
registered at the close of business on such record date. If any Securities
called for redemption or purchase shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
or purchase date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
accordance with the terms of the Securities of the series to be redeemed.

SECTION 3.06 Securities Redeemed or Purchased in Part.

            Upon surrender of a Security that is redeemed or purchased in part,
the Company shall issue and the Trustee shall authenticate for the Holder at the
expense of the Company a new Security of same series equal in principal amount
to the unredeemed or unpurchased portion of the Security surrendered.

                                   ARTICLE 4
                                   COVENANTS

SECTION 4.01 Payment of Securities.

            The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Securities on the dates and in the manner provided
in this Indenture and the Securities. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or an Affiliate, holds as of 10:00 a.m., New York City time, on that
date immediately available funds designated for and sufficient to pay all
principal, premium, if any, and interest then due.


                                       16
<PAGE>
            To the extent lawful, the Company shall pay interest on overdue
principal and overdue installments of interest at the rate per annum borne by
the applicable series of Securities.

SECTION 4.02 Maintenance of Office or Agency.

            The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee or Registrar) where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Division Trust Office of the
Trustee.

            The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company shall
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.

            The Company hereby designates the Division Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.

SECTION 4.03 Reports.

            The Company shall deliver to the Trustee within 15 days after it
files them 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 by rules and regulations prescribe) that the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act; provided, however, the Company shall not be required to
deliver to the Trustee any materials for which the Company has sought and
received confidential treatment by the Commission. The Company also shall comply
with the other provisions of TIA Section 314(a).

            Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

SECTION 4.04 Compliance Certificate.

                  (a) The Company or any Guarantors shall deliver to the
Trustee, within 90 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal


                                       17
<PAGE>
year has been made under the supervision of the signing Officers (one of whom
shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company) with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Securities
is prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

                  (b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.

SECTION 4.05 Taxes.

            The Company shall pay prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
by appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of any Securities.

SECTION 4.06 Stay, Extension and Usury Laws.

            The Company and any Guarantors covenant (to the extent that it may
lawfully do so) that they shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that they may lawfully do so) hereby expressly
waive all benefits or advantages of any such law, and covenant that they shall
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee,


                                       18
<PAGE>
but shall suffer and permit the execution of every such power as though no such
law has been enacted.

SECTION 4.07 Calculation of Original Issue Discount.

            If, as of the end of any fiscal year of the Company, the Company has
any outstanding Original Issue Discount Securities under the Indenture, the
Company shall file with the Trustee promptly following the end of such fiscal
year (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on such Original Issue
Discount Securities as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be required
under the Internal Revenue Code of 1986, as amended from time to time.

                                   ARTICLE 5
                                   SUCCESSORS

SECTION 5.01 When Company May Merge, Etc.

            In addition to provisions applicable to a particular series of
Securities, the Company shall not directly or indirectly: (i) consolidate or
merge with or into another Person (whether or not the Company is the surviving
Person), or (ii) sell, lease, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company and its
Subsidiaries in one or more related transactions to any Person unless:

                        (1) either (x) the Company is the surviving Person; or
      (y) the Person formed by or surviving any such consolidation or merger (if
      other than the Company) or to which such sale, lease, assignment,
      transfer, conveyance or other disposition shall have been made is a Person
      organized or existing under the laws of the United States, any state
      thereof or the District of Columbia;

                        (2) the Person formed by or surviving any such
      consolidation or merger (if other than the Company) or the Person to which
      such sale, lease, assignment, transfer, conveyance or other disposition
      shall have been made assumes (by supplemental indenture reasonably
      satisfactory to the Trustee) all the obligations of the Company under the
      Securities and this Indenture; and

                        (3) immediately after the transaction no Default or
      Event of Default exists.

The Company shall deliver to the Trustee on or prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.


                                       19
<PAGE>
SECTION 5.02 Successor Person Substituted.

            Upon any consolidation or merger, or any sale, assignment, transfer,
conveyance or other disposition (other than by lease) of all or substantially
all of the assets of the Company in accordance with Section 5.01 hereof, the
successor Person formed by such consolidation or into which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor Person and not to the Company), and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein; provided,
however, that the predecessor Company shall not be relieved from the obligation
to pay principal of, and interest on, any Securities except in the case of a
sale, assignment, transfer, conveyance or other disposition of all of the
Company's assets that meets the requirements of Section 5.01 hereof.

                                   ARTICLE 6
                              DEFAULTS AND REMEDIES

SECTION 6.01 Events of Default.

            An "Event of Default" occurs with respect to Securities of any
particular series if, unless as otherwise provided in the establishing Board
Resolution, Officers' Certificate or supplemental indenture hereto:

                        (1) the Company defaults in the payment of interest on
      any Security of that series when the same becomes due and payable and the
      Default continues for a period of 30 days;

                        (2) the Company defaults in the payment, when due, of
      the principal of, or premium, if any, on any Security of that series when
      the same becomes due and payable at maturity, upon redemption (including
      in connection with any offer to purchase under the terms of such
      Securities) or otherwise;

                        (3) an Event of Default, as defined in the Securities of
      that series, occurs and is continuing, or the Company fails to comply with
      any of its other agreements in the Securities of that series or in this
      Indenture with respect to that series and the Default continues for the
      period and after the notice specified below;

                        (4) the Company 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;


                                       20
<PAGE>
                              (C) consents to the appointment of a Custodian of
            it or for all or substantially all of its property;

                              (D) makes a general assignment for the benefit of
            its creditors; or

                              (E) admits in writing its inability generally to
            pay its debts as the same become due.

                        (5) a court of competent jurisdiction enters an order or
      decree under any Bankruptcy Law that:

                              (A) is for relief against the Company in an
            involuntary case;

                              (B) appoints a Custodian of the Company or for all
            or substantially all of its property; or

                              (C) orders the liquidation of the Company; and the
            order or decree remains unstayed and in effect for 60 days.

                        (6) any other Event of Default provided with respect to
      Securities of that series which is specified in a Board Resolution,
      Officers' Certificate or supplemental indenture establishing that series
      of Securities.

            The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

            A Default under clause (3) above is not an Event of Default with
respect to a particular series of Securities until the Trustee or the Holders of
at least 50% in principal amount of the then outstanding Securities of that
series notify the Company of the Default and the Company does not cure the
Default within 60 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." Such notice shall be given by the Trustee if so requested in writing
by the Holders of 50% of the principal amount of the then outstanding Securities
of that series.

SECTION 6.02 Acceleration.

            If an Event of Default with respect to Securities of any series
(other than an Event of Default specified in clauses (4) and (5) of Section
6.01) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 50% in principal amount of the then outstanding Securities
of that series by notice to the Company and the Trustee, may, subject to any
prior notice requirements set forth in any supplemental indenture, declare the
unpaid principal (or, in the case of Original Issue Discount Securities, such
lesser amount as may be provided for in such Securities) of and any accrued
interest on all the Securities of that series to be due and payable on the
Securities of that series. Upon such declaration the principal (or such lesser
amount) and interest shall be due and payable immediately. If an Event of
Default


                                       21
<PAGE>
specified in clause (4) or (5) of Section 6.01 occurs, all of such amount shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. The Holders of a majority in principal
amount of the then outstanding Securities of that series by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
with respect to that series have been cured or waived except nonpayment of
principal (or such lesser amount) or interest that has become due solely because
of the acceleration.

SECTION 6.03 Other Remedies.

            If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may pursue any available remedy to collect
the payment of principal or interest on the Securities of that series or to
enforce the performance of any provision of the Securities of that series or
this Indenture.

            The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

SECTION 6.04 Waiver of Past Defaults.

            Subject to Section 6.02, the Holders of not less than a majority in
aggregate principal amount of the then outstanding Securities of any series, by
notice to the Trustee, may on behalf of the Holders of the Securities of that
series, waive an existing Default or Event of Default with respect to that
series and its consequences except a continuing Default or Event of Default in
the payment of the principal (including any mandatory sinking fund or like
payment) of, premium, if any, or interest on any Security of that series
(including in connection with an offer to purchase); provided, however, that the
Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration and
its consequences. 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 impair any right consequent thereon.

SECTION 6.05 Control by Majority.

            The Holders of a majority in principal amount of the then
outstanding Securities of any series may direct the time, method and place of
conducting any proceeding for exercising any remedy with respect to that series
available to the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders of Securities of that series, or that may involve the
Trustee in personal liability. The Trustee may take any other action which it
deems proper that is not inconsistent with any such direction. Notwithstanding
any provision to the contrary in this Indenture, the Trustee shall not


                                       22
<PAGE>
be obligated to take any action with respect to the provisions of the Section
6.02 unless directed to do so pursuant to this Section 6.05.

SECTION 6.06 Limitation on Suits.

            A Holder of Securities of any series may not pursue a remedy with
respect to this Indenture or the Securities unless:

                        (1) the Holder gives to the Trustee written notice of a
      continuing Event of Default with respect to that series;

                        (2) the Holders of at least 25% in principal amount of
      the then outstanding Securities of that series make a written request to
      the Trustee to pursue the remedy;

                        (3) such Holder or Holders offer, and, if requested,
      provide to the Trustee indemnity satisfactory to the Trustee against any
      loss, liability or expense;

                        (4) the Trustee does not comply with the request within
      60 days after receipt of the request and the offer and, if requested, the
      provision of indemnity; and

                        (5) during such 60-day period the Holders of a majority
      in principal amount of the then outstanding Securities of that series do
      not give the Trustee a direction inconsistent with the request.

No Holder of any series of Securities may use this Indenture to prejudice the
rights of another Holder of Securities of that series or to obtain a preference
or priority over another Holder of Securities of that series.

SECTION 6.07 Rights of Holders to Receive Payment.

            Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal, premium, if any, and
interest on the Security, on or after the respective due dates expressed in the
Security (including in connection with any offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not, except as provided in the subordination provisions, if any, applicable to
such Security, be impaired or affected without the consent of the Holder.

SECTION 6.08 Collection Suit by Trustee.

            If an Event of Default specified in Section 6.01(1) or (2) hereof
occurs and is continuing with respect to Securities of any series, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal (or such portion of the principal
as may be specified as due upon acceleration at that time in the terms of that
series of Securities), premium, if any, and interest, remaining unpaid on the
Securities of that series then outstanding, together with (to the extent lawful)
interest on overdue principal and interest, and such further amount as shall be
sufficient to cover the costs and, to the


                                       23
<PAGE>
extent lawful, expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07 hereof.

SECTION 6.09 Trustee May File Proofs of Claim.

            The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due to the Trustee under Section 7.07 hereof) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor on the Securities), its creditors or its property and shall be entitled
to and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims, and any custodian in any such
judicial proceedings is hereby authorized by each Holder 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, its agent and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.

SECTION 6.10 Priorities.

            If the Trustee collects any money with respect to Securities of any
series pursuant to this Article, it shall pay out the money in the following
order:

                        First:      to the Trustee, its agents and attorneys for
                                    amounts due under Section 7.07 hereof,
                                    including payment of all compensation,
                                    expense and liabilities incurred, and all
                                    advances made, by the Trustee and the costs
                                    and expenses of collection;

                        Second:     in accordance with the subordination
                                    provisions, if any, of the Securities of
                                    such series;

                        Third:      to Securityholders for amounts due and
                                    unpaid on the Securities of such series for
                                    principal, premium, if any, and interest,
                                    ratably, without preference or priority of
                                    any kind, according to the amounts due and
                                    payable on the Securities of such series for
                                    principal, premium, if any, and interest,
                                    respectively; and

                        Fourth:     to the Company or to such party as a court
                                    of competent jurisdiction shall direct.


                                       24
<PAGE>
            The Trustee may fix a record date and payment date for any payment
to Holders of Securities of any series pursuant to this Section. The Trustee
shall notify the Company in writing reasonably in advance of any such record
date and payment date.

SECTION 6.11 Undertaking for Costs.

            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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defense made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities of any series.

                                   ARTICLE 7
                                    TRUSTEE

SECTION 7.01 Duties of Trustee.

                  (a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

                  (b) Except during the continuance of an Event of Default known
to the Trustee:

                        (i)   the duties of the Trustee shall be determined
                              solely by the express provisions of this Indenture
                              or the TIA and the Trustee need perform only those
                              duties that are specifically set forth in this
                              Indenture or the TIA and no others, and no implied
                              covenants or obligations shall be read into this
                              Indenture against the Trustee; and

                        (ii)  in the absence of bad faith on its part, the
                              Trustee may conclusively rely, as to the truth of
                              the statements and the correctness of the opinions
                              expressed therein, upon certificates or opinions
                              furnished to the Trustee and conforming to the
                              requirements of this Indenture. However, in the
                              case of any certificates or opinions which by any
                              provision hereof are specifically required to be
                              furnished to the Trustee, the Trustee shall
                              examine the certificates and opinions to determine
                              whether or not they conform to the requirements of
                              this Indenture (but need not confirm or
                              investigate the accuracy of mathematical
                              calculations or other facts stated therein).


                                       25
<PAGE>
                  (c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                        (i)   this paragraph does not limit the effect of
                              paragraph (b) of this Section;

                        (ii)  the Trustee shall not be liable for any error of
                              judgment made in good faith by a responsible
                              officer of the Trustee, unless it is proved that
                              the Trustee was negligent in ascertaining the
                              pertinent facts; and

                        (iii) the Trustee shall not be liable with respect to
                              any action it takes or omits to take in good faith
                              in accordance with a direction received by it
                              pursuant to Section 6.05 hereof.

                  (d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section.

                  (e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee may refuse
to perform any duty or exercise any right or power, including without
limitation, the provisions of Section 6.05 hereof, unless it receives security
and indemnity satisfactory to it against any loss, liability or expense.

                  (f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Absent written instruction from the Company, the Trustee shall not be required
to invest any such money. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.

SECTION 7.02 Rights of Trustee.

            Subject to TIA Section 315(a) through (d):

                  (a) The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper person.
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, other
evidence of indebtedness 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.

                  (b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.

                  (c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.


                                       26
<PAGE>
                  (d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers under the Indenture, unless the Trustee's conduct constitutes
negligence.

                  (e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

                  (f) The Trustee may consult with counsel of its selection and
may rely upon the advice of such counsel or any Opinion of Counsel.

                  (g) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless written notice of any event that is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities generally or the Securities of a
particular series, as the case may be, and this Indenture.

                  (h) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as duties.

SECTION 7.03 Individual Rights of Trustee.

            The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to TIA
Sections 310(b) and 311.

SECTION 7.04 Trustee's Disclaimer.

            The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.

SECTION 7.05 Notice of Defaults.

            If a Default or Event of Default with respect to the Securities of
any series occurs and is continuing and if it is known to the Trustee, the
Trustee shall mail to all Holders of Securities of that series a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any such Security, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of such
Securityholders.

SECTION 7.06 Reports by Trustee to Holders.

            Within 60 days after May 15 in each year, the Trustee with respect
to any series of Securities shall mail to Holders of Securities of that series
as provided in TIA Section 313(c) a


                                       27
<PAGE>
brief report dated as of such May 15 that complies with TIA Section 313(a) (if
such report is required by TIA Section 313(a)). The Trustee shall also comply
with TIA Section 313(b)(2).

            A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the Commission and each stock
exchange on which any of the Securities are listed, as required by TIA Section
313(d). The Company shall notify the Trustee when the Securities are listed on
any stock exchange, and of any delisting thereof.

SECTION 7.07 Compensation and Indemnity.

            The Company shall pay to the Trustee from time to time such
compensation as shall be agreed upon in writing for its services hereunder. The
Company shall reimburse the Trustee upon written request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and out-of-pocket expenses of the Trustee's agents and
counsel.

            The Company shall indemnify each of the Trustee or any predecessor
Trustee for any loss, liability, damage, claims or expenses, including taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee) incurred by it, without negligence or bad faith on its part, in
connection with the acceptance or administration of this Indenture and its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.

            To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee in its capacity as Trustee, except money or property
held in trust to pay principal and interest on particular Securities. Such lien
will survive the satisfaction and discharge of this Indenture. If the Trustee
incurs expenses or renders services after an Event of Default specified in
Section 6.01(4) or (5) hereof occurs, the expenses and the compensation for the
services will be intended to constitute expenses of administration under any
applicable Bankruptcy Law.

            This Section 7.07 shall survive the resignation or renewal of the
Trustee and the termination of this Indenture.

SECTION 7.08 Replacement of Trustee.

            A resignation or removal of the Trustee with respect to one or more
or all series of Securities and appointment of a successor Trustee shall become
effective only upon the successor Trustee's acceptance of appointment as
provided in this Section.

            The Trustee may resign with respect to one or more or all series of
Securities by so notifying the Company in writing. The Holders of a majority in
principal amount of the then outstanding Securities of any series may remove the
Trustee as to that series by so notifying the Trustee in writing and may appoint
a successor Trustee with the Company's consent. The Company may remove the
Trustee with respect to one or more or all series of Securities if:


                                       28
<PAGE>
                        (1)   the Trustee fails to comply with Section 7.10
                              hereof;

                        (2)   the Trustee is adjudged a bankrupt or an
                              insolvent;

                        (3)   a receiver or other public officer takes charge of
                              the Trustee or its property; or

                        (4)   the Trustee becomes incapable of acting.

            If, as to any series of Securities, the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall promptly appoint a successor Trustee for that series. Within one
year after the successor Trustee with respect to any series takes office, the
Holders of a majority in principal amount of the then outstanding Securities of
that series may appoint a successor Trustee to replace the successor Trustee
appointed by the Company. If a successor Trustee as to a particular series does
not take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of at least 10% in principal
amount of the then outstanding Securities of that series may petition any court
of competent jurisdiction for the appointment of a successor Trustee.

            If the Trustee fails to comply with Section 7.10 hereof with respect
to any series, any Holder of Securities of that series who satisfies the
requirements of TIA Section 310(b) may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee for that series.

            A successor Trustee as to any series of Securities shall deliver a
written acceptance of its appointment to the retiring Trustee and to the
Company. Immediately after that, the retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee (subject to the lien
provided for in Section 7.07 hereof), the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture as to that series.
The successor Trustee shall mail a notice of its succession to the Holders of
Securities of that series.

            Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring trustee.

            In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, 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
wherein each successor Trustee shall accept such appointment and that (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)
shall contain such provisions as shall be 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
or desirable to provide for or facilitate the administration of the


                                       29
<PAGE>
trusts hereunder by more than one Trustee; provided, however, that nothing
herein or in such supplemental Indenture shall constitute such Trustee
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust hereunder separate and apart from any trust hereunder administered by any
other such Trustee.

            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.

SECTION 7.09 Successor Trustee by Merger, Etc.

            If the Trustee as to any series of Securities consolidates, merges
or converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee as to that series.

SECTION 7.10 Eligibility; Disqualification.

            Each series of Securities shall always have a Trustee who satisfies
the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee as to any
series of Securities shall always have a combined capital and surplus of at
least $25,000,000 as set forth in its most recent published annual report of
condition. The Trustee is subject to TIA Section 310(b).

SECTION 7.11 Preferential Collection of Claims Against Company.

            The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

                                   ARTICLE 8
                     SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 8.01 Satisfaction and Discharge.

            This Indenture will be discharged and will cease to be of further
effect with respect to any series of Securities issued hereunder, when:

                        (1)   either:

                              (a) all Securities of such series that have been
                  authenticated (except lost, stolen or destroyed Securities
                  that have been replaced or paid and Securities for whose
                  payment money has theretofore been deposited in trust and
                  thereafter repaid to the Company) have been delivered to the
                  Trustee for cancellation; or

                              (b) all Securities of such series that have not
                  been delivered to the Trustee for cancellation have become due
                  and payable by


                                       30
<PAGE>
                  reason of the making of a notice of redemption or otherwise or
                  will become due and payable within one year and the Company or
                  any Guarantor has irrevocably deposited or caused to be
                  deposited with the Trustee as trust funds in trust solely for
                  the benefit of the Holders, cash in U.S. dollars, non-callable
                  U.S. Government Obligations, or a combination thereof, in such
                  amounts as will be sufficient without consideration of any
                  reinvestment of interest, to pay and discharge the entire
                  indebtedness on the Securities not delivered to the Trustee
                  for cancellation for principal, premium and accrued interest
                  to the date of maturity or redemption:

                        (2) no Default or Event of Default with respect to such
      series of Securities shall have occurred and be continuing on the date of
      such deposit or shall occur as a result of such deposit and such deposit
      will not result in a breach or violation of, or constitute a default
      under, any other material instrument to which the Company or any Guarantor
      is a party to or by which the Company or any Guarantor is bound;

                        (3) the Company or any Guarantor has paid or caused to
      be paid all sums payable by it under this Indenture with respect to such
      series of Securities; and

                        (4) the Company has delivered irrevocable instructions
      to the Trustee under this Indenture to apply the deposited money toward
      the payment of the Securities of such series at maturity or the redemption
      date, as the case may be.

In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

            Notwithstanding, the satisfaction and discharge of this Indenture
with respect to a series of Securities, if money shall have been deposited with
the Trustee pursuant to subclause (b) of clause (1) of this Section, the
provisions of Section 8.06 shall survive.

SECTION 8.02 Option to Effect Legal Defeasance or Covenant Defeasance.

            Unless Section 8.03 or 8.04 is otherwise specified to be
inapplicable to Securities of a series, the Company may, at the option of its
Board of Directors evidenced by a resolution set forth in an Officers'
Certificate, at any time, elect to have either Section 8.03 or 8.04 hereof be
applied to all outstanding Securities of any such series upon compliance with
the conditions set forth below in this Article Eight.

SECTION 8.03 Legal Defeasance and Discharge.

            Upon the Company's exercise under Section 8.02 hereof of the option
applicable to this Section 8.03, the Company and any Guarantor shall, subject to
the satisfaction of the conditions set forth in Section 8.05 hereof, be deemed
to have been discharged from their respective obligations with respect to all
outstanding Securities of any series on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company and any Guarantor shall be deemed to have paid
and discharged the entire Indebtedness represented by the outstanding Securities
of a series, which


                                       31
<PAGE>
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.06 hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Securities and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 8.05 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium and interest on such Securities when such payments are due, (b) the
Company's obligations with respect to such Securities under Article 2 and
Section 4.03 hereof, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's or any Guarantors' obligations in
connection therewith and (d) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.03
notwithstanding the prior exercise of its option under Section 8.04 hereof.

SECTION 8.04 Covenant Defeasance.

            Upon the Company's exercise under Section 8.02 hereof of the option
applicable to this Section 8.04, the Company or any Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 8.05 hereof, be released
from their respective obligations under the covenants contained in Sections
4.03, 4.04, 4.05, 4.06, 4.07 and 4.08, and Section 5.01 hereof with respect to
the outstanding Securities of any series on and after the date the conditions
set forth in Section 8.05 are satisfied (hereinafter, "Covenant Defeasance"),
and the Securities of such series shall thereafter be deemed 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 such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Securities shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Securities of any series, the Company or any
Guarantors may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such 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 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Securities shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.02
hereof of the option applicable to this Section 8.04 hereof, subject to the
satisfaction of the conditions set forth in Section 8.05 hereof, Sections
6.01(3) through 6.01(6) hereof shall not constitute Events of Default.

SECTION 8.05 Conditions to Legal or Covenant Defeasance.

            The following shall be the conditions to the application of either
Section 8.03 or 8.04 hereof to the outstanding Securities of any series. In
order to exercise either Legal Defeasance or Covenant Defeasance:

                  (a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a


                                       32
<PAGE>
nationally recognized firm of independent public accountants, to pay the
principal of, premium and interest on the outstanding Securities on the stated
date for payment thereof or on the applicable redemption date, as the case may
be;

                  (b) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal 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 Legal Defeasance had not occurred;

                  (c) in the case of an election under Section 8.04 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Securities 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;

                  (d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Securities pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(4) or 6.01(5)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;

                  (e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;

                  (f) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and

                  (g) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.

SECTION 8.06 Deposited Money and Government Securities to be Held in Trust;
             Other Miscellaneous Provisions.

            Subject to Section 8.07 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying


                                       33
<PAGE>
trustee, collectively for purposes of this Section 8.06, the "Trustee") pursuant
to Section 8.01 or Section 8.05 hereof in respect of the outstanding Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of such Securities of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.

            The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 8.05 hereof 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 the
outstanding Securities.

            Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable U.S. Government Obligations held by it
as provided in Section 8.05 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.05(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.

SECTION 8.07 Repayment to Company.

            Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Securities and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Securities shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
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 notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

SECTION 8.08 Reinstatement.

            If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable U.S. Government Securities in accordance with Section
8.01, 8.03 or 8.04 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.03 or 8.04 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.03 or 8.04 hereof, as the case


                                       34
<PAGE>
may be; provided, however, that, if the Company makes any payment of principal
of, premium, if any, or interest on any Securities following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money held by the Trustee or
Paying Agent.

                                   ARTICLE 9
                       SUPPLEMENTS, AMENDMENTS AND WAIVERS

SECTION 9.01 Without Consent of Holders.

            The Company and the Trustee as to any series of Securities may
supplement or amend this Indenture or the Securities without notice to or the
consent of any Securityholder:

                        (1) to cure any ambiguity, defect or inconsistency;

                        (2) to comply with Article 5;

                        (3) to comply with any requirements of the Commission in
      connection with the qualification of this Indenture under the TIA;

                        (4) to provide for uncertificated Securities in addition
      to or in place of certificated Securities;

                        (5) to add to, change or eliminate any of the provisions
      of this Indenture in respect of one or more series of Securities;
      provided, however, that any such addition, change or elimination (A) shall
      neither (i) apply to any Security of any series created prior to the
      execution of such supplemental indenture and entitled to the benefit of
      such provision nor (ii) modify the rights of the Holder of any such
      Security with respect to such provision or (B) shall become effective only
      when there is no outstanding Security of any series created prior to the
      execution of such supplemental indenture and entitled to the benefit of
      such provision;

                        (6) to make any change that does not adversely affect in
      any material respect the interests of the Securityholders of any series;
      or

                        (7) to establish additional series of Securities as
      permitted by Section 2.01 hereof.

SECTION 9.02 With Consent of Holders.

            Subject to Section 6.07, the Company and the Trustee as to any
series of Securities may amend this Indenture or the Securities of that series
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities of each series affected by the amendment, with each
such series voting as a separate class. The Holders of a majority in principal
amount of the then outstanding Securities of any series may also waive
compliance in a particular instance by the Company with any provision of this
Indenture with respect to that series or the Securities of that series;
provided, however, that without the consent of each Securityholder affected, an
amendment or waiver may not:


                                       35
<PAGE>
                        (1) reduce the percentage of the principal amount of
      Securities whose Holders must consent to an amendment or waiver;

                        (2) reduce the amount of, or postpone the date fixed
      for, the payment of any sinking fund or analogous provision;

                        (3) reduce the rate of, or change the time for payment
      of interest on, any Security;

                        (4) reduce the principal of or change the fixed maturity
      of any Security or waive a redemption payment or alter the redemption
      provisions with respect thereto;

                        (5) make any Security payable in money other than that
      stated in the Security (including defaulted interest);

                        (6) reduce the principal amount of Original Issue
      Discount Securities payable upon acceleration of the maturity thereof;

                        (7) make any change in Section 6.04, 6.07 or this
      Section 9.02; or

                        (8) waive a default in the payment of the principal of,
      or interest on, any Security, except to the extent otherwise provided for
      in Section 6.02 hereof.

            An amendment or waiver under this Section that waives, changes or
eliminates any covenant or other provision of this Indenture that has expressly
been included solely for the benefit of one or more particular series of
Securities, or that 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.

            It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.

            The Company shall mail supplemental indentures to Holders upon
request. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture or waiver.

SECTION 9.03 Revocation and Effect of Consents.

            Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security; provided, however, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of a Security if the Trustee receives
the written notice of revocation before the date on which the amendment,


                                       36
<PAGE>
supplement or waiver becomes effective. An amendment, supplement or waiver shall
become effective in accordance with its terms and thereafter shall bind every
Holder of Securities of that series.

SECTION 9.04 Notation on or Exchange of Securities.

            If an amendment, supplement or waiver changes the terms of a
Security: (a) the Trustee may require the Holder of the Security to deliver it
to the Trustee, the Trustee may, at the written direction of the Company and at
the Company's expense, place an appropriate notation on the Security about the
changed terms and return it to the Holder and the Trustee may place an
appropriate notation on any Security thereafter authenticated; or (b) if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.

            Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment, supplement or
waiver.

SECTION 9.05 Trustee to Sign Amendments, Etc.

            Subject to the preceding sentence, the Trustee shall sign any
amendment of supplement Indenture if the same does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver that
affects the Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise. The Company may not sign an amendment or supplemental
Indenture until the Board of Directors approves it. In executing any amended or
supplemental Indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01) shall be fully protected in relying upon, in addition to the
documents required by Section 11.04 hereof, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
Indenture is authorized or permitted by this Indenture.

                                   ARTICLE 10
                                   GUARANTEES

SECTION 10.01 Guarantee.

            Any series of Securities may be guaranteed by one or more of the
Guarantors. The terms and the form of any such Guarantee will be established in
the manner contemplated by Section 2.01 for that particular series of
Securities.

                                   ARTICLE 11
                                  MISCELLANEOUS

SECTION 11.01 Indenture Subject to Trust Indenture Act.

            This Indenture is subject to the provisions of the TIA that are
required to be part of this Indenture, and shall, to the extent applicable, be
governed by such provisions.


                                       37
<PAGE>
SECTION 11.02 Notices.

            Any notice or communication is duly given if in writing and
delivered in person or sent by first-class mail (registered or certified, return
receipt requested), telecopier or overnight air courier guaranteeing next-day
delivery, addressed as follows:

            If to the Company and/or any Guarantor:

                        Meritage Corporation
                        6613 North Scottsdale Road, Suite 200
                        Scottsdale, Arizona  85250
                        Attention:  Larry W. Seay
                        Telephone:  (480) 998-8700
                        Facsimile:   (480) 998-9178

            with a copy to:

                        Snell & Wilmer L.L.P.
                        One Arizona Center
                        400 E. Van Buren Street
                        Phoenix, Arizona  85004
                        Attention:  Steven D. Pidgeon, Esq.
                        Telephone:  (602) 382-6000
                        Facsimile:   (602) 382-6070

            If to the Trustee:

                        Wells Fargo Bank, National Association
                        707 Wilshire Blvd., l7th Floor
                        Los Angeles, CA  90017
                        Attention:  Corporate Trust Division
                        Telephone:  (213) 614-3349
                        Facsimile:   (213) 614-3355

            The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

            All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next-day delivery.

            Any notice or communication to a Securityholder shall be mailed by
first-class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to his address shown on the
register kept by the Registrar. Failure to mail a notice or communication to a
Security holder or any defect in it shall not affect its sufficiency with
respect to other Securityholders. If the Company mails a notice or communication
to


                                       38
<PAGE>
Securityholders, it shall mail a copy to the Trustee at the same time. Any
notice or communication shall also be mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA.

            If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

SECTION 11.03 Communication by Holders With Other Holders.

            Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

SECTION 11.04 Certificate and Opinion as to Conditions Precedent.

            Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:

                  (a) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

                  (b) an Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, such action
is authorized or permitted by this Indenture and that all such conditions
precedent have been complied with.

SECTION 11.05 Statements Required in Certificate or Opinion.

            Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the certificate
provided pursuant to TIA Section 314(a)(4) shall include:

                        (1) a statement that the Person making such certificate
      or opinion has read such covenant or condition;

                        (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 such Person, he
      or she has made such examination or investigation as is necessary to
      enable him or her to express an informed opinion as to whether or not such
      covenant or condition has been complied with; and

                        (4) a statement as to whether or not, in the opinion of
      such Person, such condition or covenant has been complied with; provided,
      however, that with


                                       39
<PAGE>
      respect to matters of fact an Opinion of Counsel may rely on an officer's
      certificate or certificates of public officials.

SECTION 11.06 Rules by Trustee and Agents.

            The Trustee as to Securities of any series may make reasonable rules
for action by or at a meeting of Holders of Securities of that series. The
Registrar and any Paying Agent or Authenticating Agent may make reasonable rules
and set reasonable requirements for their functions.

SECTION 11.07 Legal Holidays.

            A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York, New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.

SECTION 11.08 No Recourse Against Others.

            No past, present or future director, officer, employee, manager,
securityholder or incorporator, as such, of the Company or any successor Person
shall have any liability for any obligations of the Company or any Guarantor
under any series of Securities, any guarantees thereof, or the Indenture or for
any claim based on, in respect of, or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration of issuance
of the Securities.

SECTION 11.09 Counterparts.

            This Indenture may be executed by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

SECTION 11.10 Governing Law.

            The internal laws of the State of New York shall govern and be used
to construe this Indenture and the Securities (including any guarantees
thereof), without giving effect to the applicable principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.

SECTION 11.11 Submission to Jurisdiction; Service of Process; Waiver of Jury
              Trial.

            Each party hereto hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Indenture, the Securities
(including any guarantee thereof) or the transactions contemplated hereby and
thereby. Each party hereto irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such


                                       40
<PAGE>
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Process in
any such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the State of New York. Without limiting the
foregoing, the parties agree that service of process upon such party at the
address referred to in Section 11.02, together with written notice of such
service to such party, shall be deemed effective service of process upon such
party. Each of the parties hereto irrevocably waives any and all rights to trial
by jury in any legal proceeding arising out of or relating to this Indenture,
the Securities (including any guarantee thereof) or the transactions
contemplated hereby and thereby.

SECTION 11.12 Severability.

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

SECTION 11.13 Effect of Headings, Table of Contents, Etc.

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

SECTION 11.14 Successors and Assigns.

            All covenants and agreements of the Company in this Indenture and
the Securities shall bind its successors and assigns. All agreements of the
Trustee in this Indenture shall bind its successor. All agreements of any
Guarantor in this Indenture shall bind its successors, except as otherwise
provided by the terms hereof.

SECTION 11.15 No Interpretation of Other Agreements.

            This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any Subsidiary or of any Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

                            [Signature Page Follows]


                                       41
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first above written.

                                        MERITAGE CORPORATION



                                        BY:
                                            ------------------------------------
                                            Name:
                                            Title:


                                        WELLS FARGO BANK, National Association,
                                        as Trustee



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


                                        [GUARANTOR]



                                        BY:
                                            ------------------------------------
                                            Name:
                                            Title:


                                       42



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>4
<FILENAME>p66504ex4-2.txt
<DESCRIPTION>EX-4.2
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.2

73063

             PAR VALUE $.01                                         COMMON STOCK

                 NUMBER                                                SHARES
            MC _____________                                           ______

      [MERITAGE CORPORATION LOGO]

      [MERITAGE CORPORATION SEAL]

                                   [GRAPHIC]


      INCORPORATED UNDER THE LAWS
        OF THE STATE OF MARYLAND                    CUSIP 59001A 10 2


  THIS CERTIFICATE IS TRANSFERABLE IN      SEE REVERSE FOR IMPORTANT NOTICE ON
    THE CITIES OF SAN FRANCISCO, CA,         TRANSFER RESTRICTIONS AND OTHER
  RIDGEFIELD PARK, NJ OR NEW YORK, NY                  INFORMATION

                              MERITAGE CORPORATION

THIS CERTIFIES THAT


IS THE RECORD HOLDER OF
           FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK OF
                        [CERTIFICATE OF STOCK WATERMARK]
Meritage Corporation (the "Corporation") transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney upon
surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are issued and shall be held subject to all of the
provisions of the charter of the Corporation (the "Charter") and the Bylaws of
the Corporation and any amendments thereto. This Certificate is not valid
unless countersigned and registered by the Transfer Agent and Registrar.

     In Witness Whereof, the Corporation has caused this Certificate to be
executed on its behalf by its duly authorized officers.

Dated:

COUNTERSIGNED AND REGISTERED:
     MELLON INVESTOR SERVICES LLC
          TRANSFER AGENT AND REGISTRAR

BY                                                Larry W. Seay
     AUTHORIZED SIGNATURE                         SECRETARY

     Steven J. Hilton                             /s/ John R. Landon
     CO-CHAIRMAN, CO-CEO                          CO-CHAIRMAN, CO-CEO

     [SPECIMEN]
     [42302]
     [ABN SECOL]
<PAGE>
     The Corporation is authorized to issue two classes of capital stock which
are designated as Common Shares and Preferred Shares. The Board of Directors is
authorized to determine the preferences, limitations, and relative rights of the
Preferred Shares before the issuance of any Preferred Shares. The Corporation
will furnish, without charge, to any shareholder making a written request
therefor, a copy of the Corporation's Charter and a written statement of the
designations, relative rights, preferences and limitations applicable to each
such class of stock. Requests for such written statement may be directed to the
Secretary of the Corporation, at the Corporation's principal executive office.

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN  - as joint tenants with right of survivorship and not as tenants in
          common

UNIF GIFT MIN ACT -                          Custodian
                    ------------------------           -------------------------
                           (Cust)                         (Minor)
                    under Uniform Gifts to Minors Act

                    ------------------------------------------------------------
                                         (State)

UNIF TRF MIN ACT -                      Custodian (until age                   )
                    -------------------                      -----------------
                           (Cust)
                                                         under Uniform Transfers
                    ------------------------------------

                    to Minors Act ----------------------------------------------
                                                  (State)

    Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED,                        hereby sell, assign and transfer unto
                    ----------------------

PLEASE INSERT SOCIAL SECURITY OR OTHER
  IDENTIFYING NUMBER OF ASSIGNEE

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


--------------------------------------------------------------------------------
  (PLEASE TYPE OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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

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

--------------------------------------------------------------------------Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

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

Dated
     -------------------------------------

                                      X
                                        ----------------------------------------
                                      X
                                        ----------------------------------------
                                        THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
                                        CORRESPOND WITH THE NAME(S) AS WRITTEN
                                NOTICE: UPON THE FACE OF THE CERTIFICATE IN
                                        EVERY PARTICULAR, WITHOUT ALTERATION OR
                                        ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed


By
  --------------------------------------------
THE SIGNATURE(S) MUST BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

[SPECIMEN]
[42302]
[ABN SECOL]



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>5
<FILENAME>p66504ex5-1.txt
<DESCRIPTION>EX-5.1
<TEXT>
<PAGE>

                                                                     EXHIBIT 5.1




                                 May 1, 2002



Meritage Corporation
6613 North Scottsdale Road, Suite 200
Scottsdale, Arizona 85250

Monterey Homes Arizona, Inc.
Meritage Paseo Crossing, LLC
Monterey Homes Construction, Inc.
Meritage Paseo Construction, LLC
Meritage Homes of Arizona, Inc.
Meritage Homes Construction, Inc.
MTH-Texas GP, Inc.
MTH-Texas LP, Inc.
Legacy/Monterey Homes, LP
Meritage Homes of Northern California, Inc.
Hancock-MTH Builders, Inc.
Hancock-MTH Communities, Inc
Legacy Operating Company, L.P.
Hulen Park Venture, LLC
Meritage Holdings, L.L.C.

each c/o Meritage Corporation
6613 North Scottsdale Road, Suite 200
Scottsdale, Arizona 85250

      Re:   Registration Statement on Form S-3

Ladies and Gentlemen:

      At your request, we as special counsel have examined the Registration
Statement on Form S-3 (the "Registration Statement") relating to the
registration and sale from time to time by you and certain direct and indirect
subsidiaries which are co-registrants under the Registration Statement of up to
an aggregate of $300,000,000 of (i) debt securities ("Debt Securities"), (ii)
shares of common stock, $.01 par value per share ("Common Stock"), (iii) shares
of preferred stock, in one or more series ("Preferred Stock"), (iv) warrants to
purchase Debt Securities, Common Stock or Preferred Stock ("Warrants"), and (v)
guarantees of Debt Securities ("Guarantees") (Debt Securities, Common Stock,
Preferred Stock, Warrants and Guarantees are collectively referred to as the
"Securities"), and such corporate records, certificates and other documents and
such questions of law as we have considered necessary or appropriate for the
<PAGE>
Meritage Corporation
May 1, 2002
Page 2


purposes of this opinion. In our capacity as special counsel in connection with
such registration, we are familiar with the proceedings taken and proposed to be
taken by Meritage Corporation and the co-registrants in connection with the
authorization and issuance of the Securities and for purposes of this opinion,
have assumed that such proceedings will be timely completed in the manner
presently proposed and the terms of each issuance will otherwise be in
compliance with law. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Registration Statement.

      We are members of the Bar of the State of Arizona and the foregoing
opinion is limited to the laws of the State of Arizona and to the federal laws
of the United States of America. With respect to the Indenture and Warrant
Agreement, which are, or we expect will be, stated to be governed by the laws of
the State of New York, we have assumed with your consent that such laws are the
same as the laws of the State of Arizona with respect to the legal nature of the
Indenture, Debt Securities, Guarantees and Warrants.

      Based upon the foregoing, we advise you that in our opinion, when the
following events have occurred:

      (a) the Registration Statement and any required post-effective amendments
thereto and any and all prospectus supplement(s) required by applicable laws
have all been filed and become effective under the Securities Act of 1933, as
amended;

      (b) the due approval by the Company's stockholders, including the filing
of the appropriate charter documents with the Company's state of incorporation,
authorizing the issuance of preferred stock;

      (c) the due authorization, approval and filing by you of the Certificate
of Designation(s) setting forth the terms of the Preferred Stock;

      (d) the due authorization, execution and delivery of the Warrant Agreement
pursuant to which the Warrants are to be issued;

      (e) the due authorization, execution and delivery of the Indenture
pursuant to which Debt Securities are to be issued, and the qualification of
such Indenture under the Trust Indenture Act of 1939, as amended;

      (f) the due execution, registration and delivery of the certificate or
certificates evidencing the Securities; and

      (g) the Securities have been established, issued and delivered in the
manner specified in the Registration Statement, the prospectus and the
applicable prospectus supplement and the exhibits thereto, in accordance with
corporate and governmental authorities and not in violation of any applicable
law, agreement or instrument; then
<PAGE>
Meritage Corporation
May 1, 2002
Page 3


      1. The Debt Securities and Guarantees to be issued by you, including Debt
Securities and Guarantees issued upon exercise of any Warrants issued under the
Registration Statement, will be legally issued and binding obligations upon you,
subject to the effect of (a) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws and court decisions affecting creditors' rights and
remedies generally now or hereafter in effect and (b) the application of general
principles of equity (whether such enforceability is considered in a proceeding
in equity or at law);

      2. The Common Stock to be issued by you, including any Common Stock that
may be issuable pursuant to the conversion of any Preferred Stock or Debt
Securities or upon the exercise of any Warrants, will be legally issued, fully
paid and non-assessable;

      3. The Preferred Stock to be issued by you, including the Preferred Stock
issued upon exercise of any Warrants issued under the Registration Statement,
will be legally issued, fully paid and non-assessable; and

      4. The Warrants to be issued by you will be legally issued, and binding
obligations upon you, subject to the effect of (a) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws and court decisions
affecting creditors' rights and remedies generally now or hereafter in effect
and (b) the application of general principles of equity (whether such
enforceability is considered in a proceeding in equity or at law).

      To the extent that the obligations of either Meritage Corporation of the
co-registrants under the Indenture may be dependent on such matters, we assume
that for purposes of this opinion that the Trustee is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; that the Trustee is duly organized to engage in the activities
contemplated by the Indenture; that the Indenture has been duly authorized,
executed and delivered by the Trustee, enforceable against the Trustee in
accordance with its terms; that the Trustee is in compliance, generally and with
respect to acting as trustee under the Indenture, with all applicable laws and
regulations; and that the Trustee has the requisite organizational and legal
power and authority to perform its obligations under the Indenture.

      You have informed us that you intend to issue the Securities from time to
time on a delayed or continuous basis. Accordingly, this opinion is limited to
the laws, including the rules and regulations, as in effect on the date hereof.
We understand that prior to issuing any Securities you will advise us in writing
of the terms thereof, will afford us an opportunity to review the operative
documents pursuant to which such Securities are to be issued (including the
applicable Prospectus Supplement) and will file such supplement or amendment to
this opinion (if any) as we may reasonably consider necessary or appropriate by
reason of the terms of such Securities.
<PAGE>
Meritage Corporation
May 1, 2002
Page 4


      We hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Registration Statement and in the Prospectus.

                                       Very truly yours,

                                       /s/  Snell & Wilmer L.L.P.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>6
<FILENAME>p66504ex12-1.txt
<DESCRIPTION>EX-12.1
<TEXT>
<PAGE>
                                                                    EXHIBIT 12.1

                     MERITAGE CORPORATION AND SUBSIDIARIES
               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                      AND
                  RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                         AND PREFERRED STOCK DIVIDENDS

           (IN THOUSANDS, EXCEPT RATIO OF EARNINGS TO FIXED CHARGES)

<Table>
<Caption>
                                                                              Years ended December 31,
                                                                  2001       2000       1999       1998       1997
                                                                 --------------------------------------------------
<S>                                                              <C>        <C>        <C>        <C>        <C>
Computation of Earnings:

Earnings before income taxes and extraordinary items             83,336     56,762     32,215     30,500     15,199

Add:
     Interest expense, including amortization of
          deferred debt costs                                       348         98         96        490        165
     Interest portion of rent expense(1)                          1,250        804        557        538        593
                                                                 --------------------------------------------------
Earnings, as adjusted                                            84,934     57,664     32,868     31,528     15,957
                                                                 ==================================================

Computation of Fixed Charges:

     Interest expense, including amortization of
          deferred debt costs                                       348         98         96        490        165
     Interest portion of rent expense(1)                          1,250        804        557        538        593
     Capitalized interest                                        16,623     10,626      7,025      3,711      3,679
                                                                 --------------------------------------------------
     Total Fixed Charges                                         18,221     11,528      7,678      4,739      4,437
                                                                 ==================================================

Ratio of Earnings to Fixed Charges:
     Earnings                                                    84,934     57,664     32,868     31,528     15,957
     Fixed charges                                               18,221     11,528      7,678      4,739      4,437
     Ratio                                                         4.66       5.00       4.28       6.65       3.60

Ratio of Earnings to Combined Fixed  Charges and
and Preferred Stock Dividends:
     Earnings                                                    84,934     57,664     32,868     31,528     15,957
     Fixed charges                                               18,221     11,528      7,678      4,739      4,437
     Preferred stock dividends                                       --         --         --         --         --
     Ratio                                                         4.66       5.00       4.28       6.65       3.60
</Table>

     (1) represents 50% of rental expense

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>7
<FILENAME>p66504ex23-1.txt
<DESCRIPTION>EX-23.1
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1



                         CONSENT OF INDEPENDENT AUDITORS



The Board of Directors
Meritage Corporation:

We consent to the use of our report dated February 6, 2002, with respect to the
consolidated balance sheets of Meritage Corporation and subsidiaries as of
December 31, 2001 and 2000, and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 2001, which report appears in the Annual Report on
Form 10-K of Meritage Corporation for the year ended December 31, 2001,
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the prospectus.



Phoenix, Arizona
April 25, 2002

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.1
<SEQUENCE>8
<FILENAME>p66504ex25-1.txt
<DESCRIPTION>EX-25.1
<TEXT>
<PAGE>
                                                                    EXHIBIT 25.1


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

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

                                    FORM T-1

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

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

[ ]  CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
                               SECTION 305(b)(2)

                     WELLS FARGO BANK, NATIONAL ASSOCIATION
               (Exact name of trustee as specified in its charter)

NOT APPLICABLE                                               94-1347393
(Jurisdiction of incorporation or                            (I.R.S. Employer
organization if not a U.S. national                          Identification No.)
bank)

420 MONTGOMERY STREET
SAN FRANCISCO, CA                                            94163
(Address of principal executive offices)                     (Zip code)

                              WELLS FARGO & COMPANY
                          LAW DEPARTMENT, TRUST SECTION
                                  MAC N9305-172
                         SIXTH AND MARQUETTE, 17TH FLOOR
                              MINNEAPOLIS, MN 55479
                              (agent for services)

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

                              MERITAGE CORPORATION
               (Exact name of obligor as specified in its charter)


MARYLAND                                                     86-0611231
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

6613 NORTH SCOTTSDALE RD., SUITE 200                         85250
SCOTTSDALE, AZ
(Address of principal executive offices)                     (Zip code)

                          -----------------------------
                                 DEBT SECURITIES
                       (Title of the indenture securities)
================================================================================
<PAGE>
Item 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,
                  Treasury Department
                  Washington, D.C.  20230

                  Federal Deposit Insurance Corporation
                  Washington, D.C. 20429

                  Federal Reserve Bank of San Francisco
                  San Francisco, CA  94120

            (b)   Whether it is authorized to exercise corporate trust powers.

                  The trustee is authorized to exercise corporate trust powers.

Item 2. Affiliations with Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.

            None with respect to the trustee.

No responses are included for Items 3-14 of this Form T-1 because the obligor is
not in default as provided under Item 13.

Item 15. Foreign Trustee. Not applicable.

Item 16. List of Exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.

Exhibit 1.  A copy of the Articles of Association of the trustee now in
            effect.

Exhibit 2.  A copy of the Comptroller of the Currency Certificate of
            Corporate Existence for Wells Fargo Bank, National Association,
            dated November 28, 2001.

Exhibit 3.  A copy of the authorization of the trustee to exercise corporate
            trust powers. A copy of the Comptroller of the Currency Certificate
            of Corporate Existence (with Fiduciary Powers) for Wells Fargo Bank,
            National Association, dated November 28, 2001.

Exhibit 4.  Copy of By-laws of the trustee as now in effect.

Exhibit 5.  Not applicable.

Exhibit 6.  The consents of United States institutional trustees required by
            Section 321(b) of the Act.

Exhibit 7.  A copy of the latest report of condition of the trustee published
            pursuant to law or the requirements of its supervising or examining
            authority.

Exhibit 8.  Not applicable.

Exhibit 9.  Not applicable.
<PAGE>
                                    SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Wells Fargo Bank, National Association, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Los Angeles and State
of California on the day of 30th of April, 2002.

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION


                                                /s/ Jeanie Mar
                                        ----------------------------------------
                                        Name:       Jeanie Mar
                                        Title:      Vice President
<PAGE>
                             EXHIBIT 1 TO FORM T-1

                     WELLS FARGO BANK, NATIONAL ASSOCIATION

                             ARTICLES OF ASSOCIATION

                           EFFECTIVE OCTOBER 30, 1998

                                ARTICLE I - NAME


            The title of the Association shall be WELLS FARGO BANK, NATIONAL
ASSOCIATION.

                              ARTICLE II - OFFICES

            1. Main Office. The main office of the Association shall be in the
City and County of San Francisco, State of California. The Board of Directors
shall have the power to change the location of the main office to any other
place within the City and County of San Francisco, State of California, without
the approval of the stockholders, but subject to the approval of the Comptroller
of the Currency.

            2. Branch Offices. The Board of Directors shall have the power to
establish or change the location of any branch or branches of the Association to
any other location, without the approval of the stockholders but subject to the
approval of the Comptroller of the Currency.

            3. Conduct of Business. The general business of the Association
shall be conducted at its main office and its branches.

                        ARTICLE III - BOARD OF DIRECTORS

            1. Number; Vacancy. The Board of Directors of the Association shall
consist of not less than five nor more than twenty-five persons, the exact
number of Directors within such minimum and maximum limits to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of the stockholders at any annual or special meeting
thereof. 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.

            2. Appointment of Officers. The Board of Directors shall appoint one
of its members as the President of the Association. The President shall also be
the Chairman of the Board unless the Board of Directors appoints another
Director to be the Chairman of the Board. The Board of Directors shall have the
power to appoint or to determine the manner of appointing the other officers of
the Association.

            3. Powers. The Board of Directors shall have the power to define or
to determine the manner of defining the duties of the officers and employees of
the Association; to fix or to determine the manner of fixing the salaries to be
paid to them; to dismiss or to determine the manner of dismissing them; to
require bonds from them and to fix the penalty thereof; to regulate the manner
in which any increase of the capital of the Association shall be made; to manage
and administer the business and affairs of the Association; to make all By-Laws
that it may be lawful for the Board of Directors to make; and generally to do
and perform all acts that it may be legal for a Board of Directors to do and
perform.

                      ARTICLE IV - MEETINGS OF STOCKHOLDERS
<PAGE>
            1. Annual Meeting. The annual meeting of the stockholders 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 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 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.

            2. Special Meetings. Special meetings of the stockholders of this
Association unless otherwise regulated by statute, for any purpose or purposes
whatsoever, may be called at any time by the Board of Directors, the chief
executive officer or by one or more stockholders holding not less than one-fifth
of the voting power of the Association.

            3. Notice of Meetings. Unless otherwise regulated by statute, a
notice of the time, place and purpose of every annual and special meeting of the
stockholders shall be given by first-class mail, postage prepaid, mailed at
least ten days prior to the date of such meeting to each stockholder of record
at his address as shown upon the books of the Association.

            4. Written Consents. Unless otherwise regulated by statute, any
action required or permitted to be taken by the stockholders may be taken
without a meeting, if all stockholders shall individually or collectively
consent in writing to such action. Such written consent or consents shall be
filed with the minutes of the proceedings of the stockholders. Such action by
written consent shall have the same force and effect as the unanimous vote of
the stockholders.

                              ARTICLE V - INDEMNITY

            Any person, his heirs, executors, or administrators, may be
indemnified or reimbursed by the Association for reasonable expenses actually
incurred in connection with any action, suit, or proceeding, civil or criminal,
to which he or they shall be made a party by reason or his being or having been
a Director, officer, or employee of the Association or of any firm, corporation,
or organization which he served in any such capacity at the request of the
Association: Provided, however, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding as to
which he shall finally be adjudged to have been guilty of or liable for gross
negligence, willful misconduct or criminal acts in the performance of his duties
to the Association: And, provided further, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit, or
proceeding which has been made the subject of a compromise settlement except
with the approval of a court of competent jurisdiction, or the holders of record
of a majority of the outstanding shares of the Capital Stock of the Association,
or the Board of Directors, acting by vote of Directors not parties to the same
or substantially the same action, suit, or proceeding, constituting a majority
of the entire number of Directors. The foregoing right of indemnification or
reimbursement shall not be exclusive of other rights to which such person, his
heirs, executors, or administrators, may be entitled as a matter of law. The
Association may, upon the affirmative vote of a majority of its Board of
Directors, purchase insurance for the purpose of indemnifying its Directors,
officers, or employees.

                              ARTICLE VI - CAPITAL

            1. Capitalization. The Association is authorized to issue a total of
112,200,000 shares of common stock (the "Common Stock") and 1,225,000 shares of
preferred stock. The aggregate par value of all the shares of Common Stock which
the Association shall be authorized to issue shall be $1,122,000,000, and the
par value of each share of Common Stock which the Association shall be
<PAGE>
authorized to issue shall be Ten Dollars ($10.00). The aggregate par value of
all the shares of preferred stock which the Association shall be authorized to
issue shall be $12,250, and the par value of each share of preferred stock which
the Association shall be authorized to issue shall be One Cent ($0.01).

            2. Voting Rights. Each holder of Common Stock shall be entitled to
vote on all matters, one vote for each share of Common Stock held by him,
provided that, in all elections of Directors, each holder of Common Stock shall
have the right to vote the shares allocated to the number of shares owned by him
for as many persons as there are Directors to be elected, or to cumulate such
votes and give one candidate as many votes as the number of Directors to be
elected multiplied by the number of votes allocable to his share shall equal, or
to distribute such votes on the same principle among as many candidates as he
shall think fit.

            3. Debt Obligations. The Association, at any time and from time to
time, may authorize the issue of debt obligations, whether or not subordinated,
without the approval of the stockholders.

            4. Preferred Stock, Series A.

            A. Designation. 1,225,000 shares of the preferred stock of the
Association are designated as 7 3/4% Noncumulative Preferred Stock, Series A
(hereinafter referred to as the "Series A Preferred Shares" or the "Series").
The Series A Preferred Shares shall have a liquidation preference of $1,000 per
share (the "Liquidation Preference"). The number of authorized Series A
Preferred Shares may be reduced by further resolution duly adopted by the Board
of Directors of the Association (the "Board") and by the filing of articles of
amendment stating that such reduction has been so authorized. The number of
authorized shares of this Series shall not be increased.

            B. Dividends. (a) Dividends on the Series A Preferred Shares shall
be payable at a rate of 7 3/4% of the Liquidation Preference per annum, if, when
and as declared by the Board out of assets of the Association legally available
therefor. If declared, dividends on the Series A Preferred Shares shall be
payable quarterly in arrears on January 15, April 15, July 15 and October 15 of
each year (a "Dividend Date"), commencing on the first Dividend Date after the
Time of Exchange (as defined below). Dividends will accrue from the first day of
the fiscal quarter ending on each Dividend Date (each a "Dividend Period"),
whether or not declared or paid for the prior Dividend Period. Each declared
dividend shall be payable to the holder of record of the Series A Preferred
Shares as it appears at the close of business on the stock register of the
Association on such record date, not exceeding 45 days preceding the payment
date thereof, as shall be fixed by the Board.

            (b) If the Board fails to declare a dividend on the Series A
Preferred Shares for any Dividend Period, then the holder of the Series A
Preferred Shares will have no right to receive a dividend on such shares for
that Dividend Period, and the Association will have no obligation to pay a
dividend for that Dividend Period, whether or not dividends are declared and
paid for any future Dividend Period with respect to either the Series A
Preferred Shares or the Common Stock of the Association.

            (c) If full dividends on the Series A Preferred Shares for any
Dividend Period shall not have been declared and paid, or declared and a sum
sufficient for the payment thereof shall not have been set apart for such
payment, no dividends shall be declared or paid or set aside for payment and no
other distribution shall be declared or made or set aside for payment upon the
Common Stock or any other capital stock of the Association ranking junior to or
on a parity with the Series A Preferred Shares as to dividends or amounts upon
liquidation, nor shall any Common Stock or any other capital stock of the
Association ranking junior to or on a parity with the Series A Preferred Shares
as to dividends or amounts upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any monies to be paid to or made available
for a sinking fund for the redemption of any such stock) by the Association
(except by conversion into or exchange for other capital stock of the
Association ranking junior to the Series A Preferred Shares as to dividends and
amounts upon liquidation), until such time as dividends on all outstanding
Series A Preferred Shares have been (i) declared and paid declared for three
consecutive Dividend Periods and (ii) declared and paid or declared and a sum
sufficient for the payment thereof has been set apart for payment for the fourth
<PAGE>
consecutive Dividend Period. Notwithstanding the above, nothing in this
subparagraph shall prevent the Association from treating an amount consented to
by a holder of the Common Stock under the provisions of section 565 of the
Internal Revenue Code of 1986, as amended (the "Code"), as a dividend for
purposes of the dividends paid deduction under section 561 of the Code.

            (d) When dividends are not paid in full (or a sum sufficient for
such full payment is not set apart) upon the Series A Preferred Shares and the
shares of any other series of capital stock of the Association ranking on a
parity as to dividends with the Series A Preferred Shares, all dividends
declared upon the Series A Preferred Shares and any such other series of capital
stock shall be declared pro rata so that the amount of dividends declared per
share on the Series A Preferred Shares and such other series of capital stock
shall, in all cases, bear to each other the same ratio that full dividends, for
the then-current Dividend Period, per share on the Series A Preferred Shares
(which shall not include any accumulation in respect of unpaid dividends for
prior Dividend Periods) and full dividends, including required or permitted
accumulations, if any, on such other series of capital stock bear to each other.

            (e) The holder of the Series A Preferred Shares shall not be
entitled to any dividend, whether payable in cash, property or stock, in excess
of full dividends, as herein provided, on the Series A Preferred Shares. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Series A Preferred Shares which may be
in arrears.

            C. Redemption. (a) With the prior approval of the United States
Office of the Comptroller of the Currency (the "OCC"), the Association, at its
option, may redeem the Series A Preferred Shares, in whole or in part, at any
time or from time to time, at a redemption price equal to the Liquidation
Preference per share, plus accrued and unpaid dividends thereon to the date
fixed for redemption.

            (b) In the event the Association shall redeem any of the Series A
Preferred Shares, notice of such redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
redemption date, to the holder of record of the Series A Preferred Shares, at
the holder's address as the same appears on the stock register of the
Association. Each such notice shall state: (i) the redemption date; (ii) the
number of Series A Preferred Shares to be redeemed and, if fewer than all the
Series A Preferred Shares held by the holder are to be redeemed, the number of
such shares to be redeemed from the holder; (iii) the redemption price; and (iv)
the place or places where certificates for such shares are to be surrendered for
payment of the redemption price.

            (c) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Association in providing
money for the payment of the redemption price), said Series A Preferred Shares
shall no longer be deemed to be outstanding, and all rights of the holder
thereof as a stockholder of the Association (except the right to receive from
the Association the redemption price) shall cease. If such shares are
represented by a certificate, upon surrender in accordance with said notices of
the a certificate for any Series A Preferred Shares so redeemed (properly
endorsed or assigned for transfer, if the Board shall so require and the notice
shall so state), such shares shall be redeemed by the Association at the
redemption price aforesaid. In case fewer than all the Series A Preferred Shares
represented by any such certificate is redeemed, a new certificate shall be
issued representing the unredeemed Series A Preferred Shares without cost to the
holder thereof.

            (d) Any Series A Preferred Shares, which shall at any time have been
redeemed, shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board.

            D. Automatic Exchange. (a) Series A Preferred Shares will be issued
only in exchange (the "Automatic Exchange") for shares of 7 3/4% Noncumulative
Exchangeable Preferred Stock, Series A, $0.01 par value per share (a "REIT
Preferred Share"), of Wells Fargo Realty Corporation II, a Maryland corporation
(the "REIT"), upon the terms and conditions set forth in this Section D.
<PAGE>
            (b) The Automatic Exchange will occur only if the appropriate
federal regulatory agency directs in writing (a "Directive") an exchange of the
REIT Preferred Shares for the Series A Preferred Shares because (i) the REIT
becomes "undercapitalized" under prompt corrective action regulations, (ii) the
REIT is placed into conservatorship or receivership or (iii) the appropriate
federal regulatory agency, in its sole discretion, anticipates the REIT becoming
"undercapitalized" in the near term (an "Exchange Event").

            (c) Upon an Exchange Event, upon surrender to the Association by the
holder of the REIT Preferred Shares of the certificate, if any, representing
each share of the REIT Preferred Shares of the holder, the Association shall be
unconditionally obligated to issue to the holder in exchange for each such REIT
Preferred Share a certificate representing one Series A Preferred Share.

            (d) The Automatic Exchange shall occur as of 8:00 a.m., Eastern
Time, on the date for such exchange set forth in the Directive, or, if such date
is not set forth in the Directive, as of 8:00 a.m., Eastern Time, on the
earliest possible date such exchange could occur consistent with the Directive
(the "Time of Exchange"). As of the Time of Exchange, the holder of the REIT
Preferred Shares shall thereupon and thereafter be deemed to be and shall be for
all purposes a holder of Series A Preferred Shares. The Association shall
deliver to the holder of REIT Preferred Shares a certificate for Series A
Preferred Shares upon surrender of the certificate for the REIT Preferred
Shares. Until such replacement stock certificate is delivered (or in the event
such replacement certificate is not delivered), any certificate previously
representing the REIT Preferred Shares shall be deemed for all purposes to
represent Series A Preferred Shares.

            (e) In the event the Automatic Exchange occurs, any accrued and
unpaid dividends on the REIT Preferred Shares as of the Time of Exchange would
be deemed to be accrued and unpaid dividends on the Series A Preferred Shares.

            E. Conversion. The holder of Series A Preferred Shares shall not
have any rights to convert such shares into shares of any other class or series
of capital stock of the Association.

            F. Liquidation Rights. (a) Upon the voluntary or involuntary
dissolution, liquidation or winding up of the Association, the holder of the
Series A Preferred Shares shall be entitled to receive and to be paid out of the
assets of the Association available for distribution to its stockholder, before
any payment or distribution shall be made on the Common Stock or on any other
class of stock ranking junior to the Series A Preferred Shares upon liquidation,
the amount of the Liquidation Preference per share, plus the quarterly accrued
and unpaid dividend thereon to the date of liquidation.

            (b) After the payment to the holder of the Series A Preferred Shares
of the full preferential amounts provided for in this Section F, the holder of
the Series A Preferred Shares as such shall have no right or claim to any of the
remaining assets of the Association.

            (c) If, upon any voluntary or involuntary dissolution, liquidation
or winding up of the Association, the amounts payable with respect to the
Liquidation Preference and any other shares of capital stock of the Association
ranking as to any such distribution on a parity with the Series A Preferred
Shares are not paid in full, the holder of the Series A Preferred Shares and of
such other shares will share ratably in any such distribution of assets of the
Association in proportion to the full respective liquidating distributions to
which they are entitled.

            (d) Neither the sale of all or substantially all the property or
business of the Association, nor the merger or consolidation of the Association
into or with any other Association, nor the merger or consolidation of any other
Association into or with the Association shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, of the Association for
purposes of this Section F.

            (e) Upon the dissolution, liquidation or winding up of the
Association, the holder of the Series A Preferred Shares then outstanding shall
be entitled to be paid out of the assets of the Association available for
distribution to its stockholder all amounts to which the holder is entitled
pursuant to paragraph
<PAGE>
(a) of this Section F before any payment shall be made to the holder of any
class of capital stock of the Association ranking junior to the Series A
Preferred Shares upon liquidation.

            G. Ranking. For purposes of these articles, any stock of any class
or classes of the Association shall be deemed to rank:

                  (a) Prior to the Series A Preferred Shares, either as to
      dividends or upon liquidation, if the holder of such class or classes
      shall be entitled to the receipt of dividends or of amounts distributable
      upon dissolution, liquidation or winding up of the Association, as the
      case may be, in preference or priority to the holder of the Series A
      Preferred Shares;

                  (b) On a parity with the Series A Preferred Shares, either as
      to dividends or upon liquidation, whether or not the dividend rates,
      dividend payment dates or redemption or liquidation prices per share or
      sinking fund provisions, if any, be different from those of the Series A
      Preferred Shares, if the holder of such stock shall be entitled to the
      receipt of dividends or of amounts distributable upon dissolution,
      liquidation or winding up of the Association, as the case may be, without
      preference or priority, one over the other, as between the holder of such
      stock and the holder of the Series A Preferred Shares; and

                  (c) Junior to the Series A Preferred Shares, either as to
      dividends or upon liquidation, if such class shall be Common Stock or if
      the holder of the Series A Preferred Shares shall be entitled to receipt
      of dividends or of amounts distributable upon dissolution, liquidation or
      winding up of the Association, as the case may be, in preference or
      priority to the holder of shares of such class or classes.

            H. Voting Rights. The Series A Preferred Shares shall not have any
voting rights, either general or special, unless required by applicable law.

                        ARTICLE VII - PERPETUAL EXISTENCE

            The corporate existence of the Association shall continue until
terminated in accordance with the laws of the United States.

                            ARTICLE VIII - AMENDMENT

            These Articles of Association may be amended at any regular or
special meeting of the stockholders by the affirmative vote of the holders of a
majority of the Capital Stock of the Association, unless the vote of the holders
of a greater amount of Capital Stock is required by law, and in that case by the
vote of the holders of such greater amount.
<PAGE>
                             EXHIBIT 2 TO FORM T-1


[LOGO]

--------------------------------------------------------------------------------
COMPTROLLER OF THE CURRENCY
ADMINISTRATOR OF NATIONAL BANKS
--------------------------------------------------------------------------------
WASHINGTON, D.C. 20219

                       CERTIFICATE OF CORPORATE EXISTENCE

I, JOHN D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:

1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.

2. "Wells Fargo Bank, National Association," San Francisco, California, (Charter
No. 1741) is a National Banking Association formed under the laws of the United
States and is authorized thereunder to transact the business of banking on the
date of this Certificate.

                                    IN TESTIMONY WHEREOF, I have hereunto
                                    subscribed my name and caused my seal of
                                    office to be affixed to these presents at
                                    the Treasury Department in the City of
                                    Washington and District of Columbia, this
                                    28th day of November, 2001.


[SEAL]


                                    /s/ John D. Hawke, Jr.
                                    -----------------------------------------
                                    Comptroller of the Currency


<PAGE>
                             EXHIBIT 3 TO FORM T-1

[LOGO]
--------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of the National Banks
--------------------------------------------------------------------------------
Western District Office
50 Fremont Street, Suite 3900
San Francisco, CA 94105-2292


                       CERTIFICATE OF CORPORATE EXISTENCE
                            (WITH FIDUCIARY POWERS)

I, JOHN C. BEERS, on behalf of the Office of the Comptroller of the Currency,
hereby certify that:

1.   The Office of the Comptroller of the Currency, pursuant to Revised Statutes
     324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession,
     custody and control of all records pertaining to the chartering, regulation
     and supervision of all National Banking Associations;

2.   Wells Fargo Bank, National Association, San Francisco, California, Charter
     Number 1741, is a National Banking Association formed under the laws of the
     United States of America and authorized hereunder and continues to hold
     authority to transact the business of banking (and to act in all fiduciary
     capacities) permitted thereby on the date of this certificate.


                                   IN TESTIMONY WHEREOF, I have hereunto
                                   subscribed my name and caused the seal of the
                                   Office of the Comptroller of the Currency, in
                                   the City of San Francisco, California, to be
                                   affixed this 23rd day of April, A.D. 1993.




                                   /s/ John C. Beers
                                   ---------------------------------------------
                                   JOHN C. BEERS
                                   Manager, Licensing


<PAGE>
                             EXHIBIT 4 TO FORM T-1


                                     BY-LAWS

                                       OF

                     WELLS FARGO BANK, NATIONAL ASSOCIATION

                          (AS AMENDED NOVEMBER 2, 2000)

ARTICLE I

                            MEETINGS OF STOCKHOLDERS

            SECTION 1. ANNUAL MEETINGS. All annual meetings of the stockholders
of Wells Fargo Bank, National Association (the "Bank") shall be held at the head
office of the Bank, or other convenient place duly authorized by the Board of
Directors, on the third Monday of April in each year at 3:30 o'clock p.m., if
not a bank holiday, and if a bank holiday then on the next succeeding business
day at the same hour and place. At such meetings, directors shall be elected,
reports of the affairs of the Bank shall be considered, and any other business
may be transacted which is within the powers of the stockholders.

            SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders,
unless otherwise regulated by statute, for any purpose or purposes whatsoever,
may be called at any time by the Board of Directors, the chief executive officer
or one or more stockholders holding not less than one-fifth of the voting power
of the Bank. Such meetings shall be held at the head office of the Bank or other
convenient place duly authorized by the Board of Directors.

            SECTION 3. NOTICE OF MEETINGS. Unless otherwise provided by statute,
a notice of the time, place and purpose of every annual and special meeting of
the stockholders shall be given by first-class mail, postage prepaid, mailed at
least 10 days prior to the date of such meeting to each stockholder of record at
his or her address as shown upon the books of the Bank, or if no address is
shown, at 464 California Street, San Francisco, California. Except as otherwise
provided by statute, the transactions of any meeting of stockholders, however
called and noticed and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each of the
stockholders entitled to vote, not present in person or by proxy, signs a
written waiver of notice of such meeting. All such waivers shall be filed with
the records of the Bank or made a part of the minutes of the meeting.

            SECTION 4. PROXIES. Stockholders may vote at any meeting of the
stockholders by proxies duly authorized in writing, but no officer or employee
of the Bank shall act as proxy. Proxies shall be valid only for one meeting, to
be specified therein, and any adjournments of such meeting. Proxies shall be
dated and shall be filed with the records of the meeting.

            SECTION 5. QUORUM. Except as otherwise provided by law, the
attendance of the holders of a majority of the capital stock issued and
outstanding and entitled to vote, either present in person or represented by
proxy, is requisite and shall constitute a quorum for the transaction of
business at all meetings of the stockholders. A majority of the votes cast shall
decide every question or matter submitted to the stockholders at any meeting,
unless otherwise provided by law or by the Articles of Association.

            SECTION 6. WRITTEN CONSENTS. Any action required or permitted to be
taken by the stockholders may be taken without a meeting if all stockholders
shall individually or collectively consent in writing to such action. Any such
written consent shall be filed with the minutes of the proceedings of the
<PAGE>
stockholders. Such action by written consent shall have the same force and
effect as the unanimous vote of the stockholders.

                                   ARTICLE II

                                    DIRECTORS

            SECTION 1. CORPORATE POWERS, NUMBER. The corporate powers of this
Bank shall be vested in and exercised by a Board of Directors consisting of five
members.

            SECTION 2. ELECTION, VACANCIES. The directors shall be elected by
ballot at the annual meeting of the stockholders. Each director shall serve
until the organizational meeting of the Board of Directors held pursuant to
Section 3 of this Article in the year next following his or her election and
until his or her successor has been elected and has qualified. Vacancies in the
Board of Directors shall be filled by the majority vote of the other directors
then in office or by the stockholders.

            SECTION 3. ORGANIZATIONAL MEETING. The directors, without further
notice, shall meet on the next business day immediately following the
adjournment of the stockholders' meeting at which they have been elected and
shall, pursuant to Section 1 of Article III hereof, proceed to elect the
officers of the Bank. At said meeting the Board of Directors may consider and
act upon any other business which may properly be brought before the meeting.

            SECTION 4. PLACE OF MEETINGS. The Board of Directors shall hold its
meetings at the head office of the Bank or at such other place as may from time
to time be designated by the Board of Directors or by the chief executive
officer.

            SECTION 5. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held on such days and at such time as may be designated from
time to time for such purpose by the Board of Directors. If the day of any
regular meeting shall fall upon a bank holiday, the meeting shall be held at the
same hour on the first day following which is not a bank holiday. No call or
notice of a regular meeting need be given unless the meeting is to be held at a
place other than the head office of the Bank.

            SECTION 6. SPECIAL MEETINGS. Special meetings shall be held when
called by the chief executive officer or at the written request of two
directors.

            SECTION 7. QUORUM; ADJOURNED MEETINGS. A majority of the authorized
number of directors shall constitute a quorum for the transaction of business. A
majority of the directors present, whether or not a quorum, may adjourn any
meeting to another time and place, provided that, if the meeting is adjourned
for more than 30 days, notice of the adjournment shall be given in accordance
with these By-Laws.

            SECTION 8. NOTICE; WAIVERS OF NOTICE. Notice of special meetings and
notice of regular meetings held at a place other than the head office of the
Bank shall be given to each director, and notice of a meeting adjourned for more
than 30 days shall be given prior to the adjourned meeting to all directors not
present at the time of the adjournment. No such notice need specify the purpose
of the meeting. Such notice shall be given four days prior to the meeting if
given by mail or on the day preceding the day of the meeting if delivered
personally or by telephone, facsimile, telex or telegram. Such notice shall be
addressed or delivered to each director at such director's address as shown upon
the records of the Bank or as may have been given to the Bank by the director
for the purposes of notice. Notice need not be given to any director who signs a
waiver of notice (whether before or after the meeting) or who attends the
meeting without protesting the lack of notice prior to its commencement. All
such waivers shall be filed with and made a part of the minutes of the meeting.
<PAGE>
            SECTION 9. WRITTEN CONSENTS. Any action required or permitted to be
taken by the Board of Directors may be taken without a meeting if all members of
the Board of Directors shall individually or collectively consent in writing to
such action. Any such written consent shall be filed with the minutes of the
proceedings of the Board of Directors. Such action by written consent shall have
the same force and effect as the unanimous vote of the directors.

            SECTION 10. TELEPHONIC MEETINGS. A meeting of the Board of Directors
or of any committee thereof may be held through the use of conference telephone
or similar communications equipment, so long as all members participating in
such meeting can hear one another. Participation in such a meeting shall
constitute presence at such meeting.

            SECTION 11. COMPENSATION. Directors shall receive no compensation as
such for attendance at meetings of the Board of Directors or of its committees.

            SECTION 12. EXECUTIVE COMMITTEE. There shall be an Executive
Committee consisting of the Chairman of the Board, presiding, and the President.
The Executive Committee shall be subject to the control of the Board of
Directors but, subject thereto, it shall have the fullest authority to act for
and on behalf of the Bank and it shall have all of the powers of the Board of
Directors, which, under the law, is possible for the Board of Directors to
delegate to such a Committee, including the supervision of the general
management direction and superintendence of the business affairs of the Bank.

            SECTION 13. OTHER COMMITTEES; ALTERNATE MEMBERS. By resolution
adopted by a majority of the authorized number of directors, the Board of
Directors may constitute one or more committees to act as or on behalf of the
Board of Directors. Each such committee shall consist of one or more directors
designated by the Board of Directors to serve on such committee at the pleasure
of the Board of Directors. The Board of Directors may designate one or more
directors as alternate members of any committee, which alternate members may
replace any absent member at any meeting of such committee in the order
designated. Failing such designation and in the absence or disqualification of a
member of a Committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he, she or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member.

            SECTION 14. COMMITTEE MEMBERS' TERM OF SERVICE. Each Committee
member shall serve until the organizational meeting of the Board of Directors
held pursuant to Section 3 of this Article in the year next following his or her
election and until his or her successor has been elected and has qualified, but
any such member may be removed at any time by the Board of Directors. Vacancies
in any of said committees, however created, shall be filled by the Board of
Directors.

            SECTION 15. COMMITTEE MEETING PROCEDURES. Subject to these By-Laws
and the Board of Directors, each Committee shall have the power to determine the
form of its organization, and the provisions of these By-Laws governing the
calling, notice and place of special meetings of the Board of Directors shall
apply to all meetings of any Committee unless such committee fixes a time and
place for regular meetings in which case notice for such meeting shall be
unnecessary. The provisions of these By-Laws regarding meetings of the Board of
Directors, however called or noticed, shall apply to all meetings of any
Committee. A majority of the members of any such committee shall be necessary to
constitute a quorum and sufficient for the transaction of business and any act
of a majority present at a meeting of any such committee of which there is a
quorum present shall be the act of such committee. Any action which may be taken
at a meeting of any Committee of the Board may be taken without a meeting, if
all members of said Committee individually or collectively consent in writing to
such action. Such written consent or consents shall be filed with the minutes of
the proceedings of said Committee and shall have the same force and effect as
the unanimous vote of the Committee members. Each committee shall cause to be
kept a full and complete record of its proceedings,
<PAGE>
which shall be available for inspection by any director. There shall be
presented at each meeting of the Board of Directors copies of the minutes of all
proceedings and all actions taken by written consent of each committee since the
preceding meeting of the Board of Directors.

                                   ARTICLE III

                                    OFFICERS

            SECTION 1. OFFICERS, ELECTION. The Bank shall have (i) a Chairman of
the Board, (ii) a President and (iii) a Secretary. The Bank also may have one or
more Vice Chairmen, one or more Executive Vice Presidents, one or more Senior
Managing Directors, a Controller, one or more Managing Directors, one or more
Senior Vice Presidents, one or more Vice Presidents, one or more Assistant Vice
Presidents, one or more Assistant Secretaries and such other officers as may be
created by the Board, the Chief Executive Officer or any officer or committee
whom the Board or the Chief Executive Officer may authorize to perform this
duty. The Chairman of the Board and the President shall be elected from among
the members of the Board of Directors. The following offices shall be filled
only pursuant to election by the Board of Directors: Chairman of the Board,
President, Vice Chairman, Executive Vice President, Senior Vice President,
Senior Trust Officer, Controller and Secretary. Other officers may be appointed
by the Board, the Chief Executive Officer or by any officer or committee who may
be authorized to perform this duty by the Board or the Chief Executive Officer.
All officers shall hold office at will, at the pleasure of the Board of
Directors, the Chief Executive Officer, the officer or committee having the
authority to appoint such officers, and the officer or committee authorized by
the Board or the Chief Executive Officer to remove such officers, and may be
removed at any time, with or without notice and with or without cause. No
authorization by the Chief Executive Officer to appoint or remove officers shall
be effective unless done in writing and signed by the Chief Executive Officer.
One person may hold more than one office except the offices of President and
Secretary may not be held by the same person.

            SECTION 2. CHAIRMAN OF THE BOARD. The Chairman of the Board shall,
when present, preside at all meetings of stockholders and of the Board of
Directors and shall be the chief executive officer of the Bank. As chief
executive officer he shall, subject to the provisions of these By-Laws and such
resolutions of the Board of Directors as shall be in effect from time to time,
exercise general supervision over the property, affairs and business of the Bank
and prescribe or, to the extent that he shall deem appropriate, designate an
officer or committee or prescribe the duties, authority and signing powers of
all other officers and employees. The Chairman of the Board shall preside at all
meetings of the Executive Committee.

            SECTION 3. PRESIDENT. The President shall, subject to these By-Laws,
exercise such powers and perform such duties as may from time to time be
prescribed by the Board of Directors. In the absence of the Chairman of the
Board, the President shall preside over the meetings of the stockholders and of
the Board of Directors.

            SECTION 4. ABSENCE OR DISABILITY OF CHIEF EXECUTIVE OFFICER. In the
absence or disability of the Chairman of the Board, the President shall act as
chief executive officer. In the absence or disability of the Chairman of the
Board and the President, the officer designated by the Board of Directors or, if
there be no such designation, the officer designated by the Chairman of the
Board shall act as the chief executive officer. The Chairman of the Board shall
at all times have on file with the Secretary his written designation of the
officer from time to time so designated by him to act as the chief executive
officer in his absence or disability and in the absence or disability of the
President.

            SECTION 5. SECRETARY. The Secretary shall keep the minutes of the
meetings of the Board of Directors and of the Executive Committee and shall
perform such other duties as may be prescribed by the Board of Directors or the
chief executive officer. The Secretary is assigned all of the duties previously
<PAGE>
assigned to, or authorized by law, custom or usage to be performed by, a
cashier. In the absence of the Secretary, one of the Assistant Secretaries, or
an officer designated by the chief executive officer, shall perform the duties
and functions of the Secretary.

                                   ARTICLE IV

                              EMERGENCY PROCEDURES

            SECTION 1. "EMERGENCY" DEFINED. As used in this Article, "emergency"
shall mean any disorder, disturbance or damage caused by or resulting from any
natural disaster, act of God, act of war, enemy attack, outbreak of hostilities,
civil unrest or other similar cause or event beyond the control of the Bank
which prevents management by the Board of Directors and conduct by the officers
of the business and affairs of the Bank in the manner provided for in the
Articles of Association and in the other Articles of these By-Laws. The powers
and duties conferred and imposed by this Article and any resolutions adopted
pursuant hereto shall be effective only during an emergency. This Article may be
implemented from time to time by resolutions adopted by the Board of Directors
before or during an emergency, or during an emergency by the Executive Committee
or an Emergency Managing Committee constituted and then acting pursuant hereto.
An emergency, once commenced, shall be deemed to continue until terminated by
resolutions adopted for that purpose by the Board of Directors. During an
emergency the provisions of this Article and any implementing resolutions shall
supersede any conflicting provisions of any Article of these By-Laws or
resolutions adopted pursuant thereto.

            SECTION 2. CONDUCT OF AFFAIRS. During any emergency, the officers
and employees of the Bank shall continue, so far as possible, to conduct the
affairs and business of the Bank under the guidance of the Board of Directors,
or the Executive Committee or any Emergency Managing Committee acting pursuant
to this Article, and in accordance with known orders of governmental
authorities.

            SECTION 3. POWER OF EXECUTIVE COMMITTEE. If, during any emergency, a
quorum of either the Board of Directors or the Executive Committee cannot be
found or is unable to act, any available member of the Executive Committee shall
constitute a quorum of the Executive Committee and as such shall have and may
exercise the fullest power to conduct and manage the business and affairs of the
Bank and to relocate the head office or any other office or branch as
circumstances may require, provided that the Executive Committee shall, during
any emergency, comply with Sections 1 and 2 of Article I, relating to annual and
special meetings of the stockholders, to the extent that such compliance is
practicable. If no member of the Executive Committee is available to serve, any
two or more available directors shall be deemed to constitute a quorum of the
Executive Committee for exercise of the powers conferred and performance of the
duties imposed by this Section 3.

            SECTION 4. POWER OF EMERGENCY MANAGING COMMITTEE. If, during any
emergency, neither a quorum of the Board of Directors nor the Executive
Committee as provided in Section 3 above is available to serve, then the powers
conferred and duties imposed by said Section 3 shall be vested in and devolve
upon an Emergency Managing Committee consisting of all available directors, the
then acting chief executive officer if he or she is available, and as many Vice
Presidents or officers senior thereto as may be necessary to constitute a total
of five committee members. If officers are needed to serve on the Emergency
Managing Committee initially, or to fill vacancies from time to time, such
vacancies shall be filled by the available Vice Presidents and officers senior
thereto assigned to the head office as constituted prior to the emergency in
order of their rank and seniority. If a sufficient number of such officers is
not available, such vacancies shall be filled by other Vice Presidents selected
by the incumbent members of the Emergency Managing Committee. Any two members of
the Emergency Managing Committee and the then acting chief executive officer, if
he or she is available, shall constitute a quorum of the Emergency Managing
Committee and shall have and exercise all of the powers conferred and perform
the duties imposed by this Section 4. If
<PAGE>
the then acting chief executive officer is not available, any three members of
the Emergency Managing Committee shall constitute a quorum of said committee.

                                    ARTICLE V

                                    DEPOSITS

            The Board of Directors shall have the right to establish the terms
and conditions of agreements, rules and regulations upon which deposits may be
made with and will be repaid by the Bank or any office of the Bank. Subject to
the exercise of such right by the Board of Directors and to applicable law, and
not inconsistent therewith, the chief executive officer of the Bank, or such
other officer or officers or committee whom he may authorize to perform this
duty, or the designees of such officer, officers or committee, shall establish
the terms and conditions of agreements, rules and regulations with respect to
such deposits.

                                   ARTICLE VI

                                 INDEMNIFICATION

            SECTION 1. ACTION, ETC. OTHER THAN BY OR IN THE RIGHT OF THE BANK.
The Bank shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
or investigation, whether civil, criminal or administrative, and whether
external or internal to the Bank (other than a judicial action or suit brought
by or in the right of the Bank), by reason of the fact that he or she is or was
an Agent (as hereinafter defined) against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the Agent in connection with such action, suit or proceeding, or any appeal
therein, if the Agent acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Bank and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such conduct was unlawful. The termination of any action, suit or proceeding --
whether by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent -- shall not, of itself, create a presumption that
the Agent did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Bank and, with
respect to any criminal action or proceeding, that the Agent had reasonable
cause to believe that his or her conduct was unlawful. For purposes of this
Article, an "Agent" shall be any director, officer or employee of the Bank, or
any person who, being or having been such a director, officer or employee, is or
was serving at the request of the Bank as a director, officer, employee, trustee
or agent of another bank, corporation, partnership, joint venture, trust or
other enterprise.

            SECTION 2. ACTION, ETC. BY OR IN THE RIGHT OF THE BANK. The Bank
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed judicial action or suit brought by
or in the right of the Bank to procure a judgment in its favor by reason of the
fact that such person is or was an Agent (as defined above) against expenses
(including attorneys' fees) and amounts paid in settlement actually and
reasonably incurred by such person in connection with the defense, settlement or
appeal of such action or suit if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the Bank, except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the Bank unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
<PAGE>
            SECTION 3. DETERMINATION OF RIGHT OF INDEMNIFICATION OR
CONTRIBUTION. Unless otherwise ordered by a court, any indemnification under
Section 1 or 2, and any contribution under Section 6, of this Article shall be
made by the Bank or an Agent unless a determination is reasonably and promptly
made, either (i) by the Board of Directors acting by a majority vote of a quorum
consisting of directors who were not party to such action, suit or proceeding,
or (ii) if such a quorum is not obtainable, or if obtainable and such quorum so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders, that such Agent acted in bad faith and in a manner that such Agent
did not believe to be in or not opposed to the best interests of the Bank or,
with respect to any criminal proceeding, that such Agent believed or had
reasonable cause to believe that his or her conduct was unlawful.

            SECTION 4. ADVANCES OF EXPENSES. Except as limited by Section 5 of
this Article, costs, charges and expenses (including attorneys' fees) incurred
by an Agent in defense of any action, suit, proceeding or investigation of the
nature referred to in Section 1 or 2 of this Article or any appeal therefrom
shall be paid by the Bank in advance of the final disposition of such matter;
provided, however, that if the General Corporation Law of Delaware then would by
analogy so require, such payment shall be made only if the Agent shall undertake
to reimburse the Bank for such payment in the event that it is ultimately
determined, as provided herein, that such person is not entitled to
indemnification.

            SECTION 5. RIGHT OF AGENT TO INDEMNIFICATION OR ADVANCE UPON
APPLICATION; PROCEDURE UPON APPLICATION. Any indemnification under Section 1 or
2, or advance under Section 4, of this Article shall be made promptly and in any
event within 90 days, upon written request of the Agent, unless with respect to
an application under said Sections 1 or 2 an adverse determination is reasonably
and promptly made pursuant to Section 3 of this Article or unless with respect
to an application under said Section 4 an adverse determination if made pursuant
to said Section 4. The right to indemnification or advances as granted by this
Article shall be enforceable by the Agent in any court of competent jurisdiction
if the Board of Directors or independent legal counsel improperly denies the
claim, in whole or in part, or if no disposition of such claim is made with 90
days. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any action, suit or
proceeding in advance of its final disposition where any required undertaking
has been tendered to the Bank) that the Agent has not met the standards of
conduct which would require the Bank to indemnify or advance the amount claimed,
but the burden of proving such defense shall be on the Bank. Neither the failure
of the Bank (including the Board of Directors, independent legal counsel and the
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the Agent is proper in the circumstances because
he or she has met the applicable standard of conduct, nor an actual
determination by the Bank (including the Board of Directors, independent legal
counsel and the stockholders) that the agent had not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the Agent had not met the applicable standard of conduct. The Agent's costs
and expenses incurred in connection with successfully establishing his or her
right to indemnification, in whole or in part, in any such proceeding shall also
be indemnified by the Bank.

            SECTION 6. CONTRIBUTION. In the event that the indemnification
provided for in this Article is held by a court of competent jurisdiction to be
unavailable to an Agent in whole or in part, then in respect of any threatened,
pending or completed action, suit or proceeding in which the Bank is jointly
liable with the Agent (or would be if joined in such action, suit or
proceeding), to the extent that would by analogy be permitted by the General
Corporation Law of Delaware the Bank shall contribute to the amount of expenses
(including attorneys fees) judgments, fines and amounts paid in settlement
actually and reasonably incurred and paid or payable by the Agent in such
proportion as is appropriate to reflect (i) the relative benefits received by
the Bank on the one hand and the Agent on the other from the transaction from
which such action, suit or proceeding arose and (ii) the relative fault of the
Bank on the one hand and of the Agent on the other in connection with the events
which resulted in such expenses, judgments, fines or settlement amounts, as well
as any other relevant equitable considerations. The relative fault of the Bank
on the one hand and of the Agent on the other shall be determined by reference
to, among other things, the parties' relative intent, knowledge, access
<PAGE>
to information and opportunity to correct or prevent the circumstances resulting
in such expenses, judgments, fines or settlement amounts.

            SECTION 7. OTHER RIGHTS AND REMEDIES. Indemnification under this
Article shall be provided regardless of when the events alleged to underlie any
action, suit or proceeding may have occurred, shall continue as to a person who
has ceased to be an Agent and shall inure to the benefit of the heirs, executors
and administrators of such a person. All rights to indemnification and
advancement of expenses under this Article shall be deemed to be provided by a
contract between the Bank and the Agent who serves as such at any time while
these By-Laws and other provisions of the General Corporation Law of Delaware
that would by analogy be relevant and other applicable law, if any, are in
effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing.

            SECTION 8. INSURANCE. Upon resolution passed by the Board of
Directors, the Bank may purchase and maintain insurance on behalf of any person
who is or was an Agent against any liability asserted against such person and
incurred by him or her in any such capacity, or arising out of his or her status
as such, regardless of whether the Bank would have the power to indemnify such
person against such liability under the provisions of this Article. The Bank may
create a trust fund, grant a security interest or use other means, including
without limitation a letter of credit, to ensure the payment of such sums as may
become necessary to effect indemnification as provided herein.

            SECTION 9. CONSTITUENT CORPORATIONS. For the purposes of the
Article, references to the Bank include all constituent banks (including any
constituent of a constituent) absorbed in a consolidation or merger as well as
the resulting or surviving bank, so that any person who is or was a director,
officer or employee of such a constituent bank or who, being or having been such
a director, officer or employee, is or was serving at the request of such
constituent bank as a director, officer, employee or trustee of another bank,
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article with respect to the
resulting or surviving bank as such person would if he or she had served the
resulting or surviving bank in the same capacity.

            SECTION 10. OTHER ENTERPRISES; FINES; SERVING AT BANK'S REQUEST. For
purposes of this Article, references to "other enterprise" in Section 1 and 9
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Bank" shall include any service by
an Agent as director, officer, employee, trustee or agent of the Bank which
imposes duties on, or involves services by, such Agent with respect to any
employee benefit plan, its participants, or beneficiaries. A person who acted in
good faith and in a manner he or she reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the Bank"
for purposes of this Article.

            SECTION 11. SAVINGS CLAUSE. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Bank shall nevertheless indemnify each Agent as to expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement with respect
to any action, suit, appeal, proceeding or investigation, whether civil,
criminal or administrative, and whether internal or external, including a grand
jury proceeding and an action or suit brought by or in the right of the Bank, to
the full extent permitted by the applicable portion of this Article that shall
not have been invalidated, or by any other applicable law.

            SECTION 12. ACTIONS INITIATED BY AGENT. Anything to the contrary in
this Article notwithstanding, the Bank shall indemnify any agent in connection
with an action, suit or proceeding initiated by such Agent (other than actions,
suits, or proceedings commenced pursuant to Section 5 of this Article) only if
such action, suit or proceeding was authorized by the Board of Directors.
<PAGE>
            SECTION 13. STATUTORY AND OTHER INDEMNIFICATION. Notwithstanding any
other provision of this Article, in any administrative proceeding or civil
action not initiated by a federal bank regulatory agency, the Bank shall
indemnify any Agent and advance expenses incurred by such Agent in any action,
suit or proceeding of the nature referred to in Section 1 or 2 of this Article
to the fullest extent that would by analogy be permitted by the General
Corporation Law of Delaware, as the same may be amended from time to time,
except that no amount shall be paid pursuant to this Article in the event of an
adverse determination pursuant to Section 3 of this Article or in respect of
remuneration to the extent that it shall be determined to have been paid in
violation of law. The rights to indemnification and advancement of expenses
provided by any provision of this Article, including without limitation those
rights conferred by the preceding sentence, shall not be deemed exclusive of,
and shall not affect, any other rights to which an Agent seeking indemnification
or advancement of expenses may be entitled under any provision of any law,
articles of association, by-law, agreement or by any vote of stockholders or
disinterested directors or otherwise, both as to action in his or her official
capacity and as to action in another capacity while serving as an Agent. The
Bank may also provide indemnification and advancement of expenses to other
persons or entities to the extent deemed appropriate. Notwithstanding any
provision in these By-Laws, an Agent shall be indemnified in any administrative
proceeding or civil action initiated by a federal bank regulatory agency to the
extent reasonable and consistent with the provisions of Section 1828(k) of Title
12 of the United States Code and the implementing regulations thereunder.

                                   ARTICLE VII

                                  MISCELLANEOUS

            SECTION 1. CERTIFICATES OF STOCK. All certificates of the Bank's
stock shall be signed by the President or a Vice President and shall be
countersigned by the Secretary or an Assistant Secretary and shall bear the
corporate seal or a facsimile thereof.

            SECTION 2. SEAL. The seal of the Bank shall be in the form of two
concentric circles between which shall be the phrases "National Association" and
"Formerly Wells Fargo Bank American Trust Company" and in the center of which
shall be the words "Wells Fargo Bank" surrounded by a diamond of which the upper
left and lower right sides shall consist of three lines and the upper right and
lower left sides shall consist of a solid line of the same width as the three
lines comprising the other two sides.

            SECTION 3. EXECUTION OF WRITTEN INSTRUMENTS. All written instruments
shall be binding upon the Bank if signed on its behalf by (i) any two of the
following Officers: the Chairman of the Board, the President, any Vice Chairman,
any Executive Vice President or any Senior Managing Director or (ii) any one of
the foregoing officers signing jointly with any Managing Director or any Senior
Vice President. Whenever any other officer or person shall be authorized to
execute any agreement, document or instrument by resolution of the Board of
Directors, or by the Chief Executive Officer, or by any officer or committee
designated by the Chief Executive Officer, or by any two of the officers
identified in the immediately preceding sentence, such execution by such other
officer or person shall be equally binding upon the Bank.

            SECTION 4. OWNERSHIP INTERESTS IN OTHER ENTITIES. With respect to
another corporation, limited liability company, partnership or any other legal
entity in which the Bank has or may acquire an ownership interest, the Chairman
of the Board, the President, the Chief Financial Officer or the Treasurer,
acting alone, or any other officer or officers appointed from time to time by
the Board of Directors or the Executive Committee thereof, may authorize, sign
and deliver on behalf of the Bank (i) any proxy, written consent, ballot or
other similar instrument solicited by the entity from its owners, (ii) any stock
power, assignment, bill of sale or other instrument transferring all or any part
of the Bank's ownership of the entity or any agreement, instrument or other
document relating thereto and (iii) any purchase of stock or other
<PAGE>
ownership interest in or contribution to the capital of such entity or any
agreement, instrument or other document authorizing or evidencing the same.

            SECTION 5. AMENDMENTS. Subject to the right of the stockholders to
adopt, amend or repeal By-Laws, these By-Laws may be altered, amended or
repealed by the affirmative vote of a majority of the authorized number of
directors.

            SECTION 6. CORPORATE GOVERNANCE. To the extent not inconsistent with
applicable federal banking statutes or regulations or the safety and soundness
of this Association, this Association hereby elects to follow the corporate
governance procedures of the Delaware General Corporation Law, as the same may
be amended from time to time.
<PAGE>

                             EXHIBIT 6 TO FORM T-1



April 30, 2002



Securities and Exchange Commission
Washington, D.C. 20549

Gentlemen:

In accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities
authorized to make such examination may be furnished by such authorities to the
Securities and Exchange Commission upon its request thereof.

                                        Very truly yours,

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION


                                        /s/  Jeanie Mar
                                        ----------------------------------------
                                        Jeanie Mar
                                        Vice President
<PAGE>
                             EXHIBIT 7 TO FORM T-1


                                Board of Governors of the Federal Reserve System
                                OMB Number 7100-?038
                                Federal Deposit Insurance Corporation
                                OMB Number 3054-?052
                                Office of the Commissioner of the Currency
                                OMB Number 1557-0081
                                Expires March 31, 2004

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
-------------------------------------------------------------------------------
                                                                            /1/
                                                     Please refer to page:
                                                     Table of Contents to
                                                     the required disclosure
                                                     of estimated ???????
-------------------------------------------------------------------------------

                CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
              A BANK WITH DOMESTIC AND FOREIGN OFFICES -- FFIEC 031

REPORT AT THE CLOSE OF BUSINESS DECEMBER 31, 2001           20011231
                                                          ------------
                                                           (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 domestic offices only. Banks with
foreign offices (as defined in the instructions) must file FFIEC 031.
--------------------------------------------------------------------------------
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, KAREN B. MARTIN, VICE PRESIDENT
--------------------------------------------------------------------------------
     Name and Title of Officer Authorized to Sign Report

of the named bank do hereby declare that the Reports of Condition and Income
(including the supporting schedules) for this report date 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/ Karen B. Martin
--------------------------------------------------------------------------------
Signature of Officer Authorized to Sign Report

1/30/02
--------------------------------------------------------------------------------
Date of Signature
================================================================================
The Reports of Conditions and Income are to be prepared in accordance with
Federal regulatory authority instructions.

We, the undersigned directors (trustees), attest to the correctness of the
Report of Condition (including the supporting schedules) for this report date
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/ Carrie L. Tolstedt
--------------------------------------------------------------------------------
Director (Trustee)

/s/ Howard Atkins
--------------------------------------------------------------------------------
Director (Trustee)

/s/ Clyde W. Ostler
--------------------------------------------------------------------------------
Director (Trustee)

================================================================================

SUBMISSION OF REPORTS

Each bank must prepare its Reports of Condition and Income either:

     (a)  in electronic form and then file the computer data file directly with
          the banking agencies' collection agent, Electronic Data Systems
          Corporation (EDS), by modem or on computer diskette; or

     (b)  in hard-copy (paper) form and arrange for another party to convert the
          paper report to electronic form. That party (if other than EDS) must
          transmit the bank's computer data file to EDS.

For electronic filing assistance, contact EDS Call Report Services, 2150 N.
Prospect Ave., Milwaukee, WI 53202, telephone (800) 255-1571.

To fulfill the signature and attestation requirement for the Reports of
Condition and Income for this report date, attach this signature page (or a
photocopy or a computer-generated version of this page) to the hard-copy record
of the complete report that the bank places in its files.
--------------------------------------------------------------------------------

FDIC Certificate Number:                         0351*
                                             ------------
                                              (RCRI 9050)

http://www.wellsfargo.com
--------------------------------------------------------------------------------
Primary Internet Web Address of Bank
(Home Page), if any (TEXT 4087)
(Example: www.examplebank.com)

WELLS FARGO BANK NATIONAL ASSOCIATION
--------------------------------------------------------------------------------
Legal Title of Bank (TEXT 9010)

San Francisco
--------------------------------------------------------------------------------
City (TEXT 9130)

CA                                      94104
--------------------------------------------------------------------------------
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>
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR                      FFIEC 031
A BANK WITH DOMESTIC OFFICES ONLY                                     Page i
                                                                               2
TABLE OF CONTENTS

<TABLE>
<S>                                                  <C>
SIGNATURE PAGE                                       Cover

REPORT OF INCOME
Schedule RI - Income Statement                       RI-1, 2, 3
Schedule RI-A - Changes in Equity Capital            RI-4
Schedule RI-B - Charge-offs and Recoveries on
  Loans and Leases and Changes in Allowance
  for Loan and Lease Losses                          RI-4, 5
Schedule RI-D - Income from
  International Operations                           RI-6
Schedule RI-E - Explanations                         RI-6, 7
</TABLE>

DISCLOSURE OF ESTIMATED BURDEN


The estimated average burden associated with this information collection is 35.5
hours per respondent and is estimated to vary from 14 to 500 hours per response,
depending on individual circumstances. Burden estimates include the time for
reviewing instructions, gathering and maintaining data in the required form, and
completing the information collection, but exclude the time for compiling and
maintaining business records in the normal course of a respondent's activities.
A Federal agency may not conduct or sponsor, and an organization (or a person)
is not required to respond to a collection of information, unless it displays a
currently valid OMB control number. Comments concerning the accuracy of this
burden estimate and suggestions for reducing this burden should be directed to
the Office of Information and Regulatory Affairs, Office of Management and
Budget, Washington, D.C. 20503, and to one of the following:

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


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

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

<TABLE>
<CAPTION>
REPORT OF CONDITION
<S>                                                          <C>
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 (to be completed for the
  June report only; not included in the forms
  for the September and December reports)                    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
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 - Assets and Liabilities of IBFs               RC-12
Schedule RC-K - Quarterly Averages                           RC-13
Schedule RC-L - Derivatives and
  Off-Balance Sheet Items                                    RC-14, 15
Schedule RC-M - Memoranda                                    RC-16
Schedule RC-N - Past Due and Nonaccrual
  Loans, Leases, and Other Assets                            RC-17, 18
Schedule RC-O - Other Data for Deposit
  Insurance and FICO Assessments                             RC-19, 20
Schedule RC-R - Regulatory Capital                           RC-21,22,
                                                                23,24
Schedule RC-S - Securitization and
  Asset Sales Activities                                     RC-25,26,
                                                                27,27a
Schedule RC-T - Fiduciary and Related Services (to be
  completed beginning December 31, 2001)                     RC-28, 29, 30
Optional Narrative Statement Concerning
  the Amounts Reported in the Reports
  of Condition and Income                                    RC-31

Special Report (to be completed by all banks)
</TABLE>

For information or assistance, national and state nonmember banks should contact
the FDIC's Reports Analysis and Quality Control Section, 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>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-1
SAN FRANCISCO                                                          3
City

CA                                          94104
State                                       Zip Code

FDIC Certificate Number - 03511

CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 2001 - DECEMBER 31, 2001

ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE
BASIS IN THOUSANDS OF DOLLARS.

SCHEDULE RI -- INCOME STATEMENT

<TABLE>
<CAPTION>
                                                                     Dollar Amounts in Thousands  RIAD  Bil | Mil | Thou
------------------------------------------------------------------------------------------------------------------------
<S>    <C>                                                                                        <C>   <C>               <C>
1.     Interest Income:
       a. Interest and fee income on loans:
          (1) In domestic offices:
              (a) Loans secured by real estate                                                    4011     3,393,000      1.a.1.a
              (b) Loans to finance agricultural production and other loans to farmers             4024       151,000      1.a.1.b
              (c) Commercial and industrial loans                                                 4012     1,824,000      1.a.1.c
              (d) Loans to individuals for household, family, and other personal expenditures:
                  (1) CREDIT CARDS                                                                B485             0      1.a.1.d.1
                  (2) OTHER (INCLUDES SINGLE PAYMENT, INSTALLMENT, ALL STUDENT LOANS, AND
                      REVOLVING CREDIT PLANS OTHER THAN CREDIT CARDS)                             B486       331,000      1.a.1.d.2
              (e) Loans to foreign governments and official institutions                          4056             0      1.a.1.e
              (f) ALL OTHER LOANS IN DOMESTIC OFFICES                                             B487        83,000      1.a.1.f
          (2) In foreign offices, Edge and Agreement subsidiaries,
              and IBFs                                                                            4059         1,000      1.a.2
          (3) Total interest and fee income on loans (sum of items 1.a.(1)(a) through 1.a.(2))    4010     5,783,000      1.a.3
       b. INCOME FROM LEASE FINANCING RECEIVABLES                                                 4065       476,000      1.b
       c. INTEREST INCOME ON BALANCES DUE FROM DEPOSITORY INSTITUTIONS: (1)                       4115       137,000      1.c
       d. Interest and dividend income on securities:
          (1) U.S. TREASURY SECURITIES AND U.S. GOVERNMENT AGENCY OBLIGATIONS (EXCLUDING
              MORTGAGE-BACKED SECURITIES)                                                         B488        17,000      1.d.1
          (2) MORTGAGE-BACKED SECURITIES                                                          B489       423,000      1.d.2
          (3) ALL OTHER SECURITIES (INCLUDES SECURITIES ISSUED BY STATES AND POLITICAL
              SUBDIVISIONS IN THE U.S.)                                                           4060        82,000      1.d.3
       e. Interest income from trading assets                                                     4069        78,000      1.e
       f. Interest income on federal funds sold and securities purchased under agreements
          to resell                                                                               4020        12,000      1.f
       g. OTHER INTEREST INCOME                                                                   4518        23,000      1.g
       h. Total interest income (sum of items 1.a.(3) through 1.g)                                4107     7,031,000      1.h
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        22,000      2.a.1.a
              (b) Nontransaction accounts:
                  (1) SAVINGS DEPOSITS (INCLUDES MMDAS)                                           0093       641,000      2.a.1.b.1
                  (2) Time deposits of $100,000 or more                                           A517       203,000      2.a.1.b.2
                  (3) Time deposits of less than $100,000                                         A518       354,000      2.a.1.b.3
          (2) Interest on deposits in foreign offices, Edge and agreement subsidiaries, and IBFs  4172       232,000      2.a.2
       b. Expense of federal funds purchased and securities sold under agreements to repurchase   4180       654,000      2.b
       c. Interest on trading liabilities and other borrowed money                                4185       154,000      2.c
</TABLE>

----------
(1)      Includes interest income on time certificates of deposits not held for
         trading.

<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-2
                                                                               4
FDIC Certificate Number - 03511

SCHEDULE RI -- CONTINUED

<TABLE>
<CAPTION>
                                                                                 Year-to-date
                                                                                 ------------
                                              Dollar Amounts in Thousands  RIAD  Bil/Mil/Thou
---------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>   <C>            <C>   <C>        <C>
2.  Interest expense (continued):
    d. Interest on subordinated notes and debentures                       4200        298,000                   2.d
    e. Total interest expense (sum of items 2.a through 2.d)               4073      2,558,000                   2.e
3.  Net interest income (item 1.h minus 2.e)                                                    4074  4,473,000  3
4.  PROVISION FOR LOAN AND LEASE LOSSES                                                         4230    365,000  4
5.  Noninterest income:
    a. Income from fiduciary activities (1)                                4070        280,000                   5.a
    b. Service charges on deposit accounts in domestic offices             4080        917,000                   5.b
    c. Trading revenue (2)                                                 A220        247,000                   5.c
    d. INVESTMENT BANKING, ADVISORY, BROKERAGE, AND UNDERWRITING FEES
       AND COMMISSIONS                                                     B490        358,000                   5.d
    e. VENTURE CAPITAL REVENUE                                             B491              0                   5.e
    f. NET SERVICING FEES                                                  B492      1,656,000                   5.f
    g. NET SECURITIZATION INCOME                                           B493          4,000                   5.g
    h. INSURANCE COMMISSIONS AND FEES                                      B494          6,000                   5.h
    i. NET GAINS (LOSSES) ON SALES OF LOANS AND LEASES                     5416         59,000                   5.i
    j. NET GAINS (LOSSES) ON SALES OF OTHER REAL-ESTATE OWNED              5415          6,000                   5.j
    k. NET GAINS (LOSSES) ON SALES OF OTHER ASSETS (EXCLUDING SECURITIES)  B496        775,000                   5.k
    l. Other noninterest income*                                           B497      1,297,000                   5.l
    m. Total noninterest income (sum of items 5.a through 5.l)                                  4079  5,605,000  5.m
6.  a. Realized gains (losses) on held-to-maturity securities                                   3521          0  6.a
    b. Realized gains (losses) on available-for-sale securities                                 3196    256,000  6.b
7.  Noninterest expense:
    a. Salaries and employee benefits                                      4135      2,552,000                   7.a
    b. Expenses of premises and fixed assets (net of rental income)
       (excluding salaries and employee benefits and mortgage interest)    4217        662,000                   7.b
    c. AMORTIZATION EXPENSE OF INTANGIBLE ASSETS (INCLUDING GOODWILL)      4531        419,000                   7.c
    d. Other noninterest expense *                                         4092      2,038,000                   7.d
    e. Total noninterest expense (sum of items 7.a through 7.d)                                 4093  5,671,000  7.e
8.  Income (loss) before income taxes and extraordinary
    items, and other adjustments (item 3 plus or minus items 4, 5.m,
    6.a, 6.b, and 7.e)                                                                          4301  4,298,000  8
9.  Applicable income taxes (on item 8)                                                         4302  1,427,000  9
10. Income (loss) before extraordinary items and other adjustments
    (item 8 minus item 9)                                                                       4300  2,871,000  10
11. Extraordinary items and other adjustments, net of income taxes *                            4320          0  11
12. Net income (loss) (sum of items 10 and 11)                                                  4340  2,871,000  12
</TABLE>

----------
*    Describe on Schedule RI-E - Explanations.

(1)  For banks required to complete Schedule RC-T, items 12 through 19,
     income from fiduciary activities reported in Schedule RI, item 5.a,
     must equal the amount reported in Schedule RC-T, item 19.

(2)  For banks required to complete Schedule RI, Memorandum item 8, trading
     revenue reported in Schedule RI, item 5.c must equal the sum of
     Memorandum items 8.a through 8.d.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-3
                                                                              5
FDIC Certificate Number - 03511

SCHEDULE RI -- CONTINUED

<TABLE>
<CAPTION>
                                                                                                        Year-to-Date
                                                                                                      ----------------
MEMORANDA                                                        Dollar Amounts in Thousands    RIAD  Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------
<S>    <C>                                                                                      <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           4,000    M.1
2.     Income from the sale and servicing of mutual funds and annuities in domestic offices
       (included in Schedule RI, item 8)                                                        8431         357,000    M.2
3.     INCOME ON TAX-EXEMPT LOANS AND LEASES TO STATES AND POLITICAL SUBDIVISIONS IN
       THE U.S. (INCLUDED IN SCHEDULE RI, ITEMS 1.a AND 1.b)                                    4313           7,000    M.3
4.     Income on tax-exempt securities issued by states and political subdivisions in the U.S.
       (included in Schedule RI, item 1.d.(3))                                                  4507          20,000    M.4
5.     Number of full-time equivalent employees at end of current period (round to                        NUMBER
       nearest whole number)                                                                    4150          47,267    M.5
6.     Not applicable
7.     If the reporting bank has restated its balance sheet as a result of applying push down      CCYY / MM / DD
       accounting this calendar year, report the date of the bank's acquisition (1)             9106             N/A    M.7
8.     Trading revenue (from cash instruments and derivative instruments) (sum
       of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c) (TO
       BE COMPLETED BY BANKS THAT REPORTED AVERAGE TRADING ASSETS (SCHEDULE
       RC-K, ITEM 7) OF $2 MILLION OR MORE FOR ANY QUARTER OF THE PRECEDING
       CALENDAR YEAR.):
</TABLE>

<TABLE>
                                                                                                RIAD  Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------
<S>    <C>                                                                                      <C>   <C>               <C>
       a. Interest rate exposures                                                               8757         101,000    M.8.a
       b. Foreign exchange exposures                                                            8758         146,000    M.8.b
       c. Equity security and index exposures                                                   8759               0    M.8.c
       d. Commodity and other exposures                                                         8760               0    M.8.d
</TABLE>

<TABLE>
----------------------------------------------------------------------------------------------------------------------
<S>    <C>                                                                                      <C>   <C>               <C>
9.     Impact on income of derivatives held for purposes other than trading:                    RIAD  Bil | Mil | Thou
       a. Net increase (decrease) to interest income                                            8761         659,000    M.9.a
       b. Net (increase) decrease to interest expense                                           8762         (8,000)    M.9.b
       c. Other (noninterest) allocations                                                       8763               0    M.9.c
10.    Credit losses on derivatives (see instructions)                                          A251               0    M.10
11.    Does the reporting bank have a Subchapter S election in effect for                              YES /  NO
       federal income tax purposes for the current tax year ?                                   A530              NO    M.11
</TABLE>

----------
(1)      For example, a bank acquired on June 1, 2001, would report 20010601
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-4
                                                                               6
FDIC Certificate Number - 03511

SCHEDULE RI-A -- CHANGES IN EQUITY CAPITAL

Indicate decreases and losses in parentheses.

<TABLE>
<CAPTION>
                                                                Dollar Amounts in Thousands   RIAD    Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>     <C>               <C>
1.  TOTAL EQUITY CAPITAL MOST RECENTLY REPORTED FOR THE DECEMBER 31, 2000, REPORTS
    OF CONDITION AND INCOME (I.E., AFTER ADJUSTMENTS FROM AMENDED REPORTS OF INCOME)          3217     13,738,000       1
2.  RESTATEMENTS DUE TO CORRECTIONS OF MATERIAL ACCOUNTING ERRORS AND CHANGES IN
    ACCOUNTING PRINCIPLES*                                                                    B507              0       2
3.  BALANCE END OF PREVIOUS CALENDAR YEAR AS RESTATED (SUM OF ITEMS 1 AND 2)                  B508     13,738,000       3
4.  Net income (loss) (must equal Schedule RI, item 12)                                       4340      2,871,000       4
5.  SALE, CONVERSION, ACQUISITION, OR RETIREMENT OF CAPITAL STOCK, NET (EXCLUDING TREASURY
    STOCK TRANSACTIONS)                                                                       B509              0       5
6.  TREASURY STOCK TRANSACTIONS, NET                                                          B510              0       6
7.  Changes incident to business combinations, net                                            4356              0       7
8.  LESS: Cash dividends declared on preferred stock                                          4470              0       8
9.  LESS: Cash dividends declared on common stock                                             4460      1,298,000       9
10. OTHER COMPREHENSIVE INCOME (1)                                                            B511        174,000       10
11. Other transactions with parent holding company * (not included in items
    5, 6, 8, or 9 above)                                                                      4415        701,000       11
12. Total equity capital end of current period (sum of items 3 through 11) (must equal
    Schedule RC, item 28)                                                                     3210     16,186,000       12
</TABLE>

----------
*    Describe on Schedule RI-E - Explanations.

(1)  Includes changes in net unrealized holding gains (losses) on
     available-for-sale securities, changes in accumulated net gains
     (losses) on cash flow hedges, foreign currency translation adjustments,
     and changes in minimum pension liability adjustments.

SCHEDULE RI-B -- CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES
                 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.

<TABLE>
<CAPTION>
                                                                                  (Column A)             (Column B)
                                                                                Charge-offs (1)           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. CONSTRUCTION, LAND DEVELOPMENT, AND OTHER LAND LOANS IN DOMESTIC
      OFFICES                                                               3582             0      3583          0         1.a
   b. Secured by farmland in domestic offices                               3584         1,000      3585          0         1.b
   c. Secured by 1-4 family residential properties in domestic offices:
        (1) Revolving, open-end loans secured by 1-4 family residential
            properties and extended under lines of credit                   5411         4,000      5412      1,000         1.c.1
        (2) Closed-end loans secured by 1-4 family residential properties   5413         6,000      5414      5,000         1.c.2
   d. Secured by multifamily (5 or more) residential properties in
      domestic offices                                                      3588         2,000      3589      3,000         1.d
   e. Secured by nonfarm nonresidential properties in domestic offices      3590        15,000      3591     14,000         1.e
   f. IN FOREIGN OFFICES                                                    B512             0      B513          0         1.f
2. Loans to depository institutions and acceptances of other banks:
   a. To U.S. banks and other U.S. depository institutions                  4653             0      4663          0         2.a
   b. To foreign banks                                                      4654             0      4664          0         2.b
3. Loans to finance agricultural production and other loans to farmers      4655         6,000      4665      3,000         3
4. Commercial and industrial loans:
   a. To U.S. addressees (domicile)                                         4645       348,000      4617     58,000         4.a
   b. To non-U.S. addressees (domicile)                                     4646         2,000      4618          0         4.b
5. Loans to individuals for household, family, and other personal
   expenditures:
   a. CREDIT CARDS                                                          B514             0      B515          0         5.a
   b. OTHER (INCLUDES SINGLE PAYMENT, INSTALLMENT, ALL STUDENT LOANS
      AND REVOLVING CREDIT PLANS OTHER THAN CREDIT CARDS)                   B516        85,000      B517     33,000         5.b
</TABLE>

----------
(1)      Include write-downs arising from transfers of loans to the
         held-for-sale account.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-5
                                                                               7
FDIC Certificate Number - 03511

SCHEDULE RI-B -- CONTINUED

PART I. CONTINUED

<TABLE>
<CAPTION>
                                                                        (Column A)                (Column B)
                                                                     Charge-offs (1)              Recoveries
                                                                -----------------------    -------------------------
                                                                                Calendar year-to-date
                                                                ----------------------------------------------------
                              Dollar Amounts in Thousands       RIAD   Bil | Mil | Thou    RIAD     Bil | Mil | Thou
--------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>    <C>                 <C>      <C>                 <C>
6. Loans to foreign governments and official institutions       4643              0        4627                0        6
7. All other loans                                              4644         27,000        4628            4,000        7
8. Lease financing receivables:
   a. To U.S. addressees (domicile)                             4658         72,000        4668           26,000        8.a
   b. To non-U.S. addressees (domicile)                         4659              0        4669                0        8.b
9. Total (sum of items 1 through 8)                             4635        568,000        4605          147,000        9
</TABLE>

<TABLE>
<CAPTION>
                                                                                 (Column A)               (Column B)
MEMORANDA                                                                      Charge-offs (1)             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 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          0           M.1
2. Loans secured by real estate to non-U.S. addresses (domicile)
   (included in Schedule RI-B, part I, item 1, above):                    4652          0           4662          0           M.2
</TABLE>

----------
(1)      Include write-downs arising from transfers of loans to the
         held-for-sale account.

PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES

<TABLE>
<CAPTION>
                                                                 Dollar Amounts in Thousands    RIAD   Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                                             <C>    <C>                 <C>
1. BALANCE MOST RECENTLY REPORTED FOR THE DECEMBER 31, 2000 , REPORTS OF CONDITION
   AND INCOME (I.E., AFTER ADJUSTMENTS FROM AMENDED REPORTS OF INCOME)                          B522        1,507,000      1
2. Recoveries (must equal part I, item 9, column B above)                                       4605          147,000      2
3. LESS: Charge-offs (sum of part I, item 9, column A above and Schedule RI-E, item 6.a)        C079          568,000      3
4. PROVISION FOR LOAN AND LEASE LOSSES (MUST EQUAL SCHEDULE RI, ITEM 4)                         4230          365,000      4
5. Adjustments * (see instructions for this schedule)                                           4815          (6,000)      5
6. Balance end of current period (sum of items 1 through 5)
   (must equal Schedule RC, item 4.c)                                                           3123        1,445,000      6
</TABLE>

----------
*        Include as a negative number write-downs arising from transfers of
         loans to the held-for-sale account. Describe all adjustments on
         Schedule RI-E -- Explanations, item 6.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-6
                                                                               8
FDIC Certificate Number - 03511

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.

<TABLE>
<CAPTION>
                                                                                                           Year-to-Date
                                                                                                         ----------------
Dollar Amounts in Thousands                                                                        RIAD  Bil | Mil | Thou
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                <C>   <C>                <C>
1. INTEREST INCOME AND EXPENSE ATTRIBUTABLE TO INTERNATIONAL OPERATIONS:
   a. GROSS INTEREST INCOME                                                                        B523        N/A          1.a
   b. GROSS INTEREST EXPENSE                                                                       B524        N/A          1.b
2. NET INTEREST INCOME ATTRIBUTABLE TO INTERNATIONAL OPERATIONS (ITEM 1.a MINUS 1.b)               B525        N/A          2.
3. Noninterest income and expense attributable to international operations:
   a. Noninterest income attributable to international operations                                  4097        N/A          3.a
   b. Provision for loan and lease losses attributable to international operations                 4235        N/A          3.b
   c. Other noninterest expense attributable to international operations                           4239        N/A          3.c
   d. Net noninterest income (expense) attributable to international operations (item 3.a minus
      3.b and 3.c)                                                                                 4843        N/A          3.d
4. Estimated pretax income attributable to international operations before capital allocation
   adjustment (sum of items 2 and 3.d)                                                             4844        N/A          4
5. Adjustment to pretax income for internal allocations to international operations to reflect
   the effects of equity capital on overall bank funding costs                                     4845        N/A          5
6. Estimated pretax income attributable to international operations after capital allocation
   adjustment (sum of items 4 and 5)                                                               4846        N/A          6
7. Income taxes attributable to income from international operations as estimated in item 6        4797        N/A          7
8. Estimated net income attributable to international operations (item 6 minus 7)                  4341        N/A          8
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-7
                                                                               9
FDIC Certificate Number - 03511

SCHEDULE RI-E -- EXPLANATIONS

SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.

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

<TABLE>
<CAPTION>
                                                                                                 Year-to-Date
                                                                                               ----------------
                                              Dollar Amounts in Thousands               RIAD   Bil | Mil | Thou
-------------------------------------------------------------------------------------------------------------
<S>   <C>                                                                   <C>    <C>  <C>    <C>                 <C>
1.    OTHER NONINTEREST INCOME (FROM SCHEDULE RI, ITEM 5.l)
      ITEMIZE AND DESCRIBE THE THREE LARGEST AMOUNTS THAT EXCEED 1%
      OF THE SUM OF SCHEDULE RI, ITEMS 1.h AND 5.m:
               TEXT
      a.  C013 Income and fees from the printing and sale of checks                     C013            0          1.a
      b.  C014 Earnings on/increase in value of cash surrender value of
               life insurance                                                           C014            0          1.b
      c.  C016 Income and fees from automated teller machines (ATMs)                    C016            0          1.c
      d.  4042 Rent and other income from other real estate owned                       4042            0          1.d
      e.  C015 Safe deposit box rent                                                    C015            0          1.e
      f.  4461 Loan Origination Fees                                                    4461      710,000          1.f
      g.  4462 Intercompany Allocation                                                  4462      394,000          1.g
      h.  4463 Credit Card Fees                                                         4463      142,000          1.h
2.    OTHER NONINTEREST EXPENSE (FROM SCHEDULE RI, ITEM 7.d): ITEMIZE AND
      DESCRIBE THE THREE LARGEST AMOUNTS THAT EXCEED 1% OF THE SUM OF OF
      SCHEDULE RI, ITEMS 1.h AND 5.m:
               TEXT
      a.  C017 Data processing expenses                                                 C017            0          2.a
      b.  0497 Advertising and marketing expenses                                       0497      179,000          2.b
      c.  4136 Director's fees                                                          4136            0          2.c
      d.  C018 Printing, stationary, and supplies                                       C018            0          2.d
      e.  8403 Postage                                                                  8403            0          2.e
      f.  4141 Legal fees and expenses                                                  4141            0          2.f
      g.  4146 FDIC deposit insurance assessments                                       4146            0          2.g
      h.  4464 Service from Intercompany Affiliates                                     4464      519,000          2.h
      I.  4467 Professional Fees                                                        4467      409,000          2.I
      j.  4468 Telephone Expense                                                        4468      143,000          2.j
3.    Extraordinary items and other adjustments and applicable income tax
      effect (from Schedule RI, item 11) (itemize and describe all
      extraordinary items and other adjustments):
               TEXT
a.    (1) 6373 Effect of adopting FAS 133, "Accounting for Derivative
               Instruments and Hedging Activities"                                      6373            0          3.a.1
      (2) Applicable income tax effect                                      4486   0                               3.a.2
b.    (1) 4487                                                                          4487          N/A          3.b.1
      (2) Applicable income tax effect                                      4488   0                               3.b.2
c.    (1) 4489                                                                          4489          N/A          3.c.1
      (2) Applicable income tax effect                                      4491   0                               3.c.2
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RI-8
                                                                              10
FDIC Certificate Number - 03511

SCHEDULE RI-E -- CONTINUED

<TABLE>
<CAPTION>
                                                                                                        Year-to-Date
                                                                                                      ----------------
              Dollar Amounts in Thousands                                                       RIAD  Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>    <C>     <C>   <C>                  <C>

4. RESTATEMENTS DUE TO CORRECTIONS OF MATERIAL ACCOUNTING ERRORS AND CHANGES IN
   ACCOUNTING PRINCIPLES (from Schedule RI-A, item 2) (itemize and describe all
   restatements):
            TEXT
   a.  B526                                                                                      B526            N/A       4.a
   b.  B527                                                                                      B527            N/A       4.b
5. Other transactions with parent holding company (from Schedule RI-A, item 11)
   (itemize and describe all such transactions):
            TEXT
   a.  4498 Capital Infusions                                                                    4498        701,000       5.a
   b.  4499                                                                                      4499            N/A       5.b
6. ADJUSTMENTS TO ALLOWANCE FOR LOAN AND LEASE LOSSES (FROM SCHEDULE RI-B,
   PART II, ITEM 5) (ITEMIZE AND DESCRIBE ALL ADJUSTMENTS):
            TEXT
   a.  5523 Write-downs arising from transfers of loans in the held-for-sale
       account                                                                                   5523              0       6.a
   b.  4522 Sale of Loans                                                                        4522        (6,000)       6.b

 7. Other explanations (the space below is provided for the bank to briefly
    describe, at its option, any other significant items affecting the
    Report of Income):                                                           RIAD
    X = NO COMMENT - Y = COMMENT                                                 4769   X
    Other explanations (please type or print clearly):
            TEXT (70 CHARACTERS PER LINE)
       4769
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           --------------------------------------------------------------------
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                 FFIEC 031
Legal Title of Bank                                                   RC-1
SAN FRANCISCO                                                                11
City
CA                                          94104
State                                       Zip Code

FDIC Certificate Number - 03511

CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 2001

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>
                                        Dollar Amounts in Thousands                       RCFD   Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>    <C>          <C>    <C>                 <C>
ASSETS
1.  Cash and balances due from depository institutions (from
    Schedule RC-A):
    a. Noninterest-bearing balances and currency and coin (1)                             0081        8,537,000      1.a
    b. Interest-bearing balances (2)                                                      0071        3,744,000      1.b
2.  Securities:
    a. Held-to-maturity securities (from Schedule RC-B, column A)                         1754                0      2.a
    b. Available-for-sale securities (from Schedule RC-B, column D)                       1773        6,395,000      2.b
3.  Federal funds sold and securities purchased under agreements to
    resell                                                                                1350          247,000      3
4.  Loans and lease financing receivables (from Schedule RC-C):
    a. LOANS AND LEASES HELD FOR SALE                                                     5369       16,886,000      4.a
    b. LOANS AND LEASES, NET OF UNEARNED INCOME                       B528   78,378,000                              4.b
    c. LESS: Allowance for loan and lease losses                      3123    1,445,000                              4.c
    d. LOANS AND LEASES, NET OF UNEARNED INCOME AND ALLOWANCE
       (ITEM 4.b MINUS 4.c)                                                               B529       76,933,000      4.d
5.  Trading assets (from Schedule RC-D)                                                   3545        4,283,000      5
6.  Premises and fixed assets (including capitalized leases)                              2145        1,632,000      6
7.  Other real estate owned (from Schedule RC-M)                                          2150           97,000      7
8.  Investments in unconsolidated subsidiaries and associated
    companies (from Schedule RC-M)                                                        2130          256,000      8
9.  Customers' liability to this bank on acceptances outstanding                          2155           39,000      9
10. Intangible assets:
    a. GOODWILL                                                                           3163        5,396,000      10.a
    b. OTHER INTANGIBLE ASSETS (FROM SCHEDULE RC-M)                                       0426        6,916,000      10.b
11. Other assets (from Schedule RC-F)                                                     2160        9,314,000      11
12. Total assets (sum of items 1 through 11)                                              2170      140,675,000      12
</TABLE>

----------
(1)      Includes cash items in process of collection and unposted debits.

(2)      Includes time certificates of deposit not held for trading.

<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-2

FDIC Certificate Number - 03511                                           12

SCHEDULE RC -- CONTINUED

<TABLE>
<CAPTION>
                                             Dollar Amounts in Thousands                        RCON     Bil | Mil | Thou
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>    <C>          <C>      <C>                <C>
LIABILITIES
13. Deposits:
    a. In domestic offices (sum of totals of columns A and C from
       Schedule RC-E, part I)                                                                   2200        73,644,000      13.a
       (1) Noninterest-bearing (1)                                          6631   26,090,000                               13.a.1
       (2) Interest-bearing                                                 6636   47,554,000                               13.a.2
    b. In foreign offices, Edge and Agreement subsidiaries, and IBFs                            RCFN
       (from Schedule RC-E, part II)                                                            2200         5,433,000      13.b
       (1) Noninterest-bearing                                              6631        2,000                               13.b.1
       (2) Interest-bearing                                                 6636    5,431,000   RCFD                        13.b.2
14. Federal funds purchased and securities sold under agreements
    to repurchase                                                                               2800        23,616,000      14
15. Trading liabilities (from Schedule RC-D)                                                    3548         3,281,000      15
16. OTHER BORROWED MONEY (INCLUDES MORTGAGE INDEBTEDNESS AND OBLIGATIONS
    UNDER CAPITALIZED LEASES) (FROM SCHEDULE RC-M):                                             3190         6,114,000      16
17. Not applicable
18. Bank's liability on acceptances executed and outstanding                                    2920            39,000      18
19. Subordinated notes and debentures(2)                                                        3200         5,540,000      19
20. Other liabilities (from Schedule RC-G)                                                      2930         6,794,000      20
21. Total liabilities (sum of items 13 through 20)                                              2948       124,461,000      21
22. MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES                                              3000            28,000      22
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus                                               3838                 0      23
24. Common stock                                                                                3230           520,000      24
25. Surplus (exclude all surplus related to preferred stock)                                    3839        13,232,000      25
26. a. Retained earnings                                                                        3632         2,132,000      26.a
    b. ACCUMULATED OTHER COMPREHENSIVE INCOME (3)                                               B530           302,000      26.b
27. OTHER EQUITY CAPITAL COMPONENTS (4)                                                         A130                 0      27
28. Total equity capital (sum of items 23 through 27)                                           3210        16,186,000      28
29. Total liabilities, minority interest, and equity capital (sum
    of items 21, 22, and 28)                                                                    3300       140,675,000      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 most comprehensive level of auditing work
   performed for the bank by independent external auditors as of any                           RCFD         NUMBER
   date during 2000                                                                            6724                N/A      M. 1
</TABLE>

1  =  Independent audit of the bank conducted in accordance with generally
      accepted auditing standards by a certified public accounting firm which
      submits a report on the bank

2  =  Independent audit of the bank's parent holding company conducted in
      accordance with generally accepted auditing standards by a certified
      public accounting firm which submits a report on the consolidated holding
      company (but not on the bank separately)

3  =  ATTESTATION ON BANK MANAGEMENT'S ASSERTION ON THE EFFECTIVENESS OF THE
      BANK'S INTERNAL CONTROL OVER FINANCIAL REPORTING BY A CERTIFIED PUBLIC
      ACCOUNTING FIRM

4  =  Directors' examination of the bank conducted in accordance with
      generally accepted auditing standards by a certified public accounting
      firm (may be required by state chartering authority)

5  =  Directors' examination of the bank performed by other external auditors
      (may be required by state chartering authority)

6  =  Review of the bank's financial statements by external auditors

7  =  Compilation of the bank's financial statements by external auditors

8  =  Other audit procedures (excluding tax preparation work)

9  =  No external audit work

----------

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

(2)   Includes limited-life preferred stock and related surplus.

(3)   Includes net unrealized holding gains (losses) on available-for-sale
      securities, accumulated net gains (losses) on cash flow hedges, cumulative
      foreign currency translation adjustments, and minimum pension liability
      adjustments.

(4)   Includes treasury stock and unearned Employee Stock Ownership Plan shares.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-3

FDIC Certificate Number - 03511                                           13

SCHEDULE RC-A -- CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS

Exclude assets held for trading.

<TABLE>
<CAPTION>
                                                                                    (Column A)                 (Column B)
                                                                                   Consolidated                 Domestic
                                                                                       Bank                     Offices
                                                                            ------------------------------------------------
                                              Dollar Amounts in Thousands   RCFD  Bil | Mil | Thou   RCON   Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>   <C>                <C>    <C>                <C>
1. Cash items in process of collection, unposted debits, and currency
   and coin                                                                 0022     8,130,000                                 1
   a. Cash items in process of collection and unposted debits                                        0020       6,643,000      1.a
   b. Currency and coin                                                                              0080       1,487,000      1.b
2. Balance due from depository institutions in the U.S.                                              0082       3,544,000      2
   a. U.S. branches and agencies of foreign banks (including their IBFs)    0083        88,000                                 2.a
   b. Other commercial banks in the U.S. and other depository
      institutions in the U.S. (including their IBFs)                       0085     3,544,000                                 2.b
3. Balances due from banks in foreign countries and foreign central banks                            0070         491,000      3
   a. Foreign branches of other U.S. banks                                  0073       471,000                                 3.a
   b. Other banks in foreign countries and foreign central banks            0074        20,000                                 3.b
4. Balances due from Federal Reserve Banks                                  0090        28,000       0090          28,000      4
5. Total (sum of items 1 through 4) (total of column A must equal
   Schedule RC, sum of items 1.a and 1.b)                                   0010    12,281,000       0010      12,193,000      5
</TABLE>

SCHEDULE RC-B -- SECURITIES

Exclude assets held for trading.

<TABLE>
<CAPTION>
                                                   Held-to-maturity                              Available-for-sale
                                 ----------------------------------------------------------------------------------------------
                                          (Column A)              (Column B)              (Column C)             (Column D)
                                        Amortized Cost            Fair Value            Amortized Cost           Fair Value
                                 ----------------------------------------------------------------------------------------------
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       71,000       1287         72,000     1
2. U.S. Government agency
   obligations (exclude
   mortgage-backed securities):
   a. Issued by U.S. Government
      agencies (1)               1289           0        1290           0        1291       10,000       1293         10,000     2.a
   b. Issued by U.S.
      Government-sponsored
      agencies (2)               1294           0        1295           0        1297      143,000       1298        150,000     2.b
3. SECURITIES ISSUED BY STATES
   AND POLITICAL SUBDIVISIONS
   IN THE U.S.                   8496           0        8497           0        8498      351,000       8499        365,000     3
</TABLE>

----------

(1)   Includes Small Business Administration 'Guaranteed Loan Pool
      Certificates,' U.S. Maritime Administration obligations, and Export -
      Import Bank participation certificates.

(2)   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>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-4

FDIC Certificate Number - 03511                                           14

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
                               ----------------------------------------------------------------------------------------------
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>
4. Mortgage-backed securities
   (MBS):
   a. Pass-through securities:
      (1) Guaranteed by GNMA   1698          0         1699           0        1701      1,783,000     1702     1,792,000      4.a.1
      (2) Issued by FNMA and
          FHLMC                1703          0         1705           0        1706      2,460,000     1707     2,487,000      4.a.2
      (3) Other pass-through
          securities           1709          0         1710           0        1711          7,000     1713         8,000      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         33,000     1717        34,000      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        842,000     1736       839,000      4.b.3
5. ASSET-BACKED SECURITIES
   (ABS):
   a. CREDIT CARD RECEIVABLES  B838          0         B839           0        B840          1,000     B841         1,000      5.a
   b. HOME EQUITY LINES        B842          0         B843           0        B844              0     B845             0      5.b
   c. AUTOMOBILE LOANS         B846          0         B847           0        B848              0     B849             0      5.c
   d. OTHER CONSUMER LOANS     B850          0         B851           0        B852              0     B853             0      5.d
   e. COMMERCIAL AND
      INDUSTRIAL LOANS         B854          0         B855           0        B856              0     B857             0      5.e
   f. OTHER                    B858          0         B859           0        B860              0     B861             0      5.f
6. Other debt securities:
   a. Other domestic debt
      securities               1737          0         1738           0        1739        632,000     1741       625,000      6.a
   b. Foreign debt securities  1742          0         1743           0        1744          4,000     1746         4,000      6.b
7. Investments in mutual
   funds and other equity
   securities with readily
   determinable fair
   values (1)                                                                  A510          8,000     A511         8,000      7
8. Total (sum of items 1
   through 7) (total of
   Column A must equal
   Schedule RC item 2.a)
   (total of column D must
   equal Schedule RC, item
   2.b)                        1754          0         1771           0        1772      6,345,000     1773     6,395,000     8
</TABLE>

----------

(1)   Report Federal Reserve stock, Federal Home Loan Bank stock, and banker's
      bank stock in Schedule RC-F, item 4.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-2

FDIC Certificate Number - 03511                                           15

SCHEDULE RC-B -- CONTINUED

<TABLE>
<CAPTION>
MEMORANDA                                    Dollar Amounts in Thousands                RCFD     Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>      <C>                 <C>
1. Pledged securities (1)                                                               0416           387,000       M.1
2. Maturity and repricing data for debt securities (1,2) (excluding
   those in nonaccrual status):
   a. Securities issued by the U.S. Treasury, U.S. Government agencies,
      and states and political subdivisions in the U.S.; other
      non-mortgage debt securities; and mortgage pass-through securities
      other than those backed by closed-end first lien 1-4 family
      residential mortgages with a remaining maturity or next repricing
      date of: (3,4)
      (1) Three months or less                                                          A549            85,000       M.2.a.1
      (2) Over three months through 12 months                                           A550           134,000       M.2.a.2
      (3) Over one year through three years                                             A551           177,000       M.2.a.3
      (4) Over three years through five years                                           A552           179,000       M.2.a.4
      (5) Over five years through 15 years                                              A553           521,000       M.2.a.5
      (6) Over 15 years                                                                 A554           121,000       M.2.a.6
   b. Mortgage pass-through securities backed by closed-end first lien
      1-4 family residential mortgages with a remaining maturity or next
      repricing date of: (3,5)
      (1) Three months or less                                                          A555            73,000       M.2.b.1
      (2) Over three months through 12 months                                           A556            54,000       M.2.b.2
      (3) Over one year through three years                                             A557             1,000       M.2.b.3
      (4) Over three years through five years                                           A558            40,000       M.2.b.4
      (5) Over five years through 15 years                                              A559           209,000       M.2.b.5
      (6) Over 15 years                                                                 A560         3,910,000       M.2.b.6
   c. Other mortgage-backed securities (include CMOs, REMICs, and
      stripped MBS; exclude mortgage pass-through securities) with an
      expected average life of: (6)
      (1) Three years or less                                                           A561            78,000       M.2.c.1
      (2) Over three years                                                              A562           795,000       M.2.c.2
   d. Debt securities with a REMAINING MATURITY of one year or less
      (included in Memorandum items 2.a through 2.c above)                              A248           146,000       M.2.d
3. 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.3
4. Structured notes (included in the held-to-maturity and
   available-for-sale accounts in Schedule RC-B, items 2, 3, 5, and 6):
   a. Amortized cost                                                                    8782                 0       M.4.a
   b. Fair value                                                                        8783                 0       M.4.b
</TABLE>

----------

(1)   Includes held-to-maturity securities at amortized cost and
      available-for-sale securities at fair value.

(2)   Exclude investments in mutual funds and other equity securities with
      readily determinable fair values.

(3)   Report fixed rate debt securities by remaining maturity and floating rate
      debt securities by next repricing date.

(4)   Sum of Memorandum items 2.a.(1) through 2.a.(6) plus any nonaccrual debt
      securities in the categories of debt securities reported in Memorandum
      item 2.a that are included in Schedule RC-N, item 9, column C, must equal
      Schedule RC-B, sum of items 1, 2, 3, 5, and 6, columns A and D, plus
      mortgage pass-through securities other than those backed by closed-end
      first lien 1-4 family residential mortgages included in Schedule RC-B,
      item 4.a, columns A and D.

(5)   Sum of Memorandum items 2.b.(1) through 2.b.(6) plus any nonaccrual
      mortgage pass-through securities backed by closed-end first lien 1-4
      family residential mortgages included in Schedule RC-N, item 9, column C,
      must equal Schedule RC-B, item 4.a, sum of columns A and D, less the
      amount of mortgage pass-through securities other than those backed by
      closed-end first lien 1-4 family residential mortgages included in
      Schedule RC-B, item 4.a, columns A and D.

(6)   Sum of Memorandum items 2.c.(1) and 2.c.(2) plus any nonaccrual "Other
      mortgage-backed securities" included in Schedule RC-N, item 9, column C,
      must equal Schedule RC-B, item 4.b, sum of columns A and D.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-2

FDIC Certificate Number - 03511                                           16

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 (1) loans and leases held for sale and (2) other loans and
leases, net of unearned income.

REPORT LOANS AND LEASES NET OF ANY APPLICABLE ALLOCATED TRANSFER RISK RESERVE.

Exclude assets held for trading and commercial paper.

<TABLE>
<CAPTION>
                                                                                    (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      58,137,000                             1
    a. CONSTRUCTION, LAND DEVELOPMENT, AND OTHER LAND LOANS                                         1415        4,648,000    1.a
    b. Secured by farmland (including farm residential and other
       improvements)                                                                                1420          657,000    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        3,190,000    1.c.1
       (2) Closed-end loans secured by 1-4 family residential properties:
           (a) Secured by first liens                                                               5367       32,714,000    1.c.2.a
           (b) Secured by junior liens                                                              5368        1,039,000    1.c.2.b
    d. Secured by multifamily (5 or more) residential properties                                    1460        1,331,000    1.d
    e. Secured by nonfarm nonresidential properties                                                 1480       14,558,000    1.e
2.  LOANS TO DEPOSITORY INSTITUTIONS AND ACCEPTANCES OF OTHER BANKS:
    a. To commercial banks in the U.S.                                                              B531          438,000    2.a
       (1) To U.S. branches and agencies of foreign banks                   B532               0                             2.a.1
       (2) To other commercial banks in the U.S.                            B533         440,000                             2.a.2
    b. To other depository institutions in the U.S.                         B534               0    B534                0    2.b
    c. To banks in foreign countries                                                                B535           23,000    2.c
       (1) To foreign branches of other U.S. banks                          B536               0                             2.c.1
       (2) To other banks in foreign countries                              B537          33,000                             2.c.2
3.  Loans to finance agricultural production and other loans to farmers     1590       2,604,000    1590        2,604,000    3
4.  Commercial and industrial loans:
    a. To U.S. addressees (domicile)                                        1763      21,993,000    1763       21,993,000    4.a
    b. To non-U.S. addressees (domicile)                                    1764          33,000    1764           26,000    4.b
5.  Not applicable.
6.  Loans to individuals for household, family, and other personal
    expenditures (i.e., consumer loans) (includes purchased paper):
    a. CREDIT CARDS                                                         B538          37,000    B538           37,000    6.a
    b. OTHER REVOLVING CREDIT PLANS                                         B539       1,039,000    B539        1,039,000    6.b
    c. Other consumer loans (includes single payment, installment,
       and all student loans                                                2011       4,274,000    2011        4,273,000    6.c
7.  Loans to foreign government and official institutions (including
    foreign central banks)                                                  2081               0    2081                0    7
8.  Obligations (other than securities and leases) of states and
    political subdivisions in the U.S.                                      2107         134,000    2107          134,000    8
9.  Other loans                                                             1563       1,099,000                             9
    a. Loans for purchasing or carrying securities (secured and unsecured)                          1545          557,000    9.a
    b. All other loans (exclude consumer loans)                                                     1564          542,000    9.b
10. Lease financing receivables (net of unearned income)                                            2165        5,441,000    10
    a. Of U.S. addressees (domicile)                                        2182       5,441,000                             10.a
    b. Of non-U.S. addressees (domicile)                                    2183               0                             10.b
11. LESS: Any unearned income on loans reflected in items 1-9 above         2123               0    2123                0    11
12. Total loans and leases, net of unearned income (sum of items 1
    through 10 minus item 11) (total of column A must equal Schedule RC,
    item 4.a and 4.b)                                                       2122      95,264,000    2122       95,244,000    12
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-2

FDIC Certificate Number - 03511                                           17

SCHEDULE RC-C -- CONTINUED

PART I. CONTINUED

<TABLE>
<CAPTION>
MEMORANDA                                     Dollar Amounts in Thousands               RCFD     Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>      <C>                <C>
1. LOANS AND LEASES RESTRUCTURED AND IN COMPLIANCE WITH MODIFIED TERMS
   (INCLUDED IN SCHEDULE RC-C, PART I, AND NOT REPORTED AS PAST DUE OR
   NONACCRUAL IN SCHEDULE RC-N, MEMORANDUM ITEM 1) (EXCLUDE LOANS SECURED
   BY 1-4 FAMILY RESIDENTIAL PROPERTIES AND LOANS TO INDIVIDUALS FOR
   HOUSEHOLD, FAMILY, AND OTHER PERSONAL EXPENDITURES)                                  1616                 0      M.1
2. Maturity and repricing data for loans and leases (excluding those in
   nonaccrual status):
   a. Closed-end loans secured by first liens on 1-4 family residential
      properties in domestic offices (reported in Schedule RC-C, part I,
      item 1.c.(2)(a), column B) with a remaining maturity or next
      repricing date of: (1,2)                                                          RCON
      (1) Three months or less                                                          A564        17,500,000      M.2.a.1
      (2) Over three months through 12 months                                           A565           662,000      M.2.a.2
      (3) Over one year through three years                                             A566           202,000      M.2.a.3
      (4) Over three years through five years                                           A567         1,058,000      M.2.a.4
      (5) Over five years through 15 years                                              A568        12,317,000      M.2.a.5
      (6) Over 15 years                                                                 A569           913,000      M.2.a.6
   b. All loans and leases (reported in Schedule RC-C, part I, items 1
      through 10, column A) EXCLUDING closed-end loans secured by first
      liens on 1-4 family residential properties in domestic offices
      (reported in Schedule RC-C, part I item 1.c.(2)(a), column B) with
      a remaining maturity or next repricing date of: (1,3)                             RCFD
      (1) Three months or less                                                          A570        35,946,000      M.2.b.1
      (2) Over three months through 12 months                                           A571         5,719,000      M.2.b.2
      (3) Over one year through three years                                             A572         6,344,000      M.2.b.3
      (4) Over three years through five years                                           A573         9,117,000      M.2.b.4
      (5) Over five years through 15 years                                              A574         4,478,000      M.2.b.5
      (6) Over 15 years                                                                 A575           406,000      M.2.b.6
   c. Loans and leases (reported in Schedule RC-C, part I, items 1
      through 10, column A) with a REMAINING MATURITY of one year or less
      (excluding those in nonaccrual status)                                            A247        40,642,000      M.2.c
3. 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 (4)                                   2746         5,064,000      M.3
4. Adjustable rate closed-end loans secured by first liens on 1-4 family
   residential properties in domestic offices                                           RCON
   (included in Schedule RC-C, part I, item 1.c.(2)(a), column B)                       5370        12,650,000      M.4
5. LOANS SECURED BY REAL ESTATE TO NON-U.S. ADDRESSES (DOMICILE)                        RCFD
   (INCLUDED IN SCHEDULE RC-C, PART I, ITEM 1, COLUMN A)                                B837                 0      M.5
</TABLE>

----------

(1)   Report fixed rate loans and leases by remaining maturity and floating rate
      loans by next repricing date.

(2)   Sum of Memorandum items 2.a.(1) through 2.a.(6) plus total nonaccrual
      closed-end loans secured by first liens on 1-4 family residential
      properties in domestic offices included in Schedule RC-N, item 1.c.(2),
      column C must equal total closed-end loans secured by first liens on 1-4
      family residential properties from Schedule RC-C, part I, item
      1.c.(2)(a), column B

(3)   Sum of Memorandum items 2.b.(1) through 2.b.(6) plus total nonaccrual
      loans and leases from Schedule RC-N, sum of items 1 through 8, column C,
      minus nonaccrual closed-end loans secured by first liens on 1-4 family
      residential properties in domestic offices included in Schedule RC-N, item
      1.c.(2), column C, must equal total loans and leases from Schedule RC-C,
      Part I, sum or items 1 through 10, column A, minus total closed-end loans
      secured by first liens on 1-4 family residential properties in domestic
      offices from Schedule RC-C, part I, item 1.c.(2)(a), column B.

(4)   Exclude loans secured by real estate that are included in Schedule RC-C,
      part I, item 1, column A.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-2

FDIC Certificate Number - 03511                                           18

SCHEDULE RC-D -- TRADING ASSETS AND LIABILITIES

SCHEDULE RC-D IS TO BE COMPLETED BY BANKS THAT REPORTED AVERAGE TRADING ASSETS
(SCHEDULE RC-K, ITEM 7) OF $2 MILLION OR MORE FOR ANY QUARTER OF THE PRECEDING
YEAR.

<TABLE>
<CAPTION>
                                        Dollar Amounts in Thousands        RCON     Bil | Mil | Thou
----------------------------------------------------------------------------------------------------
<S>                                                                        <C>      <C>                <C>
 ASSETS

  1.  U.S. Treasury securities in domestic offices                          3531          309,000       1
  2.  U.S. Government agency obligations in domestic offices (exclude
      mortgage-backed securities)                                           3532          288,000       2
  3.  Securities issued by states and political subdivisions in             3533            7,000       3
      the U.S. in domestic offices
  4.  Mortgage-backed securities (MBS) in domestic offices:
      a. Pass-through securities issued or guaranteed by FNMA, FHLMC,       3534                0       4.a
         or GNMA
      b. Other mortgage-backed securities issued or guaranteed by
         FNMA, FHLMC, or GNMA (include CMOs, REMICs, and stripped MBS)      3535                0       4.b
      c. All other mortgage-backed securities                               3536          145,000       4.c
  5.  Other debt securities in domestic offices                             3537                0       5
6.-8. Not applicable
  9.  Other trading assets in domestic offices                              3541          980,000       9
                                                                            RCFN
 10. Trading assets in foreign offices                                      3542                0       10
 11. Revaluation gains on interest rate, foreign exchange rate,
     and other commodity and equity contracts:                              RCON
     a. In domestic offices                                                 3543        2,554,000       11.a
                                                                            RCFN
     b. In foreign offices                                                  3543                0       11.b
 12. Total trading assets (sum of items 1 through 11) (must equal           RCFD
     Schedule RC, item 5)                                                   3545        4,283,000       12
</TABLE>

<TABLE>
<CAPTION>
 LIABILITIES                                                                RCFD     Bil | Mil | Thou
----------------------------------------------------------------------------------------------------
<S>                                                                        <C>      <C>                <C>
 13. Liability for short positions                                          3546          726,000       13
 14. Revaluation losses on interest rate, foreign exchange rate,
     and other commodity and equity contracts                               3547        2,555,000       14
 15. Total trading liabilities (sum of items 13 and 14) (must
     equal Schedule RC, item 15)                                            3548        3,281,000       15
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-2

FDIC Certificate Number - 03511                                           19

SCHEDULE RC-E -- DEPOSIT LIABILITIES

PART I. DEPOSITS IN DOMESTIC OFFICES

<TABLE>
<CAPTION>
                                                                                                            Nontransaction
                                                                 Transaction Accounts                          Accounts
                                                    ------------------------------------------------------------------------
                                                             (Column A)
                                                                Total                 (Column B)               (Column C)
                                                             transaction              MEMO: TOTAL                 Total
                                                              accounts                  DEMAND               nontransaction
                                                             (including                DEPOSITS                  accounts
                                                                total                (INCLUDED IN              (including
                                                           demand deposits)            COLUMN A)                 MMDAs)
                                                    ------------------------------------------------------------------------
                       Dollar Amounts in Thousands  RCON   Bil | Mil | Thou   RCON  Bil | Mil | Thou  RCON  Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>    <C>                <C>   <C>               <C>   <C>
DEPOSITS OF:
1. Individuals, partnerships and corporations
   (INCLUDE ALL CERTIFIED AND OFFICIAL CHECKS)      B549      16,533,000                              B550     54,691,000      1
2. U.S. Government                                  2202          50,000                              2520              0      2
3. States and political subdivisions in the U.S.    2203         467,000                              2530         88,000      3
4. COMMERCIAL BANKS AND OTHER DEPOSITORY
   INSTITUTIONS IN THE U.S.                         B551       1,815,000                              B552              0      4
5. Banks in foreign countries                       2213               0                              2236              0      5
6. Foreign governments, and official institutions
   (including foreign central banks)                2216               0                              2377              0      6
7. Total (sum of items 1 through 6) (sum of
   columns A and C must equal Schedule RC,
   item 13.a)                                       2215      18,865,000      2210     18,199,000     2385      54,779,000     7
</TABLE>

<TABLE>
<CAPTION>
MEMORANDA                                     Dollar Amounts in Thousands               RCON     Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>      <C>                <C>
1. Selected components of total deposits (i.e., sum of item 7, columns
   A and C):
   a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts               6835         1,696,000      M.1.a
   b. Total brokered deposits                                                           2365                 0      M.1.b
   c. Fully insured brokered deposits (included in Memorandum item
      1.b above):
      (1) Issued in denominations of less than $100,000                                 2343                 0      M.1.c.1
      (2) Issued either in denominations of $100,000 or in denominations
          greater than $100,000 and participated out by the broker
          in shares of $100,000 or less                                                 2344                 0      M.1.c.2
   d. 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                 0      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                 0      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)
      (TO BE COMPLETED FOR THE DECEMBER REPORT ONLY)                                    5590           430,000      M.1.e
2. Components of total nontransaction accounts (sum of Memorandum items
   2.a through 2.c must equal item 7, column C, above):
   a. Savings deposits:
      (1) Money market deposit accounts (MMDAs)                                         6810        21,229,000     M.2.a.1
      (2) Other savings deposits (excludes MMDAs)                                       0352        24,077,000     M.2.a.2
   b. Total time deposits of less than $100,000                                         6648         6,088,000     M.2.b
   c. Total time deposits of $100,000 or more                                           2604         3,385,000     M.2.c
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-2

FDIC Certificate Number - 03511                                           20

SCHEDULE RC-E -- CONTINUED

Part I. Continued

<TABLE>
<CAPTION>
Memoranda (continued)                         Dollar Amounts in Thousands       RCON     Bil | Mil | Thou
---------------------------------------------------------------------------------------------------------
<S>                                                                             <C>      <C>                <C>
3. Maturity and repricing data for time deposits of less than $100,000:
   a. Time deposits of less than $100,000 with a remaining maturity or
      next repricing date of (1,2)
      (1) Three months or less                                                  A579        2,314,000       M.3.a.1
      (2) Over three months through 12 months                                   A580        2,676,000       M.3.a.2
      (3) Over one year through three years                                     A581          803,000       M.3.a.3
      (4) Over three years                                                      A582          295,000       M.3.a.4
   b. Time deposits of less than $100,000 with a REMAINING MATURITY
      of one year or less (included in Memorandum items 3.a.(1) through
      3.a.(4) above)(3)                                                         A241        4,990,000       M.3.b
4. Maturity and repricing data for time deposits of $100,000 or more:
   a. Time deposits of $100,000 or more with a remaining maturity or
      next repricing date of (1,4)
      (1) Three months or less                                                  A584        1,588,000       M.4.a.1
      (2) Over three months through 12 months                                   A585        1,351,000       M.4.a.2
      (3) Over one year through three years                                     A586          335,000       M.4.a.3
      (4) Over three years                                                      A587          111,000       M.4.a.4
   b. Time deposits of $100,000 or more with a REMAINING MATURITY of one
      year or less (included in Memorandum items 4.a.(1) through
      4.a.(4) above)(3)                                                         A242        2,939,000       M.4.b
</TABLE>

----------

(1)   Report fixed rate time deposits by remaining maturity and floating rate
      time deposits by next repricing date.

(2)   Sum of Memorandum items 3.a.(1) through 3.a.(4) must equal Schedule RC-E
      Memorandum item 2.b.

(3)   Report both fixed and floating rate time deposits by remaining maturity.
      Exclude floating rate time deposits with a next repricing date of one year
      or less that have a remaining maturity of over one year.

(4)   Sum of Memorandum items 4.a.(1) through 4.a.(4) must equal Schedule RC-E,
      Memorandum item 2.c

PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND AGREEMENT
SUBSIDIARIES AND IBFS)

<TABLE>
<CAPTION>
                                              Dollar Amounts in Thousands       RCON     Bil | Mil | Thou
---------------------------------------------------------------------------------------------------------
<S>                                                                             <C>      <C>                <C>
Deposits of:
1. INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS (INCLUDE ALL CERTIFIED AND
   OFFICIAL CHECKS)                                                             B553        4,161,000       1
2. U.S. BANKS (INCLUDING IBFS AND FOREIGN BRANCHES OF U.S. BANKS) AND
   OTHER U.S. DEPOSITORY INSTITUTIONS                                           B554          903,000       2
3. Foreign banks (including U.S. branches and agencies of foreign banks,
   including their IBFs)                                                        2625          369,000       3
4. Foreign governments and official institutions (including foreign
   central banks)                                                               2650                0       4
5. U.S. GOVERNMENT AND STATES AND POLITICAL SUBDIVISIONS IN THE U.S.            B555                0       5
6. Total (sum of items 1 through 5 ) (must equal Schedule RC, item 13.b)        2200        5,433,000       6
</TABLE>

<TABLE>
<CAPTION>
MEMORANDA                                     Dollar Amounts in Thousands       RCON     Bil | Mil | Thou
---------------------------------------------------------------------------------------------------------
<S>                                                                             <C>      <C>                <C>
1. Time deposits with a remaining maturity of one year or less (included
   in Part II, item 6 above)                                                    A245         5,330,000      M.1
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-11

FDIC Certificate Number - 03511                                           21

SCHEDULE RC-F -- OTHER ASSETS

<TABLE>
<CAPTION>
                                               Dollar Amounts in Thousands                      RCFD     Bil | Mil | Thou
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>    <C>          <C>      <C>                <C>
1. ACCRUED INTEREST RECEIVABLE (1)                                                              B556            487,000     1
2. Net deferred tax assets (2)                                                                  2148                  0     2
3. Interest-only strips receivable (not in the form of a security) (3) on:
   a. Mortgage loans                                                                            A519          1,458,000     3.a
   b. Other financial assets                                                                    A520            151,000     3.b
4. EQUITY SECURITIES THAT DO NOT HAVE READILY DETERMINABLE FAIR VALUES (4)                      1752            721,000     4
5. Other (itemize and describe amounts greater than $25,000 that exceed
   25% of this item)                                                                            2168          6,497,000     5

           TEXT
   a. 2166 Prepaid expenses                                                 2166           0                                5.a
   b. C009 Cash surrender value of life insurance                           C009           0                                5.b
   c. 1578 Repossessed personal property (including vehicles)               1578           0                                5.c
   d. C010 Derivatives with a positive fair value held for purposes
           other than trading                                               C010           0                                5.d
   e. 3549 Accounts Receivable                                              3549   5,413,000                                5.e
   f. 3550                                                                  3550         N/A                                5.f
   g. 3551                                                                  3551         N/A                                5.g
6. Total (sum of items 1 through 5) (must equal Schedule RC, item 11)                           2160          9,314,000     6
</TABLE>

SCHEDULE RC-G -- OTHER LIABILITIES

<TABLE>
<CAPTION>
                                               Dollar Amounts in Thousands                      RCON     Bil | Mil | Thou
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>    <C>          <C>      <C>                <C>
1. a. Interest accrued and unpaid on deposits in domestic offices(5)                            3645             43,000     1.a
   b. Other expenses accrued and unpaid (includes accrued income taxes                          RCFD
      payable)                                                                                  3646          1,930,000     1.b
2. Net deferred tax liabilities (2)                                                             3049          2,614,000     2
3. ALLOWANCE FOR CREDIT LOSSES ON OFF-BALANCE SHEET CREDIT EXPOSURES                            B557                  0     3
4. Other (itemize and describe amounts greater than $25,000 that exceed
   25% of this item)                                                                            2938          2,207,000     4

           TEXT
   a. 3066 Accounts payable                                                 3066   1,758,000                                4.a
   b. C011 Deferred compensation liabilities                                C011           0                                4.b
   c. 2932 Dividends declared but not yet payable                           2932           0                                4.c
   d. C012 Derivatives with a negative fair value held for purposes
           other than trading                                               C012           0                                4.d
   e. 3552                                                                  3552         N/A                                4.e
   f. 3553                                                                  3553         N/A                                4.f
   g. 3554                                                                  3554         N/A                                4.g
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20)                           2930          6,794,000     5
</TABLE>

----------

(1)   Include accrued interest receivable on loans, leases, debt securities, and
      other interest-bearing assets.

(2)   See discussion of deferred income taxes in Glossary entry on "income
      taxes."

(3)   Report interest-only strips receivable in the form of a security as
      available-for sale securities in Schedule RC, item 2.b, or as trading
      assets in Schedule RC, item 5, as appropriate.

(4)   Include Federal Reserve stock, Federal Home Loan Bank stock, and bankers'
      bank stock

(5)   For savings banks, includes "dividends" accrued and unpaid on deposits.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-12

FDIC Certificate Number - 03511                                           22

SCHEDULE RC-H -- SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES

<TABLE>
<CAPTION>
                                                                                                 Domestic
                                                                                                 Offices
                                                                                   ---------------------------
                                                   Dollar Amounts in Thousands     RCON       Bil | Mil | Thou
--------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>        <C>                <C>
1. Customers' liability to this bank on acceptances outstanding                    2155             39,000       1
2. Bank's liability on acceptances executed and outstanding                        2920             39,000       2
3. Federal funds sold and securities purchased under agreements to resell          1350            247,000       3
4. Federal funds purchased and securities sold under agreements to repurchase      2800         23,616,000       4
5. Other borrowed money                                                            3190          6,114,000       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          5,072,000       7
8. Total assets (excludes net due from foreign offices, Edge and Agreement
   subsidiaries, and IBFs)                                                         2192        140,314,000       8
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement
   subsidiaries, and IBFs)                                                         3129        119,028,000       9

IN ITEMS 10-17 REPORT THE AMORTIZED (HISTORICAL) COST OF BOTH HELD-TO-MATURITY
AND AVAILABLE-FOR-SALE SECURITIES IN DOMESTIC OFFICES.

10. U.S. Treasury securities                                                       1039            71,000        10
11. U.S. Government agency obligations (exclude mortgage-backed securities)        1041           153,000        11
12. Securities issued by states and political subdivisions in the U.S.             1042           351,000        12
13. Mortgage-backed securities (MBS):
    a. Pass-through securities:
       (1) Issued or guaranteed by FNMA, FHLMC, or GNMA                            1043         4,243,000        13.a.1
       (2) Other pass-through securities                                           1044             7,000        13.a.2
    b. Other mortgage-backed securities (include CMOs, REMICs, and stripped
       MBS):
       (1) Issued or guaranteed by FNMA, FHLMC, or GNMA                            1209            33,000        13.b.1
       (2) All other mortgage-backed securities                                    1280           842,000        13.b.2
14. Other domestic debt securities (include domestic asset-backed securities)      1281           633,000        14
15. Foreign debt securities (include foreign asset-backed securities)              1282             4,000        15
16. Investments in mutual funds and other equity securities with readily
    determinable fair values                                                       A510             8,000        16
17. Total amortized (historical) cost of both held-to-maturity and
    available-for-sale securities (sum of items 10 through 16)                     1374         6,345,000        17
18. Equity securities that do not have readily determinable fair values            1752           721,000        18
</TABLE>

SCHEDULE RC-I -- SELECTED ASSETS AND LIABILITIES OF IBFs

TO BE COMPLETED ONLY BY BANKS WITH IBFs AND OTHER "FOREIGN" OFFICES.

<TABLE>
<CAPTION>
                                                     Dollar Amounts in Thousands   RCFN       Bil | Mil | Thou
--------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>        <C>                <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12)   2133            20,000        1
2. Total IBF liabilities (component of Schedule RC, item 21)                       2898             1,000        2
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-13

FDIC Certificate Number - 03511                                           23

SCHEDULE RC-K--QUARTERLY AVERAGES (1)

<TABLE>
<CAPTION>
                                                     Dollar Amounts in Thousands    RCFD    Bil | Mil | Thou
------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>     <C>               <C>
ASSETS

1. Interest-bearing balances due from depository institutions                       3381        3,478,000     1
2. U.S. TREASURY SECURITIES AND U.S. GOVERNMENT AGENCY OBLIGATIONS (2)
   (EXCLUDING MORTGAGE-BACKED SECURITIES)                                           B558          229,000     2
3. MORTGAGE-BACKED SECURITIES (2)                                                   B559        5,055,000     3
4. ALL OTHER SECURITIES (2, 3)(INCLUDES SECURITIES ISSUED BY STATES AND
   POLITICAL SUBDIVISIONS IN THE U.S.)                                              B560        1,019,000     4
5. Federal funds sold and securities purchased under agreements to resell           3365           88,000     5
6. Loans:
   a. Loans in domestic offices:                                                    RCON
      (1) Total loans                                                               3360       87,516,000     6.a.1
      (2) Loans secured by real estate                                              3385       56,497,000     6.a.2
      (3) Loans to finance agricultural production and other loans to farmers       3386        2,323,000     6.a.3
      (4) Commercial and industrial loans                                           3387       22,015,000     6.a.4
      (5) Loans to individuals for household, family, and other personal
          expenditures:
          (a) CREDIT CARDS                                                          B561           26,000     6.a.5.a
          (b) OTHER (INCLUDES SINGLE PAYMENT, INSTALLMENT, ALL STUDENT LOANS,
              AND REVOLVING CREDIT PLANS OTHER THAN CREDIT CARDS)                   B562        4,799,000     6.a.5.b
                                                                                    RCFN
   b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs     3360           10,000     6.b
                                                                                    RCFD
7. Trading assets                                                                   3401        4,666,000     7
8. Lease financing receivables (net of unearned income)                             3484        5,599,000     8
9. Total assets(4)                                                                  3368      136,847,000     9

LIABILITIES

10. Interest-bearing transaction accounts in domestic (NOW accounts,                RCON
    ATS accounts, and telephone and preauthorized transfer accounts)
    (exclude demand deposits)                                                       3485          595,000     10
11. Nontransaction accounts in domestic offices:
    a. SAVINGS DEPOSITS (INCLUDES MMDAS)                                            B563       44,442,000     11.a
    b. Time deposits of $100,000 or more                                            A514        3,462,000     11.b
    c. Time deposits of less than $100,000                                          A529        6,204,000     11.c
                                                                                    RCFN
12. Interest-bearing deposits in foreign offices, Edge and Agreement
    subsidiaries, and IBFs                                                          3404        6,562,000     12
                                                                                    RCFD
13. Federal funds purchased and securities sold under agreements to repurchase      3353       19,403,000     13
14. Other borrowed money
    (includes mortgage indebtedness and obligations under capitalized leases)       3355        8,895,000     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 averages 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>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-14

FDIC Certificate Number - 03511                                           24

SCHEDULE RC-L--DERIVATIVES AND OFF-BALANCE SHEET ITEMS

Please read carefully the instructions for Some of the amounts the preparation
of Schedule RC-L. reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.

<TABLE>
<CAPTION>

                                                     Dollar Amounts in Thousands                     RCFD    Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>   <C>          <C>     <C>               <C>
1. Unused commitments:
   a. Revolving, open-end lines secured by 1-4 family residential properties,
      e.g., home equity lines                                                                        3814       10,127,000     1.a
   b. Credit card lines                                                                              3815        5,367,000     1.b
   c. Commercial real estate, construction, and land development:
      (1) Commitments to fund loans secured by real estate                                           3816        4,083,000     1.c.1
      (2) Commitments to fund loans not secured by real estate                                       6550        4,833,000     1.c.2
   d. Securities underwriting                                                                        3817                0     1.d
   e. Other unused commitments                                                                       3818       26,706,000     1.e
2. Financial standby letters of credit and foreign office guarantees                                 3819          932,000     2
   a. Amount of financial standby letters of credit conveyed to others            3820    120,000                              2.a
3. Performance standby letters of credit and foreign office guarantees                               3821        3,038,000     3.
   a. Amount of performance standby letters of credit conveyed to others          3822    243,000                              3.a
4. Commercial and similar letters of credit                                                          3411          175,000     4

5. Participations in acceptances (as described in the instructions) conveyed to
   others by the reporting bank                                                                      3428            2,000     5
6. Securities lent (including customers' securities lent where the customer is
   indemnified against loss by the reporting bank)                                                   3433        3,362,000     6
7. Notional amount of credit derivatives:
   a. Credit derivatives on which the reporting bank is the guarantor                                A534          882,000     7.a
   b. Credit derivatives on which the reporting bank is the beneficiary                              A535          965,000     7.b
8. Spot foreign exchange contracts                                                                   8765        1,027,000     8
9. All other off-balance sheet liabilities (exclude derivatives) (itemize and
   describe each component of this item over 25% of Schedule RC, item 28,
   "Total equity capital")                                                                           3430        2,879,000     9

           TEXT
   a. 3432 Securities borrowed                                                    3432  2,879,000                              9.a
   b. 3434 Commitments to purchase when-issued securities                         3434          0                              9.b
   c. 3555                                                                        3555        N/A                              9.c
   d. 3556                                                                        3556        N/A                              9.d
   e. 3557                                                                        3557        N/A                              9.e
10. All other off-balance sheet assets (exclude derivatives)(itemize and
    describe each component of this item over 25% Schedule RC item 28., "Total
    equity capital")                                                                                 5591                0     10

           TEXT
   a. 3435 Commitments to sell when-issued securities                             3435          0                              10.a
   b. 5592                                                                        5592        N/A                              10.b
   c. 5593                                                                        5593        N/A                              10.c
   d. 5594                                                                        5594        N/A                              10.d
   e. 5595                                                                        5595        N/A                              10.e
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-15

FDIC Certificate Number - 03511                                           25

SCHEDULE RC-L--CONTINUED

<TABLE>
<CAPTION>
                    Dollar Amounts in Thousands       (Column A)            (Column B)
                                                       Interest               Foreign
                Derivatives Position Indicators           Rate                Exchange
                                                       Contracts             Contracts
------------------------------------------------------------------------------------------------
                                                   Bil | Mil | Thou   Tril | Bil | Mil | Thou
                                                   ------------------------------------------
<S>                                                <C>                <C>
11. Gross amounts (e.g., notional amounts) (for
    each column, sum of items 11.a through 11.e
    must equal sum of items 12 and 13):                 RCFD 8693              RCFD 8694
    a. Futures contracts                               23,026,000                      0
                                                        RCFD 8697              RCFD 8698
    b. Forward contracts                              155,456,000              8,614,000
    c. Exchange-traded option contracts:                RCFD 8701              RCFD 8702
       (1) Written options                            233,963,000                      0
                                                        RCFD 8705              RCFD 8706
       (2) Purchased options                          245,053,000                      0
    d. Over-the-counter option contracts:               RCFD 8709              RCFD 8710
       (1) Written options                             47,744,000                260,000
                                                        RCFD 8713              RCFD 8714
       (2) Purchased options                           47,699,000                275,000
                                                        RCFD 3450              RCFD 3826
    e. Swaps                                           93,159,000                      0
12. Total gross notional amount of                      RCFD A126              RCFD A127
    derivative contracts held for trading             237,901,000              9,149,000
13. Total gross notional amount of
    derivative contracts held for                       RCFD 8725              RCFD 8726
    purposes other than trading                       608,199,000                      0
    a. Interest rate swaps where the bank               RCFD A589
       has agreed to pay a fixed rate                  34,126,000
14. Gross fair values of derivative contracts:
    a. Contracts held for trading:                      RCFD 8733              RCFD 8734
       (1) Gross positive fair value                    2,516,000                      0
                                                        RCFD 8737              RCFD 8738
       (2) Gross negative fair value                    2,450,000                248,000
    b. Contracts held for purposes other than
       trading:                                         RCFD 8741              RCFD 8742
       (1) Gross positive fair value                    1,435,000                196,000
                                                        RCFD 8745              RCFD 8746
       (2) Gross negative fair value                      679,000                      0
</TABLE>

<TABLE>
<CAPTION>
                    Dollar Amounts in Thousands              (Column C)                (Column D)
                                                               Equity                  Commodity
                Derivatives Position Indicators              Derivative                and Other
                                                             Contracts                 Contracts
-------------------------------------------------------------------------------------------------------
                                                      Tril | Bil | Mil | Thou   Tril | Bil | Mil | Thou
                                                      -------------------------------------------------
<S>                                                   <C>                       <C>                       <C>
11. Gross amounts (e.g., notional amounts) (for
    each column, sum of items 11.a through 11.e
    must equal sum of items 12 and 13):                       RCFD 8695                  RCFD 8696
    a. Futures contracts                                              0                          0        11.a
                                                              RCFD 8699                  RCFD 8700
    b. Forward contracts                                              0                          0        11.b
    c. Exchange-traded option contracts:                      RCFD 8703                  RCFD 8704
       (1) Written options                                            0                          0        11.c.1
                                                              RCFD 8707                  RCFD 8708
       (2) Purchased options                                      2,000                          0        11.c.2
    d. Over-the-counter option contracts:                     RCFD 8711                  RCFD 8712
       (1) Written options                                      745,000                     93,000        11.d.1
                                                              RCFD 8715                  RCFD 8716
       (2) Purchased options                                    745,000                     93,000        11.d.2
                                                              RCFD 8719                  RCFD 8720
    e. Swaps                                                  1,840,000                     41,000        11.e
12. Total gross notional amount of                            RCFD 8723                  RCFD 8724
    derivative contracts held for trading                     3,332,000                    227,000        12
13. Total gross notional amount of
    derivative contracts held for                             RCFD 8727                  RCFD 8728
    purposes other than trading                                       0                          0        13
    a. Interest rate swaps where the bank
       has agreed to pay a fixed rate                                                                     13.a
14. Gross fair values of derivative contracts:
    a. Contracts held for trading:                            RCFD 8735                  RCFD 8736
       (1) Gross positive fair value                             57,000                     11,000        14.a.1
                                                              RCFD 8739                  RCFD 8740
       (2) Gross negative fair value                             59,000                     11,000        14.a.2
    b. Contracts held for purposes other than
       trading:                                               RCFD 8743                  RCFD 8744
       (1) Gross positive fair value                              1,000                          0        14.b.1
                                                              RCFD 8747                  RCFD 8748
       (2) Gross negative fair value                                  0                          0        14.b.2
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-16

FDIC Certificate Number - 03511                                           26

SCHEDULE RC-M--MEMORANDA

<TABLE>
<CAPTION>

                                                     Dollar Amounts in Thousands                     RCFD    Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>   <C>          <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           44,000     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 in agency regulations          6165         16                              1.b
2. INTANGIBLE ASSETS OTHER THAN GOODWILL:
   a. Mortgage Servicing Assets                                                                      3164        6,286,000     2.a
      (1) Estimated fair value of mortgage servicing assets                       A590  6,418,000                              2.a.1
   b. Purchased credit card relationships and nonmortgage servicing assets                           B026            2,000     2.b
   c. All other identifiable intangible assets                                                       5507          628,000     2.c
   d. TOTAL (SUM OF ITEMS 2.a, 2.b, AND 2.c) (MUST EQUAL SCHEDULE RC,
      ITEM 10.b)                                                                                     0426        6,916,000     2.d
3. Other real estate owned:
   a. Direct and indirect investments in real estate ventures                                        5372           24,000     3.a
   b. All other real estate owned:                                                                   RCON
      (1) CONSTRUCTION, LAND DEVELOPMENT, AND OTHER LAND IN DOMESTIC OFFICES                         5508                0     3.b.1
      (2) Farmland in domestic offices                                                               5509                0     3.b.2
      (3) 1-4 family residential properties in domestic offices                                      5510           35,000     3.b.3
      (4) Multifamily (5 or more) residential properties in domestic offices                         5511                0     3.b.4
      (5) Nonfarm nonresidential properties in domestic offices                                      5512           38,000     3.b.5
                                                                                                     RCFN
      (6) In foreign offices                                                                         5513                0     3.b.6
                                                                                                     RCFD
   c. Total (sum of items 3.a and 3.b) (must equal Schedule RC, item 7)                              2150           97,000     3.c
4. Investments in unconsolidated subsidiaries and associated companies:
   a. Direct and indirect investments in real estate ventures                                        5374            4,000     4.a
   b. All other investments in unconsolidated subsidiaries and
      associated companies                                                                           5375          252,000     4.b
   c. Total (sum of items 4.a and 4.b) (must equal Schedule RC, item 8)                              2130          256,000     4.c
5. OTHER BORROWED MONEY:
   a. FEDERAL HOME LOAN BANK ADVANCES:
      (1) WITH A REMAINING MATURITY OF ONE YEAR OR LESS                                              2651                0     5.a.1
      (2) WITH A REMAINING MATURITY OF MORE THAN ONE YEAR THROUGH THREE YEARS                        B565                0     5.a.2
      (3) WITH A REMAINING MATURITY OF MORE THAN THREE YEARS                                         B566                0     5.a.3
   b. OTHER BORROWINGS:
      (1) WITH A REMAINING MATURITY OF ONE YEAR OR LESS                                              B571        6,051,000     5.b.1
      (2) WITH A REMAINING MATURITY OF MORE THAN ONE YEAR THROUGH THREE YEARS                        B567            5,000     5.b.2
      (3) WITH A REMAINING MATURITY OF MORE THAN THREE YEARS                                         B568           58,000     5.b.3
   c. TOTAL (SUM OF ITEMS 5.a.(1) THROUGH 5.b.(3) MUST EQUAL SCHEDULE RC,
      ITEM 16)                                                                                       3190        6,114,000     5.c
</TABLE>

<TABLE>
<CAPTION>
                                                                                                                 YES / NO
<S>                                                                                                  <C>     <C>               <C>
6. DOES THE REPORTING BANK SELL PRIVATE LABEL OR THIRD PARTY MUTUAL FUNDS
   AND ANNUITIES?                                                                                    B569           YES        6
</TABLE>

<TABLE>
<CAPTION>
                                                                                                     RCFD    Bil | Mil | Thou
<S>                                                                                                  <C>     <C>               <C>
7. ASSETS UNDER THE REPORTING BANK'S MANAGEMENT IN PROPRIETARY MUTUAL FUNDS
   AND ANNUITIES                                                                                     B570                0     7
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-17

FDIC Certificate Number - 03511                                           27

SCHEDULE RC-N--PAST DUE AND NONACCRUAL LOANS, LEASES, AND OTHER ASSETS

<TABLE>
<CAPTION>
                                                                (Column A)               (Column B)
                                                                 Past due               Past due 90
                                                              30 through 89            days or more
                                                              days and still             and still            (Column C)
                                                                 accruing                accruing             Nonaccrual
                                                       ----------------------------------------------------------------------
                         Dollar Amounts in Thousands   RCON  Bil | Mil | Thou  RCON  Bil | Mil | Thou  RCON  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>   <C>               <C>   <C>               <C>   <C>               <C>
1. Loans secured by real estate:
   a. CONSTRUCTION, LAND DEVELOPMENT, AND OTHER
      LAND LOANS IN DOMESTIC OFFICES                   2759        81,000      2769        26,000      3492         2,000      1.a
   b. Secured by farmland in domestic offices          3493         5,000      3494             0      3495        38,000      1.b
   c. Secured by 1-4 family residential
      properties in domestic offices:
      (1) Revolving, open-end loans secured by
          1-4 family residential properties and
          extended under lines of credit               5398        32,000      5399         3,000      5400        15,000      1.c.1
      (2) Closed-end loans secured by
          1-4 family residential properties            5401       670,000      5402       104,000      5403        62,000      1.c.2
   d. Secured by multifamily (5 or more) residential
      properties in domestic offices                   3499         5,000      3500             0      3501        10,000      1.d
   e. Secured by nonfarm nonresidential properties
      properties in domestic offices                   3502        55,000      3503         2,000      3504        89,000      1.e
                                                       RCFN                    RCFN                    RCFN
   f. IN FOREIGN OFFICES                               B572             0      B573             0      B574             0      1.f
2. Loans to depository institutions and acceptances
   of other banks:
   a. To U.S. banks and other U.S. depository          RCFD                    RCFD                    RCFD
      institutions                                     5377             0      5378             0      5379             0      2.a
   b. To foreign banks                                 5380             0      5381             0      5382             0      2.b
3. Loans to finance agricultural production and
   other loans to farmers                              1594        51,000      1597         1,000      1583        40,000      3
4. Commercial and industrial loans:
   a. To U.S. addressees (domicile)                    1251       183,000      1252        24,000      1253       341,000      4.a
   b. To non-U.S. addressees (domicile)                1254         2,000      1255             0      1256             0      4.b
5. Loans to individuals for household, family, and
   other personal expenditures:
   a. CREDIT CARDS                                     B575             0      B576             0      B577             0      5.a
   b. OTHER (INCLUDES SINGLE PAYMENT, INSTALLMENT,
      ALL STUDENT LOANS, AND REVOLVING
      CREDIT PLANS OTHER THAN CREDIT CARDS)            B578        60,000      B579         2,000      B580         1,000      5.b
6. Loans to foreign governments and official
   institutions                                        5389             0      5390             0      5391             0      6
7. All other loans                                     5459         9,000      5460         1,000      5461         3,000      7
8. Lease financing receivables:
   a. Of U.S. addressees (domicile)                    1257        56,000      1258         2,000      1259         1,000      8.a
   b. Of non-U.S. addressees (domicile)                1271             0      1272             0      1791             0      8.b
9. Debt securities and other assets (exclude other
   real estate owned and other repossessed assets)     3505             0      3506             0      3507        10,000      9
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-18

FDIC Certificate Number - 03511                                           28

SCHEDULE RC-N--CONTINUED

Amounts reported in Schedule RC-N, items 1 through 8, above include guaranteed
and unguaranteed portions of past due and nonaccrual loans and leases. Report in
item 10 below certain guaranteed loans and leases that have already been
included in the amounts reported in items 1 through 8.

<TABLE>
<CAPTION>
                                                              (Column A)              (Column B)
                                                               Past due               Past due 90
                                                             30 through 89           days or more
                                                            days and still            and still               (Column C)
                                                               accruing                accruing               Nonaccrual
                                                     ----------------------------------------------------------------------
                       Dollar Amounts in Thousands   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       156,000      5613        46,000      5614        57,000      10
    a. Guaranteed portion of loans and leases
       included in item 10 above                     5615       154,000      5616        46,000      5617        53,000      10.a
</TABLE>

<TABLE>
<CAPTION>
                                                              (Column A)              (Column B)
                                                               Past due               Past due 90
                                                            30 through 89            days or more
                                                            days and still             and still              (Column C)
MEMORANDA                                                      accruing                accruing               Nonaccrual
                                                     ----------------------------------------------------------------------
                       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 1)                                1658             0      1659             0      1661        61,000      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        64,000      6559         2,000      6560         4,000      M.2
3. Loans secured by real estate to non-U.S.
   addresses (domicile) (included in
   Schedule RC-N, item 1, above)                     1248             0      1249             0      1250             0      M.3
4. Not applicable
</TABLE>

<TABLE>
<CAPTION>
                                                            (Column A)
                                                             Past due                 (Column B)
                                                            30 through                Past due 90
                                                             89 days                 days or more
                                                     ----------------------------------------------
                                                     RCFD  Bil | Mil | Thou  RCFD  Bil | Mil | Thou
                                                     ----------------------------------------------
<S>                                                  <C>   <C>               <C>   <C>                                       <C>
5. Interest rate, foreign exchange rate, and other
   commodity and equity contracts:
   FAIR VALUE OF AMOUNTS CARRIED AS ASSETS           3529             0      3530             0                              M.5
</TABLE>

Person to whom questions about the Reports of Condition and Income should be
directed:

            Karen B. Martin, Regulatory Reporting
      --------------------------------------------------------------------------
            Name and Title (TEXT 8901)

            Karen.B.Martin@wellsfargo.com
      --------------------------------------------------------------------------
            E-mail Address (TEXT 4086)

            (612) 667-3975                     (612) 667-3659
      --------------------------------------   ---------------------------------
            Telephone: Area code/phone         FAX: Area code/phone number
            number/extension (TEXT 8902)       (TEXT 9116)
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-19

FDIC Certificate Number - 03511                                           29

SCHEDULE RC-O--OTHER DATA FOR DEPOSIT INSURANCE AND FICO ASSESSMENTS

<TABLE>
<CAPTION>
                                                     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             0       4.a
   b. Time and savings deposits (1) of consolidated subsidiaries                     2351             0       4.b
   c. Interest accrued and unpaid on deposits of consolidated subsidiaries           5514             0       4.c
5. Deposits in insured branches in Puerto Rico and U.S. territories and
   possessions:
   a. Demand deposits in insured branches (included in Schedule RC-E, Part II)       2229             0       5.a
   b. Time and saving 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
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 7 column B)                                                               2314             0       6.a
   b. Amount reflected in time and savings deposits (1) (included in
      Schedule RC-E, Part I, Item 7, column A or C, but not column B)                2315             0       6.b
7. Unamortized premiums and discounts on time and savings deposits: (1,2)
   a. Unamortized premiums                                                           5516             0       7.a
   b. Unamortized discounts                                                          5517             0       7.b
8. TO BE COMPLETED BY BANKS WITH "OAKAR DEPOSITS".
   a. Deposits purchased or acquired from other FDIC-insured institutions
      during the quarter (exclude deposits purchased or acquired from
      foreign offices other than insured branches in Puerto Rico and U.S.
      territories and possessions):
      (1) Total deposits purchased or acquired from other
          FDIC-insured institutions during the quarter                               A531             0       8.a.1
      (2) Amount of purchased or acquired deposits reported in item 8.a.(1)
          above attributable to a secondary fund (i.e., BIF members report
          deposits attributable to SAIF; SAIF members report deposits
          attributable to BIF)                                                       A532             0       8.a.2
   b. Total deposits sold or transferred to other FDIC-insured institutions
      during the quarter (exclude sales or transfers by the reporting bank of
      deposits in foreign offices other than insured branches in Puerto Rico
      and U.S. territories and possessions)                                          A533             0       8.b
</TABLE>

----------

(1)   For FDIC and FICO insurance assessment purposes, "time and savings
      deposits" consists of nontransaction accounts and all transaction accounts
      other than demand deposits.

(2)   Exclude core deposit intangibles.

<PAGE>

WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-20

FDIC Certificate Number - 03511                                           30

SCHEDULE RC-O--CONTINUED

<TABLE>
<CAPTION>
                                                                        Dollar Amounts in Thousands  RCON  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>   <C>         <C>   <C>               <C>
9. Deposits in lifeline accounts                                                                     5596                    9
10. Benefit-responsive "Depository Institution Investment Contracts" (included
    in total deposits in domestic offices)                                                           8432                 0  10
11. Adjustments to demand deposits in domestic offices and in insured branches
    in Puerto Rico and U.S. territories and possessions reported in Schedule RC-E
    for certain reciprocal demand balances :
    a. Amount by which demand deposits would be reduced if the reporting bank's
       reciprocal demand balances with the domestic offices of U.S. banks and
       savings associations and insured branches in Puerto Rico and U.S.
       territories and possessions that were reported on a gross basis in Schedule
       RC-E had been reported on a net basis                                                         8785                 0  11.a
    b. Amount by which demand deposits would be increased if the reporting bank's
       reciprocal demand balances with foreign banks and foreign offices of other
       U.S. banks (other than insured branches in Puerto Rico and U.S.
       territories and possessions) that were reported on a net basis in
       Schedule RC-E had been reported on a gross basis                                              A181                 0  11.b
    c. Amount by which demand deposits would be reduced if cash items in process
       of collection were included in the calculation of the reporting bank's net
       reciprocal demand balances with the domestic offices of U.S. banks and
       savings associations and insured branches in Puerto Rico and U.S.
       territories and possessions in Schedule RC-E                                                  A182                 0  11.c
12. Amount of assets netted against deposit liabilities in domestic offices and
    in insured branches in Puerto Rico and U.S. territories and possessions on
    the balance sheet (Schedule RC) in accordance with generally accepted
    accounting principles (exclude amounts related to reciprocal demand balances):
    a. Amount of assets netted against demand deposits                                               A527                 0  12.a
    b. Amount of assets netted against time and savings deposits                                     A528                 0  12.b
</TABLE>

<TABLE>
<CAPTION>
MEMORANDA (TO BE COMPLETED EACH QUARTER EXCEPT AS NOTED)
                                                                        Dollar Amounts in Thousands  RCON  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>   <C>         <C>   <C>               <C>
1.  Total deposits in domestic offices of the bank (sum of Memorandum items
    1.a.(1) and
    1.b.(1) must equal Schedule RC, item 13.a):
    a. Deposit accounts of $100,000 or less:
       (1) Amount of deposit accounts of $100,0000 or less                                           2702        41,279,000  M.1.a 1
       (2) Number of deposit accounts of $100,000 or less                                  NUMBER
           (TO BE COMPLETED FOR THE JUNE REPORT ONLY)                              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        32,365,000  M.1.b 1
                                                                                           NUMBER

       (2) Number of deposit accounts of more than $100,000                        2722  91,807                              M.1.b 2

2.  Estimated amount of uninsured deposits in domestic offices of the bank:

    a. An estimate of your bank's uninsured deposits can be determined by
       multiplying the number of deposit accounts of more than $100,000 reported
       in Memorandum item 1.b.(2) above by $100,000 and subtracting the result
       from the amount of deposit accounts of more than $100,000 reported in
       Memorandum item 1.b.(1) above.

       Indicate in the appropriate box at right whether your bank has a method or
       procedure for determining a better estimate of uninsured deposits than the                    RCON      YES / NO
       estimate described above                                                                      6861         NO         M.2.a

    b. If the box marked YES has been checked, report the estimate of uninsured                            Bil | Mil | Thou
       deposits determined by using your bank's method or procedure                                  5597                 0  M.2.b

3.  Has the reporting institution been consolidated with a parent bank
    or savings association in that parent bank's or parent savings association's
    Call Report or Thrift Financial Report ?
    If so, report the legal title and FDIC Certificate Number of the
    parent bank or parent savings association:

           TEXT                                                                                      RCON     FDIC CERT NO.
       A545                                                                                          A545               N/A  M.3
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-21

FDIC Certificate Number - 03511                                           31

SCHEDULE RC-R--REGULATORY CAPITAL

<TABLE>
<CAPTION>
                                                                        Dollar Amounts in Thousands  RCON  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>   <C>         <C>   <C>               <C>
TIER 1 CAPITAL
1.  Total equity capital (from Schedule RC, item 28)                                                 3210        16,186,000  1
2.  LESS: Net unrealized gains (losses) on available-for-sale securities (1)
    (if a gain, report as a positive value; if a loss, report as a negative value)                   8434            34,000  2
3.  LESS: Net unrealized loss on available-for-sale EQUITY securities (1) (report
    loss as a positive value)                                                                        A221                 0  3
4.  LESS: Accumulated net gains (losses) on cash flow hedges (1)
    (if a gain, report as a positive value; if a loss, report as a negative value)                   4336           268,000  4
5.  LESS: Nonqualifying perpetual preferred stock                                                    B588                 0  5
6.  Qualifying minority interests in consolidated subsidiaries                                       B589            28,000  6
7.  LESS: Disallowed goodwill and other disallowed intangible assets                                 B590         5,800,000  7
8.  LESS: Disallowed servicing assets and purchased credit card relationships                        B591           510,000  8
9.  LESS: Disallowed deferred tax assets                                                             5610                 0  9
10. Other additions to (deductions from) Tier 1 capital                                              B592                 0  10
11. Tier 1 capital (sum of items 1, 6, and 10, less items 2, 3, 4, 5, 7, 8, and 9)                   8274         9,602,000  11

TIER 2 CAPITAL
12. Qualifying subordinated debt and redeemable preferred stock                                      5306         4,801,000  12
13. Cumulative perpetual preferred stock includible in Tier 2 capital                                B593                 0  13
14. Allowance for loan and lease losses includible in Tier 2 capital                                 5310         1,445,000  14
15. Unrealized gains on available-for-sale equity securities includible in
    Tier 2 capital                                                                                   2221                 0  15
16. Other Tier 2 capital components                                                                  B594                 0  16
17. Tier 2 capital (sum of items 12 through 16)                                                      5311         6,246,000  17
18. Allowable Tier 2 capital (lesser of item 11 or 17)                                               8275         6,246,000  18

19. Tier 3 capital allocated for market risk                                                         1395                 0  19
20. LESS: Deductions for total risk-based capital                                                    B595                 0  20
21. Total risk-based capital (sum of items 11, 18, and 19, less item 20)                             3792        15,848,000  21

TOTAL ASSETS FOR LEVERAGE RATIO
22. Average total assets (from Schedule RC-K, item 9)                                                3368       136,847,000  22
23. LESS: Disallowed goodwill and other disallowed intangible assets (from
    item 7 above)                                                                                    B590         5,800,000  23
24. LESS: Disallowed servicing assets and purchased credit card relationships
    (from item 8 above)                                                                              B591           510,000  24
25. LESS: Disallowed deferred tax assets (from item 9 above)                                         5610                 0  25
26. LESS: Other deductions from assets for leverage capital purposes                                 B596                 0  26
27. Average total assets for leverage capital purposes (item 22 less items 23
    through 26)                                                                                      A224       130,537,000  27

ADJUSTMENTS FOR FINANCIAL SUBSIDIARIES
28. Adjustment to total risk-based capital reported in item 21                                       B503           135,000  28
29. Adjustment to risk-weighted assets reported in item 62                                           B504             7,000  29
30. Adjustment to average total assets reported in item 27                                           B505            83,000  30

CAPITAL RATIOS
(Column B is to be completed by all banks. Column A is to be
completed by banks with financial subsidiaries)                                          (Column A)           (Column B)
                                                                                   RCFD  Percentage  RCFD     Percentage
31. Tier 1 leverage ratio (2)                                                      7273       7.31%  7204             7.36%  31
32. Tier 1 risk-based capital ratio (3)                                            7274       7.16%  7206             7.21%  32
33. Total risk-based capital ratio (4)                                             7275      11.79%  7205            11.89%  33
</TABLE>

----------
(1)  Report amount included in Schedule RC, item 26.b, "Accumulated other
     comprehensive income."

(2)  The ratio for column B is item 11 divided by item 27. The ratio for column
     A is item 11 minus one half of item 28 divided by (item 27 minus item 30).

(3)  The ratio for column B is item 11 divided by item 62. The ratio for column
     A is item 11 minus one half of item 28 divided by (item 62 minus item 29).

(4)  The ratio for column B is item 21 divided by item 62. The ratio for column
     A is item 21 minus item 28 divided by (item 62 minus item 29).
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-22

FDIC Certificate Number - 03511                                           32

SCHEDULE RC-R--CONTINUED

Banks are not required to risk-weight each on-balance sheet asset and the credit
equivalent amount of each off-balance sheet item that qualifies for a risk
weight of less than 100 percent (50 percent for derivatives) at its lower risk
rate. When completing items 34 through 54 of Schedule RC-R, each bank should
decide for itself how detailed a risk-weight analysis it wishes to perform. In
other words, a bank can choose from among its assets and off-balance sheet items
that have a risk weight of less than 100 percent which ones to risk-weight at an
appropriate lower risk, or it can simply risk-weight some or all of these items
at a 100 percent risk weight (50 percent for derivatives).

<TABLE>
<CAPTION>
                                                                     (Column A)       (Column B)
                                                                       Totals          Items Not

                                                                       (from           Subject to
BALANCE SHEET ASSET CATEGORIES                                      Schedule RC)     Risk-Weighting
Dollar Amounts in Thousands                                       Bil | Mil | Thou  Bil | Mil | Thou
------------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>                 <C>
34. Cash and balances due from depository institutions (Column A         RCFD 0010
    equals the sum of Schedule RC, items 1.a and 1.b)                   12,281,000                      34
                                                                         RCFD 1754         RCFD B603
35. Held-to-maturity securities                                                  0                 0    35
                                                                         RCFD 1773         RCFD B608
36. Available-for-sale securities                                        6,395,000            50,000    36
37. Federal funds sold and securities purchased under                    RCFD 1350
    agreements to resell                                                   247,000                      37
                                                                         RCFD 5369         RCFD B617
38. Loans and leases held for sale                                      16,886,000                 0    38
                                                                         RCFD B528         RCFD B622
39. Loans and leases, net of unearned income (1)                        78,378,000                 0    39
                                                                         RCFD 3123         RCFD 3123
40. LESS: Allowance for loan and lease losses                            1,445,000         1,445,000    40
                                                                         RCFD 3545         RCFD B627
41. Trading assets                                                       4,283,000         4,283,000    41
                                                                         RCFD B639         RCFD B640
42. All other assets (2)                                                23,650,000         7,768,000    42
                                                                         RCFD 2170         RCFD B644
43. Total assets (sum of items 34 through 42)                          140,675,000        10,656,000    43
</TABLE>


<TABLE>
<CAPTION>
                                                                       (Column C)        (Column D)        (Column E)
                                                                                      Allocation by Risk Weight Category
                                                                    ------------------------------------------------------

BALANCE SHEET ASSET CATEGORIES                                             0%               20%               50%
Dollar Amounts in Thousands                                         Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>               <C>                 <C>
34. Cash and balances due from depository institutions (Column A           RCFD B600         RCFD B601
    equals the sum of Schedule RC, items 1.a and 1.b)                      1,515,000        10,766,000                      34
                                                                           RCFD B604         RCFD B605         RCFD B606
35. Held-to-maturity securities                                                    0                 0                 0    35
                                                                           RCFD B609         RCFD B610         RCFD B611
36. Available-for-sale securities                                          1,864,000         2,679,000            70,000    36
37. Federal funds sold and securities purchased under                      RCFD B613         RCFD B614
    agreements to resell                                                           0           247,000                      37
                                                                           RCFD B618         RCFD B619         RCFD B620
38. Loans and leases held for sale                                                 0         2,014,000        14,872,000    38
                                                                           RCFD B623         RCFD B624         RCFD B625
39. Loans and leases, net of unearned income (1)                                   0           885,000        14,451,000    39

40. LESS: Allowance for loan and lease losses                                                                               40
                                                                           RCFD B628         RCFD B629         RCFD B630
41. Trading assets                                                                 0                 0                 0    41
                                                                           RCFD B641         RCFD B642         RCFD B643
42. All other assets (2)                                                     409,000         2,815,000         1,749,000    42
                                                                           RCFD 5320         RCFD 5327         RCFD 5334
43. Total assets (sum of items 34 through 42)                              3,788,000        19,406,000        31,142,000    43
</TABLE>

<TABLE>
<CAPTION>
                                                                       (Column F)

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

BALANCE SHEET ASSET CATEGORIES                                            100%
Dollar Amounts in Thousands                                         Bil | Mil | Thou
------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>
34. Cash and balances due from depository institutions (Column A           RCFD B602
    equals the sum of Schedule RC, items 1.a and 1.b)                              0  34
                                                                           RCFD B607
35. Held-to-maturity securities                                                    0  35
                                                                           RCFD B612
36. Available-for-sale securities                                          1,732,000  36
37. Federal funds sold and securities purchased under                      RCFD 616
    agreements to resell                                                           0  37
                                                                           RCFD B621
38. Loans and leases held for sale                                                 0  38
                                                                           RCFD B626
39. Loans and leases, net of unearned income (1)                          63,042,000  39

40. LESS: Allowance for loan and lease losses                                         40
                                                                           RCFD B631
41. Trading assets                                                                 0  41
                                                                           RCFD 5339
42. All other assets (2)                                                  10,909,000  42
                                                                           RCFD 5340
43. Total assets (sum of items 34 through 42)                             75,683,000  43
</TABLE>

(1)  Include any allocated transfer risk reserve in column B.

(2)  Includes premises and fixed assets, other real estate owned, investments in
     unconsolidated subsidiaries and associated companies, customers' liability
     on acceptances outstanding, intangible assets, and other assets.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-23

FDIC Certificate Number - 03511                                           33

SCHEDULE RC-R--CONTINUED

<TABLE>
<CAPTION>
                                                 (Column A)                    (Column B)
                                                 Face Value       Credit         Credit
                                                or Notional     Conversion     Equivalent
                                                   Amount         Factor       Amount (1)
                 Dollar Amounts in Thousands  Bil | Mil | Thou              Bil | Mil | Thou
----------------------------------------------------------------------------------------------
<S>                                           <C>               <C>         <C>                 <C>
DERIVATIVES AND OFF-BALANCE SHEET ITEMS              RCFD 3819                     RCFD B645
44. Financial standby letters of credit                932,000     1.00              932,000    44
45. Performance standby letters of                   RCFD 3821                     RCFD B650
    of credit                                        3,038,000      .50            1,519,000    45
46. Commercial and similar letters                   RCFD 3411                     RCFD B655
    of credit                                          175,000      .20               35,000    46
47. Risk participations in bankers
    acceptances acquired by the                      RCFD 3429                     RCFD B660
    reporting institution                                    0     1.00                    0    47
                                                     RCFD 3433                     RCFD B664
48. Securities lent                                  3,362,000     1.00            3,362,000    48
49. Retained recourse on small business              RCFD A250                     RCFD B669
    obligations sold with recourse                           0     1.00                    0    49
50. Retained recourse on financial assets            RCFD 1727   * Below           RCFD 2243
    sold with low-level recourse                     1,480,000        M           14,166,000    50
51. All other financial assets sold with             RCFD B675                     RCFD B676
    recourse                                            22,000     1.00               22,000    51
52. All other off-balance sheet                      RCFD B681                     RCFD B682
    liabilities                                              0     1.00                    0    52
53. Unused commitments with an original              RCFD 3833                     RCFD B687
    maturity exceeding one year                     41,242,000      .50           20,621,000    53
                                                                                   RCFD A167
54. Derivative contracts                                                           5,848,000    54
</TABLE>

<TABLE>
<CAPTION>
                                                   (Column C)        (Column D)        (Column E)        (Column F)
                                                                  Allocation by Risk Weight Category

                                                       0%               20%               50%               100%
                 Dollar Amounts in Thousands    Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------
<S>                                             <C>               <C>               <C>               <C>               <C>
DERIVATIVES AND OFF-BALANCE SHEET ITEMS                RCFD B646         RCFD B647         RCFD B648         RCFD B649
44. Financial standby letters of credit                        0           120,000                 0           812,000  44
45. Performance standby letters of                     RCFD B651         RCFD B652         RCFD B653         RCFD B654
    of credit                                                  0           122,000                 0         1,397,000  45
46. Commercial and similar letters                     RCFD B656         RCFD B657         RCFD B658         RCFD B659
    of credit                                                  0                 0                 0            35,000  46
47. Risk participations in bankers
    acceptances acquired by the                        RCFD B661         RCFD B662                           RCFD B663
    reporting institution                                      0                 0                                   0  47
                                                       RCFD B665         RCFD B666         RCFD B667         RCFD B668
48. Securities lent                                            0         3,362,000                 0                 0  48
49. Retained recourse on small business                RCFD B670         RCFD B671         RCFD B672         RCFD B673
    obligations sold with recourse                             0                 0                 0                 0  49
50. Retained recourse on financial assets                                                                    RCFD B674
    sold with low-level recourse                                                                            14,166,000  50
51. All other financial assets sold with               RCFD B677         RCFD B678         RCFD B679         RCFD B680
    recourse                                                   0                 0                 0            22,000  51
52. All other off-balance sheet                        RCFD B683         RCFD B684         RCFD B685         RCFD B686
    liabilities                                                0                 0                 0                 0  52
53. Unused commitments with an original                RCFD B688         RCFD B689         RCFD B690         RCFD B691
    maturity exceeding one year                                0                 0         5,064,000        15,557,000  53
                                                       RCFD B693         RCFD B694         RCFD B695
54. Derivative contracts                                 851,000         3,429,000         1,568,000                    54
</TABLE>

*    Or institution-specific factor. Entering an 'M' allows for data entry in
     Column B.

(1)  Column A multiplied by credit conversion factor.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-24

FDIC Certificate Number - 03511                                           34

SCHEDULE RC-R--CONTINUED

<TABLE>
<CAPTION>
                                                           (Column C)       (Column D)        (Column E)         (Column F)
                                                                         Allocation by Risk Weight Category

                                                              0%               20%               50%               100%
                          Dollar Amounts in Thousands  Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>               <C>               <C>               <C>                <C>
TOTALS

55. Total assets, derivatives, and off-balance sheet          RCFD B696         RCFD B697         RCFD B698          RCFD B699
    items by risk weight category (for each column,           4,639,000        26,439,000        37,774,000        107,672,000  55
    sum of items 43 through 54)
56. Risk weight factor                                             * 0%             * 20%             * 50%             * 100%  56

57. Risk-weighted assets by risk weight category (for         RCFD B700         RCFD B701         RCFD B702          RCFD B703
    each column, item 55 multiplied by item 56)                       0         5,287,800        18,887,000        107,672,000  57
                                                                                                                     RCFD 1651
58. Market risk equivalent assets                                                                                    1,416,000  58

59. Risk-weighted assets before deductions for excess                                                                RCFD B704
    allowance for loan and lease losses and allocated                                                              133,262,800  59
    transfer risk reserve (sum of item 57, columns C
    through F, and item 58)
                                                                                                                     RCFD A222
60. LESS: Excess allowance for loan and lease losses                                                                         0  60
                                                                                                                     RCFD 3128
61. LESS: Allocated transfer risk reserve                                                                                    0  61
                                                                                                                     RCFD A223
62. Total risk-weighted assets (item 59 minus items                                                                133,262,800  62
    60 and 61)
</TABLE>

<TABLE>
<CAPTION>
Memoranda

                                                     Dollar Amounts in Thousands     RCFD  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>          <C>        <C>
1.  Current credit exposure across all derivative contracts covered by the           8764         4,269,000  M.1
    risk-based capital standards
</TABLE>

<TABLE>
<CAPTION>
                                                          With a remaining maturity of
                                                   (Column A)                        (Column B)
                                                    One year                       Over one year
                                                     or less                         through
                                                                                     five years
2.  Notional principal amounts
    or derivative contracts: (1)        RCFD   Tril | Bil | Mil | Thou    RCFD    Tril | Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------
<S>                                   <C>    <C>                       <C>      <C>
a. Interest rate contracts              3809         423,375,000          8766        57,437,000
b. Foreign exchange contracts           3812           6,662,000          8769         2,227,000
c. Gold contracts                       8771                   0          8772                 0
d. Other precious metals contracts      8774                   0          8775                 0
e. Other commodity contracts            8777             122,000          8778            12,000
f. Equity derivative contracts          A000             747,000          A001         1,840,000
</TABLE>

(1)  Exclude foreign exchange contracts with an original maturity of 14 days or
     less and all futures contracts.

<TABLE>
<CAPTION>


                                                       (Column C)
                                                          Over
                                                       five years
2.  Notional principal amounts
    or derivative contracts: (1)        RCFD      Tril | Bil | Mil | Thou
----------------------------------------------------------------------------------
<S>                                  <C>        <C>                    <C>
a. Interest rate contracts              8767          60,555,000            M.2.a
b. Foreign exchange contracts           8770                   0            M.2.b
c. Gold contracts                       8770                   0            M.2.b
d. Other precious metals contracts      8776                   0            M.2.d
e. Other commodity contracts            8779                   0            M.2.e
f. Equity derivative contracts          A002                   0            M.2.f

</TABLE>


(1)  Exclude foreign exchange contracts with an original maturity of 14 days or
     less and all futures contracts.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-25

FDIC Certificate Number - 03511                                           35

SCHEDULE RC-S--SECURITIZATION AND ASSET SALE ACTIVITIES

ALL OF SCHEDULE RC-S IS TO BE COMPLETED BEGINNING JUNE 30, 2001.

<TABLE>
<CAPTION>
                                                          (Column A)         (Column B)       (Column C)        (Column D)
                                                          1-4 Family            Home            Credit             Auto
                                                          Residential          Equity            Card              Loans
                                                             Loans             Loans          Receivables
                        Dollar Amounts in Thousands     Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>               <C>               <C>
BANK SECURITIZATION ACTIVITIES
1.  Outstanding principal balance of assets sold and
    securitized by the reporting bank with servicing
    retained or with recourse or other seller-provided         RCFD B705         RCFD B706         RCFD B707         RCFD B708
    credit enhancements                                      324,380,000         5,048,000                 0           500,000  1
2.  Maximum amount of credit exposure
    arising from recourse or other
    seller-provided credit enhancements
    provided to structures reported in
    item 1 in the form of:
    a. Retained interest-only strips
       (included in Schedules RC-B or                          RCFD B712         RCFD B713         RCFD B714         RCFD B715
       RC-F or in Schedule RC, item 5)                         1,461,000                 0                 0            19,000  2.a
b.  Standby letters of credit, sub-
    ordinated securities, and other                            RCFD B719         RCFD B720         RCFD B721         RCFD B722
    enhancements                                                       0                 0                 0             8,000  2.b
3.  Reporting bank's unused commitments
    to provide liquidity to structures                         RCFD B726         RCFD B727         RCFD B728         RCFD B729
    reported in item 1                                                 0                 0                 0                 0  3
4.  Past due loan amounts included in item 1:                  RCFD B733         RCFD B734         RCFD B735         RCFD B736
    a. 30-89 days past due                                    12,326,000            23,000                 0             7,000  4.a
                                                               RCFD B740         RCFD B741         RCFD B742         RCFD B743
    b. 90 days or more past due                                5,190,000             9,000                 0             1,000  4.b
5.  Charge-offs and recoveries on assets sold
    and securitized with servicing retained or with
    recourse or other seller-provided credit
    enhancements (calendar year-to-date):                      RIAD B747         RIAD B748         RIAD B749         RIAD B750
    a. Charge-offs                                                     0                 0                 0             3,000  5.a
                                                               RIAD B754         RIAD B755         RIAD B756         RIAD B757
    b. Recoveries                                                      0                 0                 0                 0  5.b
</TABLE>

<TABLE>
<CAPTION>
                                                          (Column E)         (Column F)       (Column G)
                                                             Other           Commercial        All Other
                                                            Consumer       and Industrial      Loans and
                                                             Loans             Loans           All Leases
                        Dollar Amounts in Thousands     Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>               <C>
BANK SECURITIZATION ACTIVITIES
1.  Outstanding principal balance of assets sold and
    securitized by the reporting bank with servicing
    retained or with recourse or other seller-provided         RCFD B709         RCFD B710         RCFD B711
    credit enhancements                                                0         5,681,000                 0  1
2.  Maximum amount of credit exposure
    arising from recourse or other
    seller-provided credit enhancements
    provided to structures reported in
    item 1 in the form of:
    a. Retained interest-only strips
       (included in Schedules RC-B or                          RCFD B716         RCFD B717         RCFD B718
       RC-F or in Schedule RC, item 5)                                 0                 0                 0  2.a
b.  Standby letters of credit, sub-
    ordinated securities, and other                            RCFD B723         RCFD B724         RCFD B725
    enhancements                                                       0                 0                 0  2.b
3.  Reporting bank's unused commitments
    to provide liquidity to structures                         RCFD B730         RCFD B731         RCFD B732
    reported in item 1                                                 0                 0                 0  3
4.  Past due loan amounts included in item 1:                  RCFD B737         RCFD B738         RCFD B739
    a. 30-89 days past due                                             0                 0                 0  4.a
                                                               RCFD B744         RCFD B745         RCFD B746
    b. 90 days or more past due                                        0                 0                 0  4.b
5.  Charge-offs and recoveries on assets sold
    and securitized with servicing retained or with
    recourse or other seller-provided credit
    enhancements (calendar year-to-date):                      RIAD B751         RIAD B752         RIAD B753
    a. Charge-offs                                                     0                 0                 0  5.a
                                                               RIAD B758         RIAD B759         RIAD B760
    b. Recoveries                                                      0                 0                 0  5.b
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-26

FDIC Certificate Number - 03511                                           36

SCHEDULE RC-S--CONTINUED

<TABLE>
<CAPTION>
                                                          (Column A)         (Column B)        (Column C)        (Column D)
                                                          1-4 Family            Home             Credit             Auto
                                                          Residential          Equity            Card              Loans
                                                             Loans             Loans          Receivables
Dollar Amounts in Thousands                             Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>               <C>                <C>
6.  Amount of ownership (or seller's)
    interest carried as:                                                         RCFD B761         RCFD B762
    a. Securities (included in RC-B or RC, item 5)                                       0                 0                     6.a
                                                                                 RCFD B500         RCFD B501
    b. Loans (included in Schedule RC-C)                                                 0                 0                     6.b
7.  Past due loan amounts included in
    interests reported in item 6.a:                                              RCFD B764         RCFD B765
    a. 30-89 days past due                                                               0                 0                     7.a
                                                                                 RCFD B767         RCFD B768
    b. 90 days or more past due                                                          0                 0                     7.b
8.  Charge-offs and recoveries on loan
    amounts included in interests reported
    in item 6.a (calendar year-to-date):                                         RIAD B770         RIAD B771
    a. Charge-offs                                                                       0                 0                     8.a
                                                                                 RIAD B773         RIAD B774
    b. Recoveries                                                                        0                 0                     8.b

FOR SECURITIZATION FACILITIES SPONSORED
BY OR OTHERWISE ESTABLISHED BY OTHER
INSTITUTIONS
9.  Maximum amount of credit exposure
    arising from credit enhancements
    provided by the reporting bank to other
    institutions' securitization structures in
    the form of standby letters of credit,
    purchased subordinated securities,                         RCFD B776         RCFD B777         RCFD B778         RCFD B779
    and other enhancements                                             0                 0                 0                 0   9
10. Reporting bank's unused commitments
    to provide liquidity to other institutions'                RCFD B783         RCFD B784         RCFD B785         RCFD B786
    securitization structures                                          0                 0                 0                 0   10
</TABLE>

<TABLE>
<CAPTION>
                                                           (Column E)        (Column F)       (Column G)
                                                             Other           Commercial       All Other
                                                            Consumer       and Industrial     Loans and
                                                             Loans              Loans         All Leases
Dollar Amounts in Thousands                             Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
------------------------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>               <C>
6.  Amount of ownership (or seller's)
    interest carried as:                                                         RCFD B763
    a. Securities (included in RC-B or RC, item 5)                                       0                    6.a
                                                                                 RCFD B502
    b. Loans (included in Schedule RC-C)                                                 0                    6.b
7.  Past due loan amounts included in
    interests reported in item 6.a:                                              RCFD B766
    a. 30-89 days past due                                                               0                    7.a
                                                                                 RCFD B769
    b. 90 days or more past due                                                          0                    7.b
8.  Charge-offs and recoveries on loan
    amounts included in interests reported
    in item 6.a (calendar year-to-date):                                         RIAD B772
    a. Charge-offs                                                                       0                    8.a
                                                                                 RIAD B775
    b. Recoveries                                                                        0                    8.b

FOR SECURITIZATION FACILITIES SPONSORED
BY OR OTHERWISE ESTABLISHED BY OTHER
INSTITUTIONS
9.  Maximum amount of credit exposure
    arising from credit enhancements
    provided by the reporting bank to other
    institutions' securitization structures in
    the form of standby letters of credit,
    purchased subordinated securities,                         RCFD B780         RCFD B781         RCFD B782
    and other enhancements                                             0                 0                 0  9
10. Reporting bank's unused commitments
    to provide liquidity to other institutions'                RCFD B787         RCFD B788         RCFD B789
    securitization structures                                          0                 0                 0  10
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-27

FDIC Certificate Number - 03511                                           37

SCHEDULE RC-S--CONTINUED

<TABLE>
<CAPTION>
                                                           (Column A)       (Column B)         (Column C)        (Column D)
                                                           1-4 Family          Home              Credit             Auto
                                                          Residential         Equity              Card              Loans
                                                             Loans             Loans           Receivables
Dollar Amounts in Thousands                             Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>               <C>               <C>
BANK ASSET SALES
11. Assets sold with recourse or other seller-
    provided credit enhancements and not                       RCFD B790         RCFD B791         RCFD B792         RCFD B793
    securitized by the reporting bank                                  0                 0                 0                 0  11
12. Maximum amount of credit exposure
    arising from recourse or other seller-
    provided credit enhancements provided                      RCFD B797         RCFD B798         RCFD B799         RCFD B800
    to assets reported in item 11                                      0                 0                 0                 0  12
</TABLE>

<TABLE>
<CAPTION>
                                                            (Column E)       (Column F)       (Column G)
                                                              Other          Commercial        All Other
                                                             Consumer      and Industrial      Loans and
                                                              Loans             Loans          All Leases
Dollar Amounts in Thousands                             Bil | Mil | Thou  Bil | Mil | Thou  Bil | Mil | Thou
------------------------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>               <C>
BANK ASSET SALES
11. Assets sold with recourse or other seller-
    provided credit enhancements and not                       RCFD B794         RCFD B795         RCFD B796
    securitized by the reporting bank                                  0            22,000                 0  11
12. Maximum amount of credit exposure
    arising from recourse or other seller-
    provided credit enhancements provided                      RCFD B801         RCFD B802         RCFD B803
    to assets reported in item 11                                      0            14,000                 0  12
</TABLE>

MEMORANDUM ITEMS 1, 2, AND 3 ARE TO BE COMPLETED BEGINNING JUNE 30, 2001.

Memoranda

<TABLE>
<CAPTION>
                                                               Dollar Amounts in Thousands          RCFD  Bil | Mil | Thou
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>   <C>               <C>
1.  Small Business obligations transferred with recourse under Section 208 of
    the Riegle Community Development and Regulatory Improvement Act of 1994:
    a. Outstanding principal balance                                                                A249                 0  M.1.a
    b. Amount of retained recourse on these obligations as of the report date                       A250                 0  M.1.b
2.  Outstanding principal balance of assets serviced for others:
    a. 1-4 family residential mortgages serviced with recourse or other servicer-
       provided credit enhancements                                                                 B804           627,000  M.2.a
    b. 1-4 family residential mortgages serviced with no recourse or other
       servicer-provided credit enhancements                                                        B805       487,199,000  M.2.b
    c. Other financial assets (1)                                                                   A591        32,821,000  M.2.c
3.  Asset-backed commercial paper conduits:
    a. Maximum amount of credit exposure arising from credit enhancements provided
       to conduit structures in the form of standby letters of credit,
       subordinated securities, and other enhancements:

       (1) Conduits sponsored by the bank, a bank affiliate, or the bank's holding company          B806                 0  M.3.a.1
       (2) Conduits sponsored by other unrelated institutions                                       B807                 0  M.3.a.2
    b. Unused commitments to provide liquidity to conduit structures:
       (1) Conduits sponsored by the bank, a bank affiliate, or the bank's holding company          B808                 0  M.3.b.1
       (2) Conduits sponsored by other unrelated institutions                                       B809                 0  M.3.b.2
</TABLE>

(1)  Memorandum item 2.c is to be completed beginning June 30, 2001, if the
     principal balance of other financial assets serviced for others is more
     than $10 million.
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-28

FDIC Certificate Number - 03511                                           38

SCHEDULE RC-T--FIDUCIARY AND RELATED SERVICES

SCHEDULE RC-T IS TO BE COMPLETED BEGINNING DECEMBER 31, 2001.
ITEMS 12 THROUGH 23 AND MEMORANDUM ITEM 4 WILL NOT BE MADE AVAILABLE TO THE
PUBLIC ON AN INDIVIDUAL INSTITUTION BASIS.

<TABLE>
<S>                                                                                   <C>    <C>        <C>
                                                                                      RCFD   YES / NO
1.  Does the bank have fiduciary powers? (If "NO", do not complete Schedule RC-T)     A345     YES      1

                                                                                      RCFD   YES / NO
2.  Does the bank exercise the fiduciary powers it has been granted?                  A346     YES      2

3.  Does the bank have any fiduciary or related activity (in the form of assets       RCFD   YES / NO
    or accounts) to report in this schedule? (If "NO", do not complete the rest       B867     YES      3
    of Schedule RC-T)
</TABLE>

    If the answer to item 3 is "YES", complete the applicable items of Schedule
    RC-T, as follows:

    Institutions with total fiduciary assets (item 9, sum of columns A and B)
    greater than $250 million (as of the preceding December 31) or with gross
    fiduciary and related services income greater than 10% of revenue (net
    interest income plus noninterest income) for the preceeding calendar year
    must complete:

    - Items 4 through 19.a quarterly
    - Items 20 through 23 annually with the December report, and
    - Memorandum items 1 through 4 annually with the December report

    Institutions with total fiduciary assets (item 9, sum of columns A and B)
    greater than $100 million but less than or equal to $250 million (as of the
    preceding December 31) that do not meet the fiduciary income test for
    quarterly reporting must complete:

    - Items 4 through 23 annually with the December report, and
    - Memorandum items 1 through 4 annually with the December report.

    Institutions with total fiduciary assets (item 9, sum of columns A and B) of
    $100 million or less (as of the preceding December 31) that do not meet the
    fiduciary income test for quarterly reporting must complete:

    - Items 4 through 11 annually with the December report, and
    - Memorandum items 1 through 3 annually with the December report.

<TABLE>
<CAPTION>
                                                            (Column A)         (Column B)         (Column C)       (Column D)
                                                              Managed          Non-Managed        Number of         Number of
                                                              Assets              Assets           Managed         Non-Managed
                                                                                                   Accounts          Accounts
                                                             Tril | Bil        Tril | Bil
                           Dollar Amounts in Thousands      | Mil | Thou      | Mil | Thou
------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                <C>               <C>              <C>           <C>
FIDUCIARY AND RELATED ASSETS                                   RCFD B868         RCFD B869         RCFD B870         RCFD B871
4.  Personal trust and agency accounts                        19,422,000         1,884,000            19,956             1,035  4
5.  Retirement related trust and agency accounts:              RCFD B872         RCFD B873         RCFD B874         RCFD B875
    a. Employee benefit-defined contribution                     328,000        14,993,000               232             2,126  5.a
                                                               RCFD B876         RCFD B877         RCFD B878         RCFD B879
    b. Employee benefit-defined benefit                          887,000         6,643,000                71               463  5.b
                                                               RCFD B880         RCFD B881         RCFD B882         RCFD B883
    c. Other retirement accounts                               1,608,000         4,396,000             1,704             3,095  5.c
                                                               RCFD B884         RCFD B885         RCFD C001         RCFD C002
6.  Corporate trust and agency accounts                                0         1,946,000                 0               958  6
                                                               RCFD B886                           RCFD B888
7.  Inventment management agency accounts                     22,157,000                               5,962                    7
                                                               RCFD B890         RCFD B891         RCFD B892         RCFD B893
8.  Other fiduciary accounts                                   1,445,000           918,000               359               250  8
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-29

FDIC Certificate Number - 03511                                           39

SCHEDULE RC-T--CONTINUED

<TABLE>
<CAPTION>
                                                        (Column A)                 (Column B)          (Column C)   (Column D)
                                                          Managed                  Non-Managed         Number of     Number of
                                                          Assets                      Assets            Managed     Non-Managed
                                                                                                        Accounts     Accounts

            Dollar Amounts in Thousands           Tril | Bil | Mil | Thou      Tril | Bil | Mil | Thou
------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                          <C>               <C>           <C>         <C>
FIDUCIARY AND RELATED
ASSETS--Continued
9. Total fiduciary accounts                             RCFD B894                     RCFD B895         RCFD B896    RCFD B897
(sum of items 4 through 8)                             45,847,000                    30,780,000            28,284        7,927  9
                                                                                      RCFD B898                      RCFD B899
10. Custody and safekeeping accounts                                                100,163,000                          2,862  10
11. Fiduciary accounts held in foreign                  RCFN B900                     RCFN B901         RCFN B902    RCFN B903
offices (included in items 9 and 10)                            0                             0                 0            0  11
</TABLE>

<TABLE>
<CAPTION>
                                                                        Dollar Amounts in Thousands  RIAD  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>   <C>       <C>   <C>               <C>
FIDUCIARY AND RELATED SERVICES INCOME
12. Personal trust and agency accounts                                                               B904           242,000  12
13. Retirement related trust and agency accounts:
    a. Employee benefit--defined contribution                                                        B905             5,000  13.a
    b. Employee benefit--defined benefit                                                             B906             2,000  13.b
    c. Other retirement accounts                                                                     B907             2,000  13.c
14. Corporate trust and agency accounts                                                              A479             3,000  14
15. Investment management agency accounts                                                            B908            14,000  15
16. Other fiduciary accounts                                                                         A480             1,000  16
17. Custody and safekeeping accounts                                                                 B909            11,000  17
18. Other fiduciary and related services income                                                      B910                 0  18
19. Total gross fiduciary and related services income (sum of items 12 through 18)
    (must equal Schedule RI, item 5.a)                                                               4070           280,000  19
    a. Fiduciary and related services income-foreign offices (included in item 19)   B912  0                                 19.a
20. Less: Expenses                                                                                   C058           211,000  20
21. Less: Net losses from fiduciary and related services                                             A488             2,000  21
22. Plus: Intracompany income credits for fiduciary and related services                             B911                 0  22
23. Net fiduciary and related services income                                                        A491            67,000  23
</TABLE>

<TABLE>
<CAPTION>
                                                                                                               Managed
Memoranda                                                                                                       Assets
                                                                        Dollar Amounts in Thousands  RCFD  Bil | Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>   <C>         <C>   <C>               <C>
1.  Managed personal trust and agency accounts:
    a. Non interest-bearing deposits                                                                 B913            (3,000) M.1.a
    b. Interest-bearing deposits                                                                     B914             8,000  M.1.b
    c. U.S. Treasury and U.S. Government agency obligations                                          B915           489,000  M.1.c
    d. State, county and municipal obligations                                                       B916         1,422,000  M.1.d
    e. Money market mutual funds                                                                     B917                 0  M.1.e
    f. Other short-term obligations                                                                  B918            21,000  M.1.f
    g. Other notes and bonds                                                                         B919           209,000  M.1.g
    h. Common and preferred stocks                                                                   B920        15,988,000  M.1.h
    i. Real estate mortgages                                                                         B921            33,000  M.1.i
    j. Real estate                                                                                   B922         1,151,000  M.1.j
    k. Miscellaneous assets                                                                          B923           104,000  M.1.k
    l. Total assets of managed personal trust and agency accounts (sum of Memorandum
       items 1.a through 1.k) (must equal Schedule RC-T, item 4, column A)                           B868        19,422,000  M.1.l
</TABLE>
<PAGE>
WELLS FARGO BANK NATIONAL ASSOCIATION                                  FFIEC 031
Legal Title of Bank                                                    RC-30

FDIC Certificate Number - 03511                                           40

SCHEDULE RC-T--CONTINUED

<TABLE>
<CAPTION>
Memoranda--Continued                                                                   (Column A)              (Column B)
                                                                                       Number of            Principal Amount
                                                                                         Issues               Outstanding
                                                   Dollar Amounts in Thousands  RCFD                RCFD    Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>    <C>          <C>     <C>               <C>
2. Corporate trust and agency accounts:
    a. Corporate and municipal trusteeships                                     B927       2,015    B928          11,019,000  M.2.a
    b. Transfer agent, registrar, paying agent, and other corporate agency      B929         269                              M.2.b
</TABLE>

<TABLE>
<CAPTION>
                                                                                       (Column A)              (Column B)
                                                                                        Number of            Market Value of
                                                                                         Funds                 Fund Assets
                                                   Dollar Amounts in Thousands  RCFD                RCFD    Bil | Mil | Thou
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>    <C>          <C>     <C>               <C>
3. Collective investment funds and common trust funds:
    a. Domestic equity                                                          B931           7    B932           1,486,000  M.3.a
    b. International/Global equity                                              B933           1    B934             184,000  M.3.b
    c. Stock/Bond blend                                                         B935           3    B936             419,000  M.3.c
    d. Taxable bond                                                             B937           4    B938           1,756,000  M.3.d
    e. Municipal bond                                                           B939           7    B940           1,687,000  M.3.e
    f. Short term investments/Money market                                      B941           0    B942                   0  M.3.f
    g. Specialty/Other                                                          B943           0    B944                   0  M.3.g
    h. Total collective investment funds
       (sum of Memorandum items 3.a through 3.g)                                B945          22    B946           5,532,000  M.3.h
</TABLE>

<TABLE>
<CAPTION>
                                                                          (Column A)           (Column B)          (Column C)
                                                                         Gross Losses         Gross Losses         Recoveries
                                                                           Managed            Non-Managed
                                                                           Accounts             Accounts

                                   Dollar Amounts in Thousands     RIAD   Mil | Thou   RIAD    Mil | Thou   RIAD   Mil | Thou
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>    <C>          <C>     <C>          <C>    <C>         <C>
4.  Fiduciary settlements, surcharges and other losses:
    a. Personal trust and agency accounts                          B947        1,000   B948         1,000   B949            0  M.4.a
    b. Retirement related trust and agency accounts                B950            0   B951             0   B952            0  M.4.b
    c. Investment management agency accounts                       B953            0   B954             0   B955            0  M.4.c
    d. Other fiduciary accounts and related services               B956            0   B957             0   B958            0  M.4.d
    e. Total fiduciary settlements, surcharges, and
       other losses (sum of Memorandum items 4.a through
       4.d) (sum of columns A and B minus column C must
       equal Schedule RC-T, item 21)                               B959        1,000   B960         1,000   B961            0  M.4.e
</TABLE>

Person to whom questions about Schedule RC-T--Fiduciary and Related Services
should be directed:

    Karen B. Martin, Vice President
--------------------------------------------------------------------------------
    Name and Title (TEXT B962)

    karen.b.martin@wellsfargo.com
--------------------------------------------------------------------------------
    E-mail Address (TEXT B926)

    612-667-3975                                     612-667-3659
-----------------------------------------------      ---------------------------
    Telephone: Area code/phone number/extension      FAX: Area code/phone number
    (TEXT B963)                                      (TEXT B964)
<PAGE>
        OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS            FFIEC 031
          REPORTED IN THE REPORTS OF CONDITION AND INCOME              RC-31
             at close of business on December 31, 2001

                                                                          41

Wells Fargo Bank National Association San Francisco                 CA
          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
Schedule RC-T, items 12 through 23 and Memorandum item 4, is regarded as
confidential and will not be released to the public. BANKS CHOOSING TO SUBMIT
THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES NOT CONTAIN THE
NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK CUSTOMERS, REFERENCES TO THE
AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER
INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD
COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not to make a
statement may check the "No comment" box below and should make no entries of any
kind in the space provided for the narrative statement; i.e., DO NOT enter in
this space such phrases as "No statement," "Not applicable," "N/A," "No
comment," and "None."

The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement must
not exceed 750 characters, including punctuation, indentation, and standard
spacing between words and sentences. If any submission should exceed 750
characters, as defined, it will be truncated at 750 characters with no notice to
the submitting bank and the truncated statement will appear as the bank's
statement both on agency computerized records and in computer-file releases to
the public.

All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by 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 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 the
statements exceeding 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.


X = NO COMMENT  Y = COMMENT                                          6979   X
                           ----------------------------------------
BANK MANAGEMENT STATEMENT (please type or print clearly):
         TEXT ( 70 CHARACTERS PER LINE )
    6980

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



         ------------------------------------------------------------
         SIGNATURE OF EXECUTIVE OFFICER OF BANK     DATE OF SIGNATURE
<PAGE>
                   THIS PAGE IS TO BE COMPLETED BY ALL BANKS

Transmitted to EDS as 0170644 on 01/30/02 at 15:13:55 CST
--------------------------------------------------------------------------------

     NAME AND ADDRESS OF BANK


     WELLS FARGO BANK NATIONAL ASSOCIATION
     420 MONTGOMERY STREET
     SAN FRANCISCO, CA 94104

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

                                                                            ----
                                                                             42
                                                                            ----

                           OMB No. FOR OCC: 1557-0081
                          OMB No. For FDIC: 3064-0052
                     OMB No. For Federal Reserve: 7100-0036
                           Expiration Date: 3/31/2004

                                 SPECIAL REPORT
                         (Dollar Amounts in Thousands)
--------------------------------------------------------------------------------

          CLOSE OF BUSINESS DATE               FDIC Certificate Number
--------------------------------------------------------------------------------
               12/31/2001                               3511
--------------------------------------------------------------------------------
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 this period, insert "none" against subitem (a).

(Excluded 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>
<S>                                                                               <C>  <C>    <C>   <C>   <C> <C>
                                                                                              RCFD
a. Number of loans made to executive officers since the previous Call Report Date ..........  3561         0   a
b. Total dollar amount of loans (in thousands of dollars)...................................  3562         0   b
c. Range of interest charged on above loans                                            FROM         TO
   (example: 9-3/4 = 9.75)........................................................7701  0.00% 7702  0.00%      c
</Table>
--------------------------------------------------------------------------------



/s/ Karen B. Martin, Vice President                             1/30/02
--------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT DATE (Month, Day, Year)

--------------------------------------------------------------------------------
FDIC 8040/53 (3-01)


</TEXT>
</DOCUMENT>
</SUBMISSION>
