exv4w1






Exhibit 4.1




 

 








MERITAGE HOMES CORPORATION,




THE GUARANTORS

named herein



and



HSBC BANK USA, National Association, as Trustee



 





INDENTURE



Dated as of April 13, 2010



 





7.15% Senior Notes due 2020



 

 




















 
















CROSS-REFERENCE TABLE




	 	 	 	 	 
	  TIA	 	Indenture	 
	Section	 	Section	 
	310(a)(1)
	 	 	7.10	 
	(a)(2)
	 	 	7.10	 
	(a)(3)
	 	 	N.A.	 
	(a)(4)
	 	 	N.A.	 
	(a)(5)
	 	 	N.A.	 
	(b)
	 	 	7.08; 7.10; 12.02	 
	(b)(1)
	 	 	7.10	 
	(c)
	 	 	N.A.	 
	311(a)
	 	 	7.11	 
	(b)
	 	 	7.11	 
	(c)
	 	 	N.A.	 
	312(a)
	 	 	2.06	 
	(b)
	 	 	12.03	 
	(c)
	 	 	12.03	 
	313(a)
	 	 	7.06	 
	(b)(1)
	 	 	N.A.	 
	(b)(2)
	 	 	7.06	 
	(c)
	 	 	7.06; 12.02	 
	(d)
	 	 	7.06	 
	314(a)
	 	 	4.02; 4.04; 12.02	 
	(b)
	 	 	N.A.	 
	(c)(1)
	 	 	12.04	 
	(c)(2)
	 	 	12.04	 
	(c)(3)
	 	 	N.A.	 
	(d)
	 	 	N.A.	 
	(e)
	 	 	12.05	 
	(f)
	 	 	N.A.	 
	315(a)
	 	 	7.01(b)	
	(b)
	 	 	7.05; 12.02	 
	(c)
	 	 	7.01(a)	
	(d)
	 	 	7.01(c)	
	(e)
	 	 	6.12	 
	316(a) (last sentence)
	 	 	2.10	 
	(a)(1)(A)
	 	 	6.05	 
	(a)(1)(B)
	 	 	6.04	 
	(a)(2)
	 	 	N.A.	 
	(b)
	 	 	6.08	 
	(c)
	 	 	8.04	 
	317(a)(1)
	 	 	6.09	 
	(a)(2)
	 	 	6.10	 
	(b)
	 	 	2.05; 7.12	 
	318(a)
	 	 	12.01	 








 




			
	N.A. means Not Applicable
	 
	Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture














 










TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE ONE

	 
	 	 	 	 	 	 
	DEFINITIONS AND INCORPORATION BY REFERENCE

	 
	 	 	 	 	 	 
	SECTION 1.01.

	 	Definitions
	 	 	1	 
	SECTION 1.02.

	 	Other Definitions
	 	 	16	 
	SECTION 1.03.

	 	Incorporation by Reference of Trust Indenture Act
	 	 	17	 
	SECTION 1.04.

	 	Rules of Construction
	 	 	17	 
	ARTICLE TWO



	THE NOTES

	 
	 	 	 	 	 	 
	SECTION 2.01.

	 	Amount of Notes
	 	 	18	 
	SECTION 2.02.

	 	Form and Dating
	 	 	19	 
	SECTION 2.03.

	 	Execution and Authentication
	 	 	20	 
	SECTION 2.04.

	 	Registrar and Paying Agent
	 	 	20	 
	SECTION 2.05.

	 	Paying Agent To Hold Money in Trust
	 	 	21	 
	SECTION 2.06.

	 	Holder Lists
	 	 	21	 
	SECTION 2.07.

	 	Transfer and Exchange
	 	 	21	 
	SECTION 2.08.

	 	Replacement Notes
	 	 	22	 
	SECTION 2.09.

	 	Outstanding Notes
	 	 	23	 
	SECTION 2.10.

	 	Treasury Notes
	 	 	23	 
	SECTION 2.11.

	 	Temporary Notes
	 	 	23	 
	SECTION 2.12.

	 	Cancellation
	 	 	24	 
	SECTION 2.13.

	 	Defaulted Interest
	 	 	24	 
	SECTION 2.14.

	 	CUSIP Number
	 	 	24	 
	SECTION 2.15.

	 	Deposit of Moneys
	 	 	24	 
	SECTION 2.16.

	 	Book-Entry Provisions for Global Notes
	 	 	25	 
	SECTION 2.17.

	 	Special Transfer Provisions
	 	 	27	 
	SECTION 2.18.

	 	Computation of Interest
	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE THREE

	 
	 	 	 	 	 	 
	REDEMPTION

	 
	 	 	 	 	 	 
	SECTION 3.01.

	 	Election To Redeem; Notices to Trustee
	 	 	29	 
	SECTION 3.02.

	 	Selection by Trustee of Notes To Be Redeemed
	 	 	29	 
	SECTION 3.03.

	 	Notice of Redemption
	 	 	30	 
	SECTION 3.04.

	 	Effect of Notice of Redemption
	 	 	31	 
	SECTION 3.05.

	 	Deposit of Redemption Price
	 	 	31	 






-i-









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	SECTION 3.06.

	 	Notes Redeemed in Part
	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE FOUR

	 
	 	 	 	 	 	 
	COVENANTS

	 
	 	 	 	 	 	 
	SECTION 4.01.

	 	Payment of Notes
	 	 	32	 
	SECTION 4.02.

	 	Reports to Holders
	 	 	32	 
	SECTION 4.03.

	 	Waiver of Stay, Extension or Usury Laws
	 	 	33	 
	SECTION 4.04.

	 	Compliance Certificate
	 	 	33	 
	SECTION 4.05.

	 	Taxes
	 	 	34	 
	SECTION 4.06.

	 	Restrictions on Secured Debt
	 	 	34	 
	SECTION 4.07.

	 	Restrictions on Sale and Leaseback Transactions
	 	 	35	 
	SECTION 4.08.

	 	Additional Note Guarantees
	 	 	36	 
	SECTION 4.09.

	 	Maintenance of Properties; Insurance; Compliance with Law
	 	 	36	 
	SECTION 4.10.

	 	Payments for Consent
	 	 	36	 
	SECTION 4.11.

	 	Legal Existence
	 	 	37	 
	SECTION 4.12.

	 	Change of Control Offer
	 	 	37	 
	SECTION 4.13.

	 	Liquidated Damages Notice
	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE FIVE

	 
	 	 	 	 	 	 
	SUCCESSOR CORPORATION

	 
	 	 	 	 	 	 
	SECTION 5.01.

	 	Limitations on Mergers, Consolidations, Etc.
	 	 	38	 
	SECTION 5.02.

	 	Successor Person Substituted
	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE SIX
	 
	 	 	 	 	 	 
	DEFAULTS AND REMEDIES
	 
	 	 	 	 	 	 
	SECTION 6.01.

	 	Events of Default
	 	 	40	 
	SECTION 6.02.

	 	Acceleration
	 	 	42	 
	SECTION 6.03.

	 	Other Remedies
	 	 	42	 
	SECTION 6.04.

	 	Waiver of Past Defaults and Events of Default
	 	 	43	 
	SECTION 6.05.

	 	Control by Majority
	 	 	43	 
	SECTION 6.06.

	 	Limitation on Suits
	 	 	43	 
	SECTION 6.07.

	 	No Personal Liability of Directors, Officers, Employees and Stockholders
	 	 	44	 
	SECTION 6.08.

	 	Rights of Holders To Receive Payment
	 	 	44	 
	SECTION 6.09.

	 	Collection Suit by Trustee
	 	 	44	 
	SECTION 6.10.

	 	Trustee May File Proofs of Claim
	 	 	44	 
	SECTION 6.11.

	 	Priorities
	 	 	45	 






-ii-









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	SECTION 6.12.

	 	Undertaking for Costs
	 	 	45	 
	SECTION 6.13.

	 	Restoration of Rights and Remedies
	 	 	46	 
	 
	 	 	 	 	 	 
	ARTICLE SEVEN

	 
	 	 	 	 	 	 
	TRUSTEE

	 
	 	 	 	 	 	 
	SECTION 7.01.

	 	Duties of Trustee
	 	 	46	 
	SECTION 7.02.

	 	Rights of Trustee
	 	 	47	 
	SECTION 7.03.

	 	Individual Rights of Trustee
	 	 	48	 
	SECTION 7.04.

	 	Trustee’s Disclaimer
	 	 	49	 
	SECTION 7.05.

	 	Notice of Defaults
	 	 	49	 
	SECTION 7.06.

	 	Reports by Trustee to Holders
	 	 	49	 
	SECTION 7.07.

	 	Compensation and Indemnity
	 	 	49	 
	SECTION 7.08.

	 	Replacement of Trustee
	 	 	50	 
	SECTION 7.09.

	 	Successor Trustee by Consolidation, Merger, etc.
	 	 	51	 
	SECTION 7.10.

	 	Eligibility; Disqualification
	 	 	51	 
	SECTION 7.11.

	 	Preferential Collection of Claims Against Issuer
	 	 	52	 
	SECTION 7.12.

	 	Paying Agents
	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE EIGHT

	 
	 	 	 	 	 	 
	AMENDMENTS, SUPPLEMENTS AND WAIVERS

	 
	 	 	 	 	 	 
	SECTION 8.01.

	 	Without Consent of Holders
	 	 	52	 
	SECTION 8.02.

	 	With Consent of Holders
	 	 	53	 
	SECTION 8.03.

	 	Compliance with Trust Indenture Act
	 	 	54	 
	SECTION 8.04.

	 	Revocation and Effect of Consents
	 	 	55	 
	SECTION 8.05.

	 	Notation on or Exchange of Notes
	 	 	55	 
	SECTION 8.06.

	 	Trustee To Sign Amendments, etc.
	 	 	55	 
	 
	 	 	 	 	 	 
	ARTICLE NINE

	 
	 	 	 	 	 	 
	DISCHARGE OF INDENTURE; DEFEASANCE
	 
	 	 	 	 	 	 
	SECTION 9.01.

	 	Discharge of Indenture
	 	 	56	 
	SECTION 9.02.

	 	Legal Defeasance
	 	 	57	 
	SECTION 9.03.

	 	Covenant Defeasance
	 	 	57	 
	SECTION 9.04.

	 	Conditions to Defeasance or Covenant Defeasance
	 	 	58	 
	SECTION 9.05.

	 	Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions
	 	 	59	 
	SECTION 9.06.

	 	Reinstatement
	 	 	60	 
	SECTION 9.07.

	 	Moneys Held by Paying Agent
	 	 	60	 






-iii-









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	SECTION 9.08.

	 	Moneys Held by Trustee
	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE TEN

	 
	 	 	 	 	 	 
	GUARANTEE OF NOTES

	 
	 	 	 	 	 	 
	SECTION 10.01.

	 	Guarantee
	 	 	61	 
	SECTION 10.02.

	 	Execution and Delivery of Guarantee
	 	 	62	 
	SECTION 10.03.

	 	Limitation of Guarantee
	 	 	62	 
	SECTION 10.04.

	 	Release of Guarantor
	 	 	63	 
	SECTION 10.05.

	 	Waiver of Subrogation
	 	 	63	 
	 
	 	 	 	 	 	 
	ARTICLE ELEVEN

	 
	 	 	 	 	 	 
	[INTENTIONALLY OMITTED]

	 
	 	 	 	 	 	 
	ARTICLE TWELVE

	 
	 	 	 	 	 	 
	MISCELLANEOUS

	 
	 	 	 	 	 	 
	SECTION 12.01.

	 	Trust Indenture Act Controls
	 	 	64	 
	SECTION 12.02.

	 	Notices
	 	 	64	 
	SECTION 12.03.

	 	Communications by Holders with Other Holders
	 	 	66	 
	SECTION 12.04.

	 	Certificate and Opinion as to Conditions Precedent
	 	 	66	 
	SECTION 12.05.

	 	Statements Required in Certificate and Opinion
	 	 	67	 
	SECTION 12.06.

	 	Rules by Trustee and Agents
	 	 	67	 
	SECTION 12.07.

	 	Business Days; Legal Holidays
	 	 	67	 
	SECTION 12.08.

	 	Governing Law; Waiver of Jury Trial
	 	 	67	 
	SECTION 12.09.

	 	No Adverse Interpretation of Other Agreements
	 	 	68	 
	SECTION 12.10.

	 	No Recourse Against Others
	 	 	68	 
	SECTION 12.11.

	 	Successors
	 	 	68	 
	SECTION 12.12.

	 	Multiple Counterparts
	 	 	69	 
	SECTION 12.13.

	 	Table of Contents, Headings, etc.
	 	 	69	 
	SECTION 12.14.

	 	Separability
	 	 	69	 
	SECTION 12.15.

	 	U.S.A. Patriot Act
	 	 	69	 
	SECTION 12.16.

	 	Force Majeure
	 	 	69	 
	 
	 	 	 	 	 	 
	EXHIBITS

	Exhibit A.

	 	Form of Note
	 	A-1
	Exhibit B.

	 	Form of Legend for Rule 144A Notes and Other Notes That Are Restricted Notes
	 	B-1
	Exhibit C.

	 	Form of Legend for Regulation S Note
	 	C-1






-iv-









 







	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	Exhibit D.

	 	Form of Legend for Global Note
	 	D-1
	Exhibit E.

	 	Form of Certificate To Be Delivered in Connection with Transfers to Non-QIB Accredited Investors
	 	E-1
	Exhibit F.

	 	Form of Certificate To Be Delivered in Connection with Transfers Pursuant to Regulation S
	 	F-1
	Exhibit G.

	 	Form of Guarantee
	 	G-1







-v-












 





          INDENTURE, dated as of April 13, 2010, among MERITAGE HOMES CORPORATION, a Maryland
corporation, as issuer (the “Issuer”), the Guarantors (as hereinafter defined) and HSBC BANK USA,
NATIONAL ASSOCIATION, a national banking association as trustee (the “Trustee”).




          Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders.




ARTICLE ONE




DEFINITIONS AND INCORPORATION BY REFERENCE



SECTION 1.01. Definitions.




          “Additional Notes” means an unlimited principal amount of Notes having identical terms
and conditions to the Notes issued pursuant to Article Two.




          “Adjusted Net Assets” of a Guarantor at any date means the lesser of the amount by
which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities), but excluding liabilities under the Guarantee, of such Guarantor at such
date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds
the amount that will be required to pay the probable liability of such Guarantor on its debts and
all other fixed and contingent liabilities (after giving effect to all other fixed and contingent
liabilities and after giving effect to any collection from any Subsidiary of such Guarantor in
respect of the obligations of such Guarantor under the Guarantee), excluding Indebtedness in
respect of the Guarantee, as they become absolute and matured.




          “Affiliate” of any Person means any other Person which directly or indirectly controls
or is controlled by, or is under direct or indirect common control with, the referent Person. For
purposes of this definition, “control” of a Person shall mean 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.




          “Agent” means any Registrar, Paying Agent or agent for service of notices and demands.




          “amend” means to amend, supplement, restate, amend and restate or otherwise modify;
and “amendment” shall have a correlative meaning.




          “asset” means any asset or property.






 









 








          “Attributable Indebtedness”, when used with respect to any Sale and Leaseback
Transaction, means, as at the time of determination, the present value (discounted at a rate
equivalent to the Issuer’s then-current weighted average cost of funds for borrowed money as at the
time of determination, compounded on a semi-annual basis) of the total obligations of the lessee
for rental payments during the remaining term of any Capitalized Lease included in any such Sale
and Leaseback Transaction.




          “Bankruptcy Event” means the commencement of any case under the Bankruptcy Code (Title
11 of the United States Code) or the commencement of any other bankruptcy, reorganization,
receivership, or similar proceeding under any federal, state or foreign law or by or against any
Person for whom the Issuer or a Restricted Subsidiary has executed a Springing Guarantee for the
benefit of such Person; provided, however, that the filing of an involuntary case
against such Person shall only be a Bankruptcy Event if (i) such involuntary case is filed in whole
or in part by the Issuer or a Restricted Subsidiary, any member in such Person which is an
Affiliate of the Issuer or a Restricted Subsidiary, or any other Affiliate of the Issuer or a
Restricted Subsidiary, or (ii) the Issuer or a Restricted Subsidiary, any member in such Person
which is an Affiliate of the Issuer or a Restricted Subsidiary, or any other Affiliate of the
Issuer or a Restricted Subsidiary shall in any way induce or participate in the filing, whether
directly or indirectly, of an involuntary bankruptcy case against such Person or any other Person,
and such involuntary case or proceeding is not dismissed with prejudice within 120 days of the
filing thereof.




          “Bankruptcy Law” means Title 11 of the United States Code, as amended, or any similar
federal or state law for the relief of debtors.




          “Board of Directors” means, with respect to any Person, the board of directors or
comparable governing body of such Person.




          “Board Resolution” means a copy of a resolution certified pursuant to an Officers’
Certificate to have been duly adopted by the Board of Directors of the Issuer and to be in full
force and effect, and delivered to the Trustee.




          “Business Day” means a day other than a Saturday, Sunday or other day on which banking
institutions in New York are authorized or required by law to close.




          “Capitalized Lease” means a lease required to be capitalized for financial reporting
purposes in accordance with GAAP.




          “Capitalized Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under a Capitalized Lease, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.







-2-









 








          “Change of Control” means the occurrence of any of the following events:





     (1) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of
this clause that person or group shall be deemed to have “beneficial ownership” of all
securities that any such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or indirectly, of
Voting Stock representing more than 50% of the voting power of the total outstanding Voting
Stock of the Issuer;




     (2) during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of the Issuer (together with any new
directors whose election to such Board of Directors or whose nomination for election by the
stockholders of the Issuer was approved by a vote of the majority of the directors of the
Issuer then still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors of the Issuer;




     (3) (a) all or substantially all of the assets of the Issuer and the Restricted
Subsidiaries are sold or otherwise transferred to any Person other than a Wholly Owned
Restricted Subsidiary or one or more Permitted Holders or (b) the Issuer consolidates or
merges with or into another Person other than a Permitted Holder or any Person other than a
Permitted Holder consolidates or merges with or into the Issuer, in either case under this
clause (3), in one transaction or a series of related transactions in which immediately
after the consummation thereof Persons owning Voting Stock representing in the aggregate
100% of the total voting power of the Voting Stock of the Issuer immediately prior to such
consummation do not own Voting Stock representing a majority of the total voting power of
the Voting Stock of the Issuer or the surviving or transferee Person; or




     (4) the Issuer shall adopt a plan of liquidation or dissolution or any such plan shall
be approved by the stockholders of the Issuer.



          “Change of Control Triggering Event” means the occurrence of both a Change of Control
and a Rating Decline.




          “Comparable Treasury Issue” means the United States Treasury security selected by the
Reference Treasury Dealer as having a maturity comparable to the remaining term of the Notes to be
redeemed that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the Notes.







-3-









 








          “Comparable Treasury Price” means, with respect to any Redemption Date, (1) the
average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the
highest and lowest Reference Treasury Dealer Quotations, or (2) if fewer than four such Reference
Treasury Dealer Quotations are provided to the Trustee, the average of all such quotations.




          “Consolidated Net Tangible Assets” means, as of any date, the total amount of assets
which would be included on a combined balance sheet of the Restricted Subsidiaries (not including
the Issuer) together with the total amount of assets that would be included on the Issuer’s balance
sheet, not including its subsidiaries, under GAAP (less applicable reserves and other properly
deductible items) after deducting therefrom:





     (1) all short-term liabilities, except for liabilities payable by their terms more than
one year from the date of determination (or renewable or extendible at the option of the
obligor for a period ending more than one year after such date);




     (2) investments in Subsidiaries that are not Restricted Subsidiaries; and




     (3) all goodwill, trade names, trademarks, patents, unamortized debt discount,
unamortized expense incurred in the issuance of debt and other intangible assets.



          “Corporate Trust Office” means the office of the Trustee at which at any particular
time its corporate trust business shall be principally administered, which office at the date of
execution is located at HSBC Bank USA, National Association, Corporate Trust and Loan Agency, 10
East 40th Street, 14th Floor, New York, New York 10016.




          “Custodian” means any receiver, trustee, assignee, liquidator or similar official
under any Bankruptcy Law.




          “Default” means (1) any Event of Default or (2) any event, act or condition that,
after notice or the passage of time or both, would be an Event of Default.




          “Depository” means, with respect to the Notes issued in the form of one or more Global
Notes, The Depository Trust Company or another Person designated as Depository by the Issuer, which
Person must be a clearing agency registered under the Exchange Act.




          “Equity Interests” of any Person means (1) any and all shares or other equity
interests (including common stock, preferred stock, limited liability company interests and
partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether
or not currently exercisable), participations or other equivalents of or interests in (however
designated) such shares or other interests in such Person.




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




-4-









 








          “Exchange Notes” has the meaning provided in the Registration Rights Agreement.




          “Financial Services Subsidiary” means a Subsidiary engaged exclusively in mortgage
banking (including mortgage origination, loan servicing, mortgage brokerage and title and escrow
businesses), master servicing and related activities, including, without limitation, a Subsidiary
which facilitates the financing of mortgage loans and mortgage-backed securities and the
securitization of mortgage-backed bonds and other activities ancillary thereto.




          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant segment of the
accounting profession of the United States, as in effect on the Measurement Date.




          “guarantee” means a direct or indirect guarantee by any Person of any Indebtedness of
any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such
Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of)
Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase
arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to
take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part). “guarantee,” when
used as a verb, and “guaranteed” have correlative meanings.




          “Guarantors” means each Restricted Subsidiary of the Issuer on the Issue Date, and each other
Person that is required to become a Guarantor by the terms of this Indenture after the Issue Date,
in each case, until such Person is released from its Note Guarantee.




          “Holder” means any registered holder, from time to time, of the Notes.




          “incur” means, with respect to any Indebtedness or Obligation, incur, create, issue,
assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to such Indebtedness or Obligation; provided that (1) the Indebtedness of a Person
existing at the time such Person became a Restricted Subsidiary or at the time such Person merged
with or into the Issuer or a Restricted Subsidiary shall be deemed to have been incurred at such
time and (2) neither the accrual of interest nor the accretion of original issue discount shall be
deemed to be an incurrence of Indebtedness.







-5-









 








          “Indebtedness” means:




          (1) any liability of any Person:





     (a) for borrowed money, or




     (b) evidenced by a bond, note, debenture or similar instrument (including a
purchase money obligation) given in connection with the acquisition of any
businesses, properties or assets of any kind (other than a trade payable or a
current liability arising in the ordinary course of business), or




     (c) for the payment of money relating to a Capitalized Lease Obligation, or




     (d) for all Redeemable Capital Stock valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends;




     (2) any liability of others described in the preceding clause (1) that such Person has
guaranteed or that is otherwise its legal liability; provided, however, that
a Springing Guarantee shall not be deemed to be Indebtedness under this clause (2) until the
earliest to occur of (a) the demand by a lender for payment under such Springing Guarantee,
(b) the occurrence or failure to occur of any event, act or circumstance that, with or
without the giving of notice and/or passage of time, entitles a lender to make a demand for
payment thereunder or (c) a Bankruptcy Event;




     (3) all Indebtedness referred to in (but not excluded from) clauses (1) and (2) above
of other Persons and all dividends of other Persons, the payment of which is secured by (or
for which the holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; and




     (4) any amendment, supplement, modification, deferral, renewal, extension or refunding
or any liability of the types referred to in clauses (1), (2) and (3) above.



          “Indenture” means this Indenture as amended, restated or supplemented from time to
time.




          “Initial Purchasers” means Citigroup Global Markets Inc. and J.P. Morgan Securities
Inc.







-6-









 








          “Institutional Accredited Investor” means an institution that is an “accredited
investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the
Securities Act.




          “interest” means, with respect to the Notes, interest and Liquidated Damages, if any, on the
Notes.




          “Interest Payment Dates” means each April 15 and October 15, commencing October 15,
2010.




          “Issue Date” means April 13, 2010.




          “Issuer” means the party named as such in the first paragraph of this Indenture until
a successor replaces such party pursuant to Article Five and thereafter means the successor.




          “Issuer Request” means any written request signed in the name of the Issuer by the
Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer or the Treasurer of the Issuer and attested to by the Secretary or any
Assistant Secretary of the Issuer.




          “Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory
or other), pledge, lease, easement, restriction, covenant, charge, security interest or other
encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law, including any conditional sale or other title retention
agreement, and any lease in the nature thereof, any option or other agreement to sell, and any
filing of, or agreement to give, any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction (other than cautionary filings in respect of operating
leases).




          “Liquidated Damages” has the meaning set forth in the Registration Rights Agreement.




          “Moody’s” means Moody’s Investors Service, Inc., and its successors.




          “Non-Recourse Land Financing” means any Indebtedness of the Issuer or any Restricted
Subsidiary for which the holder of such Indebtedness has no recourse, directly or indirectly, to
the Issuer or such Restricted Subsidiary for the principal of, premium, if any, and interest on
such Indebtedness, and for which the Issuer or such Restricted Subsidiary is not, directly or
indirectly, obligated or otherwise liable for the principal of, premium, if any, and interest on
such Indebtedness, except pursuant to mortgages, deeds of trust or other Liens or other recourse
obligations or liabilities in respect of specific land or other real property interests of the
Issuer or such Restricted Subsidiary; provided that recourse obligations or liabilities of
the Issuer or such Restricted Subsidiary solely for indemnities, covenants (including, without limitation,
perfor-






-7-









 







mance, completion or similar covenants), or breach of any warranty, representation or
covenant in respect of any Indebtedness, including liability by reason of any agreement by the
Issuer or any Restricted Subsidiary to provide additional capital or maintain the financial
condition of or otherwise support the credit of the Person incurring the Indebtedness, shall not
prevent Indebtedness from being classified as Non-Recourse Land Financing.




          “Non-U.S. Person” means a Person who is not a U.S. person, as defined in Regulation S.




          “Note Guarantee” means the guarantee of the Notes by the Guarantors.




          “Notes” means the 7.15% Senior Notes due 2020 issued by the Issuer, including, without
limitation, the Private Exchange Notes, if any, and the Exchange Notes, treated as a single class
of securities, as amended from time to time in accordance with the terms hereof, that are issued
pursuant to this Indenture.




          “Obligation” means any principal, interest, penalties, fees, indemnification,
reimbursements, costs, expenses, damages and other liabilities payable under the documentation
governing any Indebtedness.




          “Offer” has the meaning set forth in the definition of “Offer to Purchase.”




          “Offer Expiration Date” has the meaning set forth in the definition of “Offer to
Purchase.”




          “Offer to Purchase” means a written offer (the “Offer”) sent by or on behalf
of the Issuer by first-class mail, postage prepaid, to each Holder at its address appearing in the
register for the Notes on the date of the Offer offering to purchase up to the principal amount of
Notes specified in such Offer at the purchase price specified in such Offer (as determined pursuant
to this Indenture). Unless otherwise required by applicable law, the Offer shall specify an
expiration date (the “Offer Expiration Date”) of the Offer to Purchase, which shall be not
less than 30 Business Days nor more than 60 days after the date of such Offer, and a settlement
date (the “Purchase Date”) for purchase of Notes to occur no later than three Business Days
after the Offer Expiration Date. The Offer shall contain all the information required by
applicable law to be included therein. The Offer shall also contain information concerning the
business of the Issuer and its Subsidiaries which the Issuer in good faith believes will enable
such Holders to make an informed decision with respect to the Offer to Purchase. Such information
shall include, at a minimum, (i) the most recent annual and quarterly financial statements and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained
in the document required to be delivered to Holders pursuant to Section 4.02 (which requirements
may be satisfied by delivery of such documents together with the Offer), (ii) a description of
material developments in the Issuer’s business subsequent to the date of the latest of such financial
statements referred to in clause (i) (including a description of the events requiring the Issuer to
make






-8-









 








the Offer to Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Issuer to make
the Offer to Purchase
and (iv) any other information required by applicable law to be included therein. The Offer shall
contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to
the Offer to Purchase. The Offer shall also state:





     (1) the Section of this Indenture pursuant to which the Offer to Purchase is being
made;




     (2) the Offer Expiration Date and the Purchase Date;




     (3) the aggregate principal amount of the outstanding Notes offered to be purchased by
the Issuer pursuant to the Offer to Purchase (including, if less than 100%, the manner by
which such amount has been determined pursuant to the Section of this Indenture requiring
the Offer to Purchase) (the “Purchase Amount”);




     (4) the purchase price to be paid by the Issuer for each $1,000 aggregate principal
amount of Notes accepted for payment (the “Purchase Price”);




     (5) that the Holder may tender all or any portion of the Notes registered in the name
of such Holder and that any portion of a Note tendered must be tendered in a minimum
denomination of $2,000 principal amount and integral multiples of $1,000 in excess thereof;




     (6) the place or places where Notes are to be surrendered for tender pursuant to the
Offer to Purchase;




     (7) that interest on any Note not tendered or tendered but not purchased by the Issuer
pursuant to the Offer to Purchase will continue to accrue;




     (8) that on the Purchase Date the Purchase Price will become due and payable upon each
Note being accepted for payment pursuant to the Offer to Purchase and that interest thereon
shall cease to accrue on and after the Purchase Date;




     (9) that each Holder electing to tender all or any portion of a Note pursuant to the
Offer to Purchase will be required to surrender such Note, with the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Note completed, at the place or places
specified in the Offer prior to the close of business on the Offer Expiration Date (such
Note being, if the Issuer so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer duly executed by, the Holder
thereof or its attorney duly authorized in writing);



-9-









 






     (10) that Holders will be entitled to withdraw all or any portion of Notes tendered if
the Issuer receives, not later than the close of business on the fifth Business Day
preceding the Offer Expiration Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder tendered, the certificate
number of the Note the Holder tendered and a statement that such Holder is withdrawing all
or a portion of its tender;




     (11) that (a) if Notes in an aggregate principal amount less than or equal to the
Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the
Issuer shall purchase all such Notes and (b) if Notes in an aggregate principal amount in
excess of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to
Purchase, the Issuer shall purchase Notes having an aggregate principal amount equal to the
Purchase Amount on a pro rata basis (with such adjustments as may be deemed appropriate so
that only Notes in minimum denominations of $2,000 principal amount or integral multiples of
$1,000 principal amount in excess thereof shall be purchased); and




     (12) that in the case of any Holder whose Note is purchased only in part, the Issuer
shall execute and deliver to the Holder of such Note without service charge, a new Note or
Notes, of any authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unpurchased portion of the Note so tendered.



          An Offer to Purchase shall be governed by and effected in accordance with the provisions above
pertaining to any Offer.




          On or before the Purchase Date, the Issuer shall (i) accept for payment Notes or portions
thereof tendered and not withdrawn pursuant to the Offer, (ii) deposit with the Trustee U.S.
Dollars sufficient to pay the Purchase Price, plus accrued interest, if any, of all Notes to be
purchased and (iii) deliver to the Trustee Notes so accepted together with an Officers’ Certificate
stating the Notes or portions thereof being purchased by the Issuer. The Trustee shall promptly
mail to the Holders of Notes so accepted payment in an amount equal to the Purchase Price, plus
accrued interest, if any, thereon.




          “Offering” means the offering of the Notes as described in the Offering Memorandum
dated April 6, 2010 pursuant to which the Notes were offered.




          “Officer” means any of the following of the Issuer: the Chairman of the Board of
Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice
President, the Treasurer, the Secretary, the Controller or the Chief Accounting Officer.




          “Officers’ Certificate” means a certificate signed by two Officers.




-10-









 








          “Opinion of Counsel” means a written opinion reasonably satisfactory in form and
substance to the Trustee from legal counsel, which counsel is reasonably acceptable to the Trustee,
stating the matters required by Section 12.05 and delivered to the Trustee.




          “Permitted Holders” means Steven J. Hilton, his wife and children, any corporation,
limited liability company or partnership in which he has voting control and is the direct and
beneficial owner of a majority of the Equity Interests and any trust for the benefit of him or his
wife or children.




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




          “Physical Notes” means certificated Notes in registered form in substantially the form
set forth in Exhibit A.




          “Plan of Liquidation” with respect to any Person, means a plan that provides for,
contemplates or the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of such Person otherwise than as an entirety
or substantially as an entirety; and (2) the distribution of all or substantially all of the
proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the
remaining assets of such Person to creditors and holders of Equity Interests of such Person.




          “Preferred Stock” means, with respect to any Person, any and all preferred or
preference stock or other equity interests (however designated) of such Person whether now
outstanding or issued after the Issue Date.




          “principal” means, with respect to the Notes, the principal of, and premium, if any, on the
Notes.




          “Private Exchange” has the meaning set forth in the Registration Rights Agreement.




          “Private Exchange Notes” has the meaning set forth in the Registration Rights
Agreement.




          “Private Placement Legend” means the legend initially set forth on the Rule 144A Notes
and Other Notes that are Restricted Notes in the form set forth in Exhibit B.




          “Purchase Amount” has the meaning set forth in the definition of “Offer to Purchase.”




-11-









 








          “Purchase Date” has the meaning set forth in the definition of “Offer to Purchase.”




          “Purchase Price” has the meaning set forth in the definition of “Offer to Purchase.”




          “Qualified Institutional Buyer” or “QIB” shall have the meaning specified in
Rule 144A promulgated under the Securities Act.




          “Rating Agency” means each of (a) S&P and (b) Moody’s.




          “Rating Category” means:





     (1) with respect to S&P, any of the following categories: BB, B, CCC, CC, C and D (or
equivalent successor categories); and




     (2) with respect to Moody’s, any of the following categories: Ba, B, Caa, Ca, C and D
(or equivalent successor categories).



          In determining whether the rating of the Notes has decreased by one or more gradations,
gradations within Rating Categories (+ and - for S&P; or 1, 2 and 3 for Moody’s) will be taken into
account (e.g., with respect to S&P a decline in rating from BB+ to BB, as well as from BB- to B+,
will constitute a decrease of one gradation).




          “Rating Date” means the date which is 90 days prior to the earlier of (1) a Change of
Control and (2) public notice of the occurrence of a Change of Control or of the intention by the
Issuer to effect a Change of Control.




          “Rating Decline” means the decrease (as compared with the Rating Date) by one or more
gradations within Rating Categories as well as between Rating Categories of the rating of the Notes
by a Rating Agency on, or within 120 days after, the earlier of the date of public notice of the
occurrence of a Change of Control or of the intention by the Issuer to effect a Change of Control
(which period will be extended for so long as the rating of the Notes is under publicly announced
consideration for possible downgrade by any of the Rating Agencies).




          “redeem” means to redeem, repurchase, purchase, defease, retire, discharge or otherwise
acquire or retire for value; and “redemption” shall have a correlative meaning.




          “Redeemable Capital Stock” means any capital stock of the Issuer or any Subsidiary
that, either by its terms, by the terms of any security into which it is convertible or exchange
able or otherwise, (1) is or upon the happening of an event or passage of time would be
required to be redeemed on or prior to the final stated maturity of the Notes or (2) is redeemable
at the




-12-









 







option of the holder thereof at any time prior to such final stated maturity or (3) is
convertible into or exchangeable for debt securities at any time prior to such final stated
maturity.




          “Redemption Date” when used with respect to any Note to be redeemed means the date
fixed for such redemption pursuant to the terms of the Notes.




          “Reference Treasury Dealer” means Citigroup Global Markets Inc. and its successors;
provided, however, that, if the foregoing ceases to be a primary U.S. Government
securities dealer in the United States (a “Primary Treasury Dealer”), the Issuer shall
substitute another Primary Treasury Dealer.




          “Reference Treasury Dealer Quotation” means, with respect to the Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.




          “Registration Rights Agreement” means the registration rights agreement dated as of
the Issue Date among the Issuer, the Guarantors and the Initial Purchasers.





	 	 	“Regulation S” means Regulation S promulgated under the Securities Act.





          “Remaining Scheduled Payments” means, with respect to any Note, the remaining
scheduled payments of the principal (or of the portion) thereof to be redeemed and interest thereon
that would be due after the related Redemption Date but for such redemption; provided,
however, that, if such Redemption Date is not an Interest Payment Date with respect to such
Note, the amount of the next succeeding scheduled interest payment thereon will be reduced by the
amount of interest accrued thereon to such Redemption Date.




          “Responsible Officer” when used with respect to the Trustee, means an officer or
assistant officer assigned to the corporate trust department of the Trustee (or any successor group
of the Trustee) with direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular subject.




          “Restricted Note” has the same meaning as “Restricted Security” set forth in Rule
144(a)(3) promulgated under the Securities Act; provided, that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with respect to whether any
Note is a Restricted Note.




          “Restricted Subsidiary” means any Subsidiary of the Issuer which is not (i) a
Financial Services Subsidiary or (ii) an Unrestricted Subsidiary.




-13-









 








          “Rule 144” means Rule 144 promulgated under the Securities Act.




          “Rule 144A” means Rule 144A promulgated under the Securities Act.




          “S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc., and its successors.




          “Sale and Leaseback Transaction” means a sale or transfer made by the Issuer or a
Restricted Subsidiary (except a sale or transfer made to the Issuer or another Restricted
Subsidiary) of any property which is either (1) a manufacturing facility, office building or
warehouse whose book value equals or exceeds 1% of Consolidated Net Tangible Assets as of the date
of determination or (2) another property (not including a model home) which exceeds 5% of
Consolidated Net Tangible Assets as of the date of determination, if such sale or transfer is made
with the agreement, commitment or intention of leasing such property to the Issuer or a Restricted
Subsidiary.




          “SEC” means the U.S. Securities and Exchange Commission.




          “Secured Debt” means any Indebtedness which is secured by (1) a Lien on any property
of the Issuer or the property of any Restricted Subsidiary or (2) a Lien on shares of stock owned
directly or indirectly by the Issuer or a Restricted Subsidiary in a corporation or on Equity
Interests owned by the Issuer or a Restricted Subsidiary in a partnership or other entity not
organized as a corporation or in the Issuer’s rights or the rights of a Restricted Subsidiary in
respect of Indebtedness of a corporation, partnership or other entity in which the Issuer or a
Restricted Subsidiary has an Equity Interest; provided that “Secured Debt” shall not
include Non-Recourse Land Financing that consists exclusively of “land under development,” “land
held for future development” or “improved lots and parcels,” as such categories of assets are
determined in accordance with GAAP. The securing in the foregoing manner of any such Indebtedness
which immediately prior thereto was not Secured Debt shall be deemed to be the creation of Secured
Debt at the time security is given.




          “Securities Act” means the U.S. Securities Act of 1933, as amended.




          “Senior Indebtedness” means the principal of (and premium, if any, on) and interest on
(including interest accruing after the occurrence of an Event of Default or after the filing of a
petition initiating any proceeding pursuant to any Bankruptcy Law whether or not such interest is
an allowable claim in any such proceeding) and other amounts due on or in connection with any
Indebtedness of the Issuer, whether outstanding on the date hereof or hereafter created, incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the debt securities. Notwithstanding the
foregoing, “Senior Indebtedness” shall not include (1) Indebtedness of the Issuer that is expressly
subordinated in right of payment to any Senior Indebtedness of the Issuer, (2) Indebtedness of





-14-









 







the
Issuer that by operation of law is subordinate to any general unsecured obligations of the Issuer,
(3) Indebtedness of the Issuer to any Subsidiary, (4) Indebtedness of the Issuer incurred in
violation of the restrictions of Section 4.06 and 4.07 of this Indenture, (5) to the extent it
might constitute Indebtedness, any liability for federal, state or local taxes or other taxes, owed
or owing by the Issuer and (6) to the extent it might constitute Indebtedness, trade account
payables owed or owing by the Issuer or any of its Subsidiaries.




          “Significant Subsidiary” means (1) any Restricted Subsidiary that would be a
“significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as
such Regulation is in effect on the Issue Date and (2) any Restricted Subsidiary that, when
aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries
and as to which any event described in clause (7) or (8) of Section 6.01 has occurred and is
continuing, would constitute a Significant Subsidiary under clause (1) of this definition.




          “Springing Guarantee” means a guarantee by a Person which by its express terms does
not become effective until the occurrence of a Bankruptcy Event.




          “Subsidiary” means, with respect to any Person:





     (1) any corporation, limited liability company, association or other business entity of
which more than 50% of the total voting power of the Equity Interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the Board of
Directors thereof are at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination thereof);
and




     (2) any partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general partners of
which are such Person or of one or more Subsidiaries of such Person (or any combination
thereof).



          Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.




          “Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal
to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date.




          “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as
amended.




          “Trustee” means the party named as such in this Indenture until a successor replaces
it pursuant to this Indenture and thereafter means the successor.




-15-









 








          “Unrestricted Subsidiary” means a Subsidiary designated by the Issuer (evidenced by
resolutions of the Board of Directors of the Issuer, delivered to the Trustee certifying compliance
with this definition) as a Subsidiary resulting from any investment (including any guarantee of
Indebtedness) made by the Issuer or any Restricted Subsidiary of the Issuer in joint ventures
engaged in homebuilding, land acquisition or land development businesses and businesses that are
reasonably related thereto or reasonable extensions thereof with unaffiliated third parties;
provided that the aggregate amount of investments in all Unrestricted Subsidiaries shall
not exceed $10 million (with the amount of each investment being calculated based upon the amount
of investments made on or after the date such joint venture becomes a Subsidiary);
provided, further, that if the Issuer subsequently designates a Subsidiary, which
previously had been designated an Unrestricted Subsidiary, to be a Restricted Subsidiary (evidenced
by resolutions of the Board of Directors of the Issuer, delivered to the Trustee certifying
compliance with this definition) and causes such Subsidiary to comply with Section 4.08, then the
amount of any investments in such Unrestricted Subsidiary made on or after the date such joint
venture became a Subsidiary shall be credited against the $10 million basket set forth in this
definition (up to a maximum amount of $10 million).




          “U.S. Government Obligations” means direct non-callable obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee or obligations the
full faith and credit of the United States is pledged.




          “Voting Stock” with respect to any Person, means securities of any class of Equity
Interests of such Person entitling the holders thereof (whether at all times or only so long as no
senior class of stock or other relevant equity interest has voting power by reason of any
contingency) to vote in the election of members of the Board of Directors of such Person.




          “Wholly Owned Restricted Subsidiary” means a Restricted Subsidiary of which 100% of
the Equity Interests (except for directors’ qualifying shares or certain minority interests owned
by other Persons solely due to local law requirements that there be more than one stockholder, but
which interest is not in excess of what is required for such purpose) are owned directly by the
Issuer or through one or more Wholly Owned Restricted Subsidiaries.



SECTION 1.02. Other Definitions.




          The definitions of the following terms may be found in the sections indicated as follows:







	 	 	 	 	 
	Term	 	Defined in Section	 
	“Agent Members”
	 	 	2.16	(a)
	“Business Day”
	 	 	12.07	 
	“Change of Control Date”
	 	 	4.12	 
	“Change of Control Offer”
	 	 	4.12	 








-16-









 








	 	 	 	 	 
	Term	 	Defined in Section	 
	“Change of Control Payment Date”
	 	 	4.12	 
	“Covenant Defeasance”
	 	 	9.03	 
	“Events of Default”
	 	 	6.01	 
	“Global Notes”
	 	 	2.16	(a)
	“Legal Defeasance”
	 	 	9.02	 
	“Legal Holiday”
	 	 	12.07	 
	“Liquidated Damages Notice”
	 	 	4.13	 
	“Other Notes”
	 	 	2.02	 
	“Paying Agent”
	 	 	2.04	 
	“Registrar”
	 	 	2.04	 
	“Regulation S Global Notes”
	 	 	2.16	(a)
	“Regulation S Note”
	 	 	2.02	 
	“Restricted Global Note”
	 	 	2.16	(a)
	“Restricted Period”
	 	 	2.16	(f)
	“Rule 144A Notes”
	 	 	2.02	 
	“Successor”
	 	 	5.01	(b)(1)(b)







SECTION 1.03. Incorporation by Reference of Trust Indenture Act.




          Whenever this Indenture refers to a provision of the TIA, the portion of such provision
required to be incorporated herein in order for this Indenture to be qualified under the TIA is
incorporated by reference in and made a part of this Indenture. The following TIA terms used in
this Indenture have the following meanings:




          “indenture securities” means the Notes.




          “indenture securityholder” means a Holder or Noteholder.




          “indenture to be qualified” means this Indenture.




          “indenture trustee” or “institutional trustee” means the Trustee.




          “obligor on the indenture securities” means the Issuer, the Guarantors or any
other obligor on the Notes.




          All other terms used in this Indenture that are defined by the TIA, defined in the TIA by
reference to another statute or defined by SEC rule have the meanings therein assigned to them.



SECTION 1.04. Rules of Construction.




          Unless the context otherwise requires:




-17-









 









     (1) a term has the meaning assigned to it herein, whether defined expressly or by
reference;




     (2) “or” is not exclusive;




     (3) words in the singular include the plural, and in the plural include the singular;




     (4) words used herein implying any gender shall apply to both genders;




     (5) “herein,” “hereof” and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other Subsection;




     (6) unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent with the most recent audited
consolidated financial statements of the Issuer;




     (7) “$,” “U.S. Dollars” and “United States Dollars” each refer to United States dollars
or such other money of the United States that at the time of payment is legal tender for
payment of public and private debts; and




     (8) whenever in this Indenture there is mentioned, in any context, principal, interest
or any other amount payable under or with respect to any Note, such mention shall be deemed
to include mention of the payment of Liquidated Damages to the extent that, in such context,
Liquidated Damages is, was or would be payable in respect thereof.



ARTICLE TWO




THE NOTES


SECTION 2.01. Amount of Notes.




          The Trustee shall authenticate (i) Notes for original issue on the Issue Date in the aggregate
principal amount not to exceed $200,000,000 and (ii) Additional Notes in an unlimited principal
amount, upon a written order of the Issuer in the form of an Officers’ Certificate of the Issuer.
The Officers’ Certificate shall specify the amount of Notes to be authenticated and the date on
which the Notes are to be authenticated.




          Upon receipt of a written order of the Issuer in the form of an Officers’ Certificate, the
Trustee shall authenticate Notes in substitution for Notes originally issued to reflect any




-18-









 







name
change of the Issuer. Any Additional Notes shall be part of the same issue as the Notes being
issued on the date hereof and will vote on all matters as one class with the Notes being issued on
the date hereof, including, without limitation, waivers, amendments, redemptions and Offers to
Purchase. For the purposes of this Indenture, references to the Notes include Additional Notes, if
any.




          Upon receipt of an Issuer Request and an Officers’ Certificate certifying that a registration
statement relating to an exchange offer specified in the Registration Rights Agreement or any
registration rights agreement relating to the Additional Notes is effective or that the conditions
precedent to a Private Exchange thereunder have been met, the Trustee shall authenticate an
additional series of Notes for issuance in exchange for the Notes tendered for exchange pursuant to
such exchange offer registered under the Securities Act or pursuant to a Private Exchange.
Exchange Notes or Private Exchange Notes may have such distinctive series designations and such
changes in the form thereof as are specified in the Issuer Request referred to in the preceding
sentence.



SECTION 2.02. Form and Dating.




          The Notes and the Trustee’s certificate of authentication with respect thereto shall be
substantially in the form set forth in Exhibit A, which is incorporated in and forms a part
of this Indenture. The Notes may have notations, legends or endorsements required by law, rule or
usage to which the Issuer is subject. Without limiting the generality of the foregoing, Notes
offered and sold to Qualified Institutional Buyers in reliance on Rule 144A (“Rule 144A
Notes”) shall bear the legend and include the form of assignment set forth in Exhibit
B, Notes offered and sold in offshore transactions in reliance on Regulation S (“Regulation
S Notes”) shall bear the legend and include the form of assignment set forth in Exhibit
C, and Notes offered and sold to Institutional Accredited Investors in transactions exempt from
registration under the Securities
Act not made in reliance on Rule 144A or Regulation S (“Other Notes”) may be
represented by a Restricted Global Note or, if such an investor may not hold an interest in the
Restricted Global Note, a Physical Note, in each case, bearing the Private Placement Legend. Each
Note shall be dated the date of its authentication.




          The terms and provisions contained in the Notes shall constitute, and are expressly made, a
part of this Indenture and, to the extent applicable, the Issuer, the Guarantors and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms and provisions and
agree to be bound thereby.




          The Notes may be presented for registration of transfer and exchange at the offices of the
Registrar.




-19-









 







SECTION 2.03. Execution and Authentication.




          Two Officers shall sign, or one Officer shall sign and one Officer (each of whom shall, in
each case, have been duly authorized by all requisite corporate actions) shall attest to, the Notes
for the Issuer by manual or facsimile signature.




          If an Officer whose signature is on a Note was an Officer at the time of such execution but no
longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.




          No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose unless there appears on such Note a certificate of authentication substantially in the
form provided for herein executed by the Trustee by manual signature, and such certificate upon any
Note shall be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any Note shall have been
authenticated and delivered hereunder but never issued and sold by the Issuer, and the Issuer shall
deliver such Note to the Trustee for cancellation as provided in Section 2.12, for all purposes of
this Indenture such Note shall be deemed never to have been authenticated and delivered hereunder
and shall never be entitled to the benefits of this Indenture.




          The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to
authenticate the Notes. Unless otherwise provided in the appointment, an authenticating agent may
authenticate the Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Issuer and Affiliates of the Issuer. Each Paying
Agent is designated as an authenticating agent for purposes of this Indenture.




          The Notes shall be issuable only in registered form without coupons in denominations of $2,000
and integral multiples of $1,000 in excess thereof.



SECTION 2.04. Registrar and Paying Agent.




          The Issuer shall maintain an office or agency (which shall be located in the Borough of
Manhattan in The City of New York, State of New York) where Notes may be presented for registration
of transfer or for exchange (the “Registrar”), and an office or agency where Notes may be
presented for payment (the “Paying Agent”) and an office or agency where notices and
demands to or upon the Issuer, if any, in respect of the Notes and this Indenture may be served.
The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuer
may have one or more additional Paying Agents. The term “Paying Agent” includes any additional
Paying Agent. Neither the Issuer nor any Affiliate thereof may act as Paying Agent.




-20-









 








          The Issuer shall enter into an appropriate agency agreement, which shall incorporate the
provisions of the TIA, with any Agent that is not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The Issuer shall notify the
Trustee of the name and address of any such Agent. If the Issuer fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such and shall be
entitled to appropriate compensation in accordance with Section 7.07.




          The Issuer initially appoints the Trustee as Registrar, Paying Agent and Agent for service of
notices and demands in connection with the Notes and this Indenture.



SECTION 2.05. Paying Agent To Hold Money in Trust.




          Each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money
held by the Paying Agent for the payment of principal of or premium or interest on the Notes
(whether such money has been paid to it by the Issuer or any other obligor on the Notes or the
Guarantors), and the Issuer and the Paying Agent shall notify the Trustee in writing of any default
by the Issuer (or any other obligor on the Notes) in making any such payment. Money held in trust
by the Paying Agent need not be segregated except as required by law and in no event shall the
Paying Agent be liable for any interest on any money received by it hereunder. The Issuer at any
time may require the Paying Agent to pay all money held by it to the Trustee and account for any
funds disbursed and the Trustee may at any time during the continuance of any Event of Default
specified in Section 6.01 (1) or (2), upon written request to the Paying Agent, require such Paying
Agent to pay forthwith all money so held by it to the Trustee and to account for any funds
disbursed. Upon making such payment, the Paying Agent shall have no further liability for the
money delivered to the Trustee.



SECTION 2.06. Holder Lists.




          The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of the Holders. If the Trustee is not the
Registrar, the Issuer shall furnish to the Trustee at least five Business Days before each Interest
Payment Date, and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and addresses of the
Holders.



SECTION 2.07. Transfer and Exchange.




          Subject to Sections 2.16 and 2.17, when Notes are presented to the Registrar with a request
from the Holder of such Notes to register a transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations, the Registrar shall register the transfer as
requested. Every Note presented or surrendered for registration of transfer or exchange shall be
duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Registrar, duly executed by the Holder thereof or his attorneys




-21-









 







duly authorized in
writing. To permit registrations of transfers and exchanges, the Issuer shall issue and execute
and the Trustee shall authenticate new Notes (and the Guarantors shall execute the guarantee
thereon) evidencing such transfer or exchange at the Registrar’s request. No service charge shall
be made to the Holder for any registration of transfer or exchange. The Issuer may require from
the Holder payment of a sum sufficient to cover any transfer taxes or other governmental charge
that may be imposed in relation to a transfer or exchange, but this provision shall not apply to
any exchange pursuant to Section 2.11, 3.06, 4.12 or 8.05 (in which events the Issuer shall be
responsible for the payment of such taxes). The Registrar shall not be required to exchange or
register a transfer of any Note for a period of 15 days immediately preceding the mailing of notice
of redemption of Notes to be redeemed or of any Note selected, called or being called for
redemption except the unredeemed portion of any Note being redeemed in part.




          Any Holder of the Global Note shall, by acceptance of such Global Note, agree that transfers
of the beneficial interests in such Global Note may be effected only through a book entry system
maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial
interest in the Global Note shall be required to be reflected in a book entry.




          Each Holder of a Note agrees to indemnify the Issuer and the Trustee against any liability
that may result from the transfer, exchange or assignment of such Holder’s Note in violation of any
provision of this Indenture and/or applicable U.S. federal or state securities law.




          Except as expressly provided herein, neither the Trustee nor the Registrar shall have any duty
to monitor the Issuer’s compliance with or have any responsibility with respect to the Issuer’s
compliance with any federal or state securities laws.



SECTION 2.08. Replacement Notes.




          If a mutilated Note is surrendered to the Registrar or the Trustee, or if the Holder of a Note
claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the
Trustee shall authenticate a replacement Note (and the Guarantors shall execute the guarantee thereon)
if the Holder of such Note furnishes to the Issuer and the Trustee evidence
reasonably acceptable to them of the ownership and the destruction, loss or theft of such Note and
if the requirements of Section 8-405 of the New York Uniform Commercial Code as in effect on the
date of this Indenture are met. An indemnity bond shall be posted, sufficient in the judgment of
both to protect the Issuer, the Guarantors, the Trustee or any Paying Agent from any loss that any
of them may suffer if such Note is replaced. The Issuer may charge such Holder for the Issuer’s
reasonable out-of-pocket expenses in replacing such Note and the Trustee may charge the Issuer for
the Trustee’s expenses (including, without limitation, attorneys’ fees and disbursements) in
replacing such Note. Every replacement Note shall constitute a contractual obligation of the
Issuer.




-22-









 







SECTION 2.09. Outstanding Notes.




          The Notes outstanding at any time are all Notes that have been authenticated by the Trustee
except for (a) those cancelled by it, (b) those delivered to it for cancellation, (c) to the extent
set forth in Sections 9.01 and 9.02, on or after the date on which the conditions set forth in
Section 9.01 or 9.02 have been satisfied, those Notes theretofore authenticated and delivered by
the Trustee hereunder and (d) those described in this Section 2.09 as not outstanding. Subject to
Section 2.10, a Note does not cease to be outstanding because the Issuer or one of its Affiliates
holds the Note.




          If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser in whose
hands such Note is a legal, valid and binding obligation of the Issuer.




          If the Paying Agent holds, in its capacity as such, on any maturity date, money sufficient to
pay all accrued interest and principal with respect to the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture,
then on and after that date such Notes cease to be outstanding and interest on them ceases to
accrue.



SECTION 2.10. Treasury Notes.




          In determining whether the Holders of the required principal amount of Notes have concurred in
any declaration of acceleration or notice of default or direction, waiver or consent or any
amendment, modification or other change to this Indenture, Notes owned by the Issuer or any other
Affiliate of the Issuer shall be disregarded as though they were not outstanding, except that for
the purposes of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent or any amendment, modification or other change to this Indenture, only
Notes as to which a Responsible Officer of the Trustee has received an Officers’ Certificate
stating that such Notes are so owned shall be so disregarded. Notes so owned which have been
pledged in good faith shall not be disregarded if the pledgee established to the satis
faction of the Trustee the pledgee’s right so to act with respect to the Notes and that the
pledgee is not the Issuer, a Guarantor, any other obligor on the Notes or any of their respective
Affiliates.



SECTION 2.11. Temporary Notes.




          Until definitive Notes are prepared and ready for delivery, the Issuer may prepare and the
Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes.
Without unreasonable delay, the Issuer shall prepare and the Trustee, upon receipt of a written
request, shall authenticate definitive Notes in exchange for temporary Notes. Until such exchange,
temporary Notes shall be entitled to the same rights, benefits and privileges as definitive Notes.




-23-









 







SECTION 2.12. Cancellation.




          The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and
the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall (subject to the record-retention
requirements of the Exchange Act) dispose of such cancelled Notes in accordance with customary
procedures. The Issuer may not reissue or resell, or issue new Notes to replace, Notes that the
Issuer has redeemed or paid, or that have been delivered to the Trustee for cancellation.



SECTION 2.13. Defaulted Interest.




          If the Issuer defaults on a payment of interest on the Notes, it shall pay the defaulted
interest, plus (to the extent permitted by law) any interest payable on the defaulted interest, in
accordance with the terms hereof, to the Persons who are Holders on a subsequent special record
date, which date shall be at least five Business Days prior to the payment date. The Issuer shall
fix such special record date and payment date in a manner satisfactory to the Trustee. At least 10
days before such special record date, the Issuer shall mail to each Holder a notice that states the
special record date, the payment date and the amount of defaulted interest, and interest payable on
defaulted interest, if any, to be paid. The Issuer may make payment of any defaulted interest in
any other lawful manner not inconsistent with the requirements (if applicable) of any securities
exchange on which the Notes may be listed and, upon such notice as may be required by such
exchange, if, after written notice given by the Issuer to the Trustee of the proposed payment
pursuant to this sentence, such manner of payment shall be deemed practicable by the Trustee.



SECTION 2.14. CUSIP Number.




          The Issuer in issuing the Notes may use a “CUSIP” number, and if so, such CUSIP number shall
be included in notices of redemption or exchange as a convenience to Holders; provided,
that any such notice may state that no representation is made as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Notes, and that reliance may be placed only on the
other identification numbers printed on the Notes. The Issuer shall promptly notify the Trustee in
writing of any such CUSIP number used by the Issuer in connection with the issuance of the Notes
and of any change in the CUSIP number.



SECTION 2.15. Deposit of Moneys.




          Prior to 10:00 a.m., New York City time, on each Interest Payment Date and maturity date, the
Issuer shall have deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date or maturity date, as the case may
be, in a timely manner which permits the Trustee to remit payment to the




-24-









 







Holders on such Interest
Payment Date or maturity date, as the case may be. The principal and interest on Global Notes
shall be payable to the Depository or its nominee, as the case may be, as the sole registered owner
and the sole Holder of the Global Notes represented thereby. The principal and interest on
Physical Notes shall be payable, either in person or by mail, at the office of the Paying Agent.



SECTION 2.16. Book-Entry Provisions for Global Notes.




          (a) Rule 144A Notes initially shall be represented by one or more notes in registered, global
form without interest coupons (collectively, the “Restricted Global Note”). Regulation S
Notes initially shall be represented by one or more notes in registered, global form without
interest coupons (collectively, the “Regulation S Global Note,” and, together with the
Restricted Global Note and any other global notes representing Notes, the “Global Notes”).
The Global Notes shall bear legends as set forth in Exhibit D. The Global Notes initially
shall (i) be registered in the name of the Depository or the nominee of such Depository, in each
case for credit to an account of an Agent Member (or, in the case of the Regulation S Global Notes,
of Euroclear System and Clearstream Bank, S.A.), (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear legends as set forth in Exhibit B with respect to Restricted
Global Notes and Exhibit C with respect to Regulation S Global Notes.




          Members of, or direct or indirect participants in, the Depository (“Agent Members”)
shall have no rights under this Indenture with respect to any Global Note held on their behalf by
the Depository, or the Trustee as its custodian, or under the Global Notes, and the Depository may
be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute
owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee
from giving effect to any written certification, proxy or other authorization furnished by the
Depository or impair, as between the Depository and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Note.




          (b) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the
Depository, its successors or their respective nominees. Interests of beneficial owners in the
Global Notes may be transferred or exchanged for Physical Notes in accordance with the rules and
procedures of the Depository and the provisions of Section 2.17. In addition, a Global Note shall
be exchangeable for Physical Notes if (i) the Depository (x) notifies the Issuer that it is
unwilling or unable to continue as depository for such Global Note and the Issuer thereupon fails
to appoint a successor depository or (y) has ceased to be a clearing agency registered under the
Exchange Act or (ii) there shall have occurred and be continuing an Event of Default with respect
to the Notes. In all cases, Physical Notes delivered in exchange for any Global Note or beneficial
interests therein shall be registered in the names, and issued in any approved denominations,
requested by or on behalf of the Depository (in accordance with its customary procedures).




-25-









 









          (c) In connection with any transfer or exchange of a portion of the beneficial interest in any
Global Note to beneficial owners pursuant to paragraph (b), the Registrar shall (if one or more
Physical Notes are to be issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Issuer shall execute, and the Trustee shall
upon receipt of a written order from the Issuer authenticate and make available for delivery, one
or more Physical Notes of like tenor and amount.




          (d) In connection with the transfer of Global Notes as an entirety to beneficial owners
pursuant to paragraph (b), the Global Notes shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuer shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in writing in exchange for its beneficial interest in
the Global Notes, an equal aggregate principal amount of Physical Notes of authorized
denominations.




          (e) Any Physical Note constituting a Restricted Note delivered in exchange for an interest in
a Global Note pursuant to paragraph (b), (c) or (d) shall, except as otherwise provided by
paragraphs (a)(i)(x) and (c) of Section 2.17, bear the Private Placement Legend or, in the case of
the Regulation S Global Note, the legend set forth in Exhibit C, in each case, unless the
Issuer determines otherwise in compliance with applicable law.




          (f) On or prior to the 40th day after the later of the commencement of the offering of the
Notes represented by the Regulation S Global Note and the Issue Date of such Notes (such period
through and including such 40th day, the “Restricted Period”), a beneficial interest in a
Regulation S Global Note may be transferred to a Person who takes delivery in the
form of an interest in the corresponding Restricted Global Note only upon receipt by the
Trustee of a written certification from the transferor to the effect that such transfer is being
made (i)(a) to a Person whom the transferor reasonably believes is a Qualified Institutional Buyer
in a transaction meeting the requirements of Rule 144A or (b) pursuant to another exemption from
the registration requirements under the Securities Act which is accompanied by an Opinion of
Counsel regarding the availability of such exemption and (ii) in accordance with all applicable
securities laws of any state of the United States or any other jurisdiction.




          (g) Beneficial interests in the Restricted Global Note may be transferred to a Person who
takes delivery in the form of an interest in the Regulation S Global Note, whether before or after
the expiration of the Restricted Period, only if the transferor first delivers to the Trustee a
written certificate to the effect that such transfer is being made in accordance with Rule 903 or
904 of Regulation S or Rule 144 (if available).




          (h) Any beneficial interest in one of the Global Notes that is transferred to a Person who
takes delivery in the form of an interest in another Global Note shall, upon transfer, cease to be
an interest in such Global Note and become an interest in such other Global Note and, accordingly,
shall thereafter be subject to all transfer restrictions and other procedures ap-




-26-









 







plicable to
beneficial interests in such other Global Note for as long as it remains such an interest.




          (i) The Holder of any Global Note may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the Notes.



SECTION 2.17. Special Transfer Provisions.




          (a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S. Persons. The
following provisions shall apply with respect to the registration of any proposed transfer of a
Note constituting a Restricted Note to any Institutional Accredited Investor which is not a QIB or
to any Non-U.S. Person:





     (i) the Registrar shall register the transfer of any Note constituting a Restricted
Note, whether or not such Note bears the Private Placement Legend, if (x) the requested
transfer is after April 13, 2011 or such other date as such Note shall be freely
transferable under Rule 144 as certified in an Officers’ Certificate or (y) (1) in the case
of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons), the proposed transferee has delivered to the Registrar a certificate substantially
in the form of Exhibit E hereto or (2) in the case of a transfer to a Non-U.S.
Person (including a QIB), the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit F hereto; provided that in
the case of any transfer of a
Note bearing the Private Placement Legend for a Note not bearing the Private Placement
Legend, the Registrar has received an Officers’ Certificate authorizing such transfer; and




     (ii) if the proposed transferor is an Agent Member holding a beneficial interest in a
Global Note, upon receipt by the Registrar of (x) the certificate, if any, required by
paragraph (i) above and (y) instructions given in accordance with the Depository’s and the
Registrar’s procedures,


whereupon (a) the Registrar shall reflect on its books and records the date and (if the transfer
does not involve a transfer of outstanding Physical Notes) a decrease in the principal amount of a
Global Note in an amount equal to the principal amount of the beneficial interest in a Global Note
to be transferred, and (b) the Registrar shall reflect on its books and records the date and an
increase in the principal amount of a Global Note in an amount equal to the principal amount of the
beneficial interest in the Global Note transferred or the Issuer shall execute and the Trustee
shall authenticate and make available for delivery one or more Physical Notes of like tenor and
amount.




          (b) Transfers to QIBs. The following provisions shall apply with respect to the
registration or any proposed registration of transfer of a Note constituting a Restricted Note to a
QIB (excluding transfers to Non-U.S. Persons):




-27-









 









     (i) the Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on such Holder’s Note stating, or
has otherwise advised the Issuer and the Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has signed the
certification provided for on such Holder’s Note stating, or has otherwise advised the
Issuer and the Registrar in writing, that it is purchasing the Note for its own account or
an account with respect to which it exercises sole investment discretion and that it and any
such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such information
regarding the Issuer as it has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration provided by Rule
144A; and




     (ii) if the proposed transferee is an Agent Member, and the Notes to be transferred
consist of Physical Notes which after transfer are to be evidenced by an interest in the
Global Note, upon receipt by the Registrar of instructions given in accordance with the
Depository’s and the Registrar’s procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note in an amount
equal to the principal amount of the Physical Notes to be transferred, and the Trustee shall
cancel the Physical Notes so transferred.



          (c) Private Placement Legend. Upon the registration of transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar shall deliver Notes
that do not bear the Private Placement Legend. Upon the registration of transfer, exchange or
replacement of Notes bearing the Private Placement Legend, the Registrar shall deliver only Notes
that bear the Private Placement Legend unless (i) it has received the Officers’ Certificate
required by paragraph (a)(i)(y) of this Section 2.17, (ii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that neither
such legend nor the related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act or (iii) such Note has been sold pursuant to an effective
registration statement under the Securities Act and the Registrar has received an Officers’
Certificate from the Issuer to such effect.




          (d) General. By its acceptance of any Note bearing the Private Placement Legend, each
Holder of such Note acknowledges the restrictions on transfer of such Note set forth in this
Indenture and in the Private Placement Legend and agrees that it will transfer such Note only as
provided in this Indenture.




          The Registrar shall retain for a period of two years copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17. The




-28-









 







Issuer shall
have the right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable notice to the Registrar.




          The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Note (including any transfers between or among beneficial
owners of interests in any Global Note) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.



SECTION 2.18. Computation of Interest.




          Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months.




ARTICLE THREE




REDEMPTION



SECTION 3.01. Election To Redeem; Notices to Trustee.




          If the Issuer elects to redeem Notes pursuant to paragraph 6 of the Notes, at least 45 days
prior to the Redemption Date (unless a shorter notice shall be agreed to in writing by the Trustee)
but not more than 65 days before the Redemption Date, the Issuer shall notify the Trustee in
writing of the Redemption Date, the principal amount of Notes to be redeemed and the redemption
price, and deliver to the Trustee an Officers’ Certificate stating that such redemption will comply
with the conditions contained in paragraph 6 of the Notes. Notice given to the Trustee pursuant to
this Section 3.01 may not be revoked after the time that notice is given to Holders pursuant to
Section 3.03.




SECTION 3.02. Selection by Trustee of Notes To Be Redeemed.




          In the event that less than all of the Notes are to be redeemed pursuant to a redemption made
pursuant to paragraph 6 of the Notes, selection of the Notes for redemption shall be made by the
Trustee in compliance with the requirements of the principal national securities exchange, if any,
on which the Notes are listed or, if the Notes are not then listed on a national security exchange,
on a pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that no Notes of a principal amount of $2,000 or
less shall be redeemed in part. If a partial redemption is made pursuant to paragraph 6 of the
Notes, selection of the Notes or portions thereof for redemption shall be made by the Trustee only
on a pro




-29-









 







rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of the Depository), unless that method is otherwise
prohibited. The Trustee shall promptly notify the Issuer of the Notes selected for redemption and,
in the case of any Notes selected for partial redemption, the principal amount thereof to be
redeemed. The Trustee may select for redemption portions of the principal of the Notes that have
denominations larger than $2,000. For all purposes of this Indenture unless the context otherwise
requires, provisions of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption. The Issuer may acquire Notes by means other than
redemption, whether pursuant to an Issuer tender offer, open market purchase or otherwise provided
such acquisition does not otherwise violate the other terms of this Indenture.



SECTION 3.03. Notice of Redemption.




          At least 30 days, and no more than 60 days, before a Redemption Date, the Issuer shall mail,
or cause to be mailed, a notice of redemption by first-class mail to each Holder of
Notes to be redeemed at his or her last address as the same appears on the registry books
maintained by the Registrar pursuant to Section 2.04.




          The notice shall identify the Notes to be redeemed (including the CUSIP numbers thereof) and
shall state:




     (1) the Redemption Date;




     (2) the redemption price and the amount of premium and accrued interest to be paid;




          (3) if any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the Redemption Date and upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed portion will be issued;




     (4) the name and address of the Paying Agent;




     (5) that Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;




     (6) that unless the Issuer defaults in making the redemption payment, interest on Notes
called for redemption ceases to accrue on and after the Redemption Date;




     (7) the provision of paragraph 6 of the Notes, as the case may be, pursuant to which
the Notes called for redemption are being redeemed; and




     (8) the aggregate principal amount of Notes that are being redeemed.




-30-









 








          At the Issuer’s written request made at least five Business Days prior to the date on which
notice is to be given, the Trustee shall give the notice of redemption in the Issuer’s name and at
the Issuer’s sole expense.



SECTION 3.04. Effect of Notice of Redemption.




          Once the notice of redemption described in Section 3.03 is mailed, Notes called for redemption
become due and payable on the Redemption Date and at the redemption price, including any premium,
plus interest accrued to the Redemption Date. Upon surrender to the Paying Agent, such Notes shall
be paid at the redemption price, including any premium, plus interest accrued to the Redemption
Date, provided that if the Redemption Date is after a regular record date and on or prior
to the Interest Payment Date, the accrued interest shall be payable to the Holder of the redeemed
Notes registered on the relevant record date, and provided, further, that if a
Redemption Date is a Legal Holiday, payment shall be made on the next succeeding
Business Day and no interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.



SECTION 3.05. Deposit of Redemption Price.




          On or prior to 10:00 a.m., New York City time, on each Redemption Date, the Issuer shall
deposit with the Paying Agent in immediately available funds money sufficient to pay the redemption
price of, including premium, if any, and accrued interest on all Notes to be redeemed on that date
other than Notes or portions thereof called for redemption on that date which have been delivered
by the Issuer to the Trustee for cancellation.




          On and after any Redemption Date, if money sufficient to pay the redemption price of,
including premium, if any, and accrued interest on Notes called for redemption shall have been made
available in accordance with the preceding paragraph, the Notes called for redemption will cease to
accrue interest and the only right of the Holders of such Notes will be to receive payment of the
redemption price of and, subject to the first proviso in Section 3.04, accrued and unpaid interest
on such Notes to the Redemption Date. If any Note surrendered for redemption shall not be so paid,
interest will be paid, from the Redemption Date until such redemption payment is made, on the
unpaid principal of the Note and any interest not paid on such unpaid principal, in each case, at
the rate and in the manner provided in the Notes.



SECTION 3.06. Notes Redeemed in Part.




          Upon surrender of a Note that is redeemed in part, the Trustee shall authenticate for the
Holder thereof a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.





-31-












 





ARTICLE FOUR




COVENANTS


SECTION 4.01. Payment of Notes.




          The Issuer shall pay the principal of and interest (including all Liquidated Damages as
provided in the Registration Rights Agreement) on the Notes on the dates and in the manner provided
in the Notes and this Indenture. An installment of principal or interest shall be considered paid
on the date it is due if the Trustee or Paying Agent holds on that date money designated for and
sufficient to pay such installment.




          The Issuer shall pay interest on overdue principal (including post-petition interest in a
proceeding under any Bankruptcy Law), and overdue interest, to the extent lawful, at the rate
specified in the Notes.




SECTION 4.02. Reports to Holders.




          Whether or not required by the SEC, so long as any Notes are outstanding, the Issuer shall
furnish to the Holders of Notes (with a copy to the Trustee), within the time periods specified in
the SEC’s rules and regulations (including any grace periods or extensions permitted by the SEC):





     (1) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuer were required to
file these Forms, including a “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and, with respect to the annual information only, a report on the
annual financial statements by the Issuer’s independent registered public accounting firm;
and




     (2) all current reports that would be required to be filed with the SEC on Form 8-K if
the Issuer were required to file these reports.



          In addition, whether or not required by the SEC, the Issuer shall file a copy of all of the
information and reports referred to in clauses (1) and (2) above with the SEC for public
availability within the time periods specified in the SEC’s rules and regulations (unless the SEC
will not accept the filing) and make the information available to securities analysts and
prospective investors upon request. For so long as any Notes remain outstanding, the Issuer shall
furnish to the Holders (with a copy to the Trustee) and to securities analysts and prospective
investors,
upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.




-32-









 








          Delivery of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the
Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to
rely exclusively on Officers’ Certificates).



SECTION 4.03. Waiver of Stay, Extension or Usury Laws.




          Each of the Issuer and the Guarantors covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, or plead (as a defense or otherwise) or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive any of the Issuer and the Guarantors from paying all or
any portion of the principal of, premium, if any, and/or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants
or the performance of this Indenture; and (to the extent that they may lawfully do so) each of the
Issuer and the Guarantors hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though no such law had
been enacted.



SECTION 4.04. Compliance Certificate.




          (a) The Issuer shall deliver to the Trustee, within 90 days after the end of each fiscal year,
an Officers’ Certificate, one of the signers of which shall be the principal executive officer,
principal accounting officer or principal financial officer of the Issuer, stating that a review of
the activities of the Issuer and its Subsidiaries during such fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the Issuer and the
Guarantors have kept, observed, performed and fulfilled their obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the best of his or her
knowledge, the Issuer and the Guarantors have kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and are not in default in the performance or observance
of any of the terms, provisions and conditions hereof (or, if a Default shall have occurred,
describing all such Defaults of which he or she may have knowledge and what action they are taking
or propose to take with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a description of the
event and what action the Issuer and the Guarantors is taking or propose to take with respect
thereto.




          (b) The Issuer and the Guarantors shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default, an Officers’ Certificate
specifying such Default and what action the Issuer and the Guarantors are taking or propose to take
with respect thereto.



-33-









 







          (c) The Issuer’s fiscal year currently ends on December 31. The Issuer will provide written
notice to the Trustee of any change in its fiscal year.



SECTION 4.05. Taxes.




          The Issuer and the Guarantors shall, and shall cause each of their Subsidiaries to, pay prior
to delinquency all material taxes, assessments, and governmental levies except as contested in good
faith and by appropriate proceedings.



SECTION 4.06. Restrictions on Secured Debt.




          The Issuer shall not, and shall not cause or permit a Restricted Subsidiary to, create, incur,
assume or guarantee any Secured Debt unless the Notes will be secured equally and ratably with (or
prior to) such Secured Debt, with certain exceptions. This restriction does not prohibit the
creation, incurrence, assumption or guarantee of Secured Debt which is secured by:





     (1) Liens on model homes, homes held for sale, homes that are under contract for sale,
contracts for the sale of homes, land (improved or unimproved), manufacturing plants,
warehouses or office buildings and fixtures and equipment located thereat, or thereon;




     (2) Liens on assets of a Person existing at the time such Person is acquired or merged
with or into or consolidated with the Issuer or any such Restricted Subsidiary (and not
created in anticipation or contemplation thereof);




     (3) Liens arising from conditional sales agreements or title retention agreements with
respect to property acquired by the Issuer or a Restricted Subsidiary; and




     (4) Liens securing Indebtedness of a Restricted Subsidiary owed to the Issuer or to a
Wholly Owned Restricted Subsidiary of the Issuer.



          Additionally, such permitted Secured Debt includes any amendment, restatement, supplement,
renewal, replacement, extension or refunding in whole or in part, of Secured Debt permitted at the
time of the original incurrence thereof.




          In addition, the Issuer and its Restricted Subsidiaries may create, incur, assume or guarantee
Secured Debt, without equally or ratably securing the Notes, if immediately thereafter the sum of
(1) the aggregate principal amount of all Secured Debt outstanding (excluding (i) Se
cured Debt permitted under clauses (1) through (4) above and (ii) any Secured Debt in relation
to which the Notes have been equally and ratably secured) and (2) all Attributable Indebtedness in
respect of Sale and Leaseback Transactions (excluding Attributable Indebtedness in respect of Sale
and Leaseback Transactions satisfying the conditions set forth in clauses (1), (2)



-34-









 






and (3) of
Section 4.07) as of the date of determination would not exceed 20% of Consolidated Net Tangible
Assets.




          The provisions described above with respect to limitations on Secured Debt are not applicable
to Non-Recourse Land Financing by virtue of the definition of Secured Debt, and will not restrict
or limit the Issuer’s or its Restricted Subsidiaries’ ability to create, incur, assume or guarantee
any unsecured Indebtedness, or of any Subsidiary which is not a Restricted Subsidiary to create,
incur, assume or guarantee any secured or unsecured Indebtedness.



SECTION 4.07. Restrictions on Sale and Leaseback Transactions.




          The Issuer shall not, and shall not permit any Restricted Subsidiary to, enter into any Sale
and Leaseback Transaction, unless:





     (1) notice is promptly given to the Trustee of the Sale and Leaseback Transaction;




     (2) fair value is received by the Issuer or the relevant Restricted Subsidiary for the
property sold (as determined in good faith pursuant to a resolution of the Board of
Directors of the Issuer delivered to the Trustee); and




     (3) the Issuer or such Restricted Subsidiary, within 365 days after the completion of
the Sale and Leaseback Transaction, applies an amount equal to the net proceeds therefrom
either:




     (a) to the redemption, repayment or retirement of Notes of any series under
this Indenture (including the cancellation by the Trustee of any Notes of any series
delivered by the Issuer to the Trustee) or Senior Indebtedness of the Issuer, or




     (b) to the purchase by the Issuer or any Restricted Subsidiary of the Issuer of
property substantially similar to the property sold or transferred.



          In addition, the Issuer and its Restricted Subsidiaries may enter into a Sale and Leaseback
Transaction if immediately thereafter the sum of (1) the aggregate principal amount of all Secured
Debt outstanding (excluding Secured Debt permitted under clauses (1) through (4) of Section 4.06 or
Secured Debt in relation to which the Notes have been equally and ratably secured) and (2) all
Attributable Indebtedness in respect of Sale and Leaseback Transactions (excluding Attributable
Indebtedness in respect of Sale and Leaseback Transactions satisfying the
conditions set forth in clauses (1), (2) and (3) of this Section 4.07) as of the date of
determination would not exceed 20% of Consolidated Net Tangible Assets.



-35-









 






SECTION 4.08. Additional Note Guarantees.




          If, after the Issue Date, the Issuer or any Restricted Subsidiary shall acquire or create
another Restricted Subsidiary, then the Issuer shall cause such Subsidiary to:





     (1) execute and deliver to the Trustee (a) a supplemental indenture in form and
substance satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall
unconditionally guarantee all of the Issuer’s obligations under the Notes and this Indenture
and (b) a notation of guarantee in respect of its Note Guarantee; and




     (2) deliver to the Trustee one or more Opinions of Counsel that such supplemental
indenture




     (a) has been duly authorized, executed and delivered by such Restricted
Subsidiary and




     (b) constitutes a valid, legally binding and enforceable obligation of such
Restricted Subsidiary in accordance with its terms.


SECTION 4.09. Maintenance of Properties; Insurance; Compliance with Law.




          (a) The Issuer shall, and shall cause each of its Restricted Subsidiaries to, at all times
cause all properties used or useful in the conduct of their business to be maintained and kept in
good condition, repair and working order (reasonable wear and tear excepted) and supplied with all
necessary equipment, and shall cause to be made all necessary repairs, renewals, replacements,
necessary betterments and necessary improvements thereto.




          (b) The Issuer shall maintain, and shall cause to be maintained for each of its Restricted
Subsidiaries, insurance covering such risks as are usually and customarily insured against by
corporations similarly situated in the markets where the Issuer and the Restricted Subsidiaries
conduct homebuilding operations, in such amounts as shall be customary for corporations similarly
situated and with such deductibles and by such methods as shall be customary and reasonably
consistent with past practice.




          (c) The Issuer shall, and shall cause each of its Subsidiaries to, comply with all statutes,
laws, ordinances or government rules and regulations to which they are subject, non-compliance with
which would materially adversely affect the business, earnings, properties, assets or financial
condition of the Issuer and their Subsidiaries taken as a whole.



SECTION 4.10. Payments for Consent.




          The Issuer shall not, and shall not cause or permit any of its Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or



-36-









 






otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Indenture or the Notes unless such consideration is
offered to be paid or agreed to be paid to all Holders which so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent, waiver or agreement.




SECTION 4.11. Legal Existence.




          Subject to Article Five, the Issuer shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) its legal existence, and the corporate, partnership
or other existence of each Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of each Restricted Subsidiary and the
rights (charter and statutory), licenses and franchises of the Issuer and its Restricted
Subsidiaries; provided that the Issuer shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of its Restricted
Subsidiaries if the Board of Directors of the Issuer shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Issuer and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to
the Holders.




SECTION 4.12. Change of Control Offer.




          Upon the occurrence of a Change of Control Triggering Event, the Issuer shall be obligated to
make an Offer to Purchase (the “Change of Control Offer”), and shall purchase, on a
Business Day (the “Change of Control Payment Date”) not more than 60 nor less than 30 days
following the occurrence of the Change of Control, all of the then outstanding Notes at a purchase
price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the Change of Control Payment Date. The Change of Control Offer shall remain open for
at least 20 Business Days and until the close of business on the Change of Control Payment Date.




          Within 30 days following the date upon which a Change of Control Triggering Event occurs (the
“Change of Control Date”), the Issuer shall send, by first class mail, a notice to each
Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control
Offer. The notice to the Holders shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Change of Control Offer.




          Any amounts remaining after the purchase of Notes pursuant to a Change of Control Offer shall
be returned by the Trustee to the Issuer.




          The Issuer’s obligation to make a Change of Control Offer will be satisfied if a third party
makes the Change of Control Offer in the manner and at the times and otherwise in compliance with
the requirements applicable to a Change of Control Offer made by the Issuer and purchases all Notes
properly tendered and not withdrawn under the Change of Control Offer.




-37-









 








          The Issuer shall comply with applicable tender rules, including the requirements of Rule 14e-1
under the Exchange Act and any other applicable laws and regulations in connection with the
purchase of Notes pursuant to a Change of Control Offer. To the extent the provisions of any
securities laws or regulations conflict with the provisions under this Section 4.12, the Issuer
shall comply with the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.12 by virtue thereof.




SECTION 4.13. Liquidated Damages Notice..




          In the event that the Issuer is required to pay Liquidated Damages to holders of Notes
pursuant to the Registration Rights Agreement, the Issuer will provide written notice
(“Liquidated Damages Notice”) to the Trustee of its obligation to pay Liquidated Damages no
later than five days prior to the proposed payment date for the Liquidated Damages, and the
Liquidated Damages Notice shall set forth the amount of Liquidated Damages to be paid by the Issuer
on such payment date. The Trustee shall not at any time be under any duty or responsibility to any
Holder to determine the Liquidated Damages, or with respect to the nature, extent, or calculation
of the amount of Liquidated Damages owed, or with respect to the method employed in such
calculation of the Liquidated Damages.




ARTICLE FIVE




SUCCESSOR CORPORATION


SECTION 5.01. Limitations on Mergers, Consolidations, Etc.




          The Issuer shall not, directly or indirectly, in a single transaction or a series of related
transactions, (a) consolidate or merge with or into (other than a merger that satisfies the
requirements of clause (1) below with a Wholly Owned Restricted Subsidiary solely for the purpose
of changing the Issuer’s jurisdiction of incorporation to another State of the United States), or
sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the
assets of the Issuer or the Issuer and its Restricted Subsidiaries (taken as a whole) or (b) adopt
a Plan of Liquidation unless, in either case:





     (1) either:




     (a) the Issuer will be the surviving or continuing Person; or




     (b) the Person formed by or surviving such consolidation or merger or to which
such sale, lease, conveyance or other disposition shall be made (or, in the case of
a Plan of Liquidation, any Person to which assets are transferred) (collectively,
the “Successor”) is a corporation or limited liability company organized



-38-









 






and
existing under the laws of any State of the United States of America or the District
of Columbia, and the Successor expressly assumes, by supplemental indenture in form
and substance satisfactory to the Trustee, all of the obligations of the Issuer
under the Notes, this Indenture and the Registration Rights Agreement;
provided that at any time the Successor is a limited liability company,
there shall be a co-issuer of the Notes that is a corporation; and




     (2) immediately after giving effect to such transaction and the assumption of the
obligations as set forth in clause (1)(b) above and the incurrence of any Indebtedness to be
incurred in connection therewith, no Default shall have occurred and be continuing.



          Except as provided under Section 10.04, no Guarantor may consolidate with or merge with or
into another Person, whether or not affiliated with such Guarantor, unless:





     (1) either:




     (a) such Guarantor will be the surviving or continuing Person; or




     (b) the Person formed by or surviving any such consolidation or merger assumes,
by supplemental indenture in form and substance satisfactory to the Trustee, all of
the obligations of such Guarantor under the Note Guarantee of such Guarantor, this
Indenture and the Registration Rights Agreement; and




     (2) immediately after giving effect to such transaction, no Default shall have occurred
and be continuing.



          For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a
single transaction or series of transactions) of all or substantially all of the assets of one or
more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of
the assets of the Issuer, will be deemed to be the transfer of all or substantially all of the
assets of the Issuer.




          Upon any consolidation, combination or merger of the Issuer or a Guarantor, or any transfer of
all or substantially all of the assets of the Issuer in accordance with the foregoing, in which the
Issuer or such Guarantor is not the continuing obligor under the Notes or its Note Guarantee, the
surviving entity formed by such consolidation or into which the Issuer or such Guarantor is merged
or to which the conveyance, lease or transfer is made will succeed to, and be substituted for, and
may exercise every right and power of, the Issuer or such Guarantor under this Indenture, the Notes
and the Note Guarantees with the same effect as if such surviving entity
had been named therein as the Issuer or such Guarantor and, except in the case of a
conveyance, transfer or lease, the Issuer or such Guarantor, as the case may be, will be released
from the obligation to pay the principal of and interest on the Notes or in respect of its Note
Guarantee, as the



-39-









 






case may be, and all of the Issuer’s or such Guarantor’s other obligations and
covenants under the Notes, this Indenture and its Note Guarantee, if applicable.




          Notwithstanding the foregoing, any Restricted Subsidiary may merge into the Issuer or another
Restricted Subsidiary.




SECTION 5.02. Successor Person Substituted.




          Upon any consolidation or merger, or any transfer of all or substantially all of the assets of
the Issuer or any Restricted Subsidiary in accordance with Section 5.01, the successor corporation
formed by such consolidation or into which the Issuer is merged or to which such transfer is made
shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or
such Restricted Subsidiary under this Indenture with the same effect as if such successor
corporation had been named as the Issuer or such Restricted Subsidiary herein, and thereafter the
predecessor corporation shall be relieved of all obligations and covenants under this Indenture and
the Notes.




ARTICLE SIX




DEFAULTS AND REMEDIES



SECTION 6.01. Events of Default.




          Each of the following is an “Event of Default”:





     (1) failure by the Issuer to pay interest on any of the Notes when it becomes due and
payable and the continuance of any such failure for 30 days;




     (2) failure by the Issuer to pay the principal on any of the Notes when it becomes due
and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration
or otherwise;




     (3) failure by the Issuer to comply with Section 5.01;




     (4) failure by the Issuer to comply with any other agreement or covenant in this
Indenture and continuance of this failure for 30 days after notice of the failure has been
given to the Issuer by the Trustee or by the Holders of at least 25% of the aggregate
principal amount of the Notes then outstanding;




     (5) default under any mortgage, indenture or other instrument or agreement under which
there may be issued or by which there may be secured or evidenced Indebtedness (other than
Non-Recourse Land Financing) of the Issuer or any Restricted Sub-



-40-









 






sidiary, whether such
Indebtedness now exists or is incurred after the Issue Date, which default:




     (a) is caused by a failure to pay when due principal on such Indebtedness
within the applicable express grace period,




     (b) results in the acceleration of such Indebtedness prior to its express final
maturity or




     (c) results in the commencement of judicial proceedings to foreclose upon, or
to exercise remedies under applicable law or applicable security documents to take
ownership of, the assets securing such Indebtedness, and




in each case, the principal amount of such Indebtedness, together with any other
Indebtedness with respect to which an event described in clause (a), (b) or (c) has occurred
and is continuing, aggregates $10.0 million or more;




     (6) one or more judgments or orders that exceed $10.0 million in the aggregate (net of
amounts covered by insurance or bonded) for the payment of money have been entered by a
court or courts of competent jurisdiction against the Issuer or any Restricted Subsidiary
and such judgment or judgments have not been satisfied, stayed, annulled or rescinded within
60 days of being entered;




     (7) the Issuer or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:




     (a) commences a voluntary case,




     (b) consents to the entry of an order for relief against it in an involuntary
case,




     (c) consents to the appointment of a Custodian of it or for all or
substantially all of its assets, or




     (d) makes a general assignment for the benefit of its creditors;




     (8) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:




     (a) is for relief against the Issuer or any Significant Subsidiary as debtor in
an involuntary case,



-41-









 






     (b) appoints a Custodian of the Issuer or any Significant Subsidiary or a
Custodian for all or substantially all of the assets of the Issuer or any
Significant Subsidiary, or




     (c) orders the liquidation of the Issuer or any Significant Subsidiary,




and the order or decree remains unstayed and in effect for 60 days; or




     (9) any Note Guarantee of any Significant Subsidiary ceases to be in full force and
effect (other than in accordance with the terms of such Note Guarantee and this Indenture)
or is declared null and void and unenforceable or found to be invalid or any Guarantor
denies its liability under its Note Guarantee (other than by reason of release of a
Guarantor from its Note Guarantee in accordance with the terms of this Indenture and the
Note Guarantee).



          Subject to Sections 7.01 and 7.02, the Trustee shall not be charged with knowledge of any
Default, Event of Default or Change of Control or the requirement for payment of Liquidated Damages
unless written notice thereof shall have been given to a Responsible Officer at the Corporate Trust
Office of the Trustee by the Issuer or any other Person.




SECTION 6.02. Acceleration.




          If an Event of Default (other than an Event of Default specified in clause (7) or (8) of
Section 6.01 with respect to the Issuer), shall have occurred and be continuing, the Trustee, by
written notice to the Issuer, or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding by written notice to the Issuer and the Trustee, may declare all amounts
owing under the Notes to be due and payable immediately. Upon such declaration of acceleration,
the aggregate principal of and accrued and unpaid interest on the outstanding Notes shall
immediately become due and payable; provided, however, that after such acceleration, but before a
judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount
of such outstanding Notes may rescind and annul such acceleration if all Events of Default, other
than the nonpayment of accelerated principal and interest, have been cured or waived as provided in
this Indenture. If an Event of Default specified in clause (7) or (8) of Section 6.01 with respect
to the Issuer occurs, all outstanding Notes shall become due and payable without any further action
or notice.




SECTION 6.03. Other Remedies.




          If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and
interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture
and may take any necessary action requested of it as Trustee to settle, compromise, adjust or
otherwise conclude any proceedings to which it is a party.







-42-









 








          The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive
of any other remedy. All available remedies are cumulative. Any costs associated with actions
taken by the Trustee under this Section 6.03 shall be reimbursed to the Trustee by the Issuer.




SECTION 6.04. Waiver of Past Defaults and Events of Default.




          Subject to Sections 6.02, 6.08 and 8.02, the Holders of a majority in aggregate principal
amount of the Notes then outstanding have the right to waive any existing Default or compliance
with any provision of this Indenture or the Notes. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereto.




SECTION 6.05. Control by Majority.




          The Holders of a majority in aggregate principal amount of the Notes then outstanding may
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 by this Indenture. The Trustee,
however, may refuse to follow any direction that conflicts with law or this Indenture or that the
Trustee determines may be unduly prejudicial to the rights of another Holder not taking part in
such direction, and the Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, determines that the action so directed may not lawfully be taken
or if the Trustee in good faith shall, by a Responsible Officer, determine that the proceedings so
directed may involve it in personal liability; provided that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such direction.




SECTION 6.06. Limitation on Suits.




          No Holder will have any right to institute any proceeding with respect to this Indenture or
for any remedy thereunder, unless the Trustee:





     (1) has failed to act for a period of 60 days after receiving written notice of a
continuing Event of Default by such Holder and a request to act by Holders of at least 25%
in aggregate principal amount of Notes outstanding;




     (2) has been offered indemnity satisfactory to it in its reasonable judgment; and



-43-









 






     (3) has not received from the Holders of a majority in aggregate principal amount of
the outstanding Notes a direction inconsistent with such request.


However, such limitations do not apply to a suit instituted by a Holder of any Note for enforcement
of payment of the principal of or interest on such Note on or after the due date therefor (after
giving effect to the grace period specified in clause (1) of Section 6.01).




SECTION 6.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.




          No director, Officer, employee, incorporator or stockholder of the Issuer will have any
liability for any obligations of the Issuer under the Notes or this Indenture or of any Guarantor
under its Note Guarantee or this Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for issuance of the Notes and
the Note Guarantees.




SECTION 6.08. Rights of Holders To Receive Payment.




          Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of, or premium, if any, and interest of the Note (including Liquidated
Damages) on or after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.




SECTION 6.09. Collection Suit by Trustee.




          If an Event of Default in payment of principal, premium or interest specified in Section
6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Issuer or any Guarantor (or any other obligor on the Notes)
for the whole amount of unpaid principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest is lawful, interest
on overdue installments of interest, in each case at the rate set forth in the Notes, and such
further amounts as shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel.




SECTION 6.10. Trustee May File Proofs of Claim.




          The Trustee may file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07) and the Holders allowed in






-44-









 







any judicial proceedings relative to the Issuer or any Guarantor (or any other obligor upon
the Notes), its creditors or its property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on any such claims and to distribute
the same after deduction of its charges and expenses to the extent that any such charges and
expenses are not paid out of the estate in any such proceedings and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and
in the event that the Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
this Indenture.




          Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceedings.




SECTION 6.11. Priorities.




          If the Trustee collects any money pursuant to this Article Six, it shall pay out the money in
the following order:





     FIRST: to the Trustee for amounts due under Section 7.07;




     SECOND: to Holders for amounts due and unpaid on the Notes for principal, premium, if
any, and interest (including Liquidated Damages, if any) as to each, ratably, without
preference or priority of any kind, according to the amounts due and payable on the Notes;
and




     THIRD: to the Issuer or, to the extent the Trustee collects any amount from any
Guarantor, to such Guarantor.



          The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.11.




SECTION 6.12. Undertaking for Costs.




          In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’
fees and expenses, against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.12 does not apply






-45-









 







to a suit by the Trustee, a suit by a Holder pursuant to Section 6.08 or a suit by Holders of
more than 10% in principal amount of the Notes then outstanding.




SECTION 6.13. Restoration of Rights and Remedies.




          If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Issuer, the Guarantors, the Trustee and the Holders shall be
restored severally and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.




ARTICLE SEVEN




TRUSTEE



SECTION 7.01. Duties of Trustee.




          (a) If an Event of Default actually known to a Responsible Officer of the Trustee has occurred
and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a prudent person would
exercise or use under the same circumstances in the conduct of his or her own affairs.




          (b) Except during the continuance of an Event of Default:





     (1) The Trustee need perform only those duties that are specifically set forth in this
Indenture and no others.




     (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture but, in the case of any such 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 on their face to the
requirements of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).



          (c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:







-46-









 









     (1) This paragraph does not limit the effect of paragraph (b) of this Section 7.01.




     (2) The Trustee shall not be liable for any error of judgment made in good faith,
unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.




     (3) The Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to the terms
hereof.




     (4) No provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its rights,
powers or duties if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity satisfactory to it against such risk or liability is not
reasonably assured to it.



          (d) Whether or not therein expressly so provided, paragraphs (a), (b), (c) and (e) of this
Section 7.01 shall govern every provision of this Indenture that in any way relates to the Trustee.




          (e) The Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it in its sole discretion against any loss, liability, expense
or fee.




          (f) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Issuer or any Guarantor. Money held in trust by the Trustee
need not be segregated from other funds except to the extent required by the law.




SECTION 7.02. Rights of Trustee.




          Subject to Section 7.01:





     (1) The Trustee may conclusively rely on any document reasonably believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.




     (2) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, or both, which shall conform to the provisions of
Section 12.05. The Trustee shall be protected and shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or opinion.




     (3) The Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed by it with due care.



-47-









 






     (4) The Trustee shall not be liable for any action it takes or omits to take in good
faith which it reasonably believes to be authorized or within its rights or powers;
provided that the Trustee’s conduct does not constitute gross negligence or willful
misconduct.




     (5) The Trustee may consult with counsel of its selection, and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.




     (6) In no event shall the Trustee be responsible or liable for special, indirect,
punitive or consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action.




     (7) The Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the Securities and this
Indenture.




     (8) 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 each agent, custodian
and other Person employed to act hereunder.




     (9) The Trustee shall not be required to give any bond or surety in respect of the
performance of its powers and duties hereunder.



          The provisions of this Section 7.02 shall survive satisfaction and discharge or the
termination, for any reason, of this Indenture and the resignation and/or removal of the Trustee.




SECTION 7.03. Individual Rights of Trustee.




          The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may make loans to, accept deposits from, perform services for or otherwise deal with the either
of the Issuer or any Guarantor, or any Affiliates thereof, with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. The Trustee, however, shall be
subject to Sections 7.10 and 7.11.







-48-









 








SECTION 7.04. Trustee’s Disclaimer.




          The Trustee shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes or any Guarantee, it shall not be accountable for the
Issuer’s or any Guarantor’s use of the proceeds from the sale of Notes or any money paid to the
Issuer or any Guarantor pursuant to the terms of this Indenture and it shall not be responsible for
any statement in the Notes, Guarantee or this Indenture other than its certificate of
authentication.




SECTION 7.05. Notice of Defaults.




          The Trustee shall, within 30 days after the occurrence of any Default with respect to the
Notes, give the Holders notice of all uncured Defaults thereunder known to it; provided, however,
that, except in the case of an Event of Default in payment with respect to the Notes or a Default
in complying with Section 5.01, the Trustee shall be protected in withholding such notice if and so
long as it in good faith determines that the withholding of such notice is in the interest of the
Holders.




SECTION 7.06. Reports by Trustee to Holders.




          If required by TIA § 313(a), within 60 days after January 1 of any year, commencing January 1,
2011 the Trustee shall mail to each Holder a brief report dated as of such January 1 that complies
with TIA § 313(a). The Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA § 313(c) and TIA § 313(d).




          Reports pursuant to this Section 7.06 shall be transmitted by mail:





     (1) to all Holders of Notes, as the names and addresses of such Holders appear on the
Registrar’s books; and




     (2) to such Holders of Notes as have, within the two years preceding such transmission,
filed their names and addresses with the Trustee for that purpose.



          A copy of each report at the time of its mailing to Holders shall be filed with the SEC and
each stock exchange on which the Notes are listed. The Issuer shall promptly notify the Trustee in
writing when the Notes are listed on any stock exchange and any delisting thereof.




SECTION 7.07. Compensation and Indemnity.




          The Issuer and the Guarantors shall pay to the Trustee and Agents from time to time such
compensation as shall be agreed in writing between the Trustee and the Issuer for its services
hereunder (which compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). The Issuer and the Guarantors shall reimburse






-49-









 







the Trustee and Agents upon request for all reasonable disbursements, expenses and advances
incurred or made by it in connection with its duties under this Indenture, including the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.




          The Issuer and the Guarantors shall indemnify each of the Trustee and any predecessor Trustee
for, and hold each of them harmless against, any and all loss, damage, claim, liability or expense,
including without limitation taxes (other than taxes based on the income of the Trustee or such
Agent) and reasonable attorneys’ fees and expenses incurred by each of them in connection with the
acceptance or performance of its duties under this Indenture including the reasonable costs and
expenses of defending itself against any claim (whether asserted by the Company, the Guarantor, the
Holders or any other Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder (including, without limitation, settlement costs). The Trustee or
Agent shall notify the Issuer and the Guarantors in writing promptly of any claim asserted against
the Trustee or Agent for which it may seek indemnity. However, the failure by the Trustee or Agent
to so notify the Issuer and the Guarantors shall not relieve the Issuer and Guarantors of their
obligations hereunder except to the extent the Issuer and the Guarantors are prejudiced thereby.




          Notwithstanding the foregoing, the Issuer and the Guarantors need not reimburse the Trustee
for any expense or indemnify it against any loss or liability incurred by the Trustee through its
negligence or willful misconduct. To secure the payment obligations of the Issuer and the
Guarantors in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or
property held or collected by the Trustee except such money or property held in trust to pay
principal of and interest on particular Notes. The obligations of the Issuer and the Guarantors
under this Section 7.07 to compensate and indemnify the Trustee, Agents and each predecessor
Trustee and to pay or reimburse the Trustee, Agents and each predecessor Trustee for expenses,
disbursements and advances shall be joint and several liabilities of the Issuer and each of the
Guarantors and shall survive the resignation or removal of the Trustee and the satisfaction,
discharge or other termination of this Indenture, including any termination or rejection hereof
under any Bankruptcy Law.




          When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(7) or (8) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.




          For purposes of this Section 7.07, the term “Trustee” shall include any trustee appointed
pursuant to this Article Seven.




SECTION 7.08. Replacement of Trustee.




          The Trustee may resign by so notifying the Issuer and the Guarantors in writing at any time.
The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by
notifying the Issuer and the removed Trustee in writing and may appoint a succes-






-50-









 







sor Trustee with the Issuer’s written consent, which consent shall not be unreasonably
withheld. The Issuer may remove the Trustee at its election if:





     (1) the Trustee fails to comply with Section 7.10;




     (2) the Trustee is adjudged a bankrupt or an insolvent;




     (3) a receiver or other public officer takes charge of the Trustee or its property; or




     (4) the Trustee otherwise becomes incapable of acting.



          If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Issuer shall promptly appoint a successor Trustee.




          If a successor Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Issuer or the Holders of a majority in principal amount of
the outstanding Notes, at the expense of the Issuer, may petition any court of competent
jurisdiction for the appointment of a successor Trustee.




          If the Trustee fails to comply with Section 7.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.




          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuer. Immediately following such delivery, the retiring Trustee shall,
subject to its rights under Section 7.07, transfer all property held by it as Trustee to the
successor Trustee, the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each Holder.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer obligations
under Section 7.07 shall continue for the benefit of the retiring Trustee.




SECTION 7.09. Successor Trustee by Consolidation, Merger, etc.




          If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets to, another entity, subject to Section 7.10, the successor entity
without any further act shall be the successor Trustee; provided such entity shall be
otherwise qualified and eligible under this Article Seven.




SECTION 7.10. Eligibility; Disqualification.




          This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1)
and (2) in every respect. The Trustee (together with its corporate parent) shall have a






-51-









 







combined capital and surplus of at least $50,000,000 as set forth in the most recent
applicable published annual report of condition. The Trustee shall comply with TIA § 310(b),
including the provision in § 310(b)(1).




SECTION 7.11. Preferential Collection of Claims Against Issuer.




          The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA
§ 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the
extent indicated therein.




SECTION 7.12. Paying Agents.




          The Issuer shall cause each Paying Agent other than the Trustee to execute and deliver to it
and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 7.12:





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




     (B) that it will at any time during the continuance of any Event of Default, upon
written request from the Trustee, deliver to the Trustee all sums so held in trust by it
together with a full accounting thereof; and




     (C) that it will give the Trustee written notice within three (3) Business Days of any
failure of the Issuer (or by any obligor on the Notes) in the payment of any installment of
the principal of, premium, if any, or interest on, the Notes when the same shall be due and
payable.



ARTICLE EIGHT




AMENDMENTS, SUPPLEMENTS AND WAIVERS



SECTION 8.01. Without Consent of Holders.




          The Issuer and the Trustee may amend, waive or supplement this Indenture, the Note Guarantees
or the Notes without consent of any Holder:





     (1) to provide for the assumption of the Issuer’s obligations to the Holders pursuant
to Section 5.01;



-52-









 






     (2) to provide for uncertificated Notes in addition to or in place of certificated
Notes;




     (3) to cure any ambiguity, defect or inconsistency;




     (4) to release any Guarantor from any of its obligations under its Notes Guarantee or
this Indenture (to the extent permitted by this Indenture);




     (5) to maintain the qualification of this Indenture under the TIA; or




     (6) to make any other change that does not materially adversely affect the rights of
any Holder hereunder.



          The Trustee is hereby authorized to join with the Issuer and the Guarantors in the execution
of any supplemental indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to enter into any such supplemental indenture which adversely affects its
own rights, duties or immunities under this Indenture.




SECTION 8.02. With Consent of Holders.




          This Indenture or the Notes may be amended with the consent (which may include consents
obtained in connection with a tender offer or exchange offer for Notes) of the Holders of at least
a majority in aggregate principal amount of the Notes then outstanding, and any existing Default
under, or compliance with any provision of, this Indenture may be waived (other than any continuing
Default in the payment of the principal or interest on the Notes) with the consent (which may
include consents obtained in connection with a tender offer or exchange offer for Notes) of the
Holders of a majority in aggregate principal amount of the Notes then outstanding; provided that:





     (a) no such amendment may, without the consent of the Holders of two-thirds in
aggregate principal amount of Notes then outstanding, amend the obligation of the Issuer
under Section 4.12 or the related definitions that could adversely affect the rights of any
Holder; and




     (b) without the consent of each Holder affected, the Issuer and the Trustee may not:




     (1) change the maturity of any Note;




     (2) reduce the amount, extend the due date or otherwise affect the terms of any
scheduled payment of interest on or principal of the Notes;



-53-









 






     (3) reduce any premium payable upon optional redemption of the Notes, change
the date on which any Notes are subject to redemption or otherwise alter the
provisions with respect to the redemption of the Notes;




     (4) make any Note payable in money or currency other than that stated in the
Notes;




     (5) modify or change any provision of this Indenture or the related definitions
to affect the ranking of the Notes or any Note Guarantee in a manner that adversely
affects the Holders;




     (6) reduce the percentage of Holders necessary to consent to an amendment or
waiver to this Indenture or the Notes;




     (7) impair the rights of Holders to receive payments of principal of or
interest on the Notes;




     (8) release any Guarantor from any of its obligations under its Note Guarantee
or this Indenture, except as permitted by this Indenture; or




     (9) make any change in this Section 8.02.



          After an amendment, supplement or waiver under this Section 8.02 becomes effective, the Issuer
shall promptly mail to the Holders a notice briefly describing the amendment, supplement or waiver.




          Upon the written request of the Issuer, accompanied by a Board Resolution authorizing the
execution of any such supplemental indenture, and upon the receipt by the Trustee of evidence
reasonably satisfactory to the Trustee of the consent of the Holders as aforesaid and upon receipt
by the Trustee of the documents described in Section 8.06, the Trustee shall join with the Issuer
and the Guarantors in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee’s own rights, duties or immunities under this Indenture, in which
case the Trustee may, but shall not be obligated to, enter into such supplemental indenture.




          It shall not be necessary for the consent of the Holders under this Section to approve the
particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.




SECTION 8.03. Compliance with Trust Indenture Act.




          Every amendment or supplement to this Indenture or the Notes shall comply with the TIA as then
in effect.







-54-









 








SECTION 8.04. Revocation and Effect of Consents.




          Until an amendment, supplement, waiver or other action becomes effective, a consent to it by a
Holder of a Note is a continuing consent conclusive and binding upon such Holder and every
subsequent Holder of the same Note or portion thereof, and of any Note issued upon the transfer
thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on
any such Note. Any such Holder or subsequent Holder, however, may revoke the consent as to his
Note or portion of a Note, if the Trustee receives the written notice of revocation before the date
the amendment, supplement, waiver or other action becomes effective.




          The Issuer may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record
date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at
such record date (or their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether
or not such Persons continue to be Holders after such record date. No such consent shall be valid
or effective for more than 90 days after such record date unless the consent of the requisite
number of Holders has been obtained.




          After an amendment, supplement, waiver or other action becomes effective, it shall bind every
Holder, unless it makes a change described in any of clauses (1) through (9) of Section 8.02. In
that case the amendment, supplement, waiver or other action shall bind each Holder of a Note who
has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder’s Note.





	 	 	SECTION 8.05. Notation on or Exchange of Notes.





          If an amendment, supplement, or waiver changes the terms of a Note, the Trustee (in accordance
with the specific written direction of the Issuer) shall request the Holder of the Note (in
accordance with the specific written direction of the Issuer) to deliver it to the Trustee. In
such case, the Trustee shall place an appropriate notation on the Note about the changed terms and
return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in
exchange for the Note shall issue, the Guarantors shall endorse, and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such amendment, supplement or waiver.





	 	 	SECTION 8.06. Trustee To Sign Amendments, etc.





          The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article
Eight if the amendment, supplement or waiver does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In
signing or refusing to sign such amendment, supplement or waiver the Trustee shall receive and,
subject to Section 7.01, shall be fully protected in conclusively relying upon an Officers’






-55-









 







Certificate and an Opinion of Counsel stating, in addition to the matters required by Section
12.04, that such amendment, supplement or waiver is authorized or permitted by this Indenture and
is a legal, valid and binding obligation of the Issuer and Guarantors, enforceable against the
Issuer and Guarantors in accordance with its terms (subject to customary exceptions).




ARTICLE NINE




DISCHARGE OF INDENTURE; DEFEASANCE



SECTION 9.01. Discharge of Indenture.




          The Issuer may terminate its obligations and the obligations of the Guarantors under the
Notes, the Guarantees and this Indenture, except the obligations referred to in the last paragraph
of this Section 9.01, if





     (1) all the Notes that have been authenticated and delivered (except lost, stolen or
destroyed Notes which have been replaced or paid and Notes for whose payment money has been
deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from this trust) have been delivered to the Trustee for
cancellation, or




     (2) (a) all Notes not delivered to the Trustee for cancellation otherwise have become
due and payable or have been called for redemption pursuant to paragraph 6 of the Notes, and
the Issuer has irrevocably deposited or caused to be deposited with the Trustee trust funds
in trust in an amount of money sufficient to pay and discharge the entire Indebtedness
(including all principal and accrued interest) on the Notes not theretofore delivered to the
Trustee for cancellation,




     (b) the Issuer has paid all sums payable by it under this Indenture,




     (c) the Issuer has delivered irrevocable instructions to the Trustee to apply the
deposited money toward the payment of the Notes at maturity or on the Redemption Date, as
the case may be, and




     (d) the Trustee, for the benefit of the Holders, has a valid, perfected, exclusive
security interest in this trust.



          In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel (as to
legal matters) stating that all conditions precedent to satisfaction and discharge have been
complied with.







-56-









 








          After such delivery, the Trustee shall acknowledge in writing the discharge of the Issuer’s
and the Guarantors’ obligations under the Notes, the Guarantees and this Indenture except for those
surviving obligations specified below.




          Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Issuer in Sections 7.07, 9.05 and 9.06 shall survive.




SECTION 9.02. Legal Defeasance.




          The Issuer may at its option, by Board Resolution of the Board of Directors of the Issuer, be
discharged from its obligations with respect to the Notes and the Guarantors discharged from their
obligations under the Guarantees on the date the conditions set forth in Section 9.04 are satisfied
(hereinafter, “Legal Defeasance”). For this purpose, such Legal Defeasance means that the
Issuer shall be deemed to have paid and discharged the entire indebtedness represented by the Notes
and to have satisfied all its other obligations under such Notes and this Indenture insofar as such
Notes are concerned (and the Trustee, at the expense of the Issuer, shall, subject to Section 9.06,
execute instruments in form and substance reasonably satisfactory to the Trustee and Issuer
acknowledging the same), except for the following which shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of outstanding Notes to receive solely from the
trust funds described in Section 9.04 and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Notes when such payments are
due, (B) the Issuer’s obligations with respect to such Notes under Sections 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 2.11 and 4.11, (C) the rights, powers, trusts, duties, and immunities of the Trustee
hereunder (including claims of, or payments to, the Trustee under or pursuant to Section 7.07) and
(D) this Article Nine. Subject to compliance with this Article Nine, the Issuer may exercise its
option under this Section 9.02 with respect to the Notes notwithstanding the prior exercise of its
option under Section 9.03 with respect to the Notes.




SECTION 9.03. Covenant Defeasance.




          At the option of the Issuer, pursuant to a Board Resolution of the Board of Directors of the
Issuer, (x) the Issuer and the Guarantors shall be released from their respective obligations under
Sections 4.02 (except for obligations mandated by the TIA), 4.05 through 4.09, inclusive, and 4.12
and (y) Sections 6.01(5) and (6) shall no longer apply with respect to the outstanding Notes on and
after the date the conditions set forth in Section 9.04 are satisfied (hereinafter, “Covenant
Defeasance”). For this purpose, such Covenant Defeasance means that the Issuer and the
Guarantors may omit to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section or portion thereof, whether directly or
indirectly by reason of any reference elsewhere herein to any such specified Section or portion
thereof or by reason of any reference in any such specified Section or portion thereof to any other
provision herein or in any other document, but the remainder of this Indenture and the Notes shall
be unaffected thereby.







-57-









 








SECTION 9.04. Conditions to Defeasance or Covenant Defeasance.




          The following shall be the conditions to application of Section 9.02 or Section 9.03 to the
outstanding Notes:





     (1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, U.S. legal tender, U.S. Government Obligations or a combination thereof, in
such amounts as will be sufficient (without reinvestment) in the opinion of a nationally
recognized firm of independent public accountants selected by the Issuer, to pay the
principal of and interest on the Notes on the stated date for payment or on the Redemption
Date of the principal or installment of principal of or interest on the Notes, and the
Trustee must have a valid, perfected, exclusive security interest in such trust,




     (2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming
that:




     (a) the Issuer has received from, or there has been published by the Internal
Revenue Service, a ruling, or




     (b) since the date hereof, there has been a change in the applicable U.S.
federal income tax law,




in either case to the effect that, and based thereon this Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of the Legal Defeasance and will be subject to U.S. federal income tax
on the same amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred,




     (3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee
an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would have been the
case if the Covenant Defeasance had not occurred,




     (4) no Default shall have occurred and be continuing on the date of such deposit (other
than a Default resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowing),




     (5) the Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under this Indenture or any other material agree-



-58-









 






ment or instrument to which the Issuer or any of its Subsidiaries is a party or by
which the Issuer or any of its Subsidiaries is bound,




     (6) the Issuer shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by it with the intent of preferring the Holders over any other
of its creditors or with the intent of defeating, hindering, delaying or defrauding any
other of its creditors or others, and




     (7) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that the conditions provided for in, in the case of the
Officers’ Certificate, clauses (1) through (6) and, in the case of the Opinion of Counsel,
clauses (1) (with respect to the validity and perfection of the security interest), (2)
and/or (3) and (5) of this paragraph have been complied with.



          If the funds deposited with the Trustee to effect Covenant Defeasance are insufficient to pay
the principal of and interest on the Notes when due, then the Issuer’s obligations and the
obligations of Guarantors under this Indenture will be revived and no such defeasance will be
deemed to have occurred.



SECTION 9.05.
Deposited Money and U.S. Government Obligations To Be Held in Trust;
Other Miscellaneous Provisions.




          All money and U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 9.04 in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent, to the Holders of such Notes, of all sums due
and to become due thereon in respect of principal, premium, if any, and accrued interest, but such
money need not be segregated from other funds except to the extent required by law.




          The Issuer and the Guarantors shall (on a joint and several basis) pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 9.04 or the principal, premium, if any, 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 Notes.




          Anything in this Article Nine to the contrary notwithstanding, the Trustee shall deliver or
pay to the Issuer from time to time any money or U.S. Government Obligations held by it as provided
in Section 9.04 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Trustee, are in excess of
the amount thereof which would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.







-59-









 








SECTION 9.06. Reinstatement.




          If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in
accordance with Section 9.01, 9.02 or 9.03 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuer’s and each Guarantor’s obligations under this Indenture,
the Notes and the Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Nine until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with Section 9.01; provided
that if the Issuer or the Guarantors have made any payment of principal of, premium, if any, or
accrued interest on any Notes because of the reinstatement of their obligations, the Issuer or the
Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.



SECTION 9.07. Moneys Held by Paying Agent.




          In connection with the satisfaction and discharge of this Indenture, all moneys then held by
any Paying Agent under the provisions of this Indenture shall, upon written demand of the Issuer,
be paid to the Trustee, or if sufficient moneys have been deposited pursuant to Section 9.04, to
the Issuer (or, if such moneys had been deposited by the Guarantors, to such Guarantors), and
thereupon such Paying Agent shall be released from all further liability with respect to such
moneys.




SECTION 9.08. Moneys Held by Trustee.




          Subject to applicable law, any moneys deposited with the Trustee or any Paying Agent or then
held by the Issuer or the Guarantors in trust for the payment of the principal of, or premium, if
any, or interest on any Note that are not applied but remain unclaimed by the Holder of such Note
for two years after the date upon which the principal of, or premium, if any, or interest on such
Note shall have respectively become due and payable shall be repaid to the Issuer (or, if
appropriate, the Guarantors), or if such moneys are then held by the Issuer or the Guarantors in
trust, such moneys shall be released from such trust; and the Holder of such Note entitled to
receive such payment shall thereafter, as an unsecured general creditor, look only to the Issuer
and the Guarantors for the payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, that the Trustee or any
such Paying Agent, before being required to make any such repayment, shall, at the expense of the
Issuer and the Guarantors, either mail to each Holder affected, at the address shown in the
register of the Notes maintained by the Registrar pursuant to Section 2.03, or cause to be
published once a week for two successive weeks, in a newspaper published in the English language,
customarily published each Business Day and of general circulation in the City of New York, New
York, a 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 mailing or publication, any unclaimed bal-






-60-









 







ance of such moneys then remaining will be repaid to the Issuer. After payment to the Issuer
or the Guarantors or the release of any money held in trust by the Issuer or any Guarantors, as the
case may be, Holders entitled to the money must look only to the Issuer and the Guarantors for
payment as general creditors unless applicable abandoned property law designates another Person.




ARTICLE TEN




GUARANTEE OF NOTES



SECTION 10.01. Guarantee.




          Subject to the provisions of this Article Ten, each Guarantor, by execution of this Indenture,
jointly and severally, unconditionally guarantees to each Holder (i) the due and punctual payment
of the principal of and interest on each Note, when and as the same shall become due and payable,
whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the
overdue principal of and interest on the Notes, to the extent lawful, and the due and punctual
payment of all other Obligations and due and punctual performance of all Obligations of the Issuer
to the Holders or the Trustee all in accordance with the terms of such Note, this Indenture and the
Registration Rights Agreement, and (ii) in the case of any extension of time of payment or renewal
of any Notes 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, at stated maturity, by
acceleration or otherwise. Each Guarantor, by execution of this Indenture, agrees that its
obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected
by, any invalidity, irregularity or unenforceability of any such Note or this Indenture, any
failure to enforce the provisions of any such Note, this Indenture or the Registration Rights
Agreement, any waiver, modification or indulgence granted to the Issuer with respect thereto by the
Holder of such Note, or any other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or such Guarantor.




          Each Guarantor hereby waives diligence, presentment, demand for payment, filing of claims with
a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first
against the Issuer, protest or notice with respect to any such Note or the Indebtedness evidenced
thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged as to
any such Note except by payment in full of the principal thereof and interest thereon. Each
Guarantor hereby agrees that, as between such Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of this 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 declaration of acceleration of such



-61-









 






Obligations as
provided in Article Six, such Obligations (whether or not due and
payable) shall forthwith become due and payable by each Guarantor for the purpose of this
Guarantee.



SECTION 10.02. Execution and Delivery of Guarantee.




          To further evidence the Guarantee set forth in Section 10.01, each Guarantor hereby agrees
that a notation of such Guarantee, substantially in the form included in Exhibit G hereto,
shall be endorsed on each Note authenticated and delivered by the Trustee and such Guarantee shall
be executed by either manual or facsimile signature of an Officer or an Officer of a general
partner, as the case may be, of each Guarantor. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular Note.




          Each of the Guarantors hereby agrees that its Guarantee set forth in Section 10.01 shall
remain in full force and effect notwithstanding any failure to endorse on each Note a notation of
such Guarantee.




          If an officer of a Guarantor whose signature is on this Indenture or a Guarantee no longer
holds that office at the time the Trustee authenticates the Note on which such Guarantee is
endorsed or at any time thereafter, such Guarantor’s Guarantee of such Note shall be valid
nevertheless.




          The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of any Guarantee set forth in this Indenture on behalf of the Guarantor.




SECTION 10.03. Limitation of Guarantee.




          The obligations of each Guarantor are limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations
under this Indenture, result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each
Guarantor that makes a payment or distribution under its Guarantee shall be entitled to a
contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of
each Guarantor.







-62-









 








SECTION 10.04. Release of Guarantor.




          A Guarantor shall be released from all of its obligations under its Guarantee if:





     (i) all of the assets of such Guarantor have been sold or otherwise disposed of in a
transaction in compliance with the terms of this Indenture (including Sections 4.12 and
5.01); or




     (ii) all of the Equity Interests held by the Issuer and the Subsidiaries of such
Guarantor have been sold or otherwise disposed of in a transaction in compliance with the
terms of this Indenture (including Sections 4.12 and 5.01);


and in each such case, the Issuer has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided for relating to such
transactions have been complied with and that such release is authorized and permitted hereunder.




          The Trustee shall execute any documents reasonably requested in writing by the Issuer or a
Guarantor in order to evidence the release of such Guarantor from its obligations under its
Guarantee endorsed on the Notes and under this Article Ten.




SECTION 10.05. Waiver of Subrogation.




          Each Guarantor hereby irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Issuer that arise from the existence, payment, performance or
enforcement of such Guarantor’s obligations under its Guarantee and this Indenture, including,
without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any
right to participate in any claim or remedy of any Holder of Notes against the Issuer, whether or
not such claim, remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Issuer, directly or
indirectly, in cash or other property or by set-off or in any other manner, payment or Note on
account of such claim or other rights. If any amount shall be paid to any Guarantor in violation
of the preceding sentence and the Notes shall not have been paid in full, such amount shall have
been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders, and shall forthwith be paid to the Trustee for the benefit of such Holders
to be credited and applied upon the Notes, whether matured or unmatured, in accordance with the
terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 10.05 is knowingly made in contemplation of such benefits.








-63-









 








ARTICLE ELEVEN




[INTENTIONALLY OMITTED]



ARTICLE TWELVE



MISCELLANEOUS



SECTION 12.01. Trust Indenture Act Controls.




          If any provision of this Indenture limits, qualifies or conflicts with another provision which
is required to be included in this Indenture by the TIA, the required provision shall control. If
any provision of this Indenture modifies any TIA provision that may be so modified, such TIA
provision shall be deemed to apply to this Indenture as so modified. If any provision of this
Indenture excludes any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.




          The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included unless expressly excluded by this Indenture) are a part of
and govern this Indenture, whether or not physically contained herein.




SECTION 12.02. Notices.




          Except for notice or communications to Holders, any notice or communication shall be given in
writing and delivered in person, sent by facsimile, delivered by commercial courier service or
mailed by first-class mail, postage prepaid, addressed as follows:




          If to the Issuer or any Guarantor:




MERITAGE HOMES CORPORATION

17851 N. 85th Street

Suite 300

Scottsdale, AZ 85255




Attention: Chief Financial Officer




Fax Number: (480) 998-9162





-64-









 




          with, in the case of any notice furnished pursuant to Article Six, a
copy to:




SNELL & WILMER L.L.P.




One Arizona Center

400 E. Van Buren Street

Phoenix, AZ 85004




Attention: Jeffrey Beck, Esq.




Fax Number: (602) 382-6070




-65-









 





If to the Trustee:




HSBC BANK USA, NATIONAL ASSOCIATION

10 East 40th Street

14th Floor

New York, NY 10016




Attention: Corporate Trust and Loan Agency




Fax Number: (212) 525-1300




          Such notices or communications shall be effective when received and shall be sufficiently
given if so given within the time prescribed in this Indenture.




          The Issuer, the Guarantors or the Trustee by written notice to the others may designate
additional or different addresses for subsequent notices or communications.




          Any notice or communication mailed to a Holder shall be mailed to him by first-class mail,
postage prepaid, at his address shown on the register kept by the Registrar.




          Failure to mail a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. If a notice or communication to a Holder is mailed in
the manner provided above, it shall be deemed duly given, whether or not the addressee receives it.




          In case by reason of the suspension of regular mail service, or by reason of any other cause,
it shall be impossible to mail any notice as required by this Indenture, then such method of
notification as shall be made with the approval of the Trustee shall constitute a sufficient
mailing of such notice.



SECTION 12.03. Communications by Holders with Other Holders.




          Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Issuer, the Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA § 312(c).




SECTION 12.04. Certificate and Opinion as to Conditions Precedent.




          Upon any request or application by the Issuer or any Guarantor to the Trustee to take any
action under this Indenture, the Issuer or such Guarantor shall furnish to the Trustee:





     (1) an Officers’ Certificate (which shall include the statements set forth in Section
12.05) stating that, in the opinion of the signers, all conditions precedent, if any,



-66-









 






provided for in this Indenture relating to the proposed action have been complied with;
and




     (2) an Opinion of Counsel (which shall include the statements set forth in Section
12.05) stating that, in the opinion of such counsel, all such conditions precedent have been
complied with.


SECTION 12.05. Statements Required in Certificate and Opinion.


          Each certificate and opinion with respect to compliance by or on behalf of the Issuer or any
Guarantor with a condition or covenant provided for in this Indenture shall include:





     (1) a statement that the Person making such certificate or opinion has read such
covenant or condition;




     (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;




     (3) a statement that, in the opinion of such Person, it or he has made such examination
or investigation as is necessary to enable it or him to express an informed opinion as to
whether or not such covenant or condition has been complied with; and




     (4) a statement as to whether or not, in the opinion of such Person, such covenant or
condition has been complied with.



SECTION 12.06. Rules by Trustee and Agents.




          The Trustee may make reasonable rules for action by or meetings of Holders. The Registrar and
Paying Agent may make reasonable rules for their functions.




SECTION 12.07. Business Days; Legal Holidays.




          A “Business Day” is a day that is not a Legal Holiday. A “Legal Holiday” is a Saturday, a
Sunday or other day on which (i) commercial banks in the City of New York are authorized or
required by law to close or (ii) the New York Stock Exchange is not open for trading. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening
period.




SECTION 12.08. Governing Law; Waiver of Jury Trial.




          This Indenture and the Notes shall be governed by and construed in accordance with the laws of
the State of New York, as applied to contracts made and performed






-67-









 







within the State of New York. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any action or
proceeding arising out of or relating to this Indenture, the Notes, the Note Guarantees or the
transactions contemplated hereby.




SECTION 12.09. No Adverse Interpretation of Other Agreements.




          This Indenture may not be used to interpret another indenture, loan, security or debt
agreement of the Issuer or any Subsidiary thereof. No such indenture, loan, security or debt
agreement may be used to interpret this Indenture.




SECTION 12.10. No Recourse Against Others.




          No recourse for the payment of the principal of or premium, if any, or interest, including
Liquidated Damages, on any of the Notes, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any
Guarantor in this Indenture or in any supplemental indenture, or in any of the Notes, or because of
the creation of any Indebtedness represented thereby, shall be had against any stockholder,
officer, director or employee, as such, past, present or future, of the Issuer or of any successor
corporation or against the property or assets of any such stockholder, officer, employee or
director, either directly or through the Issuer or any Guarantor, or any successor corporation
thereof, whether by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that this Indenture and the
Notes are solely obligations of the Issuer and the Guarantors, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, any stockholder, officer, employee or
director of the Issuer or any Guarantor, or any successor corporation thereof, because of the
creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants
or agreements contained in this Indenture or the Notes or implied therefrom, and that any and all
such personal liability of, and any and all claims against every stockholder, officer, employee and
director, are hereby expressly waived and released as a condition of, and as a consideration for,
the execution of this Indenture and the issuance of the Notes. It is understood that this
limitation on recourse is made expressly for the benefit of any such shareholder, employee, officer
or director and may be enforced by any of them.




SECTION 12.11. Successors.




          All agreements of the Issuer and the Guarantors in this Indenture and the Notes shall bind
their respective successors. All agreements of the Trustee, any additional trustee and any Paying
Agents in this Indenture shall bind its successor.







-68-









 








SECTION 12.12. Multiple Counterparts.




          The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall
be deemed an original, but all of them together represent one and the same agreement.




          The exchange of copies of this Indenture and of signature pages by facsimile or PDF
transmission shall constitute effective execution and delivery of this Indenture for all purposes.
Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their
original signatures for all purposes.




SECTION 12.13. Table of Contents, Headings, etc.




          The table of contents, cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions hereof.




SECTION 12.14. Separability.




          Each provision of this Indenture shall be considered separable and if for any reason any
provision which is not essential to the effectuation of the basic purpose of this Indenture or the
Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.




SECTION 12.15. U.S.A. Patriot Act.




          The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act,
the Trustee, like all financial institutions and in order to help fight the funding of terrorism
and money laundering, is required to obtain, verify, and record information that identifies each
person or legal entity that establishes a relationship or opens an account with the Trustee. The
parties to this Indenture agree that they will provide the Trustee with such information as it may
reasonably request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.




SECTION 12.16. Force Majeure.




          In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of
God; it being understood that the Trustee shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as soon as practicable under the
circumstances.









-69-









 









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




	 	 	 	 	 
	 	MERITAGE HOMES CORPORATION

 	 
	 	By:  	/s/ Larry W. Seay 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	MERITAGE PASEO CROSSING, LLC

 	 
	 	By:  	Meritage Homes of Arizona, Inc.
 	 
	 	Its:	Sole Member 	 
	 	 	 
	 	By:  	/s/ Larry W. Seay
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	MERITAGE PASEO CONSTRUCTION, LLC

 	 
	 	By:  	Meritage Homes of Arizona, Inc.
 	 
	 	Its: 	Sole Member 	 
	 	 	 
	 	By:  	/s/ Larry W. Seay
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 



S-1









 






	 	 	 	 	 



	 	 	 	 	 
	 	MERITAGE HOMES OF ARIZONA, INC.

 	 
	 	By:  	  /s/ Larry W. Seay
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	MERITAGE HOMES CONSTRUCTION, INC.

 	 
	 	By:  	/s/ Larry W. Seay 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	MERITAGE HOMES OF TEXAS HOLDING, INC.

 	 
	 	By:  	/s/ Larry W. Seay 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 



	 	 	 	 	 
	 	MERITAGE HOMES OF CALIFORNIA, INC.

 	 
	 	By:  	/s/ Larry W. Seay	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 



S-2









 






	 	 	 	 	 



	 	 	 	 	 
	 	MERITAGE HOMES OF TEXAS JOINT 

VENTURE HOLDING COMPANY, INC.

 	 
	 	By:  	Meritage Homes of Texas, LLC
 	 
	 	Its: 	           Sole Member 	 
	 	 	 	 	 
	 	 	 
	 	By:  	              Meritage Homes of Texas Holding, Inc.
 	 
	 	Its: 	           Sole Member 	 
	 	 	 	 	 
	 	 	 
	 	By:  	 /s/ Larry W. Seay
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 



	 	 	 	 	 
	 	MERITAGE HOLDINGS, L.L.C.

 	 
	 	By:  	Meritage Homes of Texas Holding, Inc.
 	 
	 	Its: 	               Sole Member 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Larry W. Seay
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 



	 	 	 	 	 
	 	MERITAGE HOMES OF NEVADA, INC.

 	 
	 	By:  	/s/ Larry W. Seay 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 



S-3









 






	 	 	 	 	 



	 	 	 	 	 
	 	MTH-CAVALIER, LLC.

 	 
	 	By:  	Meritage Homes Construction, Inc.
 	 
	 	Its: 	           Sole Member 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Larry W. Seay
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	MTH GOLF, LLC

 	 
	 	By:  	Meritage Homes Construction, Inc.
 	 
	 	Its: 	           Sole Member 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	  /s/ Larry W. Seay
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 



	 	 	 	 	 
	 	MERITAGE HOMES OF COLORADO, INC.

 	 
	 	By:  	/s/ Larry W. Seay 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	MERITAGE HOMES OF FLORIDA, INC.

 	 
	 	By:  	/s/ Larry W. Seay 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 



S-4









 






	 	 	 	 	 
	 	CALIFORNIA URBAN BUILDERS, INC.

 	 
	 	By:  	/s/ Larry W. Seay  	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	CALIFORNIA URBAN HOMES, LLC

 	 
	 	By:  	Meritage Homes of California, Inc.
 	 
	 	Its: 	                Sole Member 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/ Larry W. Seay 
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	MERITAGE HOMES OF TEXAS, LLC

 	 
	 	By:  	Meritage Homes of Texas Holding, Inc.
 	 
	 	Its: 	                Sole Member 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	     /s/ Larry W. Seay 
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 



S-5









 






	 	 	 	 	 
	 	MERITAGE HOMES OPERATING COMPANY, LLC

 	 
	 	By:  	Meritage Holdings, L.L.C.
 	 
	 	Its: 	           Manager 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	              Meritage Homes of Texas Holding, Inc.
 	 
	 	Its: 	           Sole Member 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 /s/ Larry W. Seay 
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 
	 	WW PROJECT SELLER, LLC

 	 
	 	By:  	Meritage Paseo Crossing, LLC
 	 
	 	Its:  	            Sole Member 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                Meritage Homes of Arizona, Inc.
 	 
	 	Its: 	             Sole Member 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 /s/ Larry W. Seay 
 	 
	 	 	Name:  	Larry W. Seay 	 
	 	 	Title:  	Executive Vice President, Chief
Financial Officer and Assistant
Secretary 	 
	 



S-6









 






	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION, 

as Trustee

 	 
	 	By:  	/s/
Ignazio Tamburello	 
	 	 	Name:  	Ignazio Tamburello	 
	 	 	Title:  	Vice President 	 
	 




S-7












 





EXHIBIT A



CUSIP




MERITAGE HOMES CORPORATION




			
	No.
	 	$






7.15% SENIOR NOTE DUE 2020




          MERITAGE HOMES CORPORATION, a Maryland corporation (the “Issuer”), for value received,
promises to pay to CEDE & CO. or registered assigns the principal sum of $[        ] dollars on April
15, 2020.




          Interest Payment Dates: April 15 and October 15.




          Record Dates: April 1 and October 1.




          Reference is made to the further provisions of this Note contained herein, which will for all
purposes have the same effect as if set forth at this place.







A-1









 








          IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized officers.




	 	 	 	 	 
	 	MERITAGE HOMES CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	

 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Dated:



Certificate of Authentication




          This is one of the 7.15% Senior Notes due 2020 referred to in the within-mentioned Indenture.




	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION,

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 


Dated:







A-2









 








[FORM OF REVERSE OF NOTE]




MERITAGE HOMES CORPORATION



7.15% SENIOR NOTE DUE 2020



          1. Interest. MERITAGE HOMES CORPORATION, a Maryland corporation (the “Issuer”),
promises to pay, until the principal hereof is paid or made available for payment, interest on the
principal amount set forth on the face hereof at a rate of 7.15% per annum. Interest hereon will
accrue from and including the most recent date to which interest has been paid or, if no interest
has been paid, from and including [insert applicable issue date] to but excluding the date on which
interest is paid. Interest shall be payable in arrears on each April 15 and October 15 commencing
on [insert first payment date]. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Issuer shall pay interest on overdue principal and on overdue interest (to the
full extent permitted by law) at a rate of 7.15% per annum.




          2. Method of Payment. The Issuer will pay interest hereon (except defaulted interest)
to the Persons who are registered Holders at the close of business on April 1 or October 1 next
preceding the interest payment date (whether or not a Business Day). Holders must surrender Notes
to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in
money of the United States of America that at the time of payment is legal tender for payment of
public and private debts. Interest may be paid by check mailed to the Holder entitled thereto at
the address indicated on the register maintained by the Registrar for the Notes.




          3. Paying Agent and Registrar. Initially, HSBC Bank USA, National Association (the
“Trustee”) will act as a Paying Agent and Registrar. The Issuer may change any Paying Agent or
Registrar without notice. Neither the Issuer nor any of its Affiliates may act as Paying Agent or
Registrar.




          4. Indenture. The Issuer issued the Notes under an Indenture dated as of April 13,
2010 (the “Indenture”) among the Issuer, the Guarantors (as defined in the Indenture) and the
Trustee. This is one of an issue of Notes of the Issuer issued, or to be issued, under the
Indenture. The terms of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb), as
amended from time to time. Holders are referred to the Indenture and such Act for a statement of
such terms. Capitalized and certain other terms used herein and not otherwise defined have the
meanings set forth in the Indenture.




          5. [Intentionally Omitted]




          6. Optional Redemption. (a) The Issuer may, at its option, redeem the Notes in whole
at any time or in part from time to time, on at least 30 but not more than 60 days’ prior notice,
at a redemption price equal to the greater of:




          (i) 100% of the principal amount of the Notes being redeemed, or







A-3









 










     (ii) the sum of the present values of the Remaining Scheduled Payments on the Notes
being redeemed, discounted to the Redemption Date, on a semiannual basis, at the Treasury
Rate plus 50 basis points (0.50%).



          The Issuer shall also pay accrued interest on the Notes being redeemed to the Redemption Date.
For purposes of determining the redemption price and accrued Interest, Interest will be calculated
on the basis of a 360-day year consisting of twelve 30-day months.




          (b) In the event of a redemption of fewer than all of the Notes, the Trustee shall select the
Notes to be redeemed in compliance with the requirements of the principal national securities
exchange, if any, while such Notes are listed, or if such Notes are not then listed on a national
securities exchange, on a pro rata basis, by lot or in such other manner as the
Trustee shall deem fair and equitable.




          7. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at his
registered address. On and after the Redemption Date, unless the Issuer defaults in making the
redemption payment, interest ceases to accrue on Notes or portions thereof called for redemption.




          8. Offers To Purchase. The Indenture provides that upon the occurrence of a Change of
Control Triggering Event and subject to further limitations contained therein, the Issuer shall
make an Offer to Purchase outstanding Notes in accordance with the procedures set forth in the
Indenture.




          9. Registration Rights. Pursuant to a Registration Rights Agreement among the Issuer,
the Guarantors and the Initial Purchasers, the Issuer will be obligated to consummate an exchange
offer pursuant to which the Holder of this Note shall have the right to exchange this Note for
notes of a separate series issued under the Indenture (or a trust indenture substantially identical
to the Indenture in accordance with the terms of the Registration Rights Agreement) which have been
registered under the Securities Act, in like principal amount and having substantially identical
terms as the Notes. The Holders shall be entitled to receive certain additional interest payments
in the event such exchange offer is not consummated and upon certain other conditions, all pursuant
to and in accordance with the terms of the Registration Rights Agreement.




          10. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. A Holder
may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay
to it any taxes and fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Notes or portion of a Note selected for redemption, or
register the transfer of or exchange any Notes for a period of 15 days before a mailing of notice
of redemption.




          11. Persons Deemed Owners. The registered Holder of this Note may be treated as the
owner of this Note for all purposes.







A-4









 








          12. Unclaimed Money. If money for the payment of principal or interest remains
unclaimed for two years, the Trustee will pay the money back to the Issuer at its written request.
After that, Holders entitled to the money must look to the Issuer for payment as general creditors
unless an “abandoned property” law designates another Person.




          13. Amendment, Supplement, Waiver, Etc. The Issuer, the Guarantors and the Trustee
(if a party thereto) may, without the consent of the Holders of any outstanding Notes, amend, waive
or supplement the Indenture or the Notes for certain specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies, maintaining the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended, and making any change that does not
materially and adversely affect the rights of any Holder. Other amendments and modifications of
the Indenture or the Notes may be made by the Issuer, the Guarantors and the Trustee with the
consent of the Holders of not less than a majority of the aggregate principal amount of the
outstanding Notes, subject to certain exceptions requiring the consent of the Holders of the
particular Notes to be affected.




          14. Successor Corporation. When a successor corporation assumes all the obligations
of its predecessor under the Notes and the Indenture and the transaction complies with the terms of
Article Five of the Indenture, the predecessor corporation will, except as provided in Article
Five, be released from those obligations.




          15. Defaults and Remedies. Events of Default are set forth in the Indenture. Subject
to certain limitations in the Indenture, if an Event of Default (other than an Event of Default
specified in Section 6.01(7) or (8) with respect to the Issuer) occurs and is continuing, the
Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding Notes
may, by written notice to the Trustee and the Issuer, and the Trustee upon the request of the
Holders of not less than 25% in aggregate principal amount of the outstanding Notes shall, declare
all principal of and accrued interest on all Notes to be immediately due and payable and such
amounts shall become immediately due and payable. If an Event of Default specified in Section
6.01(7) or (8) occurs with respect to the Issuer, the principal amount of and interest on, all
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing
default (except a default in payment of principal, premium, if any, or interest on the Notes or a
default in the observance or performance of any of the obligations of the Issuer under Article Five
of the Indenture) if it determines that withholding notice is in their best interests.




          16. Trustee Dealings with Issuer. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the Issuer or its
Affiliates, and may otherwise deal with the Issuer or its Affiliates, as if it were not Trustee.




          17. Discharge. The Issuer’s obligations pursuant to the Indenture will be discharged,
except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture,
upon the payment of all the Notes or upon the irrevocable deposit with the Trustee of






A-5









 







United States dollars or U.S. Government Obligations sufficient to pay when due principal of
and interest on the Notes to maturity or redemption, as the case may be.




          18. Guarantees. The Note will be entitled to the benefits of certain Guarantees made
for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.




          19. Authentication. This Note shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Note.




          20. Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of New York, as applied to contracts made and performed within the State of
New York. The Trustee, the Issuer, the Guarantor and the Holders agree to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding arising out of or
relating to the Indenture or the Notes.




          21. Abbreviations. Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).




          The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to:



MERITAGE HOMES CORPORATION

17851 N. 85th Street

Suite 300

Scottsdale, AZ 85255



Attention: Chief Financial Officer




A-6









 








ASSIGNMENT



I or we assign and transfer this Note to:




(Insert assignee’s social security or tax I.D. number)




 


 


 




(Print or type name, address and zip code of assignee)



and irrevocably appoint:




 


 






Agent to transfer this Note on the books of the Issuer. The Agent may substitute another to act
for him.




	 	 	 	 	 
	 	 	 
	Date:                      	Your Signature:  	 	 
	 	 	(Sign exactly as your name appears on the 	 
	 	 	 other side of this Note) 	 
	 



Signature Guarantee:                                         




SIGNATURE GUARANTEE



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.







A-7









 








OPTION OF HOLDER TO ELECT PURCHASE




          If you want to elect to have all or any part of this Note purchased by the Issuer pursuant to
Section 4.12 of the Indenture, check the box below:




o Section 4.12




          If you want to have only part of the Note purchased by the Issuer pursuant to Section 4.12 of
the Indenture, state the amount you elect to have purchased:




$                                                            

($2,000 or integral multiples of $1,000 in excess thereof)



Date: __________________




	 	 	 	 	 
	 	 	 
	 	Your Signature:  	
 	 
	 	 	(Sign exactly as your name appears on the face of this Note) 	 
	 	 	 	 
	 



                                                             
                   



Signature Guaranteed




SIGNATURE GUARANTEE



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.





A-8









 





EXHIBIT B




[FORM OF LEGEND FOR 144A NOTES AND OTHER NOTES

THAT ARE RESTRICTED NOTES]



The Note (or its predecessor) evidenced hereby was originally issued in a transaction exempt from
registration under Section 5 of the United States Securities Act of 1933, and the Note evidenced
hereby may not be offered, sold or otherwise transferred in the absence of such registration or an
applicable exemption therefrom. Each purchaser of the Note evidenced hereby is hereby notified
that the seller may be relying on the exemption from the provisions of Section 5 of the Securities
Act provided by Rule 144A thereunder or another exemption under the Securities Act. The Holder of
the Note evidenced hereby agrees for the benefit of Meritage Homes Corporation that (a) such Note
may be resold, pledged or otherwise transferred only (1)(a) to a person who the seller reasonably
believes is a Qualified Institutional Buyer (as defined in Rule 144A under the Securities Act),
purchasing for its own account in a transaction meeting the requirements of Rule 144A under the
Securities Act, (b) in a transaction meeting the requirements of Rule 144 of the Securities Act,
(c) outside the United States to a foreign person in a transaction meeting the requirements of Rule
904 of Regulation S under the Securities Act, (d) to an Institutional Accredited Investor that is
purchasing at least $100,000 of Notes for its own account or for the account of an institutional
accredited investor (and based upon an opinion of counsel if Meritage Homes Corporation so
requests) or (e) in accordance with another exemption from the registration requirements of the
Securities Act provided that in the case of a transfer under clause (e) such transfer is subject to
the receipt by the Trustee (and Meritage Homes Corporation, if it so requests) of a certification
of the transferor and an opinion of counsel to the effect that such transfer is in compliance with
the Securities Act, (2) to Meritage Homes Corporation or any of its subsidiaries or (3) under an
effective registration statement under the Securities Act and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other applicable jurisdiction
and the Indenture governing the Notes and (b) the Holder will, and each subsequent Holder is
required to, notify any purchaser from it of the Note evidenced hereby of the resale restrictions
set forth in (a) above. If any resale or other transfer of any Note is proposed to be made under
clause (a)(1)(d) above while these transfer restrictions are in force then the transferor shall
deliver a letter from the transferee to Meritage Homes Corporation and the Trustee which shall
provide, among other things, that the transferee is an institutional accredited investor and that
it is acquiring the Securities for investment purposes and not for distribution in violation of the
Securities Act.







B-1









 







[FORM OF ASSIGNMENT FOR 144A NOTES AND OTHER NOTES

THAT ARE RESTRICTED NOTES]



I or we assign and transfer this Note to:




(Insert assignee’s social security or tax I.D. number)




 


 


 




(Print or type name, address and zip code of assignee)



and irrevocably appoint:




 


 




Agent to transfer this Note on the books of the Issuer. The Agent may substitute another to act
for him.




[Check One]




	 	 	 

	o
 (a)

	 	this Note is being transferred in compliance with the exemption from registration
under the Securities Act provided by Rule 144A thereunder.






or




	 	 	 

	o
 (b)

	 	this Note is being transferred other than in accordance with (a) above and documents
are being furnished which comply with the conditions of transfer set forth in this Note and
the Indenture.





If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to
register this Note in the name of any person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Sections 2.16 and 2.17 of
the Indenture shall have been satisfied.




	 	 	 	 	 
	 	 	 
	Date:                             	Your Signature:  	 	 
	 	 	(Sign exactly as your name appears on the face of this Note) 	 
	 	 	 	 
	 


Signature Guarantee:                                                                     
            




SIGNATURE GUARANTEE



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.







B-2









 








TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED




          The undersigned represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.




	 	 	 	 	 

	Dated:

	 	 
	 	 
	 

	 	 
	 	 
	 

	 	 	 	NOTICE: To be executed by an executive officer






B-3









 





EXHIBIT C




[FORM OF LEGEND FOR REGULATION S NOTE]



This Note has not been registered under the U.S. Securities Act of 1933, as amended (the “Act”),
and, unless so registered, may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. Persons unless registered under the Act or except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Act.







C-1









 










[FORM OF ASSIGNMENT FOR REGULATION S NOTE]



I or we assign and transfer this Note to:




(Insert assignee’s social security or tax I.D. number)




 


 


 




(Print or type name, address and zip code of assignee)



and irrevocably appoint:






 



 





Agent to transfer this Note on the books of the Issuer. The Agent may substitute another to act
for him.




[Check One]




	 	 	 

	o
 (a)

	 	this Note is being transferred in compliance with the exemption from registration
under the Securities Act provided by Rule 144A thereunder.






or




	 	 	 

	o
 (b)

	 	this Note is being transferred other than in accordance with (a) above and documents
are being furnished which comply with the conditions of transfer set forth in this Note and
the Indenture.





If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to
register this Note in the name of any person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Sections 2.16 and 2.17 of
the Indenture shall have been satisfied.




	 	 	 	 	 
	 	 	 
	Date:                                          	Your Signature:  	 	 
	 	 	(Sign exactly as your name appears on the face of this Note) 	 
	 	 	 	 
	 


Signature Guarantee:                                                             




SIGNATURE GUARANTEE



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be






C-2









 







determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.







C-3









 








TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED





     The undersigned represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.



	 	 	 	 	 

	Dated:

	 	 
	 	 
	 

	 	 
	 	 
	 

	 	 	 	NOTICE: To be executed by an executive officer






C-4









 






EXHIBIT D




[FORM OF LEGEND FOR GLOBAL NOTE]




          Any Global Note authenticated and delivered hereunder shall bear a legend (which would be in
addition to any other legends required in the case of a Restricted Note) in substantially the
following form:




          This Note is a Global Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of a depository or a nominee of a depository. This Note is not exchangeable
for Notes registered in the name of a person other than the depository or its nominee except in the
limited circumstances described in the Indenture, and no transfer of this Note (other than a
transfer of this Note as a whole by the depository to a nominee of the depository or by a nominee
of the depository to the depository or another nominee of the depository) may be registered except
in the limited circumstances described in the Indenture.




          Unless this certificate is presented by an authorized representative of The Depository Trust
Company (a New York corporation) (“DTC”) to the issuer or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of CEDE & CO. or in such
other name as it requested by an authorized representative of DTC (and any payment is made to CEDE
& CO. or such other entity as is requested by an authorized representative of DTC), any transfer,
pledge or other use hereof for value or otherwise by or to any Person is wrongful inasmuch as the
registered owner hereof, CEDE & CO., has an interest herein.




D-1









 





EXHIBIT E




Form of Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Accredited Investors




HSBC Bank USA, National Association

Meritage Homes Corporation

c/o HSBC Bank USA, National Association

10 East 40th Street, 14th Floor

New York, NY 10016



Attention: Corporate Trust and Loan Agency



Ladies and Gentlemen:




          In connection with our proposed purchase of 7.15% Senior Notes due 2020 (the “Notes”) of
Meritage Homes Corporation, a Maryland Corporation (the “Issuer”), we confirm that:





     1. We understand that any subsequent transfer of the Notes is subject to certain
restrictions and conditions set forth in the Indenture dated as of April 13, 2010 relating
to the Notes and we agree to be bound by, and not to resell, pledge or otherwise transfer
the Notes except in compliance with, such restrictions and conditions and the Securities Act
of 1933, as amended (the “Securities Act”).




     2. We understand that the Notes have not been registered under the Securities Act or
any other applicable securities laws, have not been and will not be qualified for sale under
the securities laws of any non-U.S. jurisdiction and that the Notes may not be offered,
sold, pledged or otherwise transferred except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Notes, we will do so only (i) to the Issuer
or any subsidiary thereof, (ii) in accordance with Rule 144A under the Securities Act to a
“qualified institutional buyer” (as defined in Rule 144A), (iii) to an institutional
“accredited investor” (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the Notes, (iv)
outside the United States to persons other than U.S. persons in offshore transactions
meeting the requirements of Rule 904 of Regulation S under the Securities Act, (v) pursuant
to the exemption form registration provided by Rule 144 under the Securities Act (if
applicable) or (vi) pursuant to an effective registration statement, and we further agree to
provide to any person purchasing any of the Notes from us a notice advising such purchaser
that resales of the Notes are restricted as stated herein.



E-1









 






     3. We understand that, on any proposed resale of any Notes, we will be required to
furnish to you and the Issuer such certifications, legal opinions and other information as
you and the Issuer may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us will bear
a legend to the foregoing effect.




     4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our investment in
the Notes, and we and any accounts for which we are acting each are able to bear the
economic risk of our or their investment, as the case may be.




     5. We are acquiring the Notes purchased by us for our account or for one or more
accounts (each of which is an institutional “accredited investor”) as to each of which we
exercise sole investment discretion.




     6. We are not acquiring the Notes with a view toward the distribution thereof in a
transaction that would violate the Securities Act or the securities laws of any state of the
United States or any other applicable jurisdiction.



          You are entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.




	 	 	 	 	 
	 	Very truly yours,



[Name of Transferee]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Date:
                    
                    





E-2









 





EXHIBIT F




Form of Certificate To Be Delivered

in Connection with Transfers

Pursuant to Regulation S




HSBC Bank USA, National Association

Meritage Homes Corporation

c/o HSBC Bank USA, National Association

10 East 40th Street, 14th Floor

New York, NY 10016



Attention: Corporate Trust and Loan Agency





	 	Re: 	 	 Meritage Homes Corporation, a Maryland corporation (the “Issuer”)

7.15% Senior Notes due 2020 (the “Notes”)




Dear Sirs:




          In connection with our proposed sale of $                     aggregate principal amount of the Notes,
we confirm that such sale has been effected pursuant to and in accordance with Regulation S under
the U.S. Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent
that:




     (1) the offer of the Notes was not made to a U.S. person or to a person in the United
States;




     (2) either (a) at the time the buy offer was originated, the transferee was outside the
United States or we and any person acting on our behalf reasonably believed that the
transferee was outside the United States, or (b) the transaction was executed in, on or
through the facilities of a designated off-shore securities market and neither we nor any
person acting on our behalf knows that the transaction has been pre-arranged with a buyer in
the United States;




     (3) no directed selling efforts have been made in the United States in contravention of
the requirements of Rule 904(a) of Regulation S;




     (4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; and




     (5) we have advised the transferee of the transfer restrictions applicable to the
Notes.



          You are entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal proceedings or






F-1









 







official inquiry with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.




	 	 	 	 	 
	 	Very truly yours,



[Name of Transferee]

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 




F-2









 





EXHIBIT G




NOTATION OF GUARANTEE




          Each of the undersigned (the “Guarantors”) hereby jointly and severally unconditionally
guarantees, to the extent set forth in the Indenture dated as of April 13, 2010 by and among
Meritage Homes Corporation, as issuer, the Guarantors, as guarantors, and HSBC Bank USA, National
Association, as Trustee (as amended, restated or supplemented from time to time, the “Indenture”),
and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal
of, and premium, if any, and interest on the Notes, when and as the same shall become due and
payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of
interest on overdue principal of, and premium and, to the extent permitted by law, interest, and
the due and punctual performance of all other obligations of the Issuer to the Holders or the
Trustee, all in accordance with the terms set forth in Article Ten of the Indenture, and (b) in
case of any extension of time of payment or renewal of any Notes 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.




          The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Guarantee
and the Indenture are expressly set forth in Article Ten of the Indenture, and reference is hereby
made to the Indenture for the precise terms and limitations of this Guarantee. Each Holder of the
Note to which this Guarantee is endorsed, by accepting such Note, agrees to and shall be bound by
such provisions.




[Signatures on Following Pages]






G-1









 








          IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be signed by a duly
authorized officer.




	 	 	 	 	 
	 	[GUARANTORS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




G-2