<PAGE>   1
                                                                  EXHIBIT 4.2


                             OASIS RESIDENTIAL, INC.

                                                  Issuer

                                       to

             STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.

                                                  Trustee


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


                          Supplemental Indenture No. 1

                          Dated as of November 25, 1996

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



                                   $50,000,000
                                       of
                             6 3/4% Notes due 2001,


                                   $50,000,000
                                       of
                                7% Notes due 2003

                                       and

                                   $50,000,000
                                       of
                              7 1/4% Notes due 2006
<PAGE>   2
                  SUPPLEMENTAL INDENTURE NO. 1, dated as of November 25, 1996
(the "Supplemental Indenture"), between OASIS RESIDENTIAL, INC., a corporation
duly organized and existing under the laws of the State of Nevada (herein called
the "Company"), and STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., a
National banking association duly organized and existing under the laws of the
United States of America, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

                  The Company has heretofore delivered to the Trustee an
Indenture dated as of November 25, 1996 (the "Senior Indenture"), a form of
which has been filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, as an exhibit to the Company's Registration
Statement on Form S-3 (Registration No. 33- 90488), providing for the issuance
from time to time of Senior Debt Securities of the Company (the "Securities").

                  Section 301 of the Senior Indenture provides for various
matters with respect to any series of Securities issued under the Senior
Indenture to be established in an indenture supplemental to the Senior
Indenture.

                  Section 901(7) of the Senior Indenture provides for the
Company and the Trustee to enter into an indenture supplemental to the Senior
Indenture to establish the form or terms of Securities of any series as provided
by Sections 201 and 301 of the Senior Indenture.

                  The Board of Directors of the Company has duly adopted
resolutions authorizing the Company to execute and deliver this Supplemental
Indenture.

                  All the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.

             NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase of
each of the series of Securities provided for herein by the Holders thereof, it
is mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Notes or of either series thereof, as follows:


                                   ARTICLE ONE

                    RELATION TO SENIOR INDENTURE; DEFINITIONS

                  SECTION 1.1.  Relation to Senior Indenture.

                  This Supplemental Indenture constitutes an integral part of
the Senior Indenture.
<PAGE>   3
                  SECTION 1.2.  Definitions.

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

                  (1) Capitalized terms used but not defined herein shall have
         the respective meanings assigned to them in the Senior Indenture; and

                  (2) All references herein to Articles and Sections, unless
         otherwise specified, refer to the corresponding Articles and Sections
         of this Supplemental Indenture.

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

                  "Annual Service Charge" for any period means the aggregate
interest expense for such period in respect of, and the amortization during such
period of any original issue discount of, Indebtedness of the Company and its
Subsidiaries and the amount of dividends which are payable during such period in
respect of any Disqualified Stock.

                  "Business Day" means any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in the
City of New York or Los Angeles are authorized or required by law, regulation or
executive order to close.

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

                  "Consolidated Income Available for Debt Service" for any
period means Earnings from Operations of the Company and its Subsidiaries plus
amounts which have been deducted, and minus amounts which have been added, for
the following (without duplication): (i) interest on Indebtedness of the Company
and its Subsidiaries, (ii) provision for taxes of the Company and its
Subsidiaries based on income, (iii) amortization of debt discount, (iv)
provisions for gains and losses on properties and property depreciation and
amortization, (v) the effect of any noncash charge resulting from a change in
accounting principles in determining Earnings from Operations for such period
and (vi) amortization of deferred charges.

                  "Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at State Street Bank
and Trust Company of California, N.A., 725 South Figueroa Street, 31st Floor,
Los Angeles, California, 90017, and, for


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purposes of the Place of Payment provisions of Sections 305 and 1002 of the
Senior Indenture, is located at c/o State Street Bank and Trust Company of
California, N.A. 61 Broadway, New York, New York 10006.

                  "Disqualified Stock" means, with respect to any Person, any
Capital Stock of such Person which by the terms of such Capital Stock (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise (i)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than Capital Stock which is redeemable solely in exchange for
common stock), (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part (other than Capital Stock which is
redeemable solely in exchange for Capital Stock which is not Disqualified Stock
or the redemption price of which may, at the option of such Person, be paid in
Capital Stock which is not Disqualified Stock), in each case on or prior to the
Stated Maturity of the Notes.

                  "Earnings from Operations" for any period means net earnings
excluding gains and losses on sales of investments, extraordinary items, and
property valuation losses, net as reflected in the financial statements of the
Company and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.

                  "Encumbrance" means any mortgage, lien, charge, pledge or
security interest of any kind.

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

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

                  "Indebtedness" of the Company or any Subsidiary means any
indebtedness of the Company or any Subsidiary, whether or not contingent, in
respect of (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments whether or not such indebtedness is secured by any
Encumbrance existing on property owned by the Company or any Subsidiary, (ii)
indebtedness for borrowed money secured by any Encumbrance existing on property
owned by the Company or any Subsidiary, (iii) the reimbursement obligations,
contingent or otherwise, in connection with any letters of credit actually
issued or amounts representing the balance deferred and unpaid of the purchase
price of any property or services, except any such balance that constitutes an
accrued expense or trade payable, or all conditional sale obligations or
obligations under any title retention agreement, (iv) the amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's consolidated balance sheet as a capitalized lease in accordance with
GAAP, and (vi) interest rate swaps, caps or similar agreements and


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<PAGE>   5
foreign exchange contracts, currency swaps, or similar agreements, to the
extent, in the case of items of indebtedness under (i) through (iii) above, that
any such items (other than letters of credit) would appear as a liability on the
Company's consolidated balance sheet in accordance with GAAP, and also includes,
to the extent not otherwise included, any obligation by the Company or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
Indebtedness of another Person (other than the Company or any Subsidiary) (it
being understood that Indebtedness shall be deemed to be incurred by the Company
or any Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).

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

                  "Notes" has the meaning specified in Section 2.1 hereof.

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

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

                  "Subsidiary" means a corporation a majority of the outstanding
voting power of voting stock of which is owned, directly or indirectly, by the
Company or by




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<PAGE>   6
one or more other Subsidiaries of the Company. For the purposes of this
definition, "voting stock" means stock normally having voting power for the
election of directors.


                  "Total Assets" as of any date means the sum of (i) the
Undepreciated Real Estate Assets and (ii) all other assets of the Company and
its Subsidiaries determined in accordance with GAAP (but excluding accounts
receivable and intangibles).

                  "Total Unencumbered Assets" means the sum of (i) the
Undepreciated Real Estate Assets and (ii) all other assets of the Company and
its Subsidiaries determined in accordance with GAAP (but excluding accounts
receivable and intangibles).

                  "2001 Notes" has the meaning specified in Section 2.1 hereof.

                  "2003 Notes" has the meaning specified in Section 2.1 hereof.

                  "2006 Notes" has the meaning specified in Section 2.1 hereof.

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

                  "Unsecured Indebtedness" means Indebtedness which is not
secured by any Encumbrance upon any of the properties of the Company or any
Subsidiary.


                                   ARTICLE TWO

                               THE SERIES OF NOTES

                  SECTION 2.1.  Title of the Securities.

                  There shall be a series of Securities designated the "6 3/4%
Notes due 2001" (the "2001 Notes"), a series of Securities designated the "7%
Notes due 2003" (the "2003 Notes") and a series of Securities designated the "7
1/4% Notes due 2006" (the "2006 Notes" and, together with the 2001 Notes and the
2003 Notes, the "Notes").

                  SECTION 2.2.  Limitation on Aggregate Principal Amount.

                  The aggregate principal amount of the 2001 Notes shall be
limited to $50,000,000, and, except as provided in this Section and in Section
306 of the Senior Indenture, the Company shall not execute and the Trustee shall
not authenticate or deliver 2001 Notes in excess of such aggregate principal
amount.

                  The aggregate principal amount of the 2003 Notes shall be
limited to $50,000,000, and, except as provided in this Section and in Section
306 of the Senior Indenture, the Company shall not execute and the Trustee shall
not authenticate or deliver 2003 Notes in excess of such aggregate principal
amount.


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                  The aggregate principal amount of the 2006 Notes shall be
limited to $50,000,000, and, except as provided in this Section and in Section
306 of the Senior Indenture, the Company shall not execute and the Trustee shall
not authenticate or deliver 2006 Notes in excess of such aggregate principal
amount.

                  Nothing contained in this Section 2.2 or elsewhere in this
Supplemental Indenture, or in the Notes, is intended to or shall limit execution
by the Company or authentication or delivery by the Trustee of Notes under the
circumstances contemplated by Sections 303, 304, 305, 306, 906, 1107 and 1305 of
the Senior Indenture.

                  SECTION 2.3. Interest and Interest Rates; Maturity Date of
Notes.

                  The 2001 Notes will bear interest at a rate of 6 3/4% per
annum, the 2003 Notes will bear interest at a rate of 7% per annum and the 2006
Notes will bear interest at a rate of 7 1/4% per annum, in each case, from
November 25, 1996 or from the immediately preceding Interest Payment Date to
which interest has been paid or duly provided for, payable semi-annually in
arrears on May 15 and November 15 of each year, commencing May 15, 1997 (each,
an "Interest Payment Date"), to the Person in whose name such Note is registered
at the close of business on May 1 or November 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date (each, a "Regular
Record Date"). Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. The interest so payable on any Note which is
not punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the Person in whose name such Note is
registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name such Note is registered on
the Special Record Date or other specified date determined in accordance with
the Senior Indenture.

                  If any Interest Payment Date or Maturity falls on a day that
is not a Business Day, the required payment shall be made on the next Business
Day as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.

                  The 2001 Notes will mature on November 15, 2001, the 2003
Notes will mature on November 15, 2003 and the 2006 Notes will mature on
November 15, 2006.

                  SECTION 2.4.  Limitations on Incurrence of Indebtedness.

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


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<PAGE>   8
price of any real estate assets or mortgages receivable acquired, and the amount
of any securities offering proceeds received (to the extent such proceeds were
not used to acquire real estate assets or mortgages receivable or used to reduce
Indebtedness), by the Company or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Indebtedness.

                  (b) In addition to the limitations set forth in subsection (a)
of this Section 2.4, the Company will not, and will not permit any Subsidiary
to, incur any Indebtedness secured by any Encumbrance upon any of the property
of the Company or any Subsidiary if, immediately after giving effect to the
incurrence of such additional Indebtedness and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Indebtedness of the
Company and its Subsidiaries on a consolidated basis which is secured by any
Encumbrance on property of the Company or any Subsidiary is greater than 40% of
the sum of (without duplication) (i) the Total Assets of the Company and its
Subsidiaries as of the end of the calendar quarter covered in the Company's
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
most recently filed with the Commission (or, if such filing is not permitted
under the Exchange Act, with the Trustee) prior to the incurrence of such
additional Indebtedness and (ii) the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any securities offering
proceeds received (to the extent that such proceeds were not used to acquire
real estate assets or mortgages receivable or used to reduce Indebtedness), by
the Company or any Subsidiary since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Indebtedness.

                  (c) In addition to the limitation set forth in subsections (a)
and (b) of this Section 2.4, the Company will not, and will not permit any
Subsidiary to, incur any Indebtedness if the ratio of Consolidated Income
Available for Debt Service to the Annual Service Charge for the four consecutive
fiscal quarters most recently ended prior to the date on which such additional
Indebtedness is to be incurred shall have been less than 1.5:1, on a pro forma
basis after giving effect thereto and to the application of the proceeds
therefrom, and calculated on the assumption that (i) such Indebtedness and any
other Indebtedness incurred by the Company and its Subsidiaries since the first
day of such four-quarter period and the application of the proceeds therefrom,
including to refinance other Indebtedness, had occurred at the beginning of such
period; (ii) the repayment or retirement of any other Indebtedness by the
Company and its Subsidiaries since the first day of such four-quarter period had
been repaid or retired at the beginning of such period (except that, in making
such computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such Indebtedness
during such period); (iii) in the case of Acquired Indebtedness or Indebtedness
incurred in connection with any acquisition since the first day of such
four-quarter period, the related acquisition had occurred as of the first day of
such period with the appropriate adjustments with respect to such acquisition
being included in such pro forma calculation; and (iv) in the case of any
acquisition or disposition by the Company or its Subsidiaries of any asset or
group of assets since the first day of such four-quarter period, whether by
merger, stock purchase or sale, or asset purchase or sale, such acquisition or
disposition and any related repayment of Indebtedness had occurred as of the
first day of such period with the appropriate adjustments with respect to such
acquisition or disposition being included in such pro forma calculation.


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<PAGE>   9
                  (d) The Company and its Subsidiaries may not at any time own
Total Unencumbered Assets equal to less than 150% of the aggregate outstanding
principal amount of the Unsecured Indebtedness of the Company and its
Subsidiaries on a consolidated basis.

                  (e) For purposes of this Section 2.4, Indebtedness shall be
deemed to be "incurred" by the Company or a Subsidiary whenever the Company or
such Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof.

                  SECTION 2.5.  Redemption.

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

                  SECTION 2.6.  Places of Payment.

                  The Places of Payment where the Notes may be presented or
surrendered for payment, where the Notes may be surrendered for registration of
transfer or exchange and where notices and demands to and upon the Company in
respect of the Notes and the Senior Indenture may be served shall be in (i) the
Borough of Manhattan, The City of New York, New York, and the office or agency
for such purpose shall initially be located at c/o State Street Bank and Trust
Company of California, N.A., 61 Broadway, and (ii) the City of Los Angeles and
the office or agency for such purpose shall initially be located at 725 South
Figueroa Street, 31st Floor.

                  SECTION 2.7.  Method of Payment.

                  Payment of the principal of and interest on the Notes will be
made at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York (which shall initially be an office
or agency of the Trustee), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company, payments of
principal and interest on the Notes (other than payments of principal and
interest due at Maturity) may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register or
(ii) by wire transfer to an account maintained by the Person entitled thereto
located within the United States.

                  SECTION 2.8.  Currency.

                  Principal and interest on the Notes shall be payable in
Dollars.




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<PAGE>   10
                  SECTION 2.9.  Registered Securities; Global Form.

                  The Notes shall be issuable and transferable in fully
registered form as Registered Securities, without coupons. The 2001 Notes, the
2003 Notes and the 2006 Notes shall each be issued in the form of one or more
permanent Global Securities. The depository for the Notes shall be The
Depository Trust Company ("DTC"). The Notes shall not be issuable in definitive
form except as provided in Section 305 of the Senior Indenture.

                  SECTION 2.10.  Form of Notes.

                  The 2001 Notes shall be substantially in the form attached as
Exhibit A hereto. The 2003 Notes shall be substantially in the form attached as
Exhibit B hereto. The 2006 Notes shall be substantially in the form attached as
Exhibit C hereto.

                  SECTION 2.11.  Registrar and Paying Agent.

                  The Trustee shall initially serve as Registrar and Paying
Agent for the Notes.

                  SECTION 2.12.  Defeasance.

                   The provisions of Article Fourteen of the Senior Indenture,
shall be applicable to the Notes. The provisions of Article Fourteen of the
Senior Indenture shall apply to the covenants set forth in Sections 2.4 of this
Supplemental Indenture, those covenants specified in Section 1403 of the Senior
Indenture and those covenants described under "Description of Debt Securities --
Certain Covenants" in the Prospectus relating to the Notes.

                  SECTION 2.13.  Events of Default

                  The provisions of clause (2) of Section 501 of the Senior
Indenture as applicable with respect to the Notes shall be deemed to be amended
and restated in their entirety to read as follows:

                  (2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Notes when due and payable;

                  The provisions of clause (5) of Section 501 of the Senior
Indenture as applicable with respect to the Notes shall be deemed to be amended
and restated in their entirety to read as follows:

                  (5) default under any bond, debenture, note, or other evidence
of indebtedness for money borrowed by the Company or any of its Subsidiaries
(including obligations under leases required to be capitalized on the balance
sheet of the lessee under GAAP), in an aggregate principal amount in excess of
$10,000,000, or under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or any of its Subsidiaries (including such leases)
in an aggregate principal amount in excess


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<PAGE>   11
of $10,000,000, whether such indebtedness now exists or shall hereafter be
created, which default shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
have become due and payable, or the obligations being accelerated, without the
acceleration having been rescinded or annulled;

                  The provisions of clause (7) of Section 501 of the Senior
Indenture as applicable with respect to the Notes shall be deemed to be amended
and restated in their entirety to read as follows:

                  (7) the entry by a court of competent jurisdiction of one or
more judgments, orders or decrees against the Company or any of its Subsidiaries
in an aggregate amount (excluding amounts fully covered by insurance) in excess
of $10,000,000 and such judgments, orders or decrees remain undischarged,
unstayed and unsatisfied in an aggregate amount (excluding amounts fully covered
by insurance) in excess of $10,000,000 for a period of 30 consecutive days.

                  SECTION 2.14. Acceleration of Maturity; Rescission and
Annulment.

                  The provisions of the first paragraph of Section 502 of the
Senior Indenture as applicable with respect to the Notes shall be deemed to be
amended and restated in their entirety to read as follows:

                  If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of, and the
Make-Whole Amount, if any, on, all the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by the Holders), and upon any such declaration such principal or
specified portion thereof shall become immediately due and payable. If an Event
of Default with respect to the Securities of any series set forth in Section
501(6) of the Senior Indenture occurs and is continuing, then in every such case
all the Securities of that series shall become immediately due and payable,
without notice to the Company, at the principal amount thereof (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) plus accrued
interest to the date the Securities of that series are paid plus the Make-Whole
Amount, if any, on the Securities of that series.

                                  ARTICLE THREE

                            MISCELLANEOUS PROVISIONS

                  SECTION 3.1.  Ratification of Senior Indenture.

                  Except as expressly modified or amended hereby, the Senior
Indenture continues in full force and effect and is in all respects confirmed
and preserved.



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<PAGE>   12
                  SECTION 3.2.  Governing Law.

                  This Supplemental Indenture and each Note shall be governed by
and construed in accordance with the laws of the State of New York. This
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, and shall, to the extent applicable, be governed by such
provisions.

                  SECTION 3.3.  Counterparts.

                  This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.




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<PAGE>   13
                  IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed by their respective officers hereunto
duly authorized, all as of the day and year first written above.


                                        OASIS RESIDENTIAL, INC.



                                        By:  /s/ SCOTT S. INGRAHAM
                                             -----------------------------------
                                             Name:  Scott S. Ingraham
                                             Title: President


                                        STATE STREET BANK AND TRUST
                                        COMPANY OF CALIFORNIA, N.A.
                                             as Trustee



                                        By:  /s/ SCOTT C. EMMONS
                                             -----------------------------------
                                             Name:  Scott C. Emmons
                                             Title: Trust Officer





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<PAGE>   14
                                        Exhibit A to Supplemental Indenture

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS 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.

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.

Registered No. 1                                       PRINCIPAL AMOUNT
CUSIP No.:   674216AA4                                 $50,000,000

                             OASIS RESIDENTIAL, INC.

                              6 3/4% NOTE DUE 2001


                  OASIS RESIDENTIAL, INC., a corporation duly organized and
existing under the laws of the State of Nevada (herein referred to as the
"Company" which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of FIFTY
MILLION DOLLARS on November 15, 2001 and to pay interest on the outstanding
principal amount thereon from November 25, 1996, or from the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on May 15 and November 15 in each year, commencing
May 15, 1997, at the rate of 6 3/4% per annum, until the entire principal hereof
is paid or made available for payment. The interest so payable and punctually
paid or duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security is registered at
the close of business on the Regular Record Date for such interest which shall
be the May 1 or November 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date, and may either be paid to the Person in whose name
this Security is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Securities not more than 15 days and
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payment of the principal of and interest on this


                                       A-1
<PAGE>   15
Security will be made at the office or agency maintained for that purpose in the
City of New York, New York, or elsewhere as provided in the Indenture, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Company payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account of the
Person entitled thereto located within the United States.

                  Securities of this series are one of a duly authorized issue
of securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of November 25, 1996,
as supplemented by Supplemental Indenture No. 1, dated as of November 25, 1996
(as so supplemented, herein called the "Indenture"), between the Company and
State Street Bank and Trust Company of California, N.A. (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are authenticated and
delivered. This Security is one of the series designated in the first page
thereof, limited in aggregate principal amount to $50,000,000.

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

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

                  If an Event of Default with respect to the Securities shall
occur and be continuing, the principal of the Securities may be declared due and
payable in the manner and with the effect provided in the Indenture.

                  As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Securities, the Holders of not less than 25% in principal amount of the
Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request


                                       A-2
<PAGE>   16
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof or any interest on or after the respective due dates expressed herein.

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

                  No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
Make-Whole Amount, if any) and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.

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

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

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

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


                                       A-3
<PAGE>   17
                  No recourse under or upon any obligation, covenant or
agreement contained in the Indenture or in this Security, or because of any
indebtedness evidenced hereby or thereby, shall be had against any promoter, as
such, or against any past, present or future shareholder, officer or director,
as such, of the Company or of any successor, either directly or through the
Company or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.

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

                  THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

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

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




                                       A-4
<PAGE>   18
                  IN WITNESS WHEREOF, OASIS RESIDENTIAL, INC. has caused this
instrument to be duly executed under its corporate seal.

Dated: November 25, 1996

                                        OASIS RESIDENTIAL, INC.


                                        By:  /s/ SCOTT S. INGRAHAM
                                             -----------------------------------
                                             Name:  Scott S. Ingraham
                                             Title: President, Chief Operating
                                                         Officer and Director


[Corporate Seal]


Attest:


/s/ JOHN M. CLAYTON
-----------------------------------
John M. Clayton
Assistant Secretary


TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

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

                                        STATE STREET BANK AND TRUST
                                        COMPANY OF CALIFORNIA, N.A.,
                                               as Trustee


                                        By:  /s/ SCOTT C. EMMONS
                                             -----------------------------------
                                             Authorized Signatory




                                       A-5
<PAGE>   19
                                 ASSIGNMENT FORM

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

  PLEASE INSERT SOCIAL
  SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE
-----------------------------------------------------
                                                     ...........................
-----------------------------------------------------


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



 ................................................................................
the within Security of Oasis Residential, Inc. and hereby does irrevocably
constitute and appoint

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

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

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



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




                                       A-6
<PAGE>   20
                                        Exhibit B to Supplemental Indenture

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS 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.

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.

Registered No.  1                                      PRINCIPAL AMOUNT
CUSIP No.:  674216AB2                                  $50,000,000

                             OASIS RESIDENTIAL, INC.

                                7% NOTE DUE 2003


                  OASIS RESIDENTIAL, INC., a corporation duly organized and
existing under the laws of the State of Nevada (herein referred to as the
"Company" which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of FIFTY
MILLION DOLLARS on November 15, 2003 and to pay interest on the outstanding
principal amount thereon from November 25, 1996, or from the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on May 15 and November 15 in each year, commencing
May 15, 1997 at the rate of 7% per annum, until the entire principal hereof is
paid or made available for payment. The interest so payable and punctually paid
or duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security is registered at
the close of business on the Regular Record Date for such interest which shall
be the May 1 or November 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date, and may either be paid to the Person in whose name
this Security is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Securities not more than 15 days and
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payment of the principal of and interest on this Security will be
made at the office or agency maintained for that purpose in the City of New
York, New York, or elsewhere as provided in the Indenture, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Person

                                       B-1
<PAGE>   21
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer to an account of the Person entitled thereto located within the
United States.

                  Securities of this series are one of a duly authorized issue
of securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of November 25, 1996,
as supplemented by Supplemental Indenture No. 1, dated as of November 25, 1996
(as so supplemented, herein called the "Indenture"), between the Company and
State Street Bank and Trust Company of California, N.A. (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are authenticated and
delivered. This Security is one of the series designated in the first page
thereof, limited in aggregate principal amount to $50,000,000.

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

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

                  If an Event of Default with respect to the Securities shall
occur and be continuing, the principal of the Securities may be declared due and
payable in the manner and with the effect provided in the Indenture.

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

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series of Securities then
Outstanding affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive

                                       B-2
<PAGE>   22
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.

                  No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
Make-Whole Amount, if any) and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.

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

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

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

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

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

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


                                       B-3
<PAGE>   23
                  THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

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

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




                                       B-4
<PAGE>   24
                  IN WITNESS WHEREOF, OASIS RESIDENTIAL, INC. has caused this
instrument to be duly executed under its corporate seal.

Dated: November 25, 1996

                                        OASIS RESIDENTIAL, INC.


                                        By:  /s/ SCOTT S. INGRAHAM
                                             -----------------------------------
                                             Name:  Scott S. Ingraham
                                             Title: President, Chief Operating
                                                         Officer and Director


[Corporate Seal]


Attest:


/s/ JOHN M. CLAYTON
-----------------------------------
John M. Clayton
Assistant Secretary

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

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

                                        STATE STREET BANK AND TRUST
                                        COMPANY OF CALIFORNIA, N.A.
                                             as Trustee


                                        By:  /s/ SCOTT C. EMMONS
                                             -----------------------------------
                                             Authorized Signatory




                                       B-5
<PAGE>   25
                                 ASSIGNMENT FORM

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

  PLEASE INSERT SOCIAL
  SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE
 ................................................................................

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



 ................................................................................
the within Security of Oasis Residential, Inc. and hereby does irrevocably
constitute and appoint

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

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

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



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




                                       B-6
<PAGE>   26
                                        Exhibit C to Supplemental Indenture

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS 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.

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.

Registered No. 1                                       PRINCIPAL AMOUNT
CUSIP No.:  674216AC0                                  $50,000,000

                             OASIS RESIDENTIAL, INC.

                              7 1/4% NOTE DUE 2006


                  OASIS RESIDENTIAL, INC., a corporation duly organized and
existing under the laws of the State of Nevada (herein referred to as the
"Company" which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of FIFTY
MILLION DOLLARS on November 15, 2006 and to pay interest on the outstanding
principal amount thereon from November 25, 1996, or from the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on May 15 and November 15 in each year, commencing
May 15, 1997 at the rate of 7 1/4% per annum, until the entire principal hereof
is paid or made available for payment. The interest so payable and punctually
paid or duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security is registered at
the close of business on the Regular Record Date for such interest which shall
be the May 1 or November 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date, and may either be paid to the Person in whose name
this Security is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Securities not more than 15 days and
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payment of the principal of and interest on this Security will be
made at the office or agency maintained for that purpose in the City of New
York, New York, or elsewhere as provided in the Indenture, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Person


                                       C-1
<PAGE>   27
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer to an account of the Person entitled thereto located within the
United States.

                  Securities of this series are one of a duly authorized issue
of securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of November 25, 1996,
as supplemented by Supplemental Indenture No. 1, dated as of November 25, 1996
(as so supplemented, herein called the "Indenture"), between the Company and
State Street Bank and Trust Company of California, N.A. (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are authenticated and
delivered. This Security is one of the series designated in the first page
thereof, limited in aggregate principal amount to $50,000,000.

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

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

                  If an Event of Default with respect to the Securities shall
occur and be continuing, the principal of the Securities may be declared due and
payable in the manner and with the effect provided in the Indenture.

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

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series of Securities then
Outstanding affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive

                                       C-2
<PAGE>   28
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.

                  No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
Make-Whole Amount, if any) and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.

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

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

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

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

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

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


                                       C-3
<PAGE>   29
                  THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

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

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




                                       C-4
<PAGE>   30
                  IN WITNESS WHEREOF, OASIS RESIDENTIAL, INC. has caused this
instrument to be duly executed under its corporate seal.

Dated: November 25, 1996

                                        OASIS RESIDENTIAL, INC.


                                        By:  /s/ SCOTT S. INGRAHAM
                                             -----------------------------------
                                             Name:  Scott S. Ingraham
                                             Title: President, Chief Operating
                                                         Officer and Director


[Corporate Seal]


Attest:


/s/ JOHN M. CLAYTON
-----------------------------------
John M. Clayton
Assistant Secretary

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

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

                                        STATE STREET BANK AND TRUST
                                        COMPANY OF CALIFORNIA, N.A.
                                             as Trustee


                                        By:  /s/ SCOTT C. EMMONS
                                             -----------------------------------
                                             Authorized Signatory




                                       C-5
<PAGE>   31
                                 ASSIGNMENT FORM

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

  PLEASE INSERT SOCIAL
  SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE
 ................................................................................


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



 ................................................................................
the within Security of Oasis Residential, Inc. and hereby does irrevocably
constitute and appoint

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

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

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



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




                                       C-6