exv4w13






Exhibit 4.13




 

 










HOVNANIAN ENTERPRISES, INC.




Issuer



and



SUBSIDIARY GUARANTORS OF HOVNANIAN THAT BECOME PARTIES HERETO
FROM TIME TO TIME



Guarantors



and



WILMINGTON TRUST COMPANY



as Trustee



 





INDENTURE



Dated as of [_____________]



FORM OF SUBORDINATED INDENTURE



 

 












 









 
















CROSS REFERENCE SHEET1




 






     Provisions of Trust Indenture Act of 1939 and Indenture to be dated as of [_____________]
among HOVNANIAN ENTERPRISES, INC., SUBSIDIARY GUARANTORS OF HOVNANIAN that become parties hereto
from time to time and WILMINGTON TRUST COMPANY, as Trustee:



	 	 	 
	Section of the Act	 	Section of Indenture
	310(a)(1), (2) and (5)

	 	6.9
	310(a)(3) and (4)

	 	Inapplicable
	310(b)

	 	6.8 and 6.10(a), (b) and (d)
	310(c)

	 	Inapplicable
	311(a)

	 	6.13
	311(b)

	 	6.13
	311(c)

	 	Inapplicable
	312(a)

	 	4.1 and 4.2(a)
	312(b)

	 	4.2(b)
	312(c)

	 	4.2(c)
	313(a)

	 	4.4(a)(i), (ii), (iii), (iv), (v), (vi) and (vii)
	313(a)(5)

	 	Inapplicable
	313(b)(1)

	 	Inapplicable
	313(b)(2)

	 	4.4(b)
	313(c)

	 	4.4(c)
	313(d)

	 	4.4(d)
	314(a)

	 	4.3
	314(b)

	 	Inapplicable
	314(c)(1) and (2)

	 	11.5
	314(c)(3)

	 	Inapplicable
	314(d)

	 	Inapplicable
	314(e)

	 	11.5
	314(f)

	 	Inapplicable
	315(a), (c) and (d)

	 	6.1
	315(b)

	 	5.8
	315(e)

	 	5.9
	316(a)(1)

	 	5.7
	316(a)(2)

	 	Not required
	316(a) (last sentence)

	 	7.4
	316(b)

	 	5.4
	317(a)

	 	5.2
	317(b)

	 	3.5(a)
	318(a)

	 	11.7








 




			
	1	 	This Cross Reference Sheet is not part of the
Indenture.




 









 










TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE One DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 1.1.

	 	Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE Two SECURITIES	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 2.1.

	 	Forms Generally
	 	 	8	 
	SECTION 2.2.

	 	Form of Trustee’s Certificate of
Authentication
	 	 	9	 
	SECTION 2.3.

	 	Amount Unlimited, Issuable in Series
	 	 	9	 
	SECTION 2.4.

	 	Authentication and Delivery of Securities
	 	 	12	 
	SECTION 2.5.

	 	Execution of Securities
	 	 	15	 
	SECTION 2.6.

	 	Certificate of Authentication
	 	 	15	 
	SECTION 2.7.

	 	Denomination and Date of Securities;
Payments of Interest
	 	 	16	 
	SECTION 2.8.

	 	Registration, Transfer and Exchange
	 	 	16	 
	SECTION 2.9.

	 	Mutilated, Defaced, Destroyed, Lost and
Stolen Securities
	 	 	19	 
	SECTION 2.10.

	 	Cancellation of Securities; Disposition
Thereof
	 	 	20	 
	SECTION 2.11.

	 	Temporary Securities
	 	 	20	 
	SECTION 2.12.

	 	CUSIP Numbers
	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE Three COVENANTS	 	 	21	 
	 
	 	 	 	 	 	 
	SECTION 3.1.

	 	Payment of Principal and Interest
	 	 	21	 
	SECTION 3.2.

	 	Offices for Notices and Payments, etc.
	 	 	21	 
	SECTION 3.3.

	 	No Interest Extension
	 	 	21	 
	SECTION 3.4.

	 	Appointments to Fill Vacancies in Trustee’s
Office
	 	 	21	 
	SECTION 3.5.

	 	Provision as to Paying Agent
	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE Four SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE
TRUSTEE	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 4.1.

	 	Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders
	 	 	22	 
	SECTION 4.2.

	 	Preservation and Disclosure of
Securityholders Lists
	 	 	23	 
	SECTION 4.3.

	 	Reports by the Issuer
	 	 	23	 
	SECTION 4.4.

	 	Reports by the Trustee
	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE Five REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT	 	 	24	 
	 
	 	 	 	 	 	 
	SECTION 5.1.

	 	Events of Default
	 	 	24	 
	SECTION 5.2.

	 	Payment of Securities on Default; Suit
Therefor
	 	 	27	 
	SECTION 5.3.

	 	Application of Moneys Collected by Trustee
	 	 	28	 
	SECTION 5.4.

	 	Proceedings by Securityholders
	 	 	29	 
	SECTION 5.5.

	 	Proceedings by Trustee
	 	 	30	 






 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SECTION 5.6.

	 	Remedies Cumulative and Continuing
	 	 	30	 
	SECTION 5.7.

	 	Direction of Proceedings; Waiver of Defaults
by Majority of Securityholders
	 	 	30	 
	SECTION 5.8.

	 	Notice of Defaults
	 	 	31	 
	SECTION 5.9.

	 	Undertaking to Pay Costs
	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE Six CONCERNING THE TRUSTEE	 	 	32	 
	 
	 	 	 	 	 	 
	SECTION 6.1.

	 	Duties and Responsibilities of the Trustee;
During Default; Prior to Default
	 	 	32	 
	SECTION 6.2.

	 	Certain Rights of the Trustee
	 	 	33	 
	SECTION 6.3.

	 	Trustee Not Responsible for Recitals,
Disposition of Securities or Application of
Proceeds Thereof
	 	 	34	 
	SECTION 6.4.

	 	Trustee and Agents May Hold Securities;
Collections, etc.
	 	 	35	 
	SECTION 6.5.

	 	Moneys Held by Trustee
	 	 	35	 
	SECTION 6.6.

	 	Compensation and Indemnification of Trustee
and Its Prior Claim
	 	 	35	 
	SECTION 6.7.

	 	Right of Trustee to Rely on Officers’
Certificate, etc.
	 	 	36	 
	SECTION 6.8.

	 	Qualification of Trustee; Conflicting
Interests
	 	 	36	 
	SECTION 6.9.

	 	Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series
	 	 	36	 
	SECTION 6.10.

	 	Resignation and Removal; Appointment of
Successor Trustee
	 	 	37	 
	SECTION 6.11.

	 	Acceptance of Appointment by Successor
Trustee
	 	 	38	 
	SECTION 6.12.

	 	Merger, Conversion, Consolidation or
Succession to Business of Trustee
	 	 	39	 
	SECTION 6.13.

	 	Preferential Collection of Claims Against
the Issuer
	 	 	39	 
	SECTION 6.14.

	 	Appointment of Authenticating Agent
	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE Seven CONCERNING THE SECURITYHOLDERS	 	 	41	 
	 
	 	 	 	 	 	 
	SECTION 7.1.

	 	Evidence of Action Taken by Securityholders
	 	 	41	 
	SECTION 7.2.

	 	Proof of Execution of Instruments and of
Holding of Securities
	 	 	41	 
	SECTION 7.3.

	 	Holders to be Treated as Owners
	 	 	41	 
	SECTION 7.4.

	 	Securities Owned by Issuer Deemed Not
Outstanding
	 	 	41	 
	SECTION 7.5.

	 	Right of Revocation of Action Taken
	 	 	42	 
	SECTION 7.6.

	 	Record Date for Consents and Waivers
	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE Eight SUPPLEMENTAL INDENTURES	 	 	43	 
	 
	 	 	 	 	 	 
	SECTION 8.1.

	 	Supplemental Indentures Without Consent of
Securityholders
	 	 	43	 
	SECTION 8.2.

	 	Supplemental Indentures with Consent of
Securityholders
	 	 	45	 
	SECTION 8.3.

	 	Effect of Supplemental Indenture
	 	 	46	 
	SECTION 8.4.

	 	Documents to Be Given to Trustee
	 	 	46	 
	SECTION 8.5.

	 	Notation on Securities in Respect of
Supplemental Indentures
	 	 	47	 






-ii-









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE Nine CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER
DISPOSITION	 	 	47	 
	 
	 	 	 	 	 	 
	SECTION 9.1.

	 	Consolidation Permitted, etc., on Certain
Terms
	 	 	47	 
	SECTION 9.2.

	 	Successor Corporation to be Substituted
	 	 	48	 
	SECTION 9.3.

	 	Opinion of Counsel to be Given Trustee
	 	 	48	 
	 
	 	 	 	 	 	 
	ARTICLE Ten LEGAL DEFEASANCE AND COVENANT DEFEASANCE	 	 	49	 
	 
	 	 	 	 	 	 
	SECTION 10.1.

	 	Applicability of Article
	 	 	49	 
	SECTION 10.2.

	 	Legal Defeasance and Discharge
	 	 	49	 
	SECTION 10.3.

	 	Covenant Defeasance
	 	 	49	 
	SECTION 10.4.

	 	Conditions to Legal or Covenant Defeasance
	 	 	50	 
	SECTION 10.5.

	 	Deposited Money and Government Securities to
be Held in Trust; Other Miscellaneous
Provisions
	 	 	51	 
	SECTION 10.6.

	 	Repayment to Issuer
	 	 	51	 
	SECTION 10.7.

	 	Reinstatement
	 	 	52	 
	SECTION 10.8.

	 	Survival
	 	 	52	 
	SECTION 10.9.

	 	Satisfaction and Discharge of Indenture
	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE Eleven MISCELLANEOUS PROVISIONS	 	 	53	 
	 
	 	 	 	 	 	 
	SECTION 11.1.

	 	Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt from
Individual Liability
	 	 	53	 
	SECTION 11.2.

	 	Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities
	 	 	53	 
	SECTION 11.3.

	 	Successors and Assigns of Issuer Bound by
Indenture
	 	 	53	 
	SECTION 11.4.

	 	Notices and Demands on Issuer, Trustee and
Holders of Securities
	 	 	53	 
	SECTION 11.5.

	 	Officers’ Certificates and Opinions of
Counsel; Statements to Be Contained Therein
	 	 	54	 
	SECTION 11.6.

	 	Payments Due on Saturdays, Sundays and
Holidays
	 	 	55	 
	SECTION 11.7.

	 	Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939
	 	 	55	 
	SECTION 11.8.

	 	GOVERNING LAW
	 	 	55	 
	SECTION 11.9.

	 	Counterparts
	 	 	56	 
	SECTION 11.10.

	 	Effect of Headings
	 	 	56	 
	SECTION 11.11.

	 	No Adverse Interpretation of Other Agreements
	 	 	56	 
	 
	 	 	 	 	 	 
	ARTICLE Twelve REDEMPTION OF SECURITIES AND SINKING FUNDS	 	 	56	 
	 
	 	 	 	 	 	 
	SECTION 12.1.

	 	Applicability of Article
	 	 	56	 
	SECTION 12.2.

	 	Notice of Redemption; Partial Redemptions
	 	 	56	 
	SECTION 12.3.

	 	Payment of Securities Called for Redemption
	 	 	57	 
	SECTION 12.4.

	 	Exclusion of Certain Securities from
Eligibility for Selection for Redemption
	 	 	58	 






-iii-









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SECTION 12.5.

	 	Mandatory and Optional Sinking Funds
	 	 	58	 
	 
	 	 	 	 	 	 
	ARTICLE Thirteen SUBORDINATION	 	 	60	 
	 
	 	 	 	 	 	 
	SECTION 13.1.

	 	Securities Subordinated to Senior
Indebtedness
	 	 	60	 
	SECTION 13.2.

	 	Reliance on Certificate of Liquidating
Agent; Further Evidence as to Ownership of
Senior Indebtedness
	 	 	63	 
	SECTION 13.3.

	 	Payment Permitted If No Default
	 	 	64	 
	SECTION 13.4.

	 	Disputes with Holders of Certain Senior
Indebtedness
	 	 	64	 
	SECTION 13.5.

	 	Trustee Not Charged with Knowledge of
Prohibition
	 	 	64	 
	SECTION 13.6.

	 	Trustee to Effectuate Subordination
	 	 	65	 
	SECTION 13.7.

	 	Rights of Trustee as Holder of Senior
Indebtedness
	 	 	65	 
	SECTION 13.8.

	 	Article Applicable to Paying Agents
	 	 	65	 
	SECTION 13.9.

	 	Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior
Indebtedness
	 	 	65	 
	SECTION 13.10.

	 	Trustee Not Fiduciary for Holders of Senior
Indebtedness
	 	 	66	 
	SECTION 13.11.

	 	Applicability of Article
	 	 	66	 
	 
	 	 	 	 	 	 
	ARTICLE Fourteen SUBORDINATED GUARANTEE	 	 	66	 
	 
	 	 	 	 	 	 
	SECTION 14.1.

	 	Applicability of Article
	 	 	66	 
	SECTION 14.2.

	 	Guarantee
	 	 	66	 
	SECTION 14.3.

	 	Guarantee Subordinated to Senior
Indebtedness of the Guarantor
	 	 	68	 
	SECTION 14.4.

	 	Guarantors Not to Make Payments With Respect
to Securities in Certain Circumstances
	 	 	68	 
	SECTION 14.5.

	 	Guarantee Subordinated to Prior Payment of
All Senior Indebtedness of each Guarantor on
Dissolution, Winding Up, Liquidation or
Reorganization of a Guarantor
	 	 	70	 
	SECTION 14.6.

	 	Holders to be Subrogated to Rights of
Holders of Senior Indebtedness of each
Guarantor
	 	 	71	 
	SECTION 14.7.

	 	Obligations of the Guarantor Unconditional
	 	 	72	 
	SECTION 14.8.

	 	Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice
	 	 	72	 
	SECTION 14.9.

	 	Application by Trustee of Monies Deposited
with It
	 	 	73	 
	SECTION 14.10.

	 	Subordination Rights Not Impaired by Acts or
Omissions of a Guarantor or Holders of
Senior Indebtedness of such Guarantor
	 	 	74	 
	SECTION 14.11.

	 	Holders Authorize Trustee to Effectuate
Subordination of Securities
	 	 	74	 
	SECTION 14.12.

	 	Right of Trustee to Hold Senior Indebtedness
of a Guarantor
	 	 	74	 
	SECTION 14.13.

	 	Trustee Not Fiduciary for Holders of Senior
Indebtedness of a Guarantor
	 	 	74	 
	SECTION 14.14.

	 	Article Fourteen Not to Prevent Events of
Default
	 	 	75	 
	SECTION 14.15.

	 	Execution and Delivery of Guarantee
	 	 	75	 
	SECTION 14.16.

	 	Limitation on Guarantor Liability
	 	 	75	 
	SECTION 14.17.

	 	Officers’ Certificate
	 	 	75	 







-iv-











 





FORM OF SUBORDINATED INDENTURE




     FORM OF SUBORDINATED INDENTURE, dated as of [_____________] among Hovnanian Enterprises,
Inc., a Delaware corporation (the “Issuer” or “Hovnanian”), Subsidiary Guarantors of Hovnanian that
become parties hereto from time to time and Wilmington Trust Company, a Delaware banking
corporation, as trustee (the “Trustee”).



RECITALS OF THE ISSUER:




     WHEREAS, the Issuer has duly authorized the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness to be issued in one or more
series (the “Securities”) up to such principal amount or amounts as may from time to time be
authorized in accordance with the terms of this Indenture; and



     WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to
provide, among other things, for the authentication, delivery and administration of the Securities;
and



     WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according
to its terms have been undertaken and completed.



RECITALS OF GUARANTORS:




     WHEREAS, each Guarantor desires to make the Guarantees provided for herein; and



     WHEREAS, all things necessary to make this Indenture a valid agreement of each of the
Guarantors, in accordance with its terms, have been done and the Guarantor will do all things
necessary to make the Guarantees, when executed by each of the Guarantors and endorsed on the
Securities authenticated and delivered hereunder, the valid obligations of each Guarantor as
hereinafter provided.



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



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



ARTICLE ONE

DEFINITIONS




     SECTION 1.1. Definitions.
For all purposes of this Indenture and of any indenture supplemental hereto the following
terms shall have the respective meanings specified in this Section 1.1 (except as otherwise
expressly provided herein or in any indenture supplemental hereto or unless the context otherwise
clearly requires). All other terms used in this Indenture that are defined in the Trust Indenture
Act of 1939, including terms defined therein by reference to the Securities Act of 1933, as amended
(the “Securities Act”), shall have the meanings assigned to such terms in said Trust Indenture Act
of 1939 and in the Securities Act as in force at the date of this Indenture (except as otherwise



 









 




expressly provided herein or in any indenture supplemental hereto or unless the context otherwise
clearly requires).




     All accounting terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles, and the term “generally
accepted accounting principles” means such accounting principles as are generally accepted in the
United States of America on the date of this Indenture.



     The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other subdivision. The
expressions “date of this Indenture”, “date hereof”, “date as of which this Indenture is dated” and
“date of execution and delivery of this Indenture” and other expressions of similar import refer to
the effective date of the original execution and delivery of this Indenture, viz. as of
[_____________].



     The terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular.



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



     “Authenticating Agent” shall have the meaning set forth in Section 6.14.



     “Bankruptcy Code” means the United States Bankruptcy Code, 11 United States Code §§ 101 et
seq., or any successor statute thereto.



     “Board of Directors” means the board of directors of the Issuer or any duly authorized
committee of that board or any director or directors and/or officer or officers to whom that board
or committee shall have duly delegated its authority.



     “Board Resolution” means (1) one or more resolutions, certified by the secretary or an
assistant secretary of the Issuer to have been duly adopted or consented to by the Board of
Directors of the Issuer and to be in full force and effect, or (2) a certificate signed by the
director or directors and/or officer or officers to whom the Board of Directors or any duly
authorized committee of that Board shall have duly delegated its authority, in each case delivered
to the Trustee for the Securities of any series.



     “Business Day” means, with respect to any Security, unless otherwise specified in a Board
Resolution and an Officers’ Certificate with respect to a particular series of Securities, a day
that (a) in the Place of Payment (or in any of the Places of Payment, if more than one) in which
amounts are payable, as specified in the form of such Security, and (b) in the city in which the
Corporate Trust Office is located, is not a day on which banking institutions are authorized or
required by law or regulation to close.



2









 




     “Commission” means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act or, if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now assigned to it under the
Trust Indenture Act of 1939, then the body performing such duties on such date.




     “Corporate Trust Office” means the office of the Trustee of a series of Securities at which
the trust created by this Indenture shall, at any particular time, be principally administered,
which office is, at the date as of which this Indenture is dated, located at Rodney Square North,
1100 North Market Street, Wilmington, DE 19890.



     “Covenant Defeasance” has the meaning set forth in Section 10.3.



     “Depositary” means, with respect to the Securities of any series issuable or issued in the
form of one or more Global Securities, the Person designated as Depositary by the Issuer pursuant
to Section 2.3 until a successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is
then a Depositary hereunder, and, if at any time there is more than one such Person, “Depositary”
as used with respect to the Securities of any such series shall mean the Depositary with respect to
the Global Securities of such series.



     “Dollars” and the sign “$” means the coin and currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts.



     “Eligible Guarantors” means each of Hovnanian’s subsidiaries listed on Exhibit B hereto and
each other subsidiary of Hovnanian that Guarantees a series of Securities established under this
Indenture.



     “Event of Default” means any event or condition specified as such in Section 5.1.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Global Security” means a Security evidencing all or a part of a series of Securities issued
to the Depositary for such series in accordance with Section 2.3 and bearing the legend prescribed
in Section 2.4.



     “Guarantee” has the meaning specified in Section 14.2.



     “Guarantor” has the meaning specified in Section 2.3.



     “Holder”, “Holder of Securities”, “Securityholder” or other similar terms mean, in the case of
any Security, the Person in whose name such Security is registered in the security register kept by
the Issuer for that purpose in accordance with the terms hereof.



     “Hovnanian” means Hovnanian Enterprises, Inc., a Delaware corporation.



     “Indebtedness” with respect to any Person means, without duplication:



3









 






     (a) (i) the principal of and premium, if any, and interest, if any, on indebtedness
for money borrowed of such Person, indebtedness of such Person evidenced by bonds, notes,
debentures or similar obligations, and any guaranty by such Person of any indebtedness for
money borrowed or indebtedness evidenced by bonds, notes, debentures or similar obligations
of any other Person, whether any such indebtedness or guaranty is outstanding on the date
of this Indenture or is thereafter created, assumed or incurred, (ii) obligations of such
Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or
similar credit transaction; (iii) the principal of and premium, if any, and interest, if
any, on indebtedness incurred, assumed or guaranteed by such Person in connection with the
acquisition by it or any of its subsidiaries of any other businesses, properties or other
assets; (iv) lease obligations which such Person capitalizes in accordance with ASC Topic
840 promulgated by the Financial Accounting Standards Board or such other generally
accepted accounting principles as may be from time to time in effect; (v) any indebtedness
of such Person representing the balance deferred and unpaid of the purchase price of any
property or interest therein (except any such balance that constitutes an accrued expense
or trade payable) and any guaranty, endorsement or other contingent obligation of such
Person in respect of any indebtedness of another that is outstanding on the date of this
Indenture or is thereafter created, assumed or incurred by such Person; and (vi)
obligations of such Person under interest rate, commodity or currency swaps, caps, collars,
options and similar arrangements; and




     (b) any amendments, modifications, refundings, renewals or extensions of any
indebtedness or obligation described as Indebtedness in clause (a) above.



     “Indenture” means this instrument as originally executed and delivered or, if amended or
supplemented as herein provided, as so amended or supplemented or both, including, for all purposes
of this instrument and any such supplement, the provisions of the Trust Indenture Act of 1939 that
are deemed to be a part of and govern this instrument and any such supplement, respectively, and
shall include the forms and terms of particular series of Securities established as contemplated
hereunder.



     “interest” means, when used with respect to non-interest bearing Securities (including,
without limitation, any Original Issue Discount Security that by its terms bears interest only
after maturity or upon default in any other payment due on such Security), interest payable after
maturity (whether at stated maturity, upon acceleration or redemption or otherwise) or after the
date, if any, on which the Issuer becomes obligated to acquire a Security, whether upon conversion,
by purchase or otherwise.



     “Issuer” means Hovnanian Enterprises, Inc., a Delaware corporation, and, subject to Article
Nine, its successors and assigns.



     “Issuer Order” means a written statement, request or order of the Issuer, which is signed in
its name by the chairman of the Board of Directors, the chief financial officer, the president or
chief executive officer, any vice president or the treasurer of the Issuer, and delivered to the
Trustee.



4









 





     “Legal Defeasance” has the meaning specified in Section 10.2.



     “Officers’ Certificate” means a certificate signed by the chairman of the Board of Directors,
the president or chief executive officer, or any vice president and by the chief financial officer,
the treasurer, any assistant treasurer, the controller, any assistant controller, the secretary or
any assistant secretary of the Issuer. Each such certificate shall include the statements provided
for in Section 11.5 if and to the extent required by the provisions of such Section 11.5. One of
the officers signing an Officers’ Certificate given pursuant to Section 4.3 shall be the principal
executive, financial or accounting officer of the Issuer.



     “Opinion of Counsel” means an opinion in writing signed by the chief counsel of the Issuer or
by such other legal counsel who may be an employee of or counsel to the Issuer and who shall be
reasonably satisfactory to the Trustee. Each such opinion shall include the statements provided
for in Section 11.5, if and to the extent required by the provisions of such Section 11.5.



     “original issue date” of any Security (or portion thereof) means the earlier of (a) the date
of such Security or (b) the date of any Security (or portion thereof) for which such Security was
issued (directly or indirectly) on registration of transfer, exchange or substitution.



     “original issue discount” of any debt security, including any Original Issue Discount
Security, means the difference between the principal amount of such debt security and the initial
issue price of such debt security (as set forth in the case of an Original Issue Discount Security
on the face of such Security).



     “Original Issue Discount Security” means any Security that provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
maturity thereof pursuant to Article Five.



     “Outstanding” when used with reference to Securities, shall, subject to the provisions of
Section 7.4, mean, as of any particular time, all Securities authenticated and delivered by the
Trustee under this Indenture, except:




     (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;




     (b) Securities (other than Securities of any series as to which the provisions of
Article Ten hereof shall not be applicable), or portions thereof, for the payment or
redemption of which moneys or U.S. Government Obligations (as provided for in Section 10.1)
in the necessary amount shall have been deposited in trust with the Trustee or with any
paying agent (other than the Issuer) or shall have been set aside, segregated and held in
trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own
paying agent), provided that, if such Securities, or portions thereof, are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been given as herein
provided, or provision satisfactory to the Trustee shall have been made for giving such
notice; and



5









 






     (c) Securities which shall have been paid or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the terms of Section 2.9
(except with respect to any such Security as to which proof satisfactory to the Trustee is
presented that such Security is held by a Person in whose hands such Security is a legal,
valid and binding obligation of the Issuer).



     In determining whether the Holders of the requisite aggregate principal amount of Outstanding
Securities of any or all series have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall
be deemed to be Outstanding for such purposes shall be the portion of the principal amount thereof
that would be due and payable as of the date of such determination (as certified by the Issuer to
the Trustee) upon a declaration of acceleration of the maturity thereof pursuant to Article Five.



     “paying agent” refers to a Person engaged to perform the obligations of the Trustee in respect
of payments made or funds held hereunder in respect of the Securities.



     “Periodic Offering” means an offering of Securities of a series from time to time, the
specific terms of which Securities, including, without limitation, the rate or rates of interest,
if any, thereon, the stated maturity or maturities thereof and the redemption provisions, if any,
with respect thereto, are to be determined by the Issuer or its agents upon the issuance of such
Securities.



     “Person” means any individual, corporation, limited liability company, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated organization or government
or any agency or political subdivision thereof.



     “Place of Payment”, when used with respect to the Securities of any series, means the place or
places where the principal of and interest, if any, on the Securities of such series are payable as
determined in accordance with Section 2.3.



     “principal” of a debt security, including any Security, means the amount (including, without
limitation, if and to the extent applicable, any premium and, in the case of an Original Issue
Discount Security, any accrued original issue discount, but excluding interest) that is payable
with respect to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, if any, upon any redemption at the option of the
Issuer, upon any purchase or exchange at the option of the Issuer or the holder of such debt
security and upon any acceleration of the maturity of such debt security).



     “principal amount” of a debt security, including any Security, means the principal amount as
set forth on the face of such debt security.



     “record date” shall have the meaning set forth in Section 2.7.



     “Responsible Officer”, when used with respect to the Trustee of a series of Securities, means
any officer of the Trustee with direct responsibility for the administration of the trust created
by this Indenture.



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     “Restricted Subsidiary” means (a) any Subsidiary of the Issuer other than an Unrestricted
Subsidiary, and (b) any Subsidiary of the Issuer which was an Unrestricted Subsidiary but which,
subsequent to the date hereof, is designated by the Issuer (by Board Resolution) to be a Restricted
Subsidiary; provided, however, that the Issuer may not designate any such Subsidiary to be a
Restricted Subsidiary if the Issuer would thereby breach any covenant or agreement herein contained
(on the assumptions that any outstanding Indebtedness of such Subsidiary was incurred at the time
of such designation).



     “Securities Act” shall have the meaning set forth in Section 1.1.



     “Security” or “Securities” has the meaning stated in the first recital of this Indenture and
more particularly means any Securities authenticated and delivered under this Indenture; provided,
however that if at any time there is more than one Person acting as Trustee under this Instrument,
“Securities” with respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this instrument and shall more particularly mean Securities
authenticated and delivered under this instrument, exclusive, however, of Securities of any series
as to which such Person is not Trustee.



     “Senior Indebtedness of the Issuer” means Indebtedness of the Issuer outstanding at any
time (other than the Indebtedness evidenced by the Securities of any series) except (a) any
Indebtedness as to which, by the terms of the instrument creating or evidencing such Indebtedness,
it is provided that such Indebtedness is not senior or prior in right of payment to the Securities
of a series or is pari passu or subordinate by its terms in right of payment to such Securities,
(b) renewals, extensions and modifications of any such Indebtedness, (c) any Indebtedness of the
Issuer to a wholly-owned Subsidiary of the Issuer, (d) interest accruing after the filing of a
petition initiating any proceeding referred to in Sections 5.1(e) and 5.1(f) unless such interest
is an allowed claim enforceable against the Issuer in a proceeding under federal or state
bankruptcy laws, (e) trade payables and (f) any liability for federal, state or local taxes.



     “Senior Indebtedness of each Guarantor” means Indebtedness of a Guarantor outstanding at any
time (other than a Guarantee) except (a) any Indebtedness as to which, by the terms of the
instrument creating or evidencing such Indebtedness, it is provided that such Indebtedness is not
senior or prior in right of payment to a Guarantee or is pari passu or subordinate by its terms in
right of payment to a Guarantee, (b) renewals, extensions and modifications of any such
Indebtedness, (c) any Indebtedness of a Guarantor to a wholly-owned Subsidiary of the Guarantor,
(d) interest accruing after the filing of a petition initiating any proceeding referred to in
Sections 5.1(e) and 5.1(f) unless such interest is an allowed claim enforceable against the
Guarantor in a proceeding under federal or state bankruptcy laws, (e) trade payables and (f) any
liability for federal, state or local taxes.



     “Significant Subsidiary” means any Subsidiary which is a “significant subsidiary” of the
Issuer within the meaning of Rule 1.02(w) of Regulation S-K promulgated by the Commission as in
effect on the date of this Indenture.



     “Subsidiary” of any specified Person means any corporation, association or other business
entity of which such Person, or such Person and one or more Subsidiaries of such Person, or any one
or more Subsidiaries of such Person, directly or indirectly own voting securities entitling any one
or more of such Persons and its Subsidiaries to elect a majority of the directors or other persons
performing such functions, either at all times or, so long as



7









 




there is no default or contingency which permits the holders of any other class or classes of
securities to vote for the election of one or more directors or other persons performing such
functions.




     “Trust Indenture Act of 1939” (except as otherwise provided in Sections 8.1 and 8.2) means the
Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at
the date as of which this Indenture is originally executed.



     “Trustee” means the Person identified as “Trustee” in the first paragraph hereof and, subject
to the provisions of Article Six, shall also include any successor trustee. “Trustee” shall also
mean or include each Person who is then a trustee hereunder and, if at any time there is more than
one such Person, “Trustee” as used with respect to the Securities of any series shall mean the
trustee with respect to the Securities of such series.



     “Unrestricted Subsidiary” means (a) any Subsidiary of the Issuer acquired or organized after
the date hereof, provided, however, that such Subsidiary shall not be a successor, directly or
indirectly, to any Restricted Subsidiary, and (b) any Subsidiary of the Issuer substantially all
the assets of which consist of stock or other securities of a Subsidiary or Subsidiaries of the
character described in clause (a) of this paragraph, unless and until such Subsidiary shall have
been designated to be a Restricted Subsidiary pursuant to clause (b) of the definition of
“Restricted Subsidiary”.



     “U.S. Government Obligations” means non-callable, non-payable bonds, notes, bills or other
similar obligations issued or guaranteed by the United States government or any agency thereof the
full and timely payment of which are backed by the full faith and credit of the United States of
America.



     “vice president,” when used with respect to the Issuer or the Trustee, means any vice
president, regardless of whether designated by a number or a word or words added before or after
the title “vice president.”



     “Yield to Maturity” means the yield to maturity on a series of Securities, calculated at the
time of issuance of such series, or, if applicable, at the most recent redetermination of interest
on such series, and calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.



ARTICLE TWO

SECURITIES




     SECTION 2.1. Forms Generally.
The Securities of each series shall be substantially in such form (not inconsistent with this
Indenture) as shall be established by or pursuant to one or more Board Resolutions (as set forth in
a Board Resolution or, to the extent established pursuant to rather than set forth in a Board
Resolution, an Officers’ Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have imprinted or
otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as
may be required to comply with any law or with any rules



8









 




or regulations pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such Securities, as evidenced by
their execution of such Securities.




     The definitive Securities shall be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by the officers executing such Securities
as evidenced by their execution of such Securities.



     SECTION 2.2. Form of Trustee’s Certificate of Authentication.
The Trustee’s certificate of authentication on all Securities shall be substantially as
follows:



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



	 	 	 	 	 
	 	______________________, as Trustee

 	 
	 	By  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 




     If at any time there shall be an Authenticating Agent appointed with respect to any series of
Securities, then the Securities of such series shall bear, in addition to the Trustee’s certificate
of authentication, an alternate Certificate of Authentication which shall be substantially as
follows:



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



	 	 	 	 	 
	 	__________________________, as Trustee

 	 
	 	By  	 	 
	 	 	as Authenticating Agent 	 
	 	 	 	 
	 	By  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 




     SECTION 2.3. Amount Unlimited, Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.



9









 





     The Securities may be issued in one or more series and the Securities of each such series
shall rank equally and pari passu with the Securities of each other series, but all Securities
issued hereunder shall be subordinate and junior in right of payment, to the extent and in the
manner set forth in Article Thirteen or the applicable Board Resolution, Officers’ Certificate or
supplemental indenture referred to below and relating to such Securities, to all Senior
Indebtedness of the Issuer. There shall be established in or pursuant to one or more Board
Resolutions (and, to the extent established pursuant to rather than set forth in a Board
Resolution, in an Officers’ Certificate detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance of Securities of any series:




     (1) the designation of the Securities of the series, which shall distinguish the
Securities of such series from the Securities of all other series;




     (2) any limit upon the aggregate principal amount of the Securities of the series that
may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3);




     (3) the date or dates on which the principal of the Securities of the series is
payable;




     (4) the rate or rates at which the Securities of the series shall bear interest, if
any, the date or dates from which any such interest shall accrue, on which any such
interest shall be payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which such rate or rates or
date or dates shall be determined or both;




     (5) the place or places where and the manner in which the principal of, premium, if
any, and interest, if any, on Securities of the series shall be payable (if other than as
provided in Section 3.2) and the office or agency for the Securities of the series
maintained by the Issuer pursuant to Section 3.2;




     (6) the right, if any, of the Issuer to redeem, purchase or repay Securities of the
series, in whole or in part, at its option and the period or periods within which, the
price or prices (or the method by which such price or prices shall be determined or both)
at which, the form or method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the provisions of Article
Twelve) Securities of the series may be so redeemed, purchased or repaid, in whole or in
part, pursuant to any sinking fund or otherwise;




     (7) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of
the series in whole or in part pursuant to any mandatory redemption, sinking fund or
analogous provisions or at the option of a Holder thereof and the period or periods within
which the price or prices (or the method by which such



10









 






price or prices shall be determined or both) at which, the form or method of payment
therefor if other than in cash and any terms and conditions upon which and the manner in
which (if different from the provisions of Article Twelve) Securities of the series shall
be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;




     (8) if other than denominations of $2,000 and integral multiples of $1,000 in excess
thereof, the denominations in which Securities of the series shall be issuable;




     (9) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon acceleration of the maturity thereof;




     (10) whether Securities of the series will be issuable as Global Securities;




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




     (12) any trustees, depositaries, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Securities of such series;




     (13) any deleted, modified or additional events of default or remedies or any deleted,
modified or additional covenants with respect to the Securities of such series;




     (14) whether the provisions of Article Ten will not be applicable to Securities of
such series;




     (15) any provision relating to the issuance of Securities of such series at an
original issue discount (including, without limitation, the issue price thereof, the rate
or rates at which such original issue discount shall accrete, if any, and the date or dates
from or to which or period or periods during which such original issue discount shall
accrete at such rate or rates);




     (16) if other than Dollars, the foreign currency in which payment of the principal of,
premium, if any, and interest, if any, on the Securities of such series shall be payable;




     (17) if other than Wilmington Trust Company is to act as Trustee for the Securities of
such series, the name and Corporate Trust Office of such Trustee;




     (18) if the amounts of payments of principal of, premium, if any, and interest, if
any, on the Securities of such series are to be determined with reference to an index, the
manner in which such amounts shall be determined;



11









 






     (19) the terms for conversion or exchange, if any, with respect to the Securities of
such series;




     (20) which, if any, of the Eligible Guarantors shall guarantee the Securities of such
series on the terms set forth in Article Fourteen (each of the Eligible Guarantors that
guarantee the Securities on the terms set forth in Article Fourteen, if any, a
“Guarantor”); and




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



     All Securities of any one series shall be substantially identical, except as to denomination
and except as may otherwise be provided by or pursuant to the Board Resolution or Officers’
Certificate referred to above or as set forth in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or pursuant to such Board
Resolution, such Officers’ Certificate or in any such indenture supplemental hereto.



     Any such Board Resolution or Officers’ Certificate referred to above with respect to
Securities of any series filed with the Trustee on or before the initial issuance of the Securities
of such series shall be incorporated herein by reference with respect to Securities of such series
and shall thereafter be deemed to be a part of the Indenture for all purposes relating to
Securities of such series as fully as if such Board Resolution or Officers’ Certificate were set
forth herein in full.



     SECTION 2.4. Authentication and Delivery of Securities.
The Issuer may deliver Securities of any series executed by the Issuer to the Trustee for
authentication together with the applicable documents referred to below in this Section 2.4, and
the Trustee shall thereupon authenticate and deliver such Securities to, or upon the order of, the
Issuer (contained in the Issuer Order referred to below in this Section 2.4) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be specified from time to time
by an Issuer Order. If provided for in such procedures and agreed to by the Trustee, such Issuer
Order may authorize authentication and delivery pursuant to oral instructions from the Issuer or
its duly authorized agent, which instructions shall be promptly confirmed in writing. In
authenticating the Securities of such series and accepting the additional responsibilities under
this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in the
case of subparagraphs (2), (3) and (4) below only at or before the time of the first request of the
Issuer to the Trustee to authenticate Securities of such series) and (subject to Section 6.1) shall
be fully protected in relying upon, unless and until such documents have been superseded or
revoked:




     (1) an Issuer Order requesting such authentication and setting forth delivery
instructions provided that, with respect to Securities of a series subject to a Periodic
Offering, (a) such Issuer Order may be delivered by the Issuer to the Trustee prior to the
delivery to the Trustee of such Securities for authentication and delivery, (b) the Trustee
shall authenticate and deliver Securities of such series for



12









 






original issue from time to time, in an aggregate principal amount not exceeding the
aggregate principal amount established for such series, pursuant to an Issuer Order, (c)
the maturity date or dates, original issue date or dates, interest rate or rates, if any,
and any other terms of Securities of such series shall be determined by an Issuer Order and
(d) after the original issuance of the first Security of such series to be issued, any
separate request by the Issuer that the Trustee authenticate Securities of such series for
original issuance will be deemed to be a certification by the Issuer that it is in
compliance with all conditions precedent provided for in this Indenture relating to the
authentication and delivery of such Securities;




     (2) the Board Resolution, Officers’ Certificate or executed supplemental indenture
referred to in Sections 2.1 and 2.3 by or pursuant to which the forms and terms of the
Securities of such series were established;




     (3) an Officers’ Certificate stating that the form or forms and terms of the
Securities have been established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture and covering such other matters as the Trustee may reasonably request; and




     (4) at the option of the Issuer, either an Opinion of Counsel, or a letter from legal
counsel addressed to the Trustee permitting it to rely on an Opinion of Counsel,
substantially to the effect that:




     (a) in the case of an underwritten offering, the Securities of such series
have been duly authorized, executed and delivered and, in the case of an offering
that is not underwritten, certain terms of the Securities of such series have been
established pursuant to a Board Resolution, an Officers’ Certificate or a
supplemental indenture in accordance with this Indenture, and when such other terms
as are to be established pursuant to procedures set forth in an Issuer Order shall
have been established, all such terms will have been duly authorized by the Issuer
and will have been established in conformity with the provisions of this Indenture;




     (b) when the Securities of such series have been duly authorized, executed and
delivered by the Issuer and authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and duly paid for by the purchasers
thereof, they will constitute valid and legally binding obligations of the Issuer,
enforceable in accordance with their respective terms, and will be entitled to the
benefits of this Indenture; and




     (c) the execution and delivery by the Issuer of, and the performance by the
Issuer of its obligations under, the Securities of such series will not conflict
with any provision of applicable law or the articles of incorporation or bylaws of
the Issuer or any agreement or other instrument to which the Issuer or any of the
Guarantors is a party and that is material to the Issuer and its Subsidiaries,
considered as one enterprise, or, to such counsel’s knowledge after the inquiry
indicated therein, any judgment, order



13









 






or decree of any governmental agency or any court having jurisdiction over the
Issuer and any of its Subsidiaries, and no consent, approval or authorization of
any governmental body or agency is required for the performance by the Issuer of
its obligations under the Securities, except such as are specified and have been
obtained and such as may be required by the securities or blue sky laws of the
various states in connection with the offer and sale of the Securities.



     In rendering such opinions, such counsel may qualify any opinions as to enforceability by
stating that such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, liquidation, moratorium and other similar laws relating to or affecting the rights
and remedies of creditors and is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing. Such counsel may also state that, insofar as such opinion involves
factual matters, such counsel has relied, to the extent such counsel deems proper, upon
certificates of officers of the Issuer and its subsidiaries, as applicable, and certificates of
public officials.



     The Trustee shall have the right to decline to authenticate and deliver any Securities of any
series under this Section 2.4 if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors
or board of trustees, executive committee or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee to personal
liability to existing Holders or would adversely affect the Trustee’s own rights, duties or
immunities under the Securities, this Indenture or otherwise.



     If the Issuer shall establish pursuant to Section 2.3 that the Securities of a series are to
be issued in the form of one or more Global Securities, then the Issuer shall execute and the
Trustee shall, in accordance with this Section 2.4 and the Issuer Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall represent and shall
be denominated in an amount equal to the aggregate principal amount of all of the Securities of
such series to be issued in the form of Global Securities and not yet cancelled, (ii) shall be
registered in the name of the Depositary for such Global Security or Securities or the nominee of
such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary’s instructions, and (iv) shall bear a legend substantially to the following effect:



     “THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR
DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED
FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION (THE “DEPOSITARY”) TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH



14









 




NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.




     UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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.”



     Each Depositary designated pursuant to Section 2.3 must, at the time of its designation and at
all times while it serves as Depositary, be a clearing agency registered under the Exchange Act and
any other applicable statute or regulation.



     Reference is made to Section 14.15 concerning execution and delivery of the Guarantees.



     SECTION 2.5. Execution of Securities.
The Securities shall be signed on behalf of the Issuer by the chairman of the Board of
Directors, the president or chief executive officer, any vice president, the chief financial
officer or the treasurer of the Issuer. Such signatures may be the manual or facsimile signatures
of the present or any future such officers. Typographical and other minor errors or defects in any
such reproduction of such signature shall not affect the validity or enforceability of any Security
that has been duly authenticated and delivered by the Trustee.



     In case any officer of the Issuer who shall have signed any of the Securities shall cease to
be such officer before the Security so signed shall be authenticated and delivered by the Trustee
or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to be such officer of the
Issuer; and any Security may be signed on behalf of the Issuer by such persons as, at the actual
date of the execution of such Security, shall be the proper officers of the Issuer, although at the
date of the execution and delivery of this Indenture any such person was not such an officer.



          Reference is made to Section 14.15 concerning execution and delivery of the Guarantees.



     SECTION 2.6. Certificate of Authentication.
Only such Securities as shall bear thereon a certificate of authentication substantially in
the form hereinbefore recited, executed by the Trustee by the manual signature of one of its
authorized signatories, or its Authenticating Agent, shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose. The execution of
such certificate by the Trustee or its



15









 




Authenticating Agent upon any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder and that the Holder
is entitled to the benefits of this Indenture. Each reference in this Indenture to authentication
by the Trustee includes authentication by an agent appointed pursuant to Section 6.14.




     SECTION 2.7. Denomination and Date of Securities; Payments of Interest.
The Securities of each series shall be issuable in registered form in denominations
established as contemplated by Section 2.3 or, with respect to the Securities of any series, if not
so established, in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.
The Securities of each series shall be numbered, lettered or otherwise distinguished in such manner
or in accordance with such plan as the officers of the Issuer executing the same may determine with
the approval of the Trustee, as evidenced by the execution and authentication thereof.



     Each Security shall be dated the date of its authentication. The Securities of each series
shall bear interest, if any, from the date, and such interest, if any, shall be payable on the
dates, established as contemplated by Section 2.3.



     The Person in whose name any Security of any series is registered at the close of business on
any record date applicable to a particular series with respect to any interest payment date for
such series shall be entitled to receive the interest, if any, payable on such interest payment
date notwithstanding any transfer or exchange of such Security subsequent to the record date and
prior to such interest payment date, except if and to the extent the Issuer shall default in the
payment of the interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names Outstanding Securities for such
series are registered (a) at the close of business on a subsequent record date (which shall be not
less than five Business Days prior to the date of payment of such defaulted interest) established
by notice given by mail by or on behalf of the Issuer to the Holders of Securities not less than 15
days preceding such subsequent record date or (b) as determined by such other procedure as is
mutually acceptable to the Issuer and the Trustee. The term “record date” as used with respect to
any interest payment date (except a date for payment of defaulted interest) for the Securities of
any series shall mean the date specified as such in the terms of the Securities of such series
established as contemplated by Section 2.3, or, if no such date is so established, if such interest
payment date is the first day of a calendar month, the fifteenth day of the next preceding calendar
month or, if such interest payment date is the fifteenth day of a calendar month, the first day of
such calendar month, whether or not such record date is a Business Day.



     SECTION 2.8. Registration, Transfer and Exchange.
The Issuer will keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which, subject to such
reasonable regulations as it may prescribe, it will provide for the registration of Securities of
each series and the registration of transfer of Securities of such
series. Each such register shall be in written form in the English language or in any other
form capable of being converted into such



16









 




form within a reasonable time. At all reasonable times such register or registers shall be open
for inspection and available for copying by the Trustee.




     Upon due presentation for registration of transfer of any Security of any series at any such
office or agency to be maintained for the purpose as provided in Section 3.2, the Issuer shall
execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees
a new Security or Securities of the same series, maturity date, interest rate, if any, and original
issue date in authorized denominations for a like aggregate principal amount.



     All Securities presented for registration of transfer shall (if so required by the Issuer or
the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder or his
attorney duly authorized in writing.



     At the option of the Holder thereof, Securities of any series (other than a Global Security,
except as set forth below) may be exchanged for a Security or Securities of such series having
authorized denominations and an equal aggregate principal amount, upon surrender of such Securities
to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.2.



     The Issuer or Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of transfer of
Securities. No service charge shall be made for any such transaction or for any exchange of
Securities of any series as contemplated by the immediately preceding paragraph.



     The Issuer shall not be required to exchange or register a transfer of (a) any Securities of
any series for a period of 15 days next preceding the first mailing or publication of notice of
redemption of Securities of such series to be redeemed, (b) any Securities selected, called or
being called for redemption, in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed or (c) any Security if the Holder
thereof has exercised his right, if any, to require the Issuer to repurchase such Security in whole
or in part, except the portion of such Security not required to be repurchased.



     Notwithstanding any other provision of this Section 2.8, unless and until it is exchanged in
whole or in part for Securities in definitive registered form, a Global Security representing all
or a part of the Securities of a series may not be transferred except as a whole by the Depositary
for such series to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor Depositary.



     If at any time the Depositary for any Securities of a series represented by one or more Global
Securities notifies the Issuer that it is unwilling or unable to continue as Depositary for such
Securities or if at any time the Depositary for such Securities shall no



17









 




longer be eligible under Section 2.4, the Issuer shall appoint a successor Depositary with respect
to such Securities. If a successor Depositary for such Securities is not appointed by the Issuer
within 90 days after the Issuer receives such notice or becomes aware of such ineligibility, the
Issuer’s election pursuant to Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the Trustee, upon receipt
of an Issuer Order for the authentication and delivery of definitive Securities of such series,
will authenticate and deliver Securities of such series in definitive registered form, in any
authorized denominations, in an aggregate principal amount equal to the principal amount of the
Global Security or Securities representing such Securities in exchange for such Global Security or
Securities.




     The Issuer may at any time and in its sole discretion determine that the Securities of any
series issued in the form of one or more Global Securities shall no longer be represented by a
Global Security or Securities. In such event, the Issuer shall execute, and the Trustee, upon
receipt of an Issuer Order for the authentication and delivery of definitive Securities of such
series, shall authenticate and deliver, Securities of such series in definitive registered form, in
any authorized denominations, in an aggregate principal amount equal to the principal amount of the
Global Security or Securities representing such Securities, in exchange for such Global Security or
Securities.



     If specified by the Issuer pursuant to Section 2.3 with respect to Securities represented by a
Global Security, the Depositary for such Global Security may surrender such Global Security in
exchange in whole or in part for Securities of the same series in definitive registered form on
such terms as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee shall authenticate and deliver, without service charge,




     (i) to the Person specified by such Depositary, a new Security or Securities of the
same series, of any authorized denominations as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person’s beneficial interest in the
Global Security; and




     (ii) to such Depositary a new Global Security in a denomination equal to the
difference, if any, between the principal amount of the surrendered Global Security and the
aggregate principal amount of Securities authenticated and delivered pursuant to clause (i)
above.



     Upon the exchange of a Global Security for Securities in definitive registered form in
authorized denominations, such Global Security shall be cancelled by the Trustee or an agent of the
Trustee. Securities in definitive registered form issued in exchange for a Global Security
pursuant to this Section 2.8 shall be registered in such names and in such authorized denominations
as the Depositary for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or an agent of the Trustee or the Issuer or
an agent of the Issuer. The Trustee or such agent shall deliver at its office such Securities to
or as directed by the Persons in whose names such Securities are so registered.



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     All Securities issued upon any registration of transfer or exchange of Securities shall be
valid and legally binding obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such registration of
transfer or exchange.



     SECTION 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
In case any temporary or definitive Security shall become mutilated or defaced or be
destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request
of the Issuer, the Trustee shall authenticate and deliver a new Security of the same series,
maturity date, interest rate, if any, and original issue date, bearing a number or other
distinguishing symbol not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and in substitution for the Security so destroyed,
lost or stolen. In every case the applicant for a substitute Security shall furnish to the Issuer
and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be
required by the Trustee or the Issuer or any such agent to indemnify and defend and to save each of
the Trustee and the Issuer and any such agent harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the destruction, loss or theft of such Security and of the
ownership thereof and in the case of mutilation or defacement, shall surrender the Security to the
Trustee or such agent.



     Upon the issuance of any substitute Security, the Issuer may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Trustee or its agent) connected
therewith. In case any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may instead of issuing a substitute Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Security), if the applicant for such
payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee
such security or indemnity as any of them may require to hold each of them harmless, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee
and any agent of the Issuer or the Trustee evidence to the Trustee’s satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof.



     Every substitute Security of any series issued pursuant to the provisions of this Section by
virtue of the fact that any such Security is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of
(but shall be subject to all the limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities of such series duly authenticated and delivered
hereunder. All Securities shall be held and owned upon the express condition that, to the extent
permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, defaced, destroyed, lost or stolen Securities and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the
replacement or payment of negotiable instruments or other securities without their surrender.



19









 





     SECTION 2.10. Cancellation of Securities; Disposition Thereof.
All Securities surrendered for payment, redemption, registration of transfer or exchange, or
for credit against any payment in respect of a sinking or analogous fund, if surrendered to the
Issuer or any agent of the Issuer or the Trustee or any agent of the Trustee, shall be delivered to
the Trustee or its agent for cancellation or, if surrendered to the Trustee, shall be cancelled by
it; and no Securities shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall dispose of all cancelled Securities in accordance
with its standard procedures and shall deliver a certificate of such disposition to the Issuer. If
the Issuer or its agent shall acquire any of the Securities, such acquisition shall not operate as
a redemption or satisfaction of the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee or its agent for cancellation.



     SECTION 2.11. Temporary Securities.
Pending the preparation of definitive Securities for any series, the Issuer may execute and
the Trustee, upon receipt of an Issuer Order, shall authenticate and deliver temporary Securities
for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be issuable in any
authorized denomination, and substantially in the form of the definitive Securities of such series
but with such omissions, insertions and variations as may be appropriate for temporary Securities,
all as may be determined by the Issuer. Temporary Securities may contain such references to any
provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by
the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities. Without unreasonable delay the
Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary
Securities of such series may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section 3.2 and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such series an equal
aggregate principal amount of definitive Securities of the same series having authorized
denominations. Until so exchanged, the temporary Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.3.



     SECTION 2.12. CUSIP Numbers.
The Issuer in issuing the Securities may use “CUSIP” numbers (if then generally in use), and,
if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on the Securities, and
any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer
will promptly notify the Trustee of any change to such “CUSIP” numbers.



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ARTICLE THREE

COVENANTS




     SECTION 3.1. Payment of Principal and Interest.
The Issuer covenants and agrees that it will duly and punctually pay or cause to be paid the
principal of, premium, if any, and interest, if any, on each of the Securities at the place, at the
respective times and in the manner provided in the Securities.



     SECTION 3.2. Offices for Notices and Payments, etc.
So long as any of the Securities are Outstanding, the Issuer will maintain in each Place of
Payment, an office or agency where the Securities may be presented for payment, an office or agency
where the Securities may be presented for registration of transfer and for exchange as provided in
this Indenture, and an office or agency where notices and demands to or upon the Issuer in respect
of the Securities or of this Indenture may be served. In case the Issuer shall at any time fail to
maintain any such office or agency, or shall fail to give notice to the Trustee of any change in
the location thereof, presentation may be made and notice and demand may be served in respect of
the Securities or of this Indenture to the Trustee. The Issuer hereby initially designates the
Corporate Trust Office of the Trustee for each such purpose and appoints the Trustee as registrar
and paying agent and as the agent upon whom notices and demands may be served with respect to the
Securities.



     SECTION 3.3. No Interest Extension.
In order to prevent any accumulation of claims for interest after maturity thereof, the Issuer
will not directly or indirectly extend or consent to the extension of the time for the payment of
any claim for interest on any of the Securities and will not directly or indirectly be a party to
or approve any such arrangement by the purchase or funding of said claims or in any other manner;
provided, however, that this Section 3.3 shall not apply in any case where an extension shall be
made pursuant to a plan proposed by the Issuer to the Holders of all Securities of any series then
Outstanding.



     SECTION 3.4. Appointments to Fill Vacancies in Trustee’s Office.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of the Trustee, will
appoint, in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a
Trustee hereunder.



     SECTION 3.5. Provision as to Paying Agent.
(a) If the Issuer shall appoint a paying agent other than the Trustee, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such paying agent shall
agree with the Trustee, subject to the provisions of this Section 3.5,




     (1) that it will hold all sums held by it as such paying agent for the payment of the
principal of or interest, if any, on the Securities (whether such sums
have been paid to it by the Issuer or by any other obligor on the Securities) in trust
for the benefit of the Holders of the Securities and the Trustee; and




     (2) that it will give the Trustee notice of any failure by the Issuer (or by any other
obligor on the Securities) to make any payment of the principal of,



21









 






premium, if any, or interest, if any, on the Securities when the same shall be due and
payable; and




     (3) that it will, at any time during the continuance of any such failure, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by
such paying agent.



     (b) If the Issuer shall act as its own paying agent, it will, on or before each due date of
the principal of or interest, if any, on the Securities, set aside, segregate and hold in trust for
the benefit of the Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any failure to take such
action and of any failure by the Issuer (or by any other obligor under the Securities) to make any
payment of the principal of, premium, if any, or interest, if any, on the Securities when the same
shall become due and payable.



     (c) Anything in this Section 3.5 to the contrary notwithstanding, the Issuer may, at any time,
for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust by it, or any paying agent
hereunder, as required by this Section 3.5, such sums to be held by the Trustee upon the trusts
herein contained.



     (d) Anything in this Section 3.5 to the contrary notwithstanding, any agreement of the Trustee
or any paying agent to hold sums in trust as provided in this Section 3.5 is subject to Sections
10.3 and 10.4.



     (e) Whenever the Issuer shall have one or more paying agents, it will, on or before 9:00 A.M.
on each due date of the principal of, premium, if any, or interest, if any, on any Securities,
deposit with a paying agent a sum sufficient to pay the principal, premium, if any, or interest, if
any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, if any, or interest, if any, and (unless such paying agent is the Trustee) the
Issuer will promptly notify the Trustee of its action or failure so to act.



ARTICLE FOUR

SECURITYHOLDERS LISTS AND REPORTS BY THE

ISSUER AND THE TRUSTEE




     SECTION 4.1. Issuer to Furnish Trustee Information as to Names and Addresses of
Securityholders.
The Issuer and any other obligor on the Securities covenant and agree that they will furnish
or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require
of the names and addresses of the Holders of the Securities of each series:




     (a) semiannually and not more than 15 days after each January 1 and July 1, and




     (b) at such other times as the Trustee may request in writing, within 15 days after
receipt by the Issuer of any such request,



22









 




provided that if and so long as the Trustee shall be the registrar for such series, such list shall
not be required to be furnished.




     SECTION 4.2. Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Holders of each series of Securities (i) contained
in the most recent list furnished to it as provided in Section 4.1, and (ii) received by it in the
capacity of registrar or paying agent for such series, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 4.1 upon receipt of a new list so furnished.



          (b) The rights of Holders of each series of Securities to communicate with other Holders of
such series of Securities with respect to their rights under this Indenture or under the Securities
of such series, and the corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.



          (c) Every Holder of Securities of any series, by receiving and holding the same, agrees with
the Issuer and the Trustee that neither the Issuer nor the Trustee nor any agent of any of them
shall be held accountable by reason of any disclosure of information as to names and addresses of
Holders of Securities of such series made pursuant to the Trust Indenture Act.



     SECTION 4.3. Reports by the Issuer.
The Issuer covenants:



     (a) to file with the Trustee, within 15 days after the Issuer is required to file the same
with the Commission, copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the Commission may from time to time
by rules and regulations prescribe) which the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer is not required to
file information, documents or reports pursuant to either of such Exchange Act Sections, then to
file with the Trustee and the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act, in respect of a debt
security listed and registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;



     (b) to file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and regulations;



     (c) to transmit by mail to the Holders of Securities within 30 days after the filing thereof
with the Trustee, in the manner and to the extent provided in Section 4.4(a),
such summaries of any information, documents and reports required to be filed by the Issuer
pursuant to subsections (a) and (b) of this Section 4.3 as may be required to be



23









 




transmitted to such Holders by rules and regulations prescribed from time to time by the
Commission; and




     (d) to furnish to the Trustee, not less than annually, an Officers’ Certificate from the
principal executive officer, principal financial officer or principal accounting officer as to his
knowledge of the Issuer’s compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.



          Delivery of the reports, information and documents referenced in Sections 4.3(a), (b) and (c)
to the Trustee is for informational purposes only and the Trustee’s receipt of them will not
constitute constructive notice of any information contained therein or determinable from
information contained therein, including the Issuer’s compliance with any of its covenants in this
Indenture (as to which the Trustee is entitled to rely exclusively on an Officers’ Certificate).



     SECTION 4.4. Reports by the Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act of 1939 at the times
and in the manner provided pursuant thereto. To the extent that any such report is required by the
Trust Indenture Act of 1939 with respect to any 12 month period, such report shall cover the 12
month period ending May 15 and shall be transmitted by the next succeeding July 15.



     (b) A copy of each such report shall, at the time of such transmission to Securityholders, be
furnished to the Issuer and be filed by the Trustee with each stock exchange upon which the
Securities of any applicable series are listed and also with the Commission. The Issuer agrees to
promptly notify the Trustee with respect to any series when and as the Securities of such series
become admitted to trading on any national securities exchange.



ARTICLE FIVE

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

ON EVENT OF DEFAULT




     SECTION 5.1. Events of Default.
“Event of Default”, wherever used herein with respect to Securities of any series, means any
one or more of the following events (whatever the reason for such Event of Default), unless it is
either inapplicable to a particular series or it is specifically deleted or modified in or pursuant
to the Board Resolution or supplemental indenture establishing such series of Securities or in the
form of Security, for such series:




     (a) default in the payment of the principal of or premium, if any, of the Securities
of such series as and when the same shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or



24









 






     (b) default in the payment of any installment of interest on any of the Securities of
such series as and when the same shall become due and payable, and continuance of such
default for a period of 30 days; or




     (c) default in the payment or satisfaction of any sinking fund or other purchase
obligation with respect to Securities of such series, as and when such obligation shall
become due and payable; or




     (d) failure on the part of the Issuer or a Guarantor duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in or a Guarantor of, the
Securities of such series or in this Indenture continued for a period of 90 days after the
date on which written notice of such failure, requiring the Issuer or a Guarantor to remedy
the same, shall have been given by certified or registered mail to the Issuer or a
Guarantor by the Trustee, or to the Issuer or a Guarantor and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities of such series then
Outstanding; or




     (e) without the consent of the Issuer, a court having jurisdiction shall enter an
order for relief with respect to the Issuer or any of its Significant Subsidiaries under
any applicable bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, or without the consent of the Issuer, a
court having jurisdiction shall enter a judgment, order or decree adjudging the Issuer or
any of its Significant Subsidiaries bankrupt or insolvent, or enter an order for relief for
reorganization, arrangement, adjustment or composition of or in respect of the Issuer or
any of its Significant Subsidiaries under any applicable bankruptcy, insolvency or other
similar law of the United States of America, any state thereof or the District of Columbia,
and the continuance of any such judgment, order or decree is unstayed and in effect for a
period of 60 consecutive days; or




     (f) the Issuer or any of its Significant Subsidiaries shall institute proceedings for
entry of an order for relief with respect to the Issuer or any of its Significant
Subsidiaries under any applicable bankruptcy, insolvency or other similar law of the United
States of America, any state thereof or the District of Columbia, or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency proceedings
against it, or shall file a petition seeking, or seek or consent to reorganization,
arrangement, composition or relief under any applicable bankruptcy, insolvency or other
similar law of the United States of America, any state thereof or the District of Columbia,
or shall consent to the filing of such petition or to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator or similar official of the Issuer or
of substantially all of its property, or the Issuer or any of its Significant Subsidiaries
shall make a general assignment for the benefit of creditors as recognized under any
applicable bankruptcy, insolvency or other similar law of the United States of America, any
state thereof or the District of Columbia; or



25









 






     (g) a Guarantee ceases to be in full force and effect (other than in accordance with
the terms of any Guarantee) or a Guarantor denies or disaffirms its obligations under the
Guarantee; or




     (h) any other Event of Default provided with respect to the Securities of such series.



     If an Event of Default with respect to Securities of any series then Outstanding occurs and is
continuing, then and in each and every such case, unless the principal of all of the Securities of
such series shall have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities of such series then Outstanding, by
notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the
principal (or, if the Securities of such series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such series) of all the
Securities of such series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be immediately due and
payable, notwithstanding anything to the contrary contained in this Indenture or in the Securities
of such series. This provision, however, is subject to the condition that, if at any time after
the unpaid principal amount (or such specified amount) of the Securities of such series shall have
been so declared due and payable and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, the Issuer shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of interest, if any, upon
all of the Securities of such series and the principal of any and all Securities of such series
which shall have become due otherwise than by acceleration (with interest on overdue installments
of interest, if any, to the extent that payment of such interest is enforceable under applicable
law and on such principal at the rate borne by the Securities of such series to the date of such
payment or deposit) and the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and all defaults under
this Indenture, other than the nonpayment of such portion of the principal amount of and accrued
interest, if any, on Securities of such series which shall have become due by acceleration, shall
have been cured or shall have been waived in accordance with Section 5.7 or provision deemed by the
Trustee to be adequate shall have been made therefor, then and in every such case the Holders of a
majority in aggregate principal amount of the Securities of such series then Outstanding, by
written notice to the Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon. Notwithstanding the previous sentence, no
waiver shall be effective against any Holder for any Event of Default or event which with notice or
lapse of time or both would be an Event of Default with respect to any covenant or provision which
cannot be modified or amended without the consent of the Holder of each outstanding Security
affected thereby, unless all such affected Holders agree, in writing, to waive such Event of
Default or other event.



     If any Event of Default specified in Section 5.1(e) or 5.1(f) occurs with respect to the
Issuer, all unpaid principal amount (or, if the Securities of any series then Outstanding are
Original Issue Discount Securities, such portion of the principal amount as may be




26











 




specified in the terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and payable without any
declaration or other act by the Trustee or any Securityholder.




     If the Trustee shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission or annulment or
for any other reason or shall have been determined adversely to the Trustee, then and in every such
case the Issuer, the Trustee and the Securityholders shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of the Issuer, the
Trustee and the Securityholders shall continue as though no such proceeding had been taken.



     Except with respect to an Event of Default pursuant to Section 5.1 (a), (b) or (c), the
Trustee shall not be charged with knowledge of any Event of Default unless written notice thereof
shall have been given to a Responsible Officer by the Issuer, a paying agent or any Securityholder.



     SECTION
5.2. Payment of Securities on Default; Suit Therefor. The Issuer covenants that (a) if default shall be made in the payment of any installment of
interest upon any of the Securities of any series then Outstanding as and when the same shall
become due and payable, and such default shall have continued for a period of 30 days, or (b) if
default shall be made in the payment of the principal of any of the Securities of such series as
and when the same shall have become due and payable, whether at maturity of the Securities of such
series or upon redemption or by declaration or otherwise, then, upon demand of the Trustee, the
Issuer will pay to the Trustee, for the benefit of the Holders of the Securities, the whole amount
that then shall have become due and payable on all such Securities of such series for principal or
interest, if any, or both, as the case may be, with interest upon the overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) upon the overdue
installments of interest, if any, at the rate borne by the Securities of such series; and, in
addition thereto, such further amount as shall be sufficient to cover the costs and expenses of
collection, including a reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than through its negligence
or bad faith.



     If the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its
own name and as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and
may prosecute any such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any other obligor on the Securities of such series
and collect in the manner provided by law out of the property of the Issuer or any other obligor on
the Securities of such series, wherever situated, the moneys adjudged or decreed to be payable.



     If there shall be pending proceedings for the bankruptcy or for the reorganization of the
Issuer or any other obligor on the Securities of any series then Outstanding under any bankruptcy,
insolvency or other similar law now or hereafter in effect, or if a receiver or trustee or similar
official shall have been appointed for the property of the Issuer or such



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other obligor, or in the case of any other similar judicial proceedings relative to the Issuer
or other obligor upon the Securities of such series, or to the creditors or property of the
Issuer or such other obligor, the Trustee, irrespective of whether the principal of the Securities
of such series shall then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.2, shall be entitled and empowered by intervention in such proceedings or otherwise
to file and prove a claim or claims for the whole amount of principal and interest, if any, owing
and unpaid in respect of the Securities of such series, and, in case of any judicial proceedings,
to 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 and of the Securityholders allowed in such judicial
proceedings relative to the Issuer or any other obligor on the Securities of such series, its or
their creditors, or its or their property, and to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute the same after the deduction of its
charges and expenses, and any receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make such payments to the
Trustee, and, if the Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due it for compensation and expenses or otherwise
pursuant to Section 6.6, including counsel fees and expenses incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation, expenses and counsel
fees and expenses out of the estate in any such proceedings shall be denied for any reason, payment
of the same shall be secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the Securities of such series
may be entitled to receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.




     All rights of action and of asserting claims under this Indenture, or under any of the
Securities, may be enforced by the Trustee without the possession of any of the Securities, or the
production thereof at any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable benefit of the Holders of the
Securities of the series in respect of which such judgment has been recovered.



     SECTION 5.3. Application of Moneys Collected by Trustee. Any moneys collected by the Trustee pursuant to Section 5.2 with respect to Securities of any
series then Outstanding shall be applied in the order following, at the date or dates fixed by the
Trustee for the distribution of such moneys, upon presentation of the several Securities of such
series, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:




     FIRST: To the payment of costs and expenses of collection and reasonable compensation
to the Trustee, its agents, attorneys and counsel, and of all other expenses and
liabilities incurred, and all advances made, by the Trustee pursuant to Section 6.6 except
as a result of its negligence or bad faith;



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     SECOND: If the principal of the Outstanding Securities of such series shall not have
become due and be unpaid, to the payment of interest, if any, on the Securities of such series, in the order of the maturity of the installments of such
interest, if any, with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest, if any, at the rate borne by the
Securities of such series, such payment to be made ratably to the Persons entitled thereto;




     THIRD: If the principal of the Outstanding Securities of such series shall have
become due, by declaration or otherwise, to the payment of the whole amount then owing and
unpaid upon the Securities of such series for principal and interest, if any, with interest
on the overdue principal and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest, if any, at the rate borne by the Securities
of such series; and in case such moneys shall be insufficient to pay in full the whole
amounts so due and unpaid upon the Securities of such series, then to the payment of such
principal and interest, if any, without preference or priority of principal over interest
or of interest over principal, or of any installment of interest over any other installment
of interest, or of any Security over any other Security, ratably to the aggregate of such
principal and accrued and unpaid interest; and




     FOURTH: To the payment of any surplus then remaining to the Issuer, its successors or
assigns, or to whomsoever may be lawfully entitled to receive the same.



     No claim for interest which in any manner at or after maturity shall have been transferred or
pledged separate or apart from the Securities to which it relates, or which in any manner shall
have been kept alive after maturity by an extension (otherwise than pursuant to an extension made
pursuant to a plan proposed by the Issuer to the Holders of all Securities of any series then
Outstanding), purchase, funding or otherwise by or on behalf or with the consent or approval of the
Issuer shall be entitled, in case of a default hereunder, to any benefit of this Indenture, except
after prior payment in full of the principal of all Securities of any series then Outstanding and
of all claims for interest not so transferred, pledged, kept alive, extended, purchased or funded.



     SECTION 5.4. Proceedings by Securityholders.
No Holder of any Securities of any series then Outstanding shall have any right by virtue of
or by availing of any provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the appointment of a
receiver or trustee or similar official, or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have made written request
to the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have neglected or refused
to



29









 







institute any such action, suit or proceeding, it being understood and intended, and being
expressly covenanted by the Holder of every Security of such series with every other Holder and the Trustee, that no
one or more Holders of Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the Securities to affect, disturb
or prejudice the rights of any other Holder of such Securities of such series, or to obtain or seek
to obtain priority over or preference as to any other such Holder, or to enforce any right under
this Indenture or the Securities, except in the manner herein provided and for the equal, ratable
and common benefit of all Holders of Securities of such series.



     Notwithstanding any other provisions in this Indenture, but subject to Article Thirteen, the
right of any Holder of any Security to receive payment of the principal of, premium, if any, and
interest, if any, on such Security, on or after the respective due dates expressed in such
Security, or to institute suit for the enforcement of any such payment on or after such respective
dates shall not be impaired or affected without the consent of such Holder.



     SECTION 5.5. Proceedings by Trustee. In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceedings in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.



     SECTION 5.6. Remedies Cumulative and Continuing. All powers and remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the Securityholders, by judicial
proceedings or otherwise, to enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.4, every power and remedy given
by this Article Five or by law to the Trustee or to the Securityholders may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.



     SECTION 5.7. Direction of Proceedings; Waiver of Defaults by Majority of Securityholders.
The Holders of a majority in aggregate principal amount of the Securities of any series then
Outstanding shall have the right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee
with respect to Securities of such series; provided, however, that (subject to the provisions of
Section 6.1) the Trustee shall have the right to decline to follow any such direction if the Trustee shall determine upon advice of counsel
that the action or proceeding so directed may not lawfully be taken or if the Trustee in good



30









 







faith by its board of directors, its executive committee, or a trust committee of directors or
Responsible Officers or both shall determine that the action or proceeding so directed would
involve the Trustee in personal liability. The Holders of a majority in aggregate principal amount
of the Securities of any series then Outstanding may on behalf of the Holders of all of the
Securities of such series waive any past default or Event of Default hereunder and its consequences
except a default in the payment of interest, if any, on, or the principal of, the Securities of
such series. Upon any such waiver the Issuer, the Trustee and the Holders of the Securities of
such series shall be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as
permitted by this Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not continuing.



     SECTION 5.8. Notice of Defaults. The Trustee shall, within 90 days after the occurrence of a default, with respect to
Securities of any series then Outstanding, mail to all Holders of Securities of such series, as the
names and the addresses of such Holders appear upon the Securities register, notice of all defaults
known to the Trustee with respect to such series, unless such defaults shall have been cured before
the giving of such notice (the term “defaults” for the purpose of this Section 5.8 being hereby
defined to be the events specified in clauses (a), (b), (c), (d), (e), (f), (g) and (h) of Section
5.1, not including periods of grace, if any, provided for therein and irrespective of the giving of
the written notice specified in said clause (d) but in the case of any default of the character
specified in said clause (d) no such notice to Securityholders shall be given until at least 60
days after the giving of written notice thereof to the Issuer pursuant to said clause (d));
provided, however, that, except in the case of default in the payment of the principal of or
interest, if any, on any of the Securities, or in the payment or satisfaction of any sinking fund
or other purchase obligation, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of directors or
Responsible Officers or both of the Trustee in good faith determines that the withholding of such
notice is in the best interests of the Securityholders.



     SECTION 5.9. Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.9 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding in
the aggregate more than 10% in principal amount of the Securities of any series then Outstanding, or to any suit instituted
by any Securityholders for the enforcement of the payment of the principal of or interest, if any,
on any Security against the Issuer on or after the due date expressed in such Security.



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ARTICLE SIX

CONCERNING THE TRUSTEE




     SECTION 6.1. Duties and Responsibilities of the Trustee; During Default; Prior to Default.
In case an Event of Default with respect to the Securities of a series has occurred (which has
not been cured or waived) the Trustee shall exercise with respect to such series of Securities 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.



     No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own willful misconduct, except
that:




     (a) prior to the occurrence of an Event of Default with respect to the Securities of
any series and after the curing or waiving of all such Events of Default with respect to
such series which may have occurred:




     (i) the duties and obligations of the Trustee with respect to the Securities
of any series shall be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and




     (ii) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any statements, certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but in the
case of any such statements, certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture;




     (b) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and




     (c) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders pursuant to
Section 5.7 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture.



     None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur personal financial liability in the



32









 







performance of any of its duties or in the exercise of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.



     SECTION 6.2. Certain Rights of the Trustee.



     Subject to Section 6.1:




     (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any
resolution, Officers’ Certificate or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon, security or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties;




     (b) any request, direction, order or demand of the Issuer mentioned herein shall be
sufficiently evidenced by an Officers’ Certificate or Issuer Order (unless other evidence in
respect thereof be herein specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a Board Resolution;




     (c) the Trustee may consult with counsel of its selection and any advice of such counsel
promptly confirmed in writing shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;




     (d) the Trustee shall be under no obligation to exercise any of the trusts or powers vested in
it by this Indenture at the request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture (including, without limitation, pursuant to Section 5.7), unless
such Securityholders shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or thereby;




     (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and
believed by it to be authorized or within the discretion, rights or powers conferred upon it by
this Indenture;




     (f) prior to the occurrence of an Event of Default hereunder and after the curing or waiving
of all Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders of not less than a majority
in aggregate principal amount of the Securities of all series affected then Outstanding; provided
that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such investigation shall be paid by the Issuer



33









 






or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer upon demand;




     (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys not regularly in its employ and the
Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;




     (h) the Trustee shall not be charged with knowledge of any default or Event of Default with
respect to a series of Securities unless either (i) a Responsible Officer of the Trustee assigned
to the Corporate Trust Office of the Trustee (or any successor division or department of the
Trustee) shall have actual knowledge of such default or Event of Default or (ii) written notice of
such default or Event of Default shall have been given to the Trustee by the Issuer or any other
obligor on such series of Securities or by any Holder of Securities of such series;




     (i) the Trustee shall not be liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;




     (j) the permissive rights of the Trustee hereunder shall not be construed as duties;




     (k) in no event shall the Trustee be liable for any consequential, special, punitive or
indirect loss or damages, even if advised of the likelihood thereof in advance and regardless of
the form of action;




     (l) the rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder




     (m) the Trustee may request that the Issuer deliver an Officers’ Certificate setting forth the
name of the individuals and/or titles of Officers authorized at such time to take specific actions
pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to
sign an Officers’ Certificate, including any person specified as so authorized in any such
Officers’ Certificate previously delivered and not superseded; and




     (n) the Trustee shall not be responsible for delays or failures in performance of its
obligations hereunder resulting from acts beyond its reasonable control. Such acts shall include
but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental
regulations superimposed after the fact, fire, communication line failures, computer viruses, power
failures, earthquakes, terrorist attacks or other disasters, it being understood that the Trustee
shall use reasonable best efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.



     SECTION 6.3. Trustee Not Responsible for Recitals, Disposition of Securities or Application
of Proceeds Thereof. The recitals contained herein and in the Securities,



34









 







except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture, of the Securities or of any prospectus used to sell the
Securities. The Trustee shall not be accountable for the use or application by the Issuer of any
of the Securities or of the proceeds thereof.



     SECTION 6.4. Trustee and Agents May Hold Securities; Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it
were not the Trustee or such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with
the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights
it would have if it were not the Trustee or such agent.



     SECTION 6.5. Moneys Held by Trustee. Subject to the provisions of Section 10.4 hereof, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent required by mandatory
provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under
any liability for interest on any moneys received by it hereunder.



     SECTION 6.6. Compensation and Indemnification of Trustee and Its Prior Claim.
The Issuer covenants and agrees to pay to the Trustee from time to time, and the Trustee shall
be entitled to, such compensation as shall be agreed to in writing between the Issuer and the
Trustee (which shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee
and each predecessor Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and disbursements of its counsel
and of all agents and other persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The Issuer also covenants
to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, any and
all loss, liability, damage, claim or expense, including taxes (other than taxes based on the
income of the Trustee), incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Indenture or the trusts hereunder and its
duties hereunder, including the costs and expenses of defending itself against or investigating any
claim or liability in the premises. The obligations of the Issuer under this Section 6.6 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture or the resignation or removal of the Trustee and
shall not be subordinate to the payment of Senior Indebtedness pursuant to Article Thirteen. Such
additional indebtedness shall be a senior claim to that of the Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust for the benefit of the
Holders of particular Securities. When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section



35









 







5.1 or in connection with Article Five hereof, the expenses (including the reasonable fees and expenses of its counsel) and the
compensation for the service in connection therewith are intended to constitute expenses of
administration under any bankruptcy law. The provisions of this Section 6.6 shall survive the
resignation or removal of the Trustee and the termination of this Indenture.



     SECTION 6.7. Right of Trustee to Rely on Officers’ Certificate, etc. Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of this
Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively proved and established by an
Officers’ Certificate delivered to the Trustee, and such certificate, in the absence of negligence
or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture upon the faith thereof.



     SECTION 6.8. Qualification of Trustee; Conflicting Interests. This Indenture shall always have a Trustee who satisfies the requirements of Section 310(a)(1)
of the Trust Indenture Act of 1939. The Trustee shall 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 shall comply with Section 310(b) of the Trust Indenture Act of 1939 regarding
disqualification of a trustee upon acquiring a conflicting interest.



     SECTION 6.9. Persons Eligible for Appointment as Trustee; Different Trustees for Different
Series. The Trustee for each series of Securities hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or of any state thereof
or the District of Columbia having a combined capital and surplus of at least $25,000,000, and
which is authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal, state or District of Columbia authority, or a corporation or
other Person permitted to act as trustee by the Commission. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 6.9, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. No obligor upon the Securities or any Affiliate of such
obligor shall serve as trustee upon the Securities. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 6.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.



     A different Trustee may be appointed by the Issuer for each series of Securities prior to the
issuance of such Securities. If the initial Trustee for any series of Securities is to be a
trustee other than Wilmington Trust Company, the Issuer and such Trustee shall, prior to the
issuance of such Securities, execute and deliver an indenture supplemental hereto, which shall
provide for the appointment of such Trustee as Trustee for the Securities of such series and shall
add to or change any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder



36









 







by more than one Trustee, it being understood that nothing herein or in such supplemental indenture
shall constitute such Trustees co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such Trustee.



     SECTION 6.10. Resignation and Removal; Appointment of Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with
respect to one or more or all series of Securities by giving written notice of resignation to the
Issuer. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor
trustee or trustees with respect to the applicable series by written instrument in duplicate,
executed by authority of the Board of Directors, one copy of which instrument shall be delivered to
the resigning trustee and one copy to the successor trustee or trustees. If no successor trustee
shall have been so appointed with respect to any series of Securities and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning trustee may petition
any court of competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series
for at least six months may, subject to the provisions of Section 5.9, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.



     (b) In case at any time any of the following shall occur:




     (i) the Trustee shall fail to comply with the provisions of Section 6.8 with respect
to any series of Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or Securities of such series
for at least six months; or




     (ii) the Trustee shall cease to be eligible in accordance with the provisions of
Section 6.9 and shall fail to resign after written request therefor by the Issuer or by any
such Securityholder; or




     (iii) the Trustee shall become incapable of acting with respect to any series of
Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of
the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;


then, in any such case, the Issuer may remove the Trustee with respect to the applicable series of
Securities and appoint a successor trustee for such series by written instrument, in duplicate,
executed by order of the Board of Directors one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Article
Five, any Securityholder who has been a bona fide Holder of a Security or Securities of such series
for at least six months may on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the appointment of a successor
trustee with respect to such series. Such court


37









 






may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.




     (c) The Holders of a majority in aggregate principal amount of the Securities of each series
then Outstanding may at any time remove the Trustee with respect to Securities of such series and
appoint a successor trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided
for in Section 7.1 of the action in that regard taken by the Securityholders. If no successor
trustee shall have been so appointed with respect to any series and have accepted appointment
within 30 days after the delivery of such evidence of removal, the Trustee may petition any court
of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has
been a bona fide Holder of a Security or Securities of the applicable series for at least six
months may, subject to the provisions of Section 5.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.



     (d) Any resignation or removal of the Trustee with respect to any series of Securities and any
appointment of a successor trustee with respect to such series pursuant to any of the provisions of
this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.11.



     SECTION 6.11. Acceptance of Appointment by Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to the
Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee with respect to all or any
applicable series shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all rights, powers, duties and obligations with respect to
such series of its predecessor hereunder, with like effect as if originally named as trustee for
such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall, subject to
Section 10.4, pay over to the successor trustee all moneys at the time held by it hereunder and
shall execute and deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.



     If a successor trustee is appointed with respect to the Securities of one or more (but not
all) series, the Issuer, the predecessor Trustee and each successor trustee with respect to the
Securities of any applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of
any series as to which the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the



38









 







provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental indenture shall constitute
such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust
or trusts under separate indentures.



     No successor trustee with respect to any series of Securities shall accept appointment as
provided in this Section 6.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 6.8 and eligible under the provisions of Section 6.9.



     Upon acceptance of appointment by any successor trustee as provided in this Section 6.11, the
Issuer shall give notice thereof to the Holders of Securities of each series affected, by mailing
such notice to such Holders at their addresses as they shall appear on the Securities register. If
the Issuer fails to give such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be given at the expense of the
Issuer.



     SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business of Trustee. Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this Indenture), shall be
the successor of the Trustee hereunder, provided that such corporation shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9, without the execution
or filing of any paper or any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.



     In case at the time such successor to the Trustee shall succeed to the trusts created by this
Indenture and any of the Securities of any series shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such certificate of
authentication shall have the full force as if such successor Trustee had itself authenticated such
Securities; provided, that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities of any series in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or consolidation.



     SECTION 6.13. Preferential Collection of Claims Against the Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture Act of 1939, excluding any
creditor relationship listed in Section 311(b) of the Trust Indenture Act of 1939. A Trustee who
has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act of 1939
to the extent indicated therein.



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     SECTION 6.14. Appointment of Authenticating Agent.
As long as any Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the “Authenticating
Agent”) which shall be authorized to act on behalf of the Trustee to authenticate Securities,
including Securities issued upon exchange, registration of transfer, partial redemption or pursuant
to Section 2.9. Securities of each such series authenticated by such Authenticating Agent shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee. Whenever reference is made in this Indenture to the authentication
and delivery of Securities of any series by the Trustee or to the Trustee’s Certificate of
Authentication, such reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent for such series and a Certificate of Authentication executed
on behalf of the Trustee by such Authenticating Agent. Such Authenticating Agent shall at all
times be a corporation organized and doing business under the laws of the United States of America
or of any state thereof or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least $25,000,000 (determined
as provided in Section 6.9 with respect to the Trustee) and subject to supervision or examination
by federal or state authority.



     Any corporation into which any Authenticating Agent may be merged or converted, or with which
it may be consolidated, or any corporation resulting from any merger, conversion or consolidation
to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate
agency business (including the authenticating agency contemplated by this Indenture) of any
Authenticating Agent, shall continue to be the Authenticating Agent with respect to all series of
Securities for which it served as Authenticating Agent without the execution or filing of any paper
or any further act on the part of the Trustee or such Authenticating Agent. Any Authenticating
Agent may at any time, and if it shall cease to be eligible shall, resign by giving written notice
of resignation to the Trustee and to the Issuer. The Trustee may at any time terminate the agency
of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the
Issuer.



     Upon receiving such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible in accordance with the provisions of this
Section 6.14 with respect to one or more series of Securities, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and the Issuer shall provide notice of
such appointment to all Holders of Securities of such series in the manner and to the extent
provided in Section 11.4. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating Agent. The Issuer
agrees to pay to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall have no
responsibility or liability for any action taken by it as such at the direction of the Trustee.



     Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any Authenticating Agent.



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ARTICLE SEVEN

CONCERNING THE SECURITYHOLDERS




     SECTION 7.1. Evidence of Action Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in principal amount of
the Securityholders of any or all series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified percentage of Securityholders
in person or by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments are delivered to
the Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this Article Seven.



     SECTION 7.2. Proof of Execution of Instruments and of Holding of Securities.
Subject to Sections 6.1 and 6.2, the execution of any instrument by a Securityholder or his
agent or proxy may be proved in the following manner:




     (a) The fact and date of the execution by any Holder of any instrument may be proved
by the certificate of any notary public or other officer of any jurisdiction authorized to
take acknowledgments of deeds or administer oaths that the person executing such
instruments acknowledged to him the execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other such officer. Where such execution
is by or on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of the person executing
the same.




     (b) The ownership of Securities shall be proved by the Security register or by a
certificate of the Security registrar.



     SECTION 7.3. Holders to be Treated as Owners.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security register for such series as
the absolute owner of such Security (whether or not such Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of this Indenture,
interest, if any, on such Security and for all other purposes; and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary.



     SECTION 7.4. Securities Owned by Issuer Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal amount of Outstanding
Securities of any or all series have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on the Securities with
respect to which such determination is being made or by any Affiliate of the Issuer or any other
obligor on the Securities with respect to which such determination is being made shall be
disregarded and deemed not to be Outstanding for the



41









 







purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver only Securities which a Responsible Officer of the Trustee knows are
so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s
right so to act with respect to such Securities and that the pledgee is not the Issuer or any other
obligor upon the Securities or any Affiliate of the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full protection in respect of
any decision made by the Trustee in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers’ Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the account of any of the
above-described Persons; and, subject to Sections 6.1 and 6.2, the Trustee shall be entitled to
accept such Officers’ Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are Outstanding for the purpose of any such
determination.



     SECTION 7.5. Right of Revocation of Action Taken. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in aggregate principal amount of
the Securities of any or all series, as the case may be, specified in this Indenture in connection
with such action, any Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which have consented to such
action may, by filing written notice at the Corporate Trust Office and upon proof of holding as
provided in this Article Seven, revoke such action so far as concerns such Security provided that
such revocation shall not become effective until three Business Days after such filing. Except as
aforesaid, any such action taken by the Holder of any Security shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor or on registration of transfer thereof, irrespective of whether
or not any notation in regard thereto is made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the
Securities affected by such action.



     SECTION 7.6. Record Date for Consents and Waivers. The Issuer may, but shall not be obligated to, establish a record date for the purpose of
determining the Persons entitled to (i) waive any past default with respect to the Securities of
such series in accordance with Section 5.7 of the Indenture, (ii) consent to any supplemental
indenture in accordance with Section 8.2 of the Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and any such Persons, shall be entitled to waive any
such past default, consent to any such supplemental indenture or waive compliance with any such
term, condition or provision, whether or not such Holder remains a Holder after such record date;
provided, however, that unless such waiver or consent is obtained from the Holders, or duly
designated proxies, of the requisite principal amount of Outstanding Securities of such series
prior to the date which is the 120th day after such



42









 







record date, any such waiver or consent previously given shall automatically and, without further action by any Holder be cancelled and of
no further effect.



ARTICLE EIGHT

SUPPLEMENTAL INDENTURES




     SECTION 8.1. Supplemental Indentures Without Consent of Securityholders. The Issuer, when authorized by a Board Resolution (which resolution may provide general terms
or parameters for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order), and the Trustee may from time to
time and at any time enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act of 1939 as in force at the date of the execution
thereof) for one or more of the following purposes:




     (a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the
Securities of one or more series any property or assets;




     (b) to evidence the succession of another Person to the Issuer or successive
successions, and the assumption by the successor Person of the covenants, agreements and
obligations of the Issuer herein and in the Securities or the Guarantees or to otherwise
evidence compliance with Article Nine hereof;




     (c) to add to the covenants of the Issuer such further covenants, restrictions,
conditions or provisions for the protection of the Holders of all or any series of
Securities (and if such covenants, restrictions, conditions or provisions are to be for the
protection of less than all series of Securities, stating that the same are expressly being
included solely for the protection of such series), or to surrender any right or power
herein conferred upon the Issuer, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant, restriction, condition
or provision such supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such an Event of Default or may
limit the remedies available to the Trustee upon such an Event of Default or may limit the
right of the Holders of a majority in aggregate principal amount of the Securities of such
series to waive such an Event of Default;




     (d) to cure any ambiguity or to correct or supplement any provision contained herein
or in any supplemental indenture which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture;




     (e) to establish the form or terms of Securities or the Guarantees to be endorsed
thereon of any series as permitted by Sections 2.1 and 2.3, to provide for



43









 






any Guarantees of the Securities of any series and to confirm and evidence the termination or discharge of
any Guarantee of or mortgage, lien, pledge, charge, security interest or encumbrance
securing the Securities of a series when such release, termination or discharge is
permitted by the Indenture;




     (f) to provide for the issuance of uncertificated Securities of any series (including
Securities registrable as to principal only) in addition to or in place of certificated
Securities and to provide for exchangeability of such Securities for the Securities issued
hereunder in fully registered form and to make all appropriate changes for such purpose;




     (g) to modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under the Trust Indenture
Act of 1939, or under any similar federal statute hereafter enacted, and to add to this
Indenture such other provisions as may be expressly permitted by the Trust Indenture Act of
1939, excluding, however, the provisions referred to in Section 316(a)(2) of the Trust
Indenture Act of 1939 as in effect at the date as of which this instrument was executed or
any corresponding provision provided for in any similar federal statute hereafter enacted;




     (h) to evidence and provide for the acceptance of appointment hereunder of a Trustee
other than Wilmington Trust Company as Trustee for a series of Securities and to add to or
change any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to
the requirements of Section 6.9 hereof;




     (i) subject to Section 8.2 hereof, to add to or modify the provisions hereof as may be
necessary or desirable to provide for the denomination of Securities in foreign currencies which shall not adversely affect the interests of the
Holders of the Securities in any material respect;




     (j) to modify the covenants or Events of Default of the Issuer solely in respect of, or add
new covenants or Events of Default of the Issuer that apply solely to, Securities not Outstanding
on the date of such supplemental indenture;




     (k) to evidence and provide for the acceptance of appointment hereunder by a successor
trustee with respect to the Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to the requirements of
Section 6.11;




     (l) to conform the text of this Indenture, the Securities of any series, or the Guarantees
to any provision of the “Description of Debt Securities” section of any prospectus or the
comparable section in any applicable prospectus supplement that is used to sell the Securities of
such series to the extent that such provision was intended to be a verbatim recitation of a
provision of this Indenture, the Securities of such series sold thereby, or the Guarantees
thereof; and



44









 






     (m) to make any other change that does not adversely affect the legal rights of any Holder
of Securities of the series affected by such change.



     The Trustee is hereby authorized to join with the Issuer in the execution of any such
supplemental indenture, to make any further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any
property thereunder, but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise.



     Any supplemental indenture authorized by the provisions of this Section may be executed
without the consent of the Holders of any of the Securities then Outstanding, notwithstanding any
of the provisions of Section 8.2.



     SECTION 8.2. Supplemental Indentures with Consent of Securityholders. With the consent (evidenced as provided in Article Seven and including written consents
obtained in connection with a tender offer or exchange offer) of the Holders of not less than a
majority in aggregate principal amount of the Securities then Outstanding of any series affected
thereby, the Issuer, when authorized by a Board Resolution (which resolution may provide general
terms or parameters for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order), and the Trustee may, from time to
time and at any time, enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act of 1939 as in force at the date of execution
thereof) for the purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of such series or waiving future compliance with any
provision of the Indenture or the Securities (other than a continuing
default or Event of Default in the payment of principal of or interest on Securities, which
shall require the consent of the Holders of each Security so affected); provided, that no such
supplemental indenture or waiver shall (a) change the stated final maturity of the principal of any
Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment
of interest (including default interest), if any, thereon (or, in the case of an Original Issue
Discount Security, reduce the rate of accretion of original issue discount thereon), or reduce or
alter the method of computation of any amount payable on redemption, repayment or purchase by the
Issuer thereof (or the time at which any such redemption, repayment or purchase may be made), or
make the principal thereof (including any amount in respect of original issue discount), or
interest, if any, thereon payable in any coin or currency other than that provided in the
Securities or in accordance with the terms of the Securities, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon an acceleration of the
maturity thereof pursuant to Section 5.1 or the amount thereof provable in bankruptcy pursuant to
Section 5.2, make any change to Sections 5.4 or 5.7, or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the Securities provide therefor,
any right of repayment or purchase at the option of the Securityholder, in each case without the
consent of the Holder of each Security so affected or modify the ranking or priority of the
Securities or the Guarantees issued hereunder, or (b) reduce the aforesaid percentage of Securities
of any series, the



45









 







consent of the Holders of which is required for any such supplemental indenture,
without the consent of the Holders of each Security so affected. No consent of any Holder of any
Security shall be necessary under this Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Sections 8.1 and 9.2.



     A supplemental indenture which changes or eliminates any covenant, Event of Default or other
provision of this Indenture which has expressly been included solely for the benefit of one or more
particular series of Securities, or which modifies the rights of Holders of Securities of such
series, with respect to such covenant or provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.



     Upon the request of the Issuer, accompanied by a copy of a resolution of the Board of
Directors (which resolution may provide general terms or parameters for such action and may provide
that the specific terms of such action may be determined in accordance with or pursuant to an
Issuer Order) certified by the secretary or an assistant secretary of the Issuer authorizing the
execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of the Holders of the Securities as aforesaid and other documents, if any, required by
Section 7.1, the Trustee shall join with the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may at its discretion, but shall not be
obligated to, enter into such supplemental indenture.



     It shall not be necessary for the consent of the Securityholders under this Section 8.2 to
approve the particular form of any proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.



     Promptly after the execution by the Issuer and the Trustee of any supplemental indenture
pursuant to the provisions of this Section 8.2, the Issuer (or the Trustee at the request and
expense of the Issuer) shall give notice thereof to the Holders of then Outstanding Securities of
each series affected thereby, as provided in Section 11.4. Any failure of the Issuer to give such
notice, or any defect therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.



     SECTION 8.3. Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and shall be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Issuer, the Guarantors and the Holders of Securities of each series affected
thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to
such modifications and amendments, and all the terms and conditions of any such supplemental
indenture shall be and shall be deemed to be part of the terms and conditions of this Indenture for
any and all purposes.



     SECTION 8.4. Documents to Be Given to Trustee. The Trustee, subject to the provisions of Sections 6.1 and 6.2, shall be entitled to receive
an Officers’ Certificate and



46









 




an Opinion of Counsel as provided in Section 11.5 as conclusive evidence that any supplemental indenture executed pursuant to this Article Eight complies with the
applicable provisions of this Indenture and that all conditions precedent to the execution and
delivery of such supplemental indenture have been satisfied. An Opinion of Counsel pursuant to
this Section 8.4 shall also include (a) an opinion that any such supplemental indenture has been
duly authorized, executed and delivered and constitutes the valid and legally binding obligation of
the Issuer and the Guarantors party thereto, if any, enforceable in accordance with its terms and
(b) in the case of 8.1(m) an opinion that such supplemental indenture does not adversely affect the
legal rights of any Holder of Securities of the series affected by such change. In rendering such
opinion, such counsel may qualify any opinions as to enforceability by stating that such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
liquidation, moratorium and other similar laws relating to or affecting the rights and remedies of
creditors and is subject to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.




     SECTION 8.5. Notation on Securities in Respect of Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article Eight may bear a notation in form approved by
the Trustee for such series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the Trustee and the Issuer,
to any modification of this Indenture contained in any such supplemental indenture may be prepared
and executed by the Issuer, and such Securities may be authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.



ARTICLE NINE

CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER

DISPOSITION




     SECTION 9.1. Consolidation Permitted, etc., on Certain Terms. Subject to the provisions of Section 9.2, nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Issuer with or into any other Person or
Persons (whether or not affiliated with the Issuer), or successive consolidations or mergers in
which the Issuer or its successor or successors shall be a party or parties, or shall prevent any
sale, lease, exchange or other disposition of all or substantially all the property and assets of
the Issuer to any other Person (whether or not affiliated with the Issuer) authorized to acquire
and operate the same; provided, however, and the Issuer hereby covenants and agrees, that any such
consolidation, merger, sale, lease, exchange or other disposition shall be upon the conditions that
(a) immediately after giving effect to such consolidation, merger, sale, lease, exchange or other
disposition of the Person (whether the Issuer or such other Person) formed by or surviving any such
consolidation or merger, or to which such sale, lease, exchange or other disposition shall have
been made, 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; (b) the Person (if other than
the Issuer) formed by or surviving any such consolidation or merger, or to which such sale, lease,
exchange or other



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disposition shall have been made, shall be a corporation or partnership organized
under the laws of the United States of America, any state thereof or the District of Columbia; and
(c) the due and punctual payment of the principal of premium, if any, and interest, if any, on all
the Securities, according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the Issuer, shall be
expressly assumed, by supplemental indenture satisfactory in form to the Trustee executed and
delivered to the Trustee, by the Person (if other than the Issuer) formed by such consolidation, or
into which the Issuer shall have been merged, or by the Person which shall have acquired or leased
such property.



     SECTION 9.2. Successor Corporation to be Substituted. In case of any such consolidation or merger or any sale, conveyance or lease of all or
substantially all of the property of the Issuer and upon the assumption by the successor Person, by
supplemental indenture executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of, premium, if any, and interest, if
any, on all of the Securities and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Issuer, such successor Person shall succeed to
and be substituted for the Issuer, with the same effect as if it had been named herein as the party
of the first part, and the Issuer (including any intervening successor to the Issuer which shall
have become the obligor hereunder) shall be relieved of any further obligation under this Indenture
and the Securities; provided, however, that in the case of a sale, lease, exchange or other
disposition of the property and assets of the Issuer (including any such intervening
successor), the Issuer (including any such intervening successor) shall continue to be liable on
its obligations under this Indenture and the Securities to the extent, but only to the extent, of
liability to pay the principal of, premium, if any, and interest, if any, on the Securities at the
time, places and rate prescribed in this Indenture and the Securities. Such successor Person
thereupon may cause to be signed, and may issue either in its own name or in the name of the
Issuer, any or all of the Securities issuable hereunder which theretofore shall not have been
signed by the Issuer and delivered to the Trustee; and, upon the order of such successor Person
instead of the Issuer and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee for authentication, and
any Securities which such successor Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had been issued at the
date of the execution hereof.



     In case of any such consolidation or merger or any sale, lease, exchange or other disposition
of all or substantially all of the property and assets of the Issuer, such changes in phraseology
and form (but not in substance) may be made in the Securities, thereafter to be issued, as may be
appropriate.



     SECTION 9.3. Opinion of Counsel to be Given Trustee. The Trustee, subject to Sections 6.1 and 6.2, shall receive an Officers’ Certificate and
Opinion of Counsel as



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conclusive evidence that any such consolidation, merger, sale, lease,
exchange or other disposition and any such assumption complies with the provisions of this Article
Nine.



ARTICLE TEN

LEGAL DEFEASANCE AND COVENANT DEFEASANCE




     SECTION 10.1. Applicability of Article. Unless specified otherwise pursuant to Section 2.3 for Securities of a series, this Article
shall apply to each series of Securities issued under this Indenture.



     SECTION 10.2. Legal Defeasance and Discharge. The Issuer shall, subject to the satisfaction of the conditions set forth in Section 10.4
hereof, be deemed to have been discharged from its obligations with respect to the Outstanding
Securities of any series on the date the conditions set forth below are satisfied with respect to
such series (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the
Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the
Outstanding Securities of any series, which shall thereafter be deemed to be Outstanding only for
the purposes of Section 10.5 hereof and the other Sections of this Indenture referred to in clauses
(a) and (b) below, and to have satisfied all of its obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments delivered to it by the
Issuer acknowledging the same), except of the following provisions which shall survive until
otherwise terminated or discharged hereunder; (a) the rights of Holder of Outstanding Securities of
such series to receive payments in respect of the principal of, premium, if any, and interest on
such Securities when such payments are due from the trust referred to below; (b) the Issuer’s
obligations with respect to the Securities concerning mutilated, destroyed, lost or stolen
Securities and the maintenance of an office or agency for payment and money for security payments
held in trust; (c) the rights, powers, trusts, duties and immunities of the Trustee, and the
Issuer’s obligations in connection therewith; and (d) the Legal Defeasance provisions of this
Indenture.



     SECTION 10.3. Covenant Defeasance. The Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth
in Section 10.4 hereof, be released from their obligations under the covenants contained in Article
Nine (other than Section 9.1(c)) and, to the extent described in the applicable supplemental
indenture, with respect to the covenants of any series of Securities, on and after the date that
the conditions set forth in Section 10.4 are satisfied with respect to such series (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 Issuer 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



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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 5.1 hereof, but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby. Subject to the satisfaction of the conditions set forth in
Section 10.4 hereof, Sections 5.1(d), 5.1(e), 5.1(f) and 5.1(g) hereof shall not constitute Events
of Default or defaults hereunder.



     SECTION 10.4. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 10.2 or 10.3 hereof
to the Outstanding Securities of any series:



     In order to exercise either Legal Defeasance or Covenant Defeasance:



     (a) the Issuer must irrevocably deposit, or cause to be deposited, with the Trustee, in trust,
for the benefit of the Holders of the Securities of a particular series, cash in U.S. dollars, U.S.
Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants, to pay, without
reinvestment, the principal of, premium, if any, and interest on the Outstanding Securities of such
series on the stated maturity thereof or on the applicable
redemption date, as the case may be, and the Issuer must specify whether the Securities are
being defeased to maturity or to a particular redemption date;



     (b) in the case of Legal Defeasance, the Issuer must deliver to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that the Issuer has received from, or there
has been published by, the Internal Revenue Service a ruling, or there has been a change in the
applicable United States federal income tax law after the date of this Indenture, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the
Outstanding Securities of such series will not recognize income, gain or loss for United States
federal income tax purposes as a result of such Legal Defeasance, and will be subject to United
States federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;



     (c) in the case of Covenant Defeasance, the Issuer must deliver to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for United States federal income
tax purposes as a result of such Covenant Defeasance, and such Holders will be subject to United
States federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if such 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 borrowing of funds to be
applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of deposit;



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     (e) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of,
or constitute a default under, any material agreement or instrument (other than the Indenture) to
which the Issuer or any of its Restricted Subsidiaries is a party or by which the issuer or any of
its Restricted Subsidiaries is bound;



     (f) the Issuer must deliver to the Trustee an Officers’ Certificate stating that the deposit
was not made by the Issuer with the intent of preferring the Holders of the Securities over other
creditors of the Issuer, or with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuer or others;



     (g) the Issuer must deliver to the Trustee an Officers’ Certificate and an opinion of Counsel
in the United States reasonably acceptable to the Trustee, each stating that the conditions
precedent provided for or relating to Legal Defeasance or Covenant Defeasance, as applicable, in
the case of the Officers’ Certificate, in clauses (a) through (f) and, in the case of the opinion
of Counsel, in clauses (b) and (c) of this paragraph, have been complied with.



     SECTION 10.5. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions. Subject to Section 10.6 hereof, all money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively, and solely
for purposes of this Section 10.5, the “Trustee”) pursuant to Section 10.4 hereof in respect of the
Outstanding Securities of any series 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 Issuer 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 Issuer 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 10.4 hereof in respect of any series of Securities 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 of such series.



     Anything in this Article Ten to the contrary notwithstanding, the Trustee shall deliver or pay
to the Issuer from time to time upon the request of the Issuer any money or non-callable U.S.
Government Obligations held by it as provided in Section 10.4 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 10.4(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 10.6. Repayment to Issuer. Any money deposited with the Trustee or any paying agent, or then held by the Issuer, in trust
for the payment of the principal of,



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premium or interest on any Security 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 Issuer on its request or (if then held by the Issuer) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured creditor, look only
to the Issuer for payment thereof, and all liability of the Trustee or such paying agent with
respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such paying agent, before being required to make any
such repayment, may at the expense of the Issuer cause to be published once, in 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 Issuer.



     SECTION 10.7. Reinstatement. If the Trustee or paying agent is unable to apply any money or non-callable U.S. Government
Obligations in accordance with Section 10.2 or 10.3 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 Issuer’s obligations
under this Indenture and the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 10.2 or 10.3 hereof until such time as the Trustee or paying agent is
permitted to apply all such money in accordance with Section 10.2 or 10.3 hereof, as the case may
be; provided, however, that, if the Issuer makes any payment of principal of, premium, if any, or
interest on any Security following the reinstatement of its obligations, the Issuer 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.



     SECTION 10.8. Survival. The Trustee’s rights under this Article Ten shall survive termination of this Indenture.



     SECTION 10.9. Satisfaction and Discharge of Indenture.



     If at any time (a)(i) the Issuer shall have paid or caused to be paid the principal of,
premium, if any, and interest, if any, on all the Securities Outstanding of any series (other than
Securities which have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.9) as and when the same shall have become due and payable, or (ii) the Issuer
shall have delivered to the Trustee for cancellation all Securities of any series theretofore
authenticated (other than Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9), or (b)(i) the Securities of any series mature within
one year, or all of them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (ii) the Issuer irrevocably
deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or
U.S. Government Obligations or a combination thereof sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certificate delivered to
the Trustee, without consideration of any reinvestment, to pay principal of and premium and
interest on the Securities to maturity or redemption, as the case may be, and to pay all other sums
payable by it hereunder, (iii) no Event of Default has occurred and is continuing on the date of
the deposit, (iv) the deposit will not result in a breach or violation of, or constitute a default
under, the Indenture or any other agreement or




52












 




instrument to which the Issuer is a party or by which it is bound, and (v) the Issuer
delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating
that all conditions precedent provided for herein relating to the satisfaction and discharge of the
Indenture have been complied with; and if, in any such case, the Issuer shall also pay or cause to
be paid all other sums payable hereunder by the Issuer (including all amounts, payable to the
Trustee pursuant to Section 6.6), then, (x) after satisfying the conditions in clause (a), only the
Issuer’s obligations under Sections 6.6 and 10.5, as applicable, will survive or (y) after
satisfying the conditions in clause (b), only the Issuer’s or obligations in Article Two and
Sections 3.1, 3.2, 6.6, 6.10, 10.5, 10.6 and 10.7 will survive, and, in either case, the Trustee,
on demand of the Issuer accompanied by an Officers’ Certificate and an Opinion of Counsel, each
stating that all conditions precedent relating to the satisfaction and discharge contemplated by
this provision have been complied with, and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction and discharging of this Indenture. The Issuer
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly
incurred, and to compensate the Trustee for any services thereafter reasonably and properly
rendered, by the Trustee in connection with this Indenture or the Securities.




ARTICLE ELEVEN

MISCELLANEOUS PROVISIONS




     SECTION 11.1. Partners, Incorporators, Stockholders, Officers and Directors of Issuer Exempt
from Individual Liability.
No recourse under or upon any obligation, covenant or agreement contained in this Indenture,
or in any Security, or because of any indebtedness evidenced thereby, shall be had against any
incorporator, as such or against any past, present or future stockholder, officer, director or
employee, as such, of the Issuer or the Guarantors or any partner of the Issuer or the Guarantors
or of any successor, either directly or through the Issuer or the Guarantors or any successor,
under any rule of law, statute or constitutional provision or by the enforcement of any assessment
or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and
released by the acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.



     SECTION 11.2. Provisions of Indenture for the Sole Benefit of Parties and Holders of
Securities.
Nothing in this Indenture or in the Securities, expressed or implied, shall give or be
construed to give to any Person, other than the parties hereto and their successors and the Holders
of the Senior Indebtedness and the Holders of the Securities, any legal or equitable right, remedy
or claim under this Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and their successors and
of the Holders of the Securities.



     SECTION 11.3. Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture contained by or on
behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.



     SECTION 11.4. Notices and Demands on Issuer, Trustee and Holders of Securities.
Any notice or demand which by any provision of this Indenture is required or



53









 







permitted to be
given or served by the Trustee or by the Holders of Securities to or on the Issuer, or as required
pursuant to the Trust Indenture Act of 1939, may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until
another address of the Issuer is filed by the Issuer with the Trustee) to Hovnanian Enterprises,
Inc., 110 West Front Street, P.O. Box 500, Red Bank, New Jersey 07701. Any notice, direction,
request or demand by the Issuer or any Holder of Securities to or upon the Trustee shall be deemed
to have been sufficiently given or served by being deposited postage prepaid, first-class mail
(except as otherwise specifically provided herein) addressed (until another address of the Trustee
is filed by the Trustee with the Issuer) to Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, DE 19890 [specify series of Securities]).



     Where this Indenture provides for notice to Holders of Securities, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder entitled thereto, at his last address as it appears in
the Security register. Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be
filed with the Trustee, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.



     In case, by reason of the suspension of or irregularities in regular mail service, it shall be
impracticable to mail notice to the Issuer when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be sufficient notice.



     SECTION 11.5. Officers’ Certificates and Opinions of Counsel; Statements to Be Contained
Therein.
Upon any application or demand by the Issuer to the Trustee to take any action under any of
the provisions of this Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have
been complied with, except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion need be furnished.



     Each certificate or opinion provided for in this Indenture (other than a certificate provided
pursuant to Section 4.3(d)) and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) 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, (c) a statement that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion as to whether or not such
covenant or condition has been complied with, and (d) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been complied with.



54









 





     Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of or representations by counsel unless
such officer knows that the certificate or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any certificate, statement or
opinion of counsel may be based, insofar as it relates to factual matters, on information with
respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of
or representations by an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.



     Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or representations by
an accountant or firm of accountants in the employ of the Issuer unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are erroneous.



     Any certificate or opinion of any independent firm of public accountants filed with and
directed to the Trustee shall contain a statement that such firm is independent.



     SECTION 11.6. Payments Due on Saturdays, Sundays and Holidays.
If the date of maturity of principal of or interest, if any, on the Securities of any series
or the date fixed for redemption, purchase or repayment of any such Security shall not be a
Business Day, then payment of interest, if any, premium, if any, or principal need not be made on
such date, but may be made on the next succeeding Business Day with the same force and effect as if
made on the date of maturity or the date fixed for redemption, purchase or repayment, and, in the
case of payment, no interest shall accrue for the period after such date.



     SECTION 11.7. Conflict of Any Provision of Indenture with Trust Indenture Act of 1939.
If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
another provision included in this Indenture which is required to be included herein by any of
Sections 310 to 317 of the Trust Indenture Act of 1939, inclusive, or is deemed applicable to this
Indenture by virtue of the provisions of the Trust Indenture Act of 1939, such required provision
shall control.



     SECTION 11.8. GOVERNING LAW.
THIS INDENTURE, EACH SECURITY AND EACH GUARANTEE SHALL BE DEEMED TO BE A CONTRACT UNDER THE
LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE.



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     SECTION 11.9. Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an
original; but such counterparts shall together constitute but one and the same instrument.



     SECTION 11.10. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.



     SECTION 11.11. No Adverse Interpretation of Other Agreements.
The Indenture may not be used to interpret another indenture or loan or debt agreement of the
Issuer or any subsidiary of the Issuer, and no such indenture or loan or debt agreement may be used
to interpret the Indenture.



ARTICLE TWELVE

REDEMPTION OF SECURITIES AND SINKING FUNDS




     SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified, as contemplated by Section 2.3 for Securities of such series.



     SECTION 12.2. Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Securities of any series to be redeemed as a whole or
in part at the option of the Issuer shall be given by mailing notice of such redemption by first
class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Securities of such series at their last addresses as they shall
appear in the Security register. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder receives the notice.
Failure to give notice by mail, or any defect in the notice to the Holder of any Security of a
series designated for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.



     The notice of redemption to each such Holder shall specify (i) the principal amount of each
Security of such series held by such Holder to be redeemed, (ii) the date fixed for
redemption, (iii) the redemption price, (iv) the place or places of payment, (v) the CUSIP
number relating to such Securities, (vi) that payment will be made upon presentation and surrender
of such Securities, (vii) whether such redemption is pursuant to the mandatory or optional sinking
fund, or both, if such be the case, (viii) whether interest, if any, (or, in the case of Original
Issue Discount Securities, original issue discount) accrued to the date fixed for redemption will
be paid as specified in such notice and (ix) whether on and after said date interest, if any, (or,
in the case of Original Issue Discount Securities, original issue discount) thereon or on the
portions thereof to be redeemed will cease to accrue. In case any Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.



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     The notice of redemption of Securities of any series to be redeemed at the option of the
Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at
the expense of the Issuer.



     On or before the redemption date specified in the notice of redemption given as provided in
this Section 12.2, the Issuer will deposit with the Trustee or with one or more paying agents (or,
if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided
in Section 3.5) an amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price, together with accrued
interest, if any, to the date fixed for redemption. The Issuer will deliver to the Trustee at
least 45 days prior to the date fixed for redemption (unless a shorter notice period shall be
satisfactory to the Trustee) an Officers’ Certificate stating the aggregate principal amount of
Securities to be redeemed. In case of a redemption at the election of the Issuer prior to the
expiration of any restriction on such redemption, the Issuer shall deliver to the Trustee, prior to
the giving of any notice of redemption to Holders pursuant to this Section, an Officers’
Certificate stating that such restriction has been complied with.



     If less than all the Securities of a series are to be redeemed, the Trustee, within 10
Business Days after the Issuer gives written notice to the Trustee that such redemption is to
occur, shall select on a pro rata basis, by lot or in such manner as it shall deem, in its sole
discretion, appropriate and fair, Securities of such series to be redeemed. Notice of the
redemption shall be given only after such selection has been made. Securities may be redeemed in
part in denominations of $2,000 and multiples of $1,000 in excess thereof in original principal
amount of Securities, unless another minimum authorized denomination is specified for Securities of
such series, or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of
the Securities of such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all provisions relating to the
redemption of Securities of any series shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of such Security which has been or is
to be redeemed.



     SECTION 12.3. Payment of Securities Called for Redemption.
If notice of redemption has been given as provided by this Article Twelve, the Securities or
portions of Securities specified in such notice shall become due and payable on the date and at the
place or places stated in such notice at the applicable redemption price, together with interest,
if any accrued to the date fixed for redemption, and on and after said date (unless the Issuer
shall default in the payment of such Securities at the redemption price, together with interest, if
any, accrued to said date) interest, if any (or, in the case of Original Issue Discount Securities,
original issue discount), on the Securities or portions of Securities so called for redemption
shall cease to accrue, and such Securities shall cease from and after the date fixed for redemption
(unless an earlier date shall be specified in a Board Resolution, Officers’ Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to which the form and
terms of the Securities of such series were established) except as provided in Sections 6.5 and
10.4, to be entitled to any benefit or security under this Indenture, and the Holders thereof shall
have no right in respect of such



57









 







Securities except the right to receive the redemption price
thereof and unpaid interest, if any, to the date fixed for redemption. On presentation and
surrender of such Securities at a place of payment specified in said notice, said Securities or the
specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest, if any, accrued thereon to the date fixed for redemption; provided
that payment of interest, if any, becoming due on or prior to the date fixed for redemption shall
be payable to the Holders of Securities registered as such on the relevant record date subject to
the terms and provisions of Sections 2.3 and 2.7 hereof.



     If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the redemption price shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original
Issue Discount Security) borne by such Security.



     Upon presentation of any Security redeemed in part only, the Issuer shall execute and the
Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of
the Issuer, a new Security or Securities of such series, and of like tenor, of authorized
denominations, in principal amount equal to the unredeemed portion of the Security so presented.



     SECTION 12.4. Exclusion of Certain Securities from Eligibility for Selection for Redemption.
Securities shall be excluded from eligibility for selection for redemption if they are
identified by registration and certificate number in an Officers’ Certificate delivered to the
Trustee at least 45 days prior to the last date on which notice of redemption may be given as being
owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer, or
(b) a Person specifically identified in such written statement as an Affiliate of the Issuer.



     SECTION 12.5. Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the terms of the Securities of
any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess
of such minimum amount provided for by the terms
of the Securities of any series is herein referred to as an “optional sinking fund payment.”
The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund
payment date.”



     In lieu of making all or any part of any mandatory sinking fund payment with respect to any
series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities of
such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the
Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10, (b) receive credit
for optional sinking fund payments (not previously so credited) made pursuant to this Section 12.5,
or (c) receive credit for Securities of such series (not previously so credited) redeemed by the
Issuer through any optional redemption provision contained in the terms of such series. Securities
so delivered or credited shall be received or credited by the Trustee at the sinking fund
redemption price specified in such Securities.



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     On or before the 60th day next preceding each sinking fund payment date for any series, the
Issuer will deliver to the Trustee an Officers’ Certificate (a) specifying the portion of the
mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied
by credit of Securities of such series and the basis for such credit, (b) stating that none of the
Securities of such series to be so credited has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect to such series have occurred
(which have not been waived or cured or otherwise ceased to exist) and are continuing, and (d)
stating whether or not the Issuer intends to exercise its right to make an optional sinking fund
payment with respect to such series and, if so, specifying the amount of such optional sinking fund
payment which the Issuer intends to pay on or before the next succeeding sinking fund payment date.
Any Securities of such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the
Trustee with such Officers’ Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers’ Certificate shall be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the cash payments or payments therein
referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the
Issuer, on or before any such 60th day, to deliver such Officers’ Certificate and Securities
(subject to the parenthetical clause in the second preceding sentence) specified in this paragraph,
if any, shall not constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due
on the next succeeding sinking fund payment date shall be paid entirely in cash without the option
to deliver or credit Securities of such series in respect thereof, and (ii) that the Issuer will
make no optional sinking fund payment with respect to such series as provided in this Section 12.5.



     If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on
the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund
payments made in cash shall exceed $50,000, or a lesser sum if the Issuer shall so request with
respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price together with accrued interest, if
any, to the date fixed for redemption. If such amount shall be $50,000 or less and the Issuer
makes no such request, then it shall be carried over until a sum in excess of $50,000 is available.
The Trustee shall select, in the manner provided in Section 12.2, for redemption on such sinking
fund payment date a sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer of the
serial numbers of the Securities of such series (or portions thereof) so selected. The Issuer, or
the Trustee, in the name and at the expense of the Issuer (if the Issuer shall so request the
Trustee in writing) shall cause notice of redemption of the Securities of such series to be given
in substantially the manner provided in Section 12.2 (and with the effect provided in Section 12.3)
for the redemption of Securities of such series in part at the option of the Issuer. The amount of
any sinking fund payments not so applied or allocated to the redemption of Securities of such
series shall be added to the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section 12.5. Any and



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all
sinking fund moneys held on the stated maturity date of the Securities of any particular series (or
earlier, if such maturity is accelerated), which are not held for the payment or redemption of
particular Securities of such series shall be applied, together with other moneys, if necessary,
sufficient for the purpose, to the payment of the principal of, and interest, if any, on, the
Securities of such series at maturity.



     On or before 9:00 A.M. on each sinking fund payment date, the Issuer shall pay to the Trustee
in cash or shall otherwise provide for the payment of all interest, if any, accrued to the date
fixed for redemption on Securities to be redeemed on such sinking fund payment date.



     The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking
fund moneys or give any notice of redemption of Securities for such series by operation of the
sinking fund during the continuance of a default in payment of interest on such Securities or of
any Event of Default with respect to such series except that, where the giving of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to
be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient
for such redemption. Except as aforesaid, and subject to Article Thirteen, any moneys in the
sinking fund for such series at the time when any such default or Event of Default known to a
Responsible Officer of the Trustee shall occur, and any moneys thereafter paid into the sinking
fund, shall, during the continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities. In case such Event
of Default shall have been waived as provided in Section 5.7 or the default cured on or before the
60th day preceding the sinking fund payment date in any year, such moneys shall thereafter be
applied on the next succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.



ARTICLE THIRTEEN

SUBORDINATION




     SECTION 13.1. Securities Subordinated to Senior Indebtedness.
(a) The Issuer covenants and agrees, and each Holder of Securities of each series, by his
acceptance thereof, likewise covenants and agrees, that anything in this Indenture or the
Securities of any series to the contrary notwithstanding, the indebtedness evidenced by the
Securities of each series is subordinate and junior in right of payment, to the extent provided
herein, to all Senior Indebtedness, whether outstanding on the date of execution of this Indenture
or thereafter created, incurred or assumed, and that the subordination is for the benefit of the
holders of Senior Indebtedness.



     (b) Subject to Section 13.4, if (i) the Issuer shall default in the payment of any principal
of, premium, if any, or interest, if any, on any Senior Indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by declaration of acceleration or
otherwise, or (ii) any other default shall occur with respect to Senior Indebtedness and the
maturity of such Senior Indebtedness has been accelerated in accordance with its terms, then, upon
written notice of such default to the Issuer and the Trustee by the holders of Senior Indebtedness
or any trustee therefor, unless and until, in



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either case, the default has been cured or waived, or
has ceased to exist, or any such acceleration has been rescinded or such Senior Indebtedness has
been paid in full, no direct or indirect payment (in cash, property, securities, by set-off or
otherwise) shall be made or agreed to be made on account of the principal of, premium, if any, or
interest, if any, on any of the Securities, or in respect of any redemption, retirement, purchase
or other acquisition of any of the Securities other than those made in capital stock of the Issuer
(or cash in lieu of fractional shares thereof).



     (c) If any default (other than a default described in paragraph (b) of this Section 13.1)
shall occur under the Senior Indebtedness, pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be required to effect
such acceleration) or the expiration of any applicable grace periods occurs (a “Senior Nonmonetary
Default”), then, upon the receipt by the Issuer and the Trustee of written notice thereof (a
“Payment Notice”) from or on behalf of holders of not less than 25% in aggregate principal amount
of the Senior Indebtedness outstanding specifying an election to prohibit such payment and other
action by the Issuer in accordance with the following provisions of this paragraph (c), the Issuer
may not make any payment or take any other action that would be prohibited by paragraph (b) of this
Section 13.1 during the period (the “Payment Blockage Period”) commencing on the date of receipt of
such Payment Notice and ending on the earlier of (i) the date, if any, on which the holders of such
Senior Indebtedness or their representative notify the Trustee that such Senior Nonmonetary Default
is cured or waived or ceases to exist or the Senior Indebtedness to which such Senior Nonmonetary
Default relates is discharged or (ii) the 120th day after the date of receipt of such Payment
Notice. Notwithstanding the provisions described in the immediately preceding sentence, the Issuer
may resume payments on the Securities following such Payment Blockage Period. In no event shall a
Payment Blockage Period extend beyond 120 days from the date of the receipt by the Trustee of the
Payment Notice (the “Initial Period”). Any number of additional Payment Blockage Periods may be
commenced during the Initial Period; provided, however, that no such additional period shall extend
beyond the Initial Period. After the expiration of the Initial Period, no Payment Blockage Period
may be commenced on the basis of a Senior Nonmonetary Default on the Senior Indebtedness which was
the basis of a Payment Blockage Period commenced during the Initial Period until at least 270
consecutive days have elapsed from
the last day of the Initial Period. No Senior Nonmonetary Default with respect to Senior
Indebtedness which existed or was continuing on the date of the commencement of any Payment
Blockage Period and of which the applicable holder(s) of Senior Indebtedness are aware shall be, or
can be made, the basis for the commencement of a second Payment Blockage Period whether or not
within a period of 270 consecutive days unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days.



     (d) If (i) (A) without the consent of the Issuer, a receiver, conservator, liquidator or
trustee of the Issuer or of any of its property is appointed by the order or decree of any court or
agency or supervisory authority having jurisdiction, and such decree or order remains in effect for
more than 60 days or (B) the Issuer is adjudicated bankrupt or insolvent or (C) any of its property
is sequestered by court order and such order remains in effect for more than 60 days or (D) a
petition is filed against the Issuer under any state or



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federal bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or receivership law of any
jurisdiction whether now or hereafter in effect (including without limitation the Bankruptcy Code),
and is not dismissed within 60 days after such filing; or (ii) the Issuer (A) commences a voluntary
case or other proceeding seeking liquidation, reorganization, arrangement, insolvency, readjustment
of debt, dissolution, liquidation or other relief with respect to itself or its debt or other
liabilities under any bankruptcy, insolvency or other similar law now or hereafter in effect
(including without limitation the Bankruptcy Code) or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any substantial part of its
property, or (B) consents to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it, or (C) fails
generally to, or cannot, pay its debts generally as they become due or (D) takes any corporate
action to authorize or effect any of the foregoing; or (iii) any Subsidiary of the Issuer takes,
suffers or permits to exist any of the events or conditions referred to in the foregoing clause (i)
or (ii), then all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made to any Holder of any
Securities on account thereof. Any payment or distribution, whether in cash, securities or other
property (other than securities of the Issuer or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to the extent provided
in these subordination provisions with respect to the indebtedness evidenced by the Securities to
the payment of all Senior Indebtedness then outstanding and to any securities issued in respect
thereof under any such plan of reorganization or adjustment) which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Securities of any series
shall be paid or delivered directly to the holders of Senior Indebtedness in accordance with the
priorities then existing among such holders until all Senior Indebtedness (including any interest
thereon accruing after the commencement of any such proceedings) shall have been paid in full. In
the event of any such proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness, the Holders of the Securities, together with the holders of any obligations of the
Issuer ranking on a parity with the Securities, shall be entitled to be paid from the remaining
assets of the Issuer the amounts at the time due and owing on account of unpaid principal of and
interest, if any, on the Securities and such other obligations before any payment or other
distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of the Issuer
ranking junior to the Securities and such other obligations.



     (e) If, notwithstanding the foregoing, any payment or distribution of any character, whether
in cash, securities or other property (other than securities of the Issuer or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in the subordination provisions with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Indebtedness then outstanding and to any
securities issued in respect thereof under any such plan of reorganization or readjustment), shall
be received by the Trustee or any Holder in contravention of any of the terms hereof, such payment
or distribution of securities shall be received in trust for the benefit of and shall be paid over
or delivered and transferred to the holders of the Senior Indebtedness then outstanding in
accordance with the priorities



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then existing among such holders for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder to endorse or
assign any such payment, distribution or security, each holder of Senior Indebtedness is hereby
irrevocably authorized to endorse or assign the same.



     (f) No present or future holder of any Senior Indebtedness shall be prejudiced in the right to
enforce subordination of the indebtedness evidenced by the Securities by any act or failure to act
on the part of the Issuer or any Holder of Securities. Nothing contained herein shall impair, as
between the Issuer and the Holders of Securities of each series, the obligation of the Issuer to
pay to such Holders the principal of and interest, if any, on such Securities or prevent the
Trustee or the Holder from exercising all rights, powers and remedies otherwise permitted by
applicable law or hereunder upon a default or Event of Default hereunder, all subject to the rights
of the holders of the Senior Indebtedness to remove cash, securities or other property otherwise
payable or deliverable to the Holders.



     (g) Senior Indebtedness shall not be deemed to have been paid in full unless the holders
thereof shall have received cash, securities or other property equal to the amount of such Senior
Indebtedness then outstanding. Upon the payment in full of all Senior Indebtedness, the Holders of
Securities of each series shall be subrogated to all rights of any holders of Senior Indebtedness
to receive any further payment or distributions applicable to the Senior Indebtedness until the
indebtedness evidenced by the Securities of such series shall have been paid in full and such
payments or distributions received by such Holders, by reason of such subrogation, of cash,
securities or other property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Issuer and its creditors other than the holders of Senior
Indebtedness, on the one hand, and such Holders, on the other hand, be deemed to be a payment by
the Issuer on account of Senior Indebtedness, and not on account of the Securities of such series.



     (h) The provisions of this Section 13.1 shall not impair any rights, interests, remedies or
powers of any secured creditor of the Issuer in respect of any security interest the creation of
which is not prohibited by the provisions of this Indenture.



     (i) The securing of any obligations of the Issuer, otherwise ranking on a parity with the
Securities, shall not be deemed to prevent such obligations from constituting obligations ranking
on a parity with the Securities.



     SECTION 13.2. Reliance on Certificate of Liquidating Agent; Further Evidence as to Ownership
of Senior Indebtedness.
Upon any payment or distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent jurisdiction in which
such dissolution or winding up or liquidation or reorganization or arrangement proceedings are
pending or upon a certificate of the bankruptcy trustee, receiver, assignee for the benefit of
creditors or other Person making such payment or distribution, delivered to the Trustee or to the
Holders, for the purpose of ascertaining the Persons entitled to participate in such distribution,
the holders of the Senior Indebtedness and other indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other facts



63









 







pertinent
thereto or to this Article Thirteen. In the absence of any such bankruptcy trustee, receiver,
assignee or other Person, the Trustee shall be entitled to rely upon written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee or representative on
behalf of such holder) as evidence that such Person is a holder of Senior Indebtedness (or is such
a trustee or representative). If the Trustee determines, in good faith, that further evidence is
required with respect to the right of any Person as a holder of Senior Indebtedness to participate
in any payment or distributions pursuant to this Article Thirteen, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, as to the extent to which such Person is entitled to participate
in such payment or distribution, and to other facts pertinent to the rights of such Person under
this Article Thirteen, and if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to receive such payment.



     SECTION 13.3. Payment Permitted If No Default.
Nothing contained in this Article Thirteen or elsewhere in this Indenture, or in any of the
Securities, shall prevent (a) the Issuer at any time, except during the pendency of any default
with respect to Senior Indebtedness described in Section 13.1(b) or Section 13.1(c) or of any of
the events described in Section 13.1(d), from making payments of the principal of or interest, if
any, on the Securities, or (b) the application by the Trustee or any paying agent of any moneys
deposited with it hereunder to payments of the principal of or interest, if any, on the Securities,
if, at the time of such deposit, the Trustee or such paying agent, as the case may be, did not have
the written notice provided for in Section 13.5 of any event prohibiting the making of such
deposit, or if, at the time of such deposit (whether or not in trust) by the Issuer with the
Trustee or paying agent (other than the Issuer) such payment would not have been prohibited by the
provisions of this Article Thirteen, and the Trustee or any paying agent shall not be affected by
any notice to the contrary received by it on or after such date.



     SECTION 13.4. Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Issuer to make any payment on or under any Senior Indebtedness, other than
any Senior Indebtedness as to which the provisions of this Section 13.4 shall have been waived by
the Issuer in the instrument or instruments by which the Issuer incurred, assumed, guaranteed or
otherwise created such Senior Indebtedness, shall not be deemed a default under Section 13.1 hereof
if (i) the Issuer shall be disputing its obligation to make such payment or perform such
obligation, and (ii) either (A) no final judgment relating to such dispute shall have been issued
against the Issuer which is in full force and effect and is not subject to further review,
including a judgment that has become final by reason of the expiration of the time within which a
party may seek further appeal or review, or (B) if a judgment that is subject to further review or
appeal has been issued, the Issuer shall in good faith be prosecuting an appeal or other proceeding
for review, and a stay of execution shall have been obtained pending such appeal or review.



     SECTION 13.5. Trustee Not Charged with Knowledge of Prohibition.
Anything in this Article Thirteen or elsewhere in this Indenture contained to the contrary
notwithstanding, the Trustee shall not at any time be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of moneys to or by



64









 







the Trustee and shall
be entitled to assume conclusively that no such facts exist and that no event specified in clauses
(b) and (c) of Section 13.1 has happened unless and until the Trustee shall have received an
Officers’ Certificate to the effect or notice in writing to that effect signed by or on behalf of
the holder or holders, or the representatives, of Senior Indebtedness who shall have been certified
by the Issuer or otherwise established to the reasonable satisfaction of the Trustee to be such
holder or holders or representatives or from any trustee under any indenture pursuant to which such
Senior Indebtedness shall be outstanding; provided, however, that, if the Trustee shall not have
received the Officers’ Certificate or notice provided for in this Section 13.5 at least three
Business Days preceding the date upon which by the terms hereof any moneys become payable for any
purpose (including, without limitation, the payment of either the principal of or interest, if any,
on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such moneys and apply the same to the purpose for
which they were received and shall not be affected by any notice to the contrary that may be
received by it within three Business Days preceding such date. The Issuer shall give prompt
written notice to the Trustee and to each paying agent of any facts that would prohibit any payment
of moneys to or by the Trustee or any paying agent, and the Trustee shall not be charged with
knowledge of the curing of any default or the elimination of any other fact or condition preventing
such payment or distribution unless and until the Trustee shall have received an Officers’
Certificate to such effect.



     SECTION 13.6. Trustee to Effectuate Subordination.
Each Holder of Securities by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the subordination as
between such Holder and holders of Senior Indebtedness as provided in this Article Thirteen and
appoints the Trustee its attorney-in-fact for any and all such purposes.



     SECTION 13.7. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article Thirteen with
respect to any Senior Indebtedness which may at the time be held by it, to the same extent as any
other holder of Senior Indebtedness and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article Thirteen shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.6.



     SECTION 13.8. Article Applicable to Paying Agents.
In case at any time any paying agent other than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term “Trustee” as used in this Article Thirteen shall in
such case (unless the context shall otherwise require) be construed as extending to and including
such paying agent within its meaning as fully for all intents and purposes as if the paying agent
were named in this Article Thirteen in addition to or in place of the Trustee; provided, however,
that Sections 13.5 and 13.7 shall not apply to the Issuer if it acts as paying agent.



          SECTION 13.9. Subordination Rights Not Impaired by Acts or Omissions of the Issuer or
Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Issuer or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the




65









 







Issuer with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder may have or be otherwise charged with.
The holders of Senior Indebtedness, may at any time or from time to time and in their absolute
direction, change the manner, place or terms of payment, change or extend the time of payment of,
or renew or alter, any such Senior Indebtedness, or amend or supplement any instrument pursuant to
which any such Senior Indebtedness is issued or by which it may be secured, or release any security
therefor, or exercise or refrain from exercising any other of their rights under such Senior
Indebtedness, including, without limitation, the waiver of default thereunder, all without notice
to or assent from the Holders of the Securities or the Trustee and without affecting the
obligations of the Issuer, the Trustee or the Holders of Securities under this Article Thirteen.




          SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of the Senior
Indebtedness, and shall not be liable to any such holders if it shall mistakenly pay over or
distribute money or assets to Securityholders or the Issuer. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article Thirteen and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into this Indenture
against the Trustee.




     SECTION 13.11. Applicability of Article.
Unless specified otherwise pursuant to Section 2.3 for Securities of a series, this Article
Thirteen shall apply to each series of Securities issued under this Indenture.



ARTICLE FOURTEEN

SUBORDINATED GUARANTEE




     SECTION 14.1. Applicability of Article.
The provisions of this Article shall be applicable to each of the Guarantors specified
pursuant to Section 2.3 for the Guarantee of Securities of a series.



     SECTION 14.2. Guarantee.
Each Guarantor of a particular series of Securities hereby unconditionally guarantees (each
such guarantee to be referred to herein as a “Guarantee”), jointly and severally with each other
Guarantor of the Securities of that series, if any, to each Holder of such Securities authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, such Securities or the obligations of the Issuer
hereunder or thereunder, (i) the due and punctual payment of the principal of and any premium or
interest on such Securities, whether at maturity or on an interest payment date, by acceleration,
pursuant to an offer to purchase such Securities or otherwise, and interest on the overdue
principal of and interest, if any, on such Securities, if lawful, and all other obligations of the
Issuer to the Holders of such Securities or the Trustee hereunder or thereunder shall be promptly
paid in full, all in accordance with the terms hereof and thereof including all amounts payable to
the Trustee under Section 6.6 hereof, and (ii) in case of any extension of time of payment or
renewal of any such Securities or any of such other obligations, the same shall be promptly paid in
full when due or to be performed in



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accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.



          If the Issuer fails to make any payment when due of any amount so guaranteed for whatever
reason, the Guarantor of the Securities of that series shall be obligated, jointly and severally
with each other Guarantor, if any, to pay the same immediately. Each Guarantor hereby agrees that
its obligations hereunder shall be continuing, absolute and unconditional, irrespective of, and
shall be unaffected by, the validity, regularity or enforceability of the Securities, this
Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of
the Securities or the Trustee with respect to any provisions hereof or thereof, the recovery of any
judgment against the Issuer, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of such Guarantor. Each Guarantor
hereby waives diligence, presentment, demand of payment, demand of performance, filing of claims
with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a
proceeding first against the Issuer, the benefit of discussion, protest, notice and all demand
whatsoever and covenants that its Guarantee shall not be discharged except by complete performance
of the obligations contained in the Securities guaranteed by such Guarantee, in this Indenture and
in this Article Fourteen. If any Holder of Securities of a series guaranteed hereby or the Trustee
is required by any court or otherwise to return to the Issuer or any Guarantor of such Securities,
or any custodian,
trustee, liquidator or other similar official acting in relation to the Issuer or any
Guarantor, any amount paid by the Issuer or any Guarantor of such Securities to the Trustee or such
Holder, this Article Fourteen, to the extent theretofore discharged with respect to any Guarantee
of such Securities, shall be reinstated in full force and effect. Each Guarantor agrees that it
shall not be entitled to any right of subrogation in relation to the Holders of Securities of a
series guaranteed hereby by such Guarantor in respect of any obligations guaranteed hereby by such
Guarantee until payment in full of all such obligations. Each Guarantor further agrees that, as
between such Guarantor, on the one hand, and the Holders of Securities of a series guaranteed
hereby by such Guarantor and the Trustee on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Five hereof for the purposes of such
Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration
in respect of the obligations guaranteed hereby and (ii) in the event of any acceleration of such
obligations as provided in Article Five hereof such obligations (whether or not due and payable)
shall forthwith become due and payable by such Guarantor, jointly and severally with any other
Guarantor of such Securities, for the purpose of this Article Fourteen. In addition, without
limiting the foregoing, upon the effectiveness of an acceleration under Article Five, the Trustee
may make a demand for payment on the Securities under any Guarantee provided hereunder and not
discharged.




          With respect to each Guarantee by a Guarantor, such Guarantor shall be subrogated to all
rights of the Holder of any Securities guaranteed hereby by such Guarantee against the Issuer in
respect of any amounts paid to such Holder by such Guarantor pursuant to the provisions of such
Guarantee; provided that the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such


67









 







right of subrogation until the principal of and interest on all
such Securities shall have been paid in full.




          The Guarantee set forth in this Section 14.2 shall not be valid or become obligatory for any
purpose with respect to a Security until the certificate of authentication on such Security shall
have been signed by the Trustee or any duly appointed agent.




     SECTION 14.3. Guarantee Subordinated to Senior Indebtedness of the Guarantor.
Each Guarantor agrees, and each Holder of the Securities by his acceptance thereof likewise
agrees, that the payments pursuant to the Guarantee by each Guarantor shall be subordinated in
accordance with the following provisions of this Article Fourteen unless, with respect to any
series of Securities, specified otherwise pursuant to Section 2.3, to the prior payment in full of
all Senior Indebtedness of each Guarantor.



          This Article Fourteen shall constitute a continuing offer to all persons who, in reliance upon
such provisions, become holders of, or continue to hold, Senior Indebtedness of each Guarantor, and
such provisions are made for the benefit of the holders of Senior Indebtedness of each Guarantor,
and such holders are made obligees hereunder and any one or more of them may enforce such
provisions.




     SECTION 14.4. Guarantors Not to Make Payments With Respect to Securities in Certain
Circumstances.
(a) Upon the maturity of the principal of any Senior Indebtedness of each Guarantor (other
than payment of sinking fund installments) by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the holders of such Senior Indebtedness of each
Guarantor, before any payment, pursuant to the Guarantee, is made on account of the principal or
interest on the Securities or to acquire any of the Securities or on account of the mandatory
redemption provisions in the Securities (except mandatory redemption payments made in respect of
Securities acquired by each Guarantor before the maturity of such Senior Indebtedness of each
Guarantor).



     (b) Unless Section 14.5 shall be applicable, if (i) a Guarantor shall default in the payment
of any principal of, premium, if any, or interest, if any, on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise, or (ii) any other default shall occur with respect to Senior
Indebtedness and the maturity of such Senior Indebtedness has been accelerated in accordance with
its terms, then, upon written notice of such default to the Guarantor and the Trustee by the
holders of Senior Indebtedness or any trustee therefor, unless and until, in either case, the
default has been cured or waived, or has ceased to exist, or any such acceleration has been
rescinded or such Senior Indebtedness has been paid in full, no direct or indirect payment (in
cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account
of the principal of, premium, if any, or interest, if any, on any of the Securities, or in respect
of any redemption, retirement, purchase or other acquisition of any of the Securities other than
those made in capital stock of the Guarantor (or cash in lieu of fractional shares thereof).



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     (c) Unless Section 14.5 shall be applicable, If any default (other than a default described in
paragraph (b) of this Section 14.4) shall occur under the Senior Indebtedness, pursuant to which
the maturity thereof may be accelerated immediately without further notice (except such notice as
may be required to effect such acceleration) or the expiration of any applicable grace periods
occurs (a “Guarantor Senior Nonmonetary Default”), then, upon the receipt by the applicable
Guarantor and the Trustee of written notice thereof (a “Guarantor Payment Notice”) from or on
behalf of holders of not less than 25% in aggregate principal amount of the Senior Indebtedness of
such Guarantor outstanding specifying an election to prohibit such payment and other action by the
Guarantor in accordance with the following provisions of this paragraph (c), the Guarantor may not
make any payment or take any other action that would be prohibited by paragraph (b) of this Section
14.4 during the period (the “Guarantor Payment Blockage Period”) commencing on the date of receipt
of such Guarantor Payment Notice and ending on the earlier of (i) the date, if any, on which the
holders of such Senior Indebtedness or their representative notify the Trustee that such Guarantor
Senior Nonmonetary Default is cured or waived or ceases to exist or the Senior Indebtedness to
which such Guarantor Senior Nonmonetary Default relates is discharged or (ii) the 120th day after
the date of receipt of such Guarantor Payment Notice. Notwithstanding the provisions described in
the immediately preceding sentence, the Guarantor may resume payments on the Securities following
such Guarantor Payment Blockage Period. In no event shall a Guarantor
Payment Blockage Period extend beyond 120 days from the date of the receipt by the Trustee of
the Guarantor Payment Notice (the “Guarantor Initial Period”). Any number of additional Guarantor
Payment Blockage Periods may be commenced during the Guarantor Initial Period; provided, however,
that no such additional period shall extend beyond the Guarantor Initial Period. After the
expiration of the Guarantor Initial Period, no Guarantor Payment Blockage Period may be commenced
on the basis of a Guarantor Senior Nonmonetary Default on the Senior Indebtedness which was the
basis of a Guarantor Payment Blockage Period commenced during the Guarantor Initial Period until at
least 270 consecutive days have elapsed from the last day of the Guarantor Initial Period. No
Guarantor Senior Nonmonetary Default with respect to Senior Indebtedness which existed or was
continuing on the date of the commencement of any Payment Blockage Period and of which the
applicable holder(s) of Senior Indebtedness are aware shall be, or can be made, the basis for the
commencement of a second Guarantor Payment Blockage Period whether or not within a period of 270
consecutive days unless such event of default shall have been cured or waived for a period of not
less than 90 consecutive days.



     (d) In the event that notwithstanding the provisions of this Section 14.4 each Guarantor shall
make, pursuant to this Guarantee, any payment or distribution of any character to the Trustee on
account of the principal of or interest on the Securities, or on account of the mandatory
redemption provisions, after the happening of an event of default with respect to any Senior
Indebtedness of each Guarantor based on a default in the payment of the principal or interest on
Senior Indebtedness of each Guarantor, or after receipt by the Trustee of a Guarantor Payment
Notice as provided in this Section 14.4 or after the acceleration of the Securities of any series
pursuant to Section 5.1, then, but only if the Trustee is in receipt of the notice specified in
Section 14.8, unless and until such default or event of default shall have been cured or waived or
shall have ceased to exist, or such acceleration shall have been rescinded, such payment (subject
to the provisions of



69









 







Sections 14.8 and 14.9) shall be held by the Trustee in trust for the benefit
of, and, if the Senior Indebtedness of each Guarantor shall have been declared immediately due and
payable, shall be paid forthwith over and delivered to, the holders of Senior Indebtedness of each
Guarantor (pro rata as to each of such holders on the basis of the respective amounts of Senior
Indebtedness of each Guarantor held by them) or their representative or the trustee under the
indenture or other agreement (if any) pursuant to which Senior Indebtedness of each Guarantor may
have been issued, as their respective interests may appear, such payments to be made in accordance
with an Officers’ Certificate as provided in Section 11.5 (on which the Trustee may conclusively
rely) identifying all holders of Senior Indebtedness of each Guarantor and the principal amount of
Senior Indebtedness of each Guarantor then outstanding held by each and stating the reasons why
such Officers’ Certificate is being delivered to the Trustee, for application to the payment of all
Senior Indebtedness of each Guarantor remaining unpaid to the extent necessary to pay all Senior
Indebtedness of each Guarantor in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness of each Guarantor.
In the event of the failure of any Holder of a Security to endorse or assign any such payment or
distribution, each holder of Senior Indebtedness of each Guarantor is hereby irrevocably authorized
to endorse or assign the same. Each Guarantor shall give prompt notice to the Trustee of any
default under any Senior Indebtedness of each Guarantor or under any agreement pursuant to which
Senior Indebtedness of each Guarantor may have been issued.



     SECTION 14.5. Guarantee Subordinated to Prior Payment of All Senior Indebtedness of each
Guarantor on Dissolution, Winding Up, Liquidation or Reorganization of a Guarantor.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to a Guarantor, its creditors or its
property, (ii) any case or proceeding for the liquidation, dissolution or other winding-up of a
Guarantor, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by such Guarantor for the benefit of creditors, or (iv) any other marshalling
of the assets of such Guarantor:




     (a) the holders of all Senior Indebtedness of such Guarantor shall first be entitled
to receive payment in full (or to have such payment duly provided for) of the principal and
interest due thereon (including any interest thereon accruing after commencement of any
such proceeding) before the Holders of the Securities are entitled to receive, pursuant to
this Guarantee any payment or any distribution, whether in cash, securities or other
property, on account of the principal or interest on the Securities;




     (b) any payment or distribution of assets of such Guarantor of any kind or character,
whether in cash, property or securities (other than securities of such Guarantor as
reorganized or readjusted or securities of such Guarantor or any other company, trust or
corporation provided for by a plan of reorganization or readjustment, junior or the payment
of which is otherwise subordinate, at least to the extent provided in this Article, to the
payment of all Senior Indebtedness of such Guarantor at the time outstanding and to the
payment of all securities issued in



70









 







exchange therefor to the holders of the Senior
Indebtedness of such Guarantor at the time outstanding), to which the Holders of the
Securities or the Trustee on behalf of the Holders of the Securities would be entitled,
pursuant to this Guarantee except for the provisions of this Article Fourteen, including
any such payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of such Guarantor being subordinated to the payment of
the Securities, shall be paid by the liquidating trustee or agent or other person making
such payment or distribution directly to the holders of Senior Indebtedness of such
Guarantor or their representative(s), or to the trustee under any indenture under which
Senior Indebtedness of such Guarantor may have been issued (pro rata as to each such
holder, representative or trustee on the basis of the respective amounts of unpaid Senior
Indebtedness of such Guarantor held or represented by each), to the extent necessary to
make payment in full of all Senior Indebtedness of such Guarantor remaining unpaid after
giving effect to any concurrent payment or distribution or provision therefor to the
holders of such Senior Indebtedness of such Guarantor; and




     (c) in the event that notwithstanding the foregoing provisions of this Section 14.5,
any payment or distribution of assets of such Guarantor of any kind or character, whether
in cash, property or securities shall be received, pursuant to the Guarantee, by the
Trustee or the Holders of the Securities on account of principal or interest on the
Securities before all Senior Indebtedness of such Guarantor is paid in
full, or effective provisions made for its payment, such payment or distribution
(subject to the provisions of Sections 14.8 and 14.9) shall be received and held in trust
for and shall be paid over or delivered to the liquidating trustee, agent or other person
making such payment or distribution or to the holders of the Senior Indebtedness of such
Guarantor remaining unpaid or unprovided for or their representative, or to the trustee
under any indenture under which Senior Indebtedness of such Guarantor may have been issued
(pro rata as provided in subsection (2) above), for application to the payment of such
Senior Indebtedness of such Guarantor until all such Senior Indebtedness of such Guarantor
shall have been paid in full, after giving effect to any concurrent payment or distribution
or provision therefor to the holders of such Senior Indebtedness of such Guarantor.



          If a Guarantor effects a transaction permitted by Article Nine, such transaction shall not be
deemed to be a dissolution, winding up, liquidation or reorganization of such Guarantor for
purposes of this Section.




          A Guarantor shall give prompt written notice to the Trustee of any dissolution, winding up,
liquidation or reorganization of such Guarantor, assignment for the benefit of creditors by such
Guarantor or any other marshalling of assets of such Guarantor.




     SECTION 14.6. Holders to be Subrogated to Rights of Holders of Senior Indebtedness of each
Guarantor.
Subject to the payment in full of all Senior Indebtedness of each Guarantor, the Holders of
the Securities shall be subrogated to the rights of the holders of Senior Indebtedness of each
Guarantor to receive payments or distributions of assets of each Guarantor applicable to the Senior
Indebtedness of each Guarantor until all



71









 







amounts owing under the Guarantee shall be paid in full
and for the purpose of such subrogation no payments or distributions to the holders of Senior
Indebtedness of each Guarantor by virtue of this Article Fourteen which otherwise would have been
made to the Holders of the Securities, shall, as between each Guarantor, its creditors other than
holders of its Senior Indebtedness of each Guarantor and the Holders, be deemed to be a payment by
each Guarantor to or on account of the Senior Indebtedness of each Guarantor, it being understood
that the provisions of this Article Fourteen are solely for the purpose of defining the relative
rights of the holders of Senior Indebtedness of the Guarantors on the one hand and the Holders on
the other hand.



          If any payment or distribution to which the Holders would otherwise have been entitled but for
the provisions of this Article shall have been applied, pursuant to the provisions of this Article,
to the payment of Senior Indebtedness of each Guarantor, then and in such case, the Holders shall
be entitled to receive from the holders of such Senior Indebtedness of each Guarantor at the time
outstanding any payments or distributions received by such holders of such Senior Indebtedness of
each Guarantor in excess of the amount sufficient to pay all amounts payable under or in respect of
such Senior Indebtedness of each Guarantor in full.




     SECTION 14.7. Obligations of the Guarantor Unconditional.
Nothing contained in this Article Fourteen or elsewhere in this Indenture or in any Security
is intended to or shall impair, as between a Guarantor and the Holders of the Securities guaranteed
by such Guarantor’s Guarantee, the obligations of such Guarantor, which are absolute and
unconditional, to pay to such Holders the principal of and interest on the Securities as and when
the same shall become due and payable in accordance with the provisions of this Guarantee or is
intended to or shall affect the relative rights of such Holders and creditors of a Guarantor other
than the holders of the Senior Indebtedness of such Guarantor, nor shall anything herein or therein
prevent the Trustee or such Holder from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under this Article Fourteen
of the holders of Senior Indebtedness of a Guarantor, in respect of cash, property or securities of
such Guarantor received upon the exercise of any such remedy.



          Upon any distribution of assets of a Guarantor referred to in this Article Fourteen, the
Trustee, subject to the provisions of Sections 6.1 and 6.2, and the Holders of the Securities
guaranteed hereby by such Guarantor shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating trustee or agent or
other person making any distribution to the Trustee or to such Holders, for the purpose of
ascertaining the persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this
Article Fourteen.




     SECTION 14.8. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the existence of any facts
which would prohibit the making of any payment to or by the Trustee, and the



72









 







Trustee shall not be
required to withhold payment to the Holders of Securities as provided in Section 14.4(d), unless
and until the Trustee shall have received written notice thereof at its Corporate Trust Office from
a Guarantor or from one or more holders of Senior Indebtedness of such Guarantor or from any
representative thereof or trustee therefor identifying the specific sections of this Indenture
involved and describing in detail the facts that would obligate the Trustee to withhold payments to
Holders of Securities, as well as any other facts required by the next succeeding paragraph of this
Section 14.8; and, prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Sections 6.1 and 6.2, shall be entitled to assume conclusively that no such facts
exist; provided, however, that, if the Trustee shall not have received any such written notice
provided for in this Section 14.8 at least three Business Days preceding the date upon which by the
terms hereof any moneys become payable for any purpose (including, without limitation, the payment
of either the principal of or interest, if any, on any Security), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority to receive such
moneys and apply the same to the purpose for which they were received and shall not be affected by
any notice to the contrary that may be received by it within three Business Days preceding such
date.



          The Trustee shall be entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness of a Guarantor (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder of Senior Indebtedness of
such Guarantor or a trustee on behalf of any such holder. In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any person as a holder
of Senior Indebtedness of a Guarantor to participate in any payment or distribution pursuant to
this Article Fourteen, the Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such Guarantor held by such
person, the extent to which such person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such person under this Article Fourteen, and if such
evidence is not furnished the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.




     SECTION 14.9. Application by Trustee of Monies Deposited with It.
Except as provided in Section 10.5, any deposit of monies by a Guarantor with the Trustee or
any Paying Agent (whether or not in trust) for the payment of the principal or interest on any
Securities shall be subject to the provisions of Sections 14.3, 14.4, 14.5 and 14.6 except that, if
prior to the opening of business on the date on which by the terms of this Indenture any such
monies may become payable for any purpose (including, without limitation, the payment, pursuant to
this Guarantee, of either the principal or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 14.8, then the Trustee
shall have full power and authority to receive such monies and to apply the same to the purpose for
which they were received and shall not be affected by any notice to the contrary which may be
received by it on or after such date, without, however, limiting any rights that holders of Senior
Indebtedness of a Guarantor may have to recover any such payments from the Holders in accordance
with the provisions of this Article.



73









 





     SECTION 14.10. Subordination Rights Not Impaired by Acts or Omissions of a Guarantor or
Holders of Senior Indebtedness of such Guarantor.
No right of any present or future holders of any Senior Indebtedness of a Guarantor to enforce
subordination as provided herein shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of such Guarantor or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by such Guarantor with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or be otherwise charged with.
The holders of Senior Indebtedness of such Guarantor may extend, renew, modify or amend the terms
of the Senior Indebtedness of such Guarantor or any security therefor and release, sell or exchange
such security and otherwise deal freely with such Guarantor, all without affecting the liabilities
and obligations of the parties to this Indenture or the Holders.



     SECTION 14.11. Holders Authorize Trustee to Effectuate Subordination of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and expressly directs the
Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Fourteen and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up, liquidation or reorganization
of a Guarantor (whether in bankruptcy, insolvency or receivership proceedings, voluntary
liquidation or upon assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Guarantor, the timely filing of a claim for the
unpaid balance, pursuant to this Guarantee, of its or his Securities in the form required in said
proceedings and cause said claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in such proceeding on or prior to 30 days before the expiration
of the time to file such claim or claims, then the holders of Senior Indebtedness of such Guarantor
have the right to file and are hereby authorized to file an appropriate claim for and on behalf of
the Holders of said Securities.



     SECTION 14.12. Right of Trustee to Hold Senior Indebtedness of a Guarantor.
The Trustee in its individual capacity, shall be entitled to all of the rights set forth in
this Article Fourteen in respect of any Senior Indebtedness of a Guarantor at any time held by it
to the same extent as any other holder of such Senior Indebtedness of a Guarantor, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights as such holder.
Nothing in this Article Fourteen shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.6.



     SECTION 14.13. Trustee Not Fiduciary for Holders of Senior Indebtedness of a Guarantor.
With respect to the holders of Senior Indebtedness of a Guarantor, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are specifically set forth in
this Article Fourteen, and no implied covenants or obligations with respect to the holders of
Senior Indebtedness of a Guarantor shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of a
Guarantor and the Trustee shall not be liable to any holder of Senior Indebtedness of a Guarantor
if it shall pay over or deliver to Holders of Securities, a Guarantor or any other person monies or
assets to which any holder of



74









 







Senior Indebtedness of such Guarantor shall be entitled by virtue of
this Article Fourteen or otherwise.



     SECTION 14.14. Article Fourteen Not to Prevent Events of Default.
The failure to make a payment on account of principal or interest on the Securities of any
series by reason of any provision in this Article Fourteen shall not be construed as preventing the
occurrence of an Event of Default under Section 5.1.



     SECTION 14.15. Execution and Delivery of Guarantee.
To evidence a Guarantee set forth in this Article Fourteen, the Guarantor hereby agrees that
the Guarantee Notation, substantially in the form of Exhibit A hereto, shall be endorsed on each
Security authenticated and delivered by the Trustee that is
guaranteed by such Guarantee and that this Indenture or indenture supplemental hereto shall be
executed on behalf of such Guarantor by its Chairman of the Board, its president or chief executive
officer, any vice president, the chief financial officer or the treasurer. Such signatures may be
the manual or facsimile signatures of the present or any future such officers.



          Each Guarantor hereby agrees that its Guarantee shall remain in full force and effect
notwithstanding any failure to endorse the Guarantee Notation on each such Security.




          If an officer whose signature is on this Indenture or indenture supplemental hereto or on the
Securities guaranteed hereby no longer holds that office at the time the Trustee authenticates the
Security on which a notation of the Guarantee is endorsed, such Guarantee shall be valid
nevertheless.




          The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of each Guarantee thereof.




     SECTION 14.16. Limitation on Guarantor Liability.
Notwithstanding anything to the contrary in this Article, each Guarantor, and by its
acceptance of a Security, each Holder, hereby confirms that it is the intention of all such parties
that the Guarantee of such Guarantor not constitute a fraudulent conveyance under applicable
fraudulent conveyance provisions of the Bankruptcy Code or any comparable provision of state law.
To effectuate that intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of each Guarantor under its Guarantee are limited to the maximum amount that
would not render the Guarantor’s obligations subject to avoidance under applicable fraudulent
conveyance provisions of the Bankruptcy Code or any comparable provision of state law.



     SECTION 14.17. Officers’ Certificate.
If there occurs an event referred to in the first sentence of Section 14.4(c) or the first
sentence of Section 14.5, the applicable Guarantor shall promptly give to the Trustee an Officers’
Certificate (on which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness of such Guarantor and the principal amount of Senior Indebtedness of such Guarantor
then outstanding held by each such holder and stating the reasons why such Officers’ Certificate is
being delivered to the Trustee.



75









 





SIGNATURES




     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the date first above written.



	 	 	 	 	 
	 	Hovnanian Enterprises, Inc.,

As Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Wilmington Trust Company, As 
Trustee

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



 









 






	 	 	 	 	 



EXHIBIT A




[FORM OF NOTATION OF SECURITY




RELATING TO GUARANTEE]



GUARANTEE




     [Name of Guarantor] (hereinafter referred to as the “Guarantor”, which term includes any
successor person under the Indenture (the “Indenture”) referred to in the Security upon which this
notation is endorsed) (the “Endorsed Security”), has unconditionally guaranteed, jointly and
severally with each other Guarantor (i) the due and punctual payment of the principal of, premium,
if any, and interest on the Endorsed Security and all other Securities of the same series as the
Endorsed Security (the “Guaranteed Securities”), whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal of, premium, if any, and
interest, if any, on the Guaranteed Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Issuer to the Holders of Guaranteed Securities or the
Trustee all in accordance with the terms set forth in Article Fourteen of the Indenture and (ii) in
case of any extension of time of payment or renewal of any Guaranteed Securities or any of such
other obligations, that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto
in the Indenture.



     The obligations of the Guarantor to the Holders of Guaranteed Securities and to the Trustee
pursuant to the Guarantee evidenced hereby and the Indenture are expressly set forth in Article
Fourteen of the Indenture and reference is hereby made to such Indenture for the terms of such
Guarantee.



     No stockholder, officer, director, employee or incorporator, as such, past, present or future,
of the Guarantor shall have any personal liability under the Guarantee evidenced hereby by reason
of his or its status as such stockholder, officer, director, employee or incorporator. Each Holder
of a Guaranteed Security by accepting a Guaranteed Security waives and releases all such liability.
This waiver and release are part of the consideration for the issuance of the Guarantee.



     Each Holder of a Guaranteed Security by accepting a Guaranteed Security agrees that any
Guarantor named below shall have no further liability with respect to its Guarantee if such
Guarantor otherwise ceases to be liable in respect of its Guarantee in accordance with the terms of
the Indenture.



     The Guarantee evidenced hereby shall not be valid or obligatory for any purpose until the
certificate of authentication of the Guaranteed Securities shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized officers.



Guarantor

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	 	[NAME OF GUARANTOR]

 	 
	 	
 	 
	 	By: 	 
	 	Title:  	 	 



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EXHIBIT B




[SUBSIDIARY GUARANTORS]




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