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                                                                    EXHIBIT 4.9


                      OFFICERS' CERTIFICATE PURSUANT TO THE
                           INDENTURE IDENTIFIED BELOW

     The undersigned Bryan A. Binyon, Vice President and Treasurer of KB Home
(the "Issuer"), and Kimberly N. King, Corporate Secretary and Director,
Corporate Legal Affairs of the Issuer:

         (a) Each hereby certifies that he or she has read and is familiar with
     the provisions of Article Two of the Indenture referred to below relating
     to the issuance of Securities thereunder; that he or she is generally
     familiar with the other provisions of the Indenture and with the affairs of
     the Issuer and its corporate acts and proceedings; that, in his or her
     opinion, he or she has made such examination or investigation as is
     necessary to enable him or her to express an informed opinion as to whether
     or not the covenants and conditions have been complied with and that all
     covenants or conditions provided for in the Indenture relating to the
     establishment of a series of Securities and the form and terms of such
     series and the issuance, authentication and delivery of such Securities
     have been complied with.

         (b) Acting pursuant to Article Two of the Indenture referred to below,
     do hereby authorize, adopt and approve the following terms for a series of
     Securities to be issued under a Senior Subordinated Debt Indenture dated as
     of November 19, 1996 (the "Indenture", which term, as used herein, includes
     the terms of the Notes established by this Officers' Certificate), between
     the Issuer and SunTrust Bank, as successor to SunTrust Bank, Atlanta, as
     Trustee:

     (1) Designation of Securities of the series:

         9 1/2% Senior Subordinated Notes due 2011.

     (2) Limit on the aggregate principal amount of Notes (except for Notes
authenticated and delivered upon registration of transfer, or in exchange for,
or in lieu of, other Notes pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3 of
the Indenture, or Section 10 of this Officers' Certificate or pursuant to any
provision of the Indenture providing for redemption, repayment or repurchase of
Notes in whole or in part):

          $350,000,000, of which $250,000,000 aggregate principal amount are to
          be authenticated and delivered upon original issuance on the Closing
          Date and, subject to the provisions of Section 16(a), (b), (c), (d)
          and (e) of this Officers' Certificate, not in excess of $100,000,000
          aggregate principal amount may be authenticated and delivered upon
          original issuance, at any time and from time to time after the Closing
          Date, upon the delivery to the Trustee of an Issuer Order, accompanied
          by a Board Resolution.

     (3) Date on which the principal of Notes is payable at maturity:

         February 15, 2011.


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     (4) Interest on the Notes:

         (a) The rate of interest on the Notes and the method of calculation
     thereof:

             9 1/2% per annum calculated on the basis of a 360-day year of
             twelve 30-day months.

         (b) The date from which such interest shall accrue:

             February 8, 2001.

         (c) Interest payment dates:

             February 15 and August 15, commencing August 15, 2001.

         (d) Record dates:

             February 1 and August 1 (in each case whether or not a Business
             Day), as the case may be, next preceding each February 15 and
             August 15, respectively.

     (5) Place or places where Notes shall be payable:

     The principal of and interest on the Notes shall be payable in the Borough
of Manhattan, The City of New York at an office or agency maintained by the
Issuer for such purpose pursuant to Section 3.2 of the Indenture. Such office or
agency shall initially be the agent of the Trustee in The City of New York,
which on the date hereof is Harris Trust Company of New York, Wall Street Plaza,
88 Pine Street, 19th Floor, New York, New York 10005. In addition, so long as
the Trustee shall act as trustee with respect to the Notes, the principal of and
interest on the Notes shall be payable at the office of the Trustee in Atlanta,
Georgia designated for such purpose.

     (6) With respect to redemption, in whole or in part, of Notes at the option
of the Issuer:

         The Notes will be redeemable at the Issuer's option, in whole or in
     part, on any date on or after February 15, 2006 and prior to maturity, upon
     not less than 30 nor more than 60 days' notice given in accordance with the
     provisions of the Indenture, at the redemption prices, expressed as
     percentages of principal amount, set forth below, together with accrued
     interest to the date fixed for redemption, (provided that payments of
     interest becoming due on or prior to a redemption date will be payable to
     the Holders of the Notes at the close of business on the relevant record
     date), if redeemed during the 12-month period beginning February 15 of the
     years indicated below:


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<TABLE>
<CAPTION>
                                         Redemption
Year                                        Price
----                                     ----------
<S>                                      <C>
2006  ...........................         104.750%
2007  ...........................         103.167%
2008  ...........................         101.583%
2009 and thereafter .............         100.000%
</TABLE>

     (7) Repurchase of Notes at option of the Holders upon Change of Control:

         (a) If at any time there occurs a Change of Control with respect to the
     Issuer, each Holder of Notes will have the right, at such Holder's option,
     to require the Issuer to repurchase all of such Holder's Notes, or a
     portion thereof which is in a principal amount of $1,000 or any integral
     multiple thereof, on the date (the "Change of Control Repurchase Date")
     that is 30 Change of Control Business Days after the date of the Change of
     Control at a price equal to 101% of the principal amount thereof, plus
     accrued and unpaid interest to the Change of Control Repurchase Date (the
     "Change of Control Repurchase Price"); provided, however, that if a Change
     of Control Repurchase Date is after a record date for the payment of
     interest on the Notes and on or before the related interest payment date,
     accrued and unpaid interest on the Notes surrendered for repurchase
     pursuant to this Section 7 and not withdrawn which otherwise would have
     been paid as part of the Change of Control Repurchase Price will instead be
     paid (such payment to be made on the Change of Control Repurchase Date) to
     the Persons in whose names such Notes are registered at the close of
     business on such record date and, in such case, the term "Change of Control
     Repurchase Price" shall be deemed to mean 101% of the principal amount of
     such Notes without accrued and unpaid interest.

         (b) Within 15 Change of Control Business Days after the occurrence of a
     Change of Control, the Issuer or, at the request of the Issuer, the Trustee
     will give notice (the "Change of Control Notice"), in the manner provided
     in Section 11.4 of the Indenture, to all Holders of the Notes of the
     occurrence of such Change of Control and of the Issuer's offer to
     repurchase Notes pursuant to the repurchase right arising as a result
     thereof and will cause a copy of such notice to be published in an
     Authorized Newspaper in The City of New York. If such Change of Control
     Notice is given by the Issuer, the Issuer shall also deliver a copy thereof
     to the Trustee. Such Change of Control Notice shall contain all
     instructions and (except in the case of the published notice) materials
     necessary to enable Holders of Notes to surrender their Notes to the Issuer
     for repurchase (including (except in the case of the published notice),
     without limitation, a form of Change of Control Repurchase Notice (as
     defined below)) and, without limitation to the foregoing, shall state:

             (i) that the Issuer is offering to repurchase all of the Notes as a
         result of a Change of Control pursuant to this Section 7, and shall
         state the events causing such Change of Control and the date of such
         Change of Control;

             (ii) the Change of Control Repurchase Date;



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             (iii) the Change of Control Repurchase Price, including a statement
         as to whether or not Holders surrendering Notes for repurchase will be
         entitled to receive accrued and unpaid interest or whether accrued and
         unpaid interest will be payable to Holders on the relevant record date;

             (iv) that a Holder electing to have a Note (or any portion thereof
         which is a principal amount of $1,000 or any integral multiple thereof)
         repurchased will be required to surrender the Note, duly endorsed by,
         or accompanied by a written instrument or instruments of transfer
         executed by, the Holder or his attorney duly authorized in writing,
         together with a duly completed Change of Control Repurchase Notice, at
         an address specified in subparagraph (v) below prior to the Change of
         Control Repurchase Date (such notice shall specify the information
         which the Holder must set forth in such Change of Control Repurchase
         Notice, and shall indicate that copies of the form of Change of Control
         Repurchase Notice are available at the office of the Trustee and at
         each other office or agency specified in subparagraph (v) below);

             (v) the address of the Trustee where Notes may be surrendered for
         repurchase pursuant to such Change of Control, and the name and address
         of each other office or agency where Notes may be surrendered for
         repurchase pursuant to such Change of Control, which shall include the
         office or agency in the Borough of Manhattan, The City of New York
         maintained with respect to the Notes pursuant to Section 3.2 of the
         Indenture;

             (vi) that the Change of Control Repurchase Price for any Note which
         has been duly surrendered, together with a duly completed Change of
         Control Repurchase Notice, and not withdrawn will be paid on the Change
         of Control Repurchase Date;

             (vii) that any Note repurchased by the Issuer on the Change of
         Control Repurchase Date shall cease to accrue interest on the Change of
         Control Repurchase Date unless the Issuer defaults in making payment in
         full of the Change of Control Repurchase Price, and that any Note which
         is not surrendered for repurchase or which is surrendered and
         thereafter withdrawn shall continue to accrue interest;

             (viii) that Holders who have surrendered Notes for repurchase will
         be entitled to withdraw such Notes (or any portion thereof in a
         principal amount of $1,000 or any integral multiple thereof) if the
         Trustee or any office or agency referred to in clause (v) above, as the
         case may be, receives, prior to the Change of Control Repurchase Date,
         a telegram, telex, facsimile transmission, letter or hand delivery
         notice setting forth the name of the Holder, the certificate number and
         the principal amount of the Note (which may be all or a portion of such
         principal amount which is $1,000 or an integral multiple thereof) with
         respect to which such notice of withdrawal is being submitted and the
         principal amount, if any, of the Note which is not being withdrawn;


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             (ix) that Holders whose Notes are repurchased only in part will be
         issued new Notes equal in principal amount to the unrepurchased portion
         of the Notes surrendered, and that Holders surrendering Notes for
         repurchase in part may specify the denomination or denominations (which
         must be $1,000 or an integral multiple of $1,000) of the Note or Notes
         to be issued for the unrepurchased portion of the Notes being
         surrendered and that, in the absence of any such specification, one
         Note will be issued for the portion not repurchased; and

             (x) any other procedures the Holder must follow to exercise its
         rights under this Section 7.

         (c) "Change of Control Repurchase Notice" means a written notice (which
     may be the form thereof provided by the Issuer pursuant to Section 7(b) or
     any other written notice which sets forth the information described below),
     signed by the Holder or his attorney duly authorized in writing, stating:

             (i) the name and address of the Holder and the certificate number
         of the Note which the Holder is delivering to be repurchased;

             (ii) if the Note is surrendered for repurchase in part, the portion
         of the principal amount of the Note which the Holder is delivering to
         be repurchased, which portion must be $1,000 or an integral multiple
         thereof;

             (iii) if the Note is surrendered for repurchase in part, the
         denomination or denominations (which must be $1,000 or any integral
         multiple thereof) of the Note or Notes to be issued to the Holder for
         the unrepurchased portion of the Note being surrendered, provided that
         the failure so to specify such denomination or denominations shall not
         constitute a defect in the Change of Control Repurchase Notice and, in
         such event, one Note will be issued for such unrepurchased portion of
         the Note being surrendered; and

             (iv) that such Holder is electing to have such Note (or portion
         thereof) repurchased by the Issuer on the Change of Control Repurchase
         Date.

     The delivery of a Note, by hand, by mail or otherwise, prior to the Change
of Control Repurchase Date to the Trustee or to an office or agency referred to
in Section 7(b)(v) above shall be a condition to the receipt by the Holder of
the Change of Control Repurchase Price therefor.

     (8) Effect of Change of Control Repurchase Notice; Right of Withdrawal:

     Upon surrender by a Holder of a Note for repurchase pursuant to Section 7,
together with a duly completed Change of Control Repurchase Notice, such Holder
shall (unless such Note is withdrawn as specified in the following paragraph)
thereafter be entitled to receive, on the Change of Control Repurchase Date, the
Change of Control Repurchase Price, with respect to such Note. On the Change of
Control Repurchase Date, the Issuer will pay or cause the Trustee or a paying
agent to pay the Holders of Notes which have been duly surrendered for
repurchase


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and not withdrawn the Change of Control Repurchase Price, as the case may be,
and, if such date is after a record date for the payment of interest on the
Notes and on or before the related interest payment date, shall pay or cause to
be paid accrued and unpaid interest on such Notes to the Holders thereof on such
record date.

     A Holder who has surrendered a Note for repurchase on a Change of Control
Repurchase Date will be entitled to withdraw such Note (or any portion thereof
in a principal amount of $1,000 or any integral multiple thereof) if the Trustee
or any office or agency referred to in Section 7(b)(v) receives, prior to the
Change of Control Repurchase Date, a telegram, telex, facsimile transmission,
letter or hand delivery notice setting forth the information specified in
Section 7(b)(viii).

     If any Note is withdrawn in whole, the Issuer shall cause such Note
promptly to be mailed or otherwise delivered to the Holder thereof.

     If any Note surrendered for repurchase shall not be so paid in full on the
relevant Change of Control Repurchase Date, the principal thereof (including the
premium thereon) shall, until paid, bear interest from such Change of Control
Repurchase Date at the rate of interest borne by the Notes, and the Issuer shall
cause such Note promptly to be mailed or otherwise delivered to the Holder
thereof.

     The Issuer shall publicly announce the results of an offer made following a
Change of Control on or promptly after the Change of Control Repurchase Date.

     (9) Deposit of Change of Control Repurchase Price:

     On or prior to the Change of Control Repurchase Date, the Issuer shall
deposit with the Trustee or with a paying agent for the Notes (or, if the Issuer
is acting as its own paying agent, shall set aside, segregate and hold in trust
as provided in Section 3.4 of the Indenture) an amount of cash sufficient to pay
(i) the aggregate Change of Control Repurchase Price for all Notes or portions
thereof which have been duly surrendered for repurchase and not withdrawn and
(ii) if the Change of Control Repurchase Date is after a record date for the
payment of interest on the Notes and on or before the related interest payment
date, the aggregate amount of interest payable on such Change of Control
Repurchase Date to the Persons in whose names such Notes were registered at the
close of business on such record date.

     Anything in this Officers' Certificate, the Notes or the Indenture to the
contrary notwithstanding, except in the case of a Change of Control Repurchase
Date which falls after a record date for the payment of interest on the Notes
and on or before the related interest payment date, interest payable on Notes
duly surrendered for repurchase on a Change of Control Repurchase Date shall be
paid with and in the same manner as the principal of such Notes payable on such
Change of Control Repurchase Date.

     (10) Notes repurchased in part:

     In the case of any Note which is repurchased only in part, the Issuer shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Note, without service charge, a new Note or Notes, of any authorized
denominations as specified by such Holder (or, if the Holder


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<PAGE>   7

shall fail to specify any such denominations, a single Note in an authorized
denomination), in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Note so surrendered which is not
repurchased.

     Provisions of this Indenture that apply to the repurchase of all of a Note
pursuant to Section 7 also apply to the repurchase of a portion of such Note.

     (11) Covenant to comply with securities laws upon repurchase of Notes:

     In connection with any offer to purchase Notes under Section 7, the Issuer
will conduct such offer in compliance with applicable securities laws and
regulations, including Section 14(e) of the Exchange Act and Rule 14e-1
thereunder, to the extent applicable.

     (12) Repurchase of the Notes at the option of the Issuer with Net Cash
Proceeds of Equity Offerings.

         (a) At any time prior to February 15, 2004, the Issuer at its option
     may redeem Notes in an aggregate principal amount equal to up to 35% of the
     original aggregate principal amount of the Notes (including any Additional
     Notes) with the Net Cash Proceeds of one or more Equity Offerings, at any
     time or from time to time, at a redemption price equal to 109.5% of the
     principal amount plus accrued interest to the date fixed for redemption
     (provided that payments of interest becoming due on or prior to a
     redemption date will be payable to the Holders of the Notes (including any
     Additional Notes) at the close of business on the relevant record date);
     provided that Notes (including any Additional Notes) with an aggregate
     principal amount equal to at least $162,500,000 remain outstanding after
     each such redemption; and provided, further, that notice of any such
     redemption is mailed within 60 days after the closing date of the
     applicable Equity Offering and, in any event, not less than 30 nor more
     than 60 days prior to the applicable redemption date, all in accordance
     with the requirements of the Indenture.

         (b) "Equity Offering" means any public or private sale of Common Stock
     of the Issuer (excluding Disqualified Capital Stock), other than public
     offerings with respect to Common Stock of the Issuer registered on Form
     S-8.

         (c) "Net Cash Proceeds" means the cash proceeds received by the Issuer
     from any Equity Offering, net of attorney's fees, accountants' fees,
     underwriters' or placement agents' fees, discounts or commissions and
     brokerage, consultant and other fees incurred in connection with such
     issuance or sale and net of taxes paid or payable as a result thereof.

     (13) Denominations in which Notes are issuable, if other than $1,000 and
any integral multiples thereof:

     Not Applicable.

     (14) If other than the principal amount thereof, the portion of the
principal amount of Notes payable on declaration of acceleration:


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     Not Applicable.

     (15) Whether Notes are issuable as Registered Securities, Unregistered
Securities (with or without interest coupons), or any combination thereof:

         (a) The Notes will be issued in book-entry form and represented by one
     or more Registered Global Securities (the "Global Notes"). The Depositary
     for the Global Notes will be The Depository Trust Company, New York, New
     York ("DTC"). The Global Notes will be deposited with, or on behalf of DTC
     and registered in the name of Cede & Co., the nominee of DTC. Unless and
     until it is exchanged for individual certificates evidencing Notes, as
     provided below, a Global Note may not be transferred except as a whole by
     DTC to its nominee or by a nominee to DTC or another nominee of DTC, or by
     DTC or its nominee to a successor Depositary or to a nominee of the
     successor Depositary.

         (b) In addition to the events specified in Section 2.8 of the Indenture
     under which one or more Notes in definitive form will be issued in exchange
     for Global Notes, if at any time an Event of Default under the Indenture
     has occurred and is continuing with respect to the Notes, then the Issuer
     will execute, and the Trustee, upon receipt of an Officers' Certificate for
     the authentication and delivery of Notes in definitive registered form,
     will authenticate and deliver, Notes in definitive registered form, in any
     authorized denominations, in an aggregate principal amount equal to the
     principal amount of the Global Notes, in exchange for such Global Notes.
     Any Note in definitive form issued in exchange for a beneficial interest in
     a Global Note will be registered in such name or names as DTC shall
     instruct the Trustee. DTC may surrender Global Notes in exchange in whole
     or in part for Notes in definitive registered form on such terms as are
     acceptable to the Issuer and DTC.

     (16) Any other terms of Notes:

     The Issuer covenants and agrees for the benefit of the Holders of the Notes
as follows:

         (a) Limitation on Incurrence of Additional Indebtedness

         The Issuer will not, and will not permit any of its Restricted
     Subsidiaries to, directly or indirectly, create, incur, issue, assume,
     guarantee, extend the maturity of or in any other manner become liable with
     respect to, or otherwise become responsible for the payment of
     (collectively, "incur"), any Indebtedness unless after giving effect to the
     incurrence thereof and the receipt and application of the net proceeds
     therefrom either:

             (1) the Consolidated Fixed Charge Coverage Ratio of the Issuer
         (determined on a pro forma basis for the last four fiscal quarters of
         the Issuer for which financial statements are available at the date of
         determination) is at least 2.0 to 1 or

             (2) the ratio of Indebtedness of the Issuer and its Restricted
         Subsidiaries to Consolidated Net Worth of the Issuer is less than 3.5
         to 1.


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<PAGE>   9

     Notwithstanding the foregoing, the Issuer and its Restricted Subsidiaries
may incur:

             (1) Refinancing Indebtedness;

             (2) Non-Recourse Indebtedness incurred for the acquisition or
         improvement of real property and secured by mortgage Liens on such real
         property or improvements;

             (3) Indebtedness to the Issuer or to Restricted Subsidiaries;

             (4) Indebtedness under the 2000 Revolving Credit Facility included
         in the Existing Credit Facilities in an aggregate principal amount at
         any one time of not more than $564,000,000; and

             (5) Excluded Debt.

         (b) Limitation on Restrictions on Distributions from Restricted
     Domestic Subsidiaries

         The Issuer will not, and will not permit any of its Restricted Domestic
     Subsidiaries to, directly or indirectly, create, assume or otherwise cause
     or permit to exist or to become effective any consensual encumbrance or
     restriction on the ability of any Restricted Domestic Subsidiary to:

             (1) pay dividends or make any other distributions on its Capital
         Stock or on any other interest or participation in, or measured by, its
         profits, owned by the Issuer or any of its other Restricted
         Subsidiaries, or pay interest on or principal of any Indebtedness owed
         to the Issuer or any of its other Restricted Subsidiaries;

             (2) make loans or advances to the Issuer or any of its other
         Restricted Subsidiaries; or

             (3) transfer any of its properties or assets to the Issuer or any
         of its other Restricted Subsidiaries,

     except for (i) encumbrances or restrictions on the payment of cash by any
     Restricted Domestic Subsidiary which do not exceed $10,000 in the aggregate
     and (ii) encumbrances or restrictions existing or created under or by
     reason of:

                 (a) applicable law;

                 (b) covenants or restrictions contained in Existing
             Indebtedness;




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<PAGE>   10

                 (c) customary provisions restricting subletting or assignment
             of any contract or of any lease governing a leasehold interest of
             the Issuer or any Restricted Domestic Subsidiary;

                 (d) restrictions under any instrument creating or evidencing
             any Acquired Indebtedness that was permitted to be incurred
             pursuant to the Indenture and the Notes and which (I) only apply to
             assets that were subject to such restrictions and encumbrances
             prior to the acquisition of such assets by the Issuer or its
             Restricted Domestic Subsidiaries and (II) were not created in
             connection with, or in contemplation of, such acquisition;

                 (e) restrictions replacing those permitted by clause (b) or (d)
             which are not more restrictive than, and do not extend to any
             Persons or assets other than the Persons or assets subject to, the
             restrictions and encumbrances so replaced;

                 (f) restrictions under any instrument creating or evidencing
             any Refinancing Indebtedness which are not more restrictive than
             those under, and do not extend to any Persons or assets other than
             the Persons or assets subject thereto under, the instrument
             creating or evidencing the Indebtedness being refunded, extended or
             refinanced by such Refinancing Indebtedness;

                 (g) any Permitted Lien or any agreement restricting the sale or
             other disposition of property securing Indebtedness permitted by
             the Indenture and the Notes if such Permitted Lien or agreement, as
             the case may be, does not by its terms expressly restrict the
             ability of a Restricted Domestic Subsidiary of the Issuer to make
             any of the dividends, payments, distributions, loans, advances or
             transfers referred to in clauses (1), (2) or (3) above;

                 (h) reasonable and customary borrowing base covenants set forth
             in credit agreements evidencing Indebtedness otherwise permitted by
             the Indenture and the Notes, which covenants restrict or limit the
             distribution of revenues or sale proceeds from real estate or a
             real estate project based upon the amount of Indebtedness
             outstanding on such real estate or real estate project and the
             value of some or all of the remaining real estate or the project's
             remaining assets;

                 (i) customary agreements entered into in the ordinary course of
             business restricting the ability of the joint venture to make
             distributions or payments of cash or property to participants in
             such joint venture; or

                 (j) the Existing Credit Facilities or a Substitute Credit
             Facility but only so long as no such encumbrance or restriction
             under the Existing Credit Facilities or a Substitute Credit
             Facility by its terms expressly


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<PAGE>   11

             restricts the ability of a Restricted Domestic Subsidiary of the
             Issuer to make any of the dividends, payments, distributions,
             loans, advances or transfers referred to in clauses (1), (2) or (3)
             above (it being understood that covenants requiring or having the
             effect of requiring the maintenance of a specified level of net
             worth which do not by their terms expressly restrict the ability of
             a Restricted Domestic Subsidiary of the Issuer to make any such
             dividends, payments, distributions, loans, advances or transfers
             referred to in clauses (1), (2) or (3) above shall be permitted
             under this clause (j)).

         (c) Limitation on Restricted Payments

         The Issuer will not, and will not permit any of its Restricted
     Subsidiaries to, directly or indirectly, make any Restricted Payment if,
     after giving effect thereto,

             (1) a Default or an Event of Default shall have occurred and be
         continuing; or

             (2) the aggregate amount of Restricted Payments (the amount of any
         Restricted Payment, if other than in cash, to be determined by the
         Board of Directors of the Issuer, whose reasonable determination shall
         be conclusive and evidenced by a Board Resolution certified by an
         Officers' Certificate and filed with the Trustee) made by the Issuer
         and its Restricted Subsidiaries from and after November 19, 1996 would
         exceed the sum of (a) 50% of the Consolidated Net Income of the Issuer
         accrued on a cumulative basis for the period commencing on September 1,
         1996 (the "Commencement Date") and ending on the last day (the
         "Reference Day") of the Issuer's last fiscal quarter ending prior to
         the date of such proposed Restricted Payment (or, in the event such
         Consolidated Net Income as so determined on a cumulative basis shall be
         a deficit, minus 100% of such deficit), (b) the aggregate net proceeds,
         including the fair market value of property other than cash (such fair
         market value to be determined by a majority of the disinterested
         members of the full Board of Directors of the Issuer, whose reasonable
         determination shall be conclusive and evidenced by a Board Resolution
         certified by an Officers' Certificate and filed with the Trustee),
         received by the Issuer from any Person (other than a Restricted
         Subsidiary) after the Commencement Date and on or prior to the
         Reference Date from the issue or sale of Qualified Capital Stock of the
         Issuer, or any options, warrants or other rights (other than
         convertible or exchangeable debt securities except as provided below)
         to purchase Qualified Capital Stock of the Issuer, or from the issuance
         or sale of debt securities of the Issuer which are converted into or
         exchanged for Qualified Capital Stock of the Issuer, and (c)
         $100,000,000; or

             (3) the Issuer would be unable to incur an additional $1.00 of
         Indebtedness pursuant to the first paragraph of the covenant set forth
         in Section 16(a) of the Officers' Certificate;



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<PAGE>   12

         provided, however, that the foregoing provisions shall not prevent (a)
         the payment of any dividend or distribution within 60 days after the
         date of declaration thereof, if the payment would have complied with
         the foregoing provisions on the date of such declaration or (b) the
         repurchase or redemption of shares of Capital Stock from any officer,
         director or employee of the Issuer or its Restricted Subsidiaries whose
         employment has been terminated or who has died or become disabled in an
         aggregate amount not to exceed $5,000,000 for any fiscal year of the
         Issuer; provided that amounts paid pursuant to this clause (b) shall
         reduce amounts available for future Restricted Payments.

             (d) Limitations on Transactions with Officers, Directors and
         Employees

             The Issuer will not, and will not permit any of its Restricted
         Subsidiaries to, directly or indirectly,

                 (1) make any loan, advance, guarantee or capital contribution
             to, or for the benefit of, or

                 (2) sell, lease, transfer or otherwise dispose of any of its
             properties or assets to, or for the benefit of, or

                 (3) purchase or lease any property or assets from, or

                 (4) enter into or amend any contract, agreement or
             understanding with, or for the benefit of,

                    (a) any officer, director or employee of the Issuer,

                    (b) any officer, director or employee of a Subsidiary of the
                 Issuer (provided that clause (4) above shall not apply with
                 respect to this clause (b)) or

                    (c) any former officer or director of the Issuer or any of
                 its Subsidiaries who owns, directly or indirectly, 7.5% or more
                 of the voting power of the Common Stock of the Issuer

     (each an "Affiliate Transaction"), except on terms that are no less
     favorable to the Issuer or the relevant Restricted Subsidiary, as the case
     may be, than those that could have been obtained in a comparable
     transaction on an arm's length basis from a Person that is not such an
     officer, director or employee.

         Notwithstanding the foregoing, the term "Affiliate Transaction" shall
     not include any transaction with an officer, director or employee of the
     Issuer or of any Subsidiary of the Issuer in their capacity as officer,
     director or employee entered into in the ordinary course of business or
     which is consistent with past practice (including compensation and employee
     benefit arrangements with any officer, director


                                       12


<PAGE>   13

     or employee of the Issuer or of any Subsidiary of the Issuer) and shall not
     include the acquisition by any officer, director or employee of the Issuer
     of any securities of the Issuer in the open market in arm's length
     transactions.

         (e) Limitation on Investments in Restricted Foreign Subsidiaries,
     Unrestricted Subsidiaries and Equity Method Persons

         The Issuer will not, and will not permit any of its Restricted Domestic
     Subsidiaries to, directly or indirectly, make any Investment in any
     Restricted Foreign Subsidiary, Unrestricted Subsidiary or Equity Method
     Person (each, a "Subject Entity") if, after giving effect thereto, the
     aggregate amount of all such Investments made after the date of the
     Indenture would exceed the sum of:

             (1) $110,000,000,

             (2) the aggregate amount of cash dividends and distributions
         received by the Issuer after the date of the Indenture from Subject
         Entities,

             (3) in the case of any such Investment made after the date of the
         Indenture as a loan or advance to, or purchase (or other acquisition
         for consideration) of Indebtedness or other debt securities of, a
         Subject Entity, the amount of all cash repayments of principal of such
         loans, advances, Indebtedness or debt securities paid to the Issuer or
         any of its Restricted Domestic Subsidiaries (or to a Person designated
         by the Issuer or any of its Restricted Domestic Subsidiaries, which
         Person is not a Subsidiary or Affiliate of the Issuer) by such Subject
         Entity,

             (4) in the case of any such Investment made after the date of the
         Indenture as a capital contribution to, or purchase (or other
         acquisition for consideration) of Capital Stock or other equity
         securities of, a Subject Entity, the aggregate cash amount paid to the
         Issuer or any of its Restricted Domestic Subsidiaries (or to a Person
         designated by the Issuer or any of its Restricted Domestic
         Subsidiaries, which Person is not a Subsidiary or Affiliate of the
         Issuer) by such Subject Entity as a return of such capital or to
         repurchase such Capital Stock or other equity securities (not to exceed
         the respective amount paid to purchase such Capital Stock or equity
         securities), and

             (5) in the case of any other such Investment made in a Subject
         Entity after the date of the Indenture, the cash amount paid to the
         Issuer or any of its Restricted Domestic Subsidiaries (or to a Person
         designated by the Issuer or any of its Restricted Domestic
         Subsidiaries, which Person is not a Subsidiary or Affiliate of the
         Issuer) by such Subject Entity as a repayment or reimbursement of such
         Investment.

         (f) Corporate Existence

         Subject to Article Nine of the Indenture (as modified by Section 24(h)
     of this Officers' Certificate), the Issuer will do or cause to be done all
     things necessary to preserve and keep in full force and effect its
     corporate existence and its rights (charter


                                       13


<PAGE>   14

     and statutory) and franchises; provided, however, that the Issuer shall not
     be required to preserve any such right or franchise if the Board of
     Directors shall determine that the preservation thereof is no longer
     desirable in the conduct of the business of the Issuer and its Subsidiaries
     taken as a whole.

         (g) Payment of Taxes

         The Issuer will pay or discharge or cause to be paid or discharged,
     before the same shall become delinquent, all taxes, assessments and
     governmental charges levied or imposed upon the Issuer or any Restricted
     Significant Subsidiary or upon the income, profits or property of the
     Issuer or any Restricted Significant Subsidiary; provided that the Issuer
     shall not be required to pay or discharge or cause to be paid or discharged
     any such tax, assessment or charge whose amount, applicability or validity
     is being contested in good faith by appropriate proceedings; provided,
     further, that the Issuer shall not be required to pay or cause to be paid
     (i) any such delinquent taxes, assessments or charges until the aggregate
     amount thereof at any time outstanding shall exceed $10,000,000 or (ii) any
     such tax, assessment or charge levied on any property of the Issuer or any
     Restricted Significant Subsidiary that is without recourse to the Issuer or
     any Restricted Significant Subsidiary.

         (h) Waiver of Stay, Extension or Usury Laws

         The Issuer covenants (to the extent that it may lawfully do so) that it
     will not at any time insist upon, plead, 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 the Issuer from paying all
     or any portion of the principal of or interest on the Notes as contemplated
     herein and in the Indenture, wherever enacted, now or at any time hereafter
     in force, or which may affect the covenants or the performance of this
     Officers' Certificate or the Indenture and (to the extent that it may
     lawfully do so) the Issuer 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 granted to the Trustee, but will suffer and permit
     the execution of every such power as though no such law had been enacted.

     (17) Initial public offering price of Notes:

     The Issuer will sell the Notes to underwriters for 99.0% of the principal
amount thereof. Such underwriters propose to offer the Notes from time to time
for sale in one or more negotiated transactions, or otherwise, at varying prices
to be determined at the time of sale.

     (18) Underwriting discount as a percentage of the principal amount of
Notes:

     See Section 17.

     (19) If other than Dollars, the coin or currency in which payment of
principal of and interest on the Notes shall be payable and in which the Notes
shall be denominated.

     Not applicable.



                                       14



<PAGE>   15

     (20) Terms defined for purposes of this Officers' Certificate and the
issuance of the Notes:

     "2000 Revolving Credit Facility" means the 2000 Revolving Loan Agreement,
dated as of October 3, 2000, among the Issuer, the banks party thereto, Bank of
America, N.A., as administrative agent, Credit Lyonnais Los Angeles Branch, as
syndication agent, Bank One, NA, as documentation agent, and Banc of America
Securities LLC, as lead arranger and sole book manager.

     "Acquired Indebtedness" means:

         (1) with respect to any Person (except a Person formed or organized by
     or on behalf of the Issuer for purposes other than to act as an acquisition
     vehicle) that becomes a Subsidiary of the Issuer after the date of the
     Indenture, Indebtedness of such person and its Subsidiaries existing at the
     time such Person becomes a Subsidiary of the Issuer that was not incurred
     in connection with, or in contemplation of, such Person becoming a
     Subsidiary of the Issuer,

         (2) with respect to the Issuer or any of its Subsidiaries, any
     Indebtedness incurred by the Issuer or any of its Subsidiaries in
     connection with the acquisition of an asset from another Person after the
     date of the Indenture that was not incurred in connection with, or in
     contemplation of, such acquisition.

     "Additional Notes" means Notes, if any, originally issued under the
Indenture after the Closing Date in an aggregate principal amount not in excess
of $100,000,000.

     "Associate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
Closing Date.

     "Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) in or of the equity
(which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person.

     "Capitalized Lease Obligation" means an obligation under a Capital Lease
and the amount of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with GAAP.

     A "Change of Control" shall be deemed to have occurred at such time as
either of the following events shall occur:

         (1) there shall be consummated any consolidation or merger of the
     Issuer in which the Issuer is not the continuing or surviving corporation
     or pursuant to which the Issuer's Voting Stock would be converted into
     cash, securities or other property, other than a merger of the Issuer in
     which the holders of the Issuer's Voting Stock immediately prior to the
     merger have the same or greater proportionate ownership, directly or
     indirectly, of the Voting Stock of the surviving corporation immediately
     after such merger as they had of the Issuer's Voting Stock immediately
     prior to such merger; or


                                       15


<PAGE>   16

         (2) there is a report filed by any Person, including its Affiliates and
     Associates, on Schedule 13D or 14D-1 (or any successor schedule, form or
     report) pursuant to the Exchange Act, disclosing that such Person (for the
     purposes of this definition only, the term "Person" shall include a
     "person" within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
     Exchange Act or any successor provision to either of the foregoing) has
     become the beneficial owner (as the term "beneficial owner" is defined
     under Rule 13d-3 or any successor rule or regulation promulgated under the
     Exchange Act) of 50% or more of the voting power of the Issuer's Voting
     Stock then outstanding;

provided, however, that a Person shall not be deemed beneficial owner of, or to
own beneficially,

         (a) any securities tendered pursuant to a tender or exchange offer made
     by or on behalf of such Person or any of such Person's Affiliates or
     Associates until such tendered securities are accepted for purchase or
     exchange thereunder, or

         (b) any securities if such beneficial ownership (x) arises solely as a
     result of a revocable proxy delivered in response to a proxy or consent
     solicitation made pursuant to, and in accordance with, the applicable rules
     and regulations under the Exchange Act, and (y) is not also then reportable
     on Schedule 13D (or any successor schedule, form or report) under the
     Exchange Act.

Notwithstanding the foregoing, a Change of Control shall not be deemed to have
occurred if at any time the Issuer, any Subsidiary of the Issuer, any employee
stock ownership plan or any other employee benefit plan of the Issuer or any
Subsidiary of the Issuer, or any Person holding the Issuer's Voting Stock for or
pursuant to the terms of any such employee benefit plan, files or becomes
obligated to file a report under or in response to Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report) under the Exchange Act
disclosing beneficial ownership by it of shares of Voting Stock, whether in
excess of 50% or otherwise.

     "Change of Control Business Day" means a day on which banking institutions
are not authorized or required by law or regulation to close in The City of New
York.

     "Closing Date" means February 8, 2001.

     "Common Stock" of any Person means all Capital Stock of such Person that is
generally entitled to:

         (1) vote in the election of directors of such Person or

         (2) if such Person is not a corporation, vote or otherwise participate
     in the selection of the governing body, partners, managers or others that
     will control the management and policies of such Person.

     "Consolidated Adjusted Net Income" of the Issuer means, for any period, the
Consolidated Net Income of the Issuer and its Restricted Subsidiaries for such
period, provided that




                                       16


<PAGE>   17

         (1) the Net Income of any Person acquired in a pooling of interests
     transaction for any period prior to the date of such acquisition shall be
     excluded and

         (2) the Net Income of any Person which is not a Restricted Subsidiary
     or is an Equity Method Person shall be included only to the extent of the
     amount of cash dividends or distributions paid by it to the Issuer or a
     Restricted Subsidiary during such period.

     "Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
of:

         (1) the sum, without duplication, of Consolidated Adjusted Net Income,
     Consolidated Interest Expense (but only to the extent that such
     Consolidated Interest Expense reduces such Consolidated Adjusted Net Income
     for such period), Consolidated Tax Expense, depreciation and amortization
     (including, without limitation, previously capitalized interest amortized
     to cost of sales), in each case for such period, of the Issuer and its
     Restricted Subsidiaries (determined on a consolidated basis in accordance
     with GAAP) to

         (2) Consolidated Interest Expense of the Issuer and its Restricted
     Subsidiaries for such period;

provided, however, that in making such computation, the Consolidated Interest
Expense attributable to interest on any Indebtedness computed on a pro forma
basis and bearing a floating interest rate shall be computed as if the rate in
effect on the date of computation had been the applicable rate for the entire
period unless such interest rate has been fixed by hedging or other similar
contracts or agreements, in which case such interest rate shall be deemed to be
equal to such fixed rate of interest.

     "Consolidated Interest Expense" means, for any period, the aggregate amount
of interest which, in conformity with GAAP, would be set forth opposite the
caption "interest expense" or any like caption on a consolidated income
statement of the Issuer and its Restricted Subsidiaries (including, but not
limited to, imputed interest on Capitalized Lease Obligations, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, the net costs associated with hedging
obligations, amortization of other financing fees and expenses, the interest
portion of any deferred payment obligation, amortization of discount or premium,
if any, and all other non-cash interest expense (other than previously
capitalized interest amortized to cost of sales)) plus, without duplication, all
capitalized interest of the Issuer and its Restricted Subsidiaries for such
period and all interest incurred or paid by the Issuer or any of its Restricted
Subsidiaries under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of the Issuer for such period,
in each case determined on a consolidated basis in accordance with GAAP.

     "Consolidated Net Income" of the Issuer means, for any period, the
consolidated Net Income of the Issuer and its Restricted Subsidiaries for such
period, determined in accordance with GAAP.

                                       17



<PAGE>   18

     "Consolidated Net Worth" means the consolidated shareholders' equity of the
Issuer; provided that, for purposes of computing Consolidated Net Worth, all
Subsidiaries of the Issuer whose accounts are consolidated with those of the
Issuer under GAAP shall be treated as if they were Wholly Owned Subsidiaries of
the Issuer, whether or not they are in fact Wholly Owned Subsidiaries of the
Issuer.

     "Consolidated Tax Expense" of the Issuer means, for any period, the
consolidated federal, state, local and foreign tax expense of the Issuer and its
Restricted Subsidiaries for such period, determined in accordance with GAAP.

     "Default" means any event or condition which is or, with notice or lapse of
time or both, would be an Event of Default.

     "Disqualified Capital Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable other than solely for Qualified Capital Stock, pursuant to a sinking
fund obligation or otherwise, or is redeemable or required to be repurchased or
repaid at the option of the holder thereof for consideration other than solely
for Qualified Capital Stock, in whole or in part, on or prior to the final
maturity date of the Notes; provided that, in the case of any Restricted
Domestic Subsidiary through which the Issuer conducts any real estate joint
venture, the fact that any participant in such joint venture who holds Capital
Stock of such Restricted Domestic Subsidiary may have the right, pursuant to a
"buy-sell" agreement or similar arrangement, to require that the Issuer or any
other Subsidiary of the Issuer purchase such Capital Stock from such joint
venturer, shall not cause such Capital Stock to be deemed Disqualified Capital
Stock.

     "Equity Method Person" means, as of any date of determination, any Person
(other than a Subsidiary of the Issuer) which is or is required to be accounted
for by the Issuer by the equity method of accounting in the Issuer's
consolidated financial statements in accordance with GAAP.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Excluded Debt" means any Indebtedness of the Issuer or its Restricted
Subsidiaries which is:

         (1) subordinated (subject to the rights of holders of Senior
     Indebtedness) in right of payment to the Notes (upon liquidation or
     otherwise) at least to the extent that the Notes are subordinated to the
     Senior Indebtedness and

         (2) matures after, and is not redeemable mandatorily or at the option
     of the holder thereof prior to, the final maturity date of the Notes.

     "Existing Credit Facilities" means the 2000 Revolving Credit Facility and
the 2000 Term Loan Agreement, dated as of October 3, 2000 among the Issuer, the
banks party thereto, Bank of America N.A., as administrative agent, Credit
Lyonnais Los Angeles Branch, as syndication agent, Bank One, NA, as
documentation agent, and Banc of America Securities LLC, as lead


                                       18



<PAGE>   19

arranger and sole book manager, and any credit facility which is an extension or
renewal thereof (including, in each case, any increase in the amount of credit
available thereunder).

     "Existing Indebtedness" means all Indebtedness of the Issuer and its
Restricted Subsidiaries that is outstanding on the Closing Date.

     "GAAP" means generally accepted accounting principles as in effect and
implemented by the Issuer from time to time.

     A "guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Indebtedness of any other
Person including, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person to
purchase or pay principal of or interest on (or advance or supply funds or
pledge assets for the purchase or payment of or payment of interest on)
Indebtedness of such other Person (whether by agreement to provide additional
capital or to maintain financial condition or other similar agreement).

     "incur" has the meaning set forth in Section 16(a) of this Officers'
Certificate.

     "Indebtedness" means:

         (1) any liability of any Person (a) for borrowed money or for the
     deferred purchase price of property or services (other than current
     liabilities, including Trade Payables, arising in the ordinary course of
     business) or which is evidenced by a note, bond, debenture or similar
     instrument, and which would appear as a liability upon a balance sheet of
     such Person prepared on a consolidated basis in accordance with GAAP, or
     (b) for the payment of money relating to a Capitalized Lease Obligation;

         (2) any liability of such Person in respect of letters of credit or
     other similar instruments (or reimbursement obligations with respect
     thereto), but this clause (2) does not include letters of credit provided
     in the ordinary course of business and securing performance (and not
     financial) obligations and performance, completion, surety or similar bonds
     or obligations provided in the ordinary course of business;

         (3) any liability or obligation of others described in clause (1) or
     (2) with respect to which such Person has made a guarantee or similar
     arrangement, directly or indirectly (to the extent of such guarantee or
     arrangement), but this clause (3) does not include obligations in respect
     of banker's acceptances and performance, completion, surety or similar
     bonds or obligations provided in the ordinary course of business; and

         (4) all Indebtedness of others secured by a Lien (other than assessment
     district and similar Liens arising in connection with municipal financings)
     on any asset of such Person, whether or not such Indebtedness is assumed by
     such Person.

The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations described above and the
maximum liability of such Person for any such contingent obligations at such
date. To the extent such Person guarantees the obligation of another Person to
pay interest on Indebtedness owed by such other Person, then a


                                       19



<PAGE>   20

designated percentage of the interest guaranteed or the principal amount of the
underlying Indebtedness, as the case may be, shall be deemed Indebtedness of the
referent Person. For purposes of this definition, the amount of such deemed
Indebtedness of the referent Person shall be equal to the lesser of (a) the
aggregate principal amount of the underlying Indebtedness relating to such
interest guarantee and (b) the aggregate amount of interest due and payable over
the term of such Indebtedness (or the term of the Notes, if shorter) determined
based upon the rate of interest in effect as of the date of such determination,
together with the maximum prepayment premium or penalty which could become due
or payable with respect to such Indebtedness if such Indebtedness were prepaid
prior to the maturity of the Notes.

     "Investment" of any Person means:

         (1) all investments by such Person in any other Person in the form of
     loans, advances or capital contributions,

         (2) all payments of Indebtedness or other obligations of any other
     Person by such Person,

         (3) all purchases (or other acquisitions for consideration) by such
     Person of Indebtedness, Capital Stock or other securities of any other
     Person, and

         (4) all other items that would be classified as investments (including,
     without limitation, purchases of assets outside the ordinary course of
     business) on a balance sheet of such Person prepared in accordance with
     GAAP.

     "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or other similar encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including, without limitation, 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 statute) of any
jurisdiction).

     "Mortgage Finance Subsidiary" means Kaufman and Broad Mortgage Company, an
Illinois corporation.

     "Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP, excluding, however,

         (1) any gain (but not loss) realized upon the sale or other disposition
     (including, without limitation, dispositions pursuant to sale and leaseback
     transactions) of any real property or equipment of such Person which is not
     sold or otherwise disposed of in the ordinary course of business, and

         (2) any gain (but not loss) realized upon the sale or other disposition
     of any Capital Stock of such Person or any of its Restricted Subsidiaries
     owned by such Person.

     "Non-Recourse Indebtedness" means Indebtedness secured by a Lien on
property to the extent that the liability for such Indebtedness (and any
interest thereon) is limited to the security


                                       20


<PAGE>   21

of such property without liability on the part of the Issuer or any of its
Subsidiaries for any deficiency, including liability by reason of any agreement
by the Issuer or any of its Subsidiaries to provide additional capital or
maintain the financial condition of or otherwise support the credit of the
Person incurring such Indebtedness.

     "Notes" means the 9-1/2% Senior Subordinated Notes due 2011 of the Issuer,
including, without limitation, any Additional Notes which may be issued.

     "Qualified Capital Stock" means Capital Stock other than Disqualified
Capital Stock.

     "Refinancing Indebtedness" means Indebtedness that solely refunds,
refinances or extends, and is incurred within six months of the scheduled
maturity date or a mandatory repurchase date or optional redemption date of, any
Notes, Existing Indebtedness (excluding any Existing Indebtedness repaid with
the proceeds from the sale of the Notes) or other Indebtedness incurred by the
Issuer or its Restricted Subsidiaries pursuant to the terms of the Indenture and
the Notes, but only to the extent that:

         (1) if the Indebtedness being refunded, refinanced or extended is
     subordinated to the Notes, the Refinancing Indebtedness is also
     subordinated to the Notes at least to the extent and in the manner as such
     Indebtedness,

         (2) if the Indebtedness being refunded, refinanced or extended is
     subordinated to the Notes, the Refinancing Indebtedness (a) is scheduled to
     mature either no earlier than the Indebtedness being refunded, refinanced
     or extended or after the scheduled maturity date of the Notes and (b) has a
     Weighted Average Life to Maturity at the time such Refinancing Indebtedness
     is incurred that is equal to or greater than the Weighted Average Life to
     Maturity of the Indebtedness being refunded, refinanced or extended,

         (3) such Refinancing Indebtedness is in an aggregate principal amount
     that is equal to or less than the aggregate principal amount then
     outstanding under the Indebtedness being refunded, refinanced or extended
     and

         (4) such Refinancing Indebtedness is incurred by the same Person that
     initially incurred the Indebtedness being refunded, refinanced or extended
     except that (a) the Issuer may incur Refinancing Indebtedness to refund,
     refinance or extend Indebtedness of any Restricted Subsidiary and (b) any
     Restricted Subsidiary may incur Refinancing Indebtedness to refund,
     refinance or extend Indebtedness of any other Restricted Subsidiary.

     "Restricted Domestic Subsidiary" means, as of any date of determination, a
Restricted Subsidiary

         (1) that is organized under the laws of the United States of America or
     any state thereof or the District of Columbia and

         (2) the majority of the assets of which (as reflected on a balance
     sheet of such Subsidiary prepared in accordance with GAAP) is located in
     the United States of America.


                                       21

<PAGE>   22

     "Restricted Foreign Subsidiary" means, as of any date of determination, a
Restricted Subsidiary that is not a Restricted Domestic Subsidiary.

     "Restricted Payment" means, with respect to any Person,

         (1) the declaration or payment of any dividend or the making of any
     other payment or distribution of cash, securities or other property in
     respect of such Person's Capital Stock or in respect of any warrants,
     options or other rights (other than convertible or exchangeable debt
     securities of such Person) to purchase or acquire such Person's Capital
     Stock (except that a dividend payable solely in Qualified Capital Stock of
     the Issuer shall not constitute a Restricted Payment),

         (2) any payment on account of the purchase, redemption, retirement or
     other acquisition for value of such Person's Capital Stock or any warrants,
     options or other rights (other than convertible or exchangeable debt
     securities of such Person) to purchase or acquire such Person's Capital
     Stock, or any other payment or distribution made in respect thereof, either
     directly or indirectly, or

         (3) any principal payment, redemption, repurchase, defeasance or other
     acquisition or retirement, prior to scheduled principal payment or
     scheduled maturity, of Indebtedness (other than collateralized mortgage
     obligations issued by Subsidiaries of the Mortgage Finance Subsidiary) of
     the Issuer or any of its Subsidiaries which is subordinated in right of
     payment to the Notes;

provided, however, that with respect to the Issuer and its Restricted
Subsidiaries, Restricted Payments shall not include

         (a) any payment described in clause (1) or (2) above made to the Issuer
     or any of its Restricted Subsidiaries by any of the Issuer's other
     Restricted Subsidiaries,

         (b) any exchange offer, but only to the extent the Issuer exchanges
     solely Capital Stock of the Issuer (other than Disqualified Stock) for
     Indebtedness of the Issuer or a Restricted Subsidiary in such exchange
     offer or

         (c) any redemption, repurchase or retirement of Indebtedness (the
     Indebtedness being so redeemed, repurchased or retired being hereinafter
     called "Subject Indebtedness") described in clause (3) above if made from
     the proceeds of Indebtedness which (x) is subordinated to the Notes to the
     same extent as the Subject Indebtedness, (y) is scheduled to mature either
     no earlier than the Subject Indebtedness or after the scheduled maturity
     date of the Notes and (z) has a Weighted Average Life to Maturity at the
     time such Indebtedness is incurred that is equal to or greater than the
     Weighted Average Life to Maturity of the Subject Indebtedness.

     "Restricted Significant Subsidiary" means any Restricted Subsidiary which
is a "significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X under
the Securities Act of 1933, as amended, and the Exchange Act (as such Regulation
S-X was in effect on June 1, 1996).


                                       22


<PAGE>   23

     "Restricted Subsidiary" means a Subsidiary of the Issuer which is not, as
of the determination date, an Unrestricted Subsidiary.

     "Subsidiary" of any Person means:

         (1) any corporation at least a majority of the aggregate voting power
     of the Common Stock of which is owned by such Person, directly or through
     one or more other Subsidiaries of such Person, and

         (2) any entity other than a corporation at least a majority of the
     Common Stock of which is owned by such Person, directly or through one or
     more other Subsidiaries of such Person.

     "Substitute Credit Facility" means any credit facility of the Issuer which
is created subsequent to the Closing Date and which replaces all or part of the
Existing Credit Facilities or a Substitute Credit Facility (and which may
provide for an increase in the amount of credit available thereunder), so long
as the Issuer is the borrower under such Substitute Credit Facility.

     "Unrestricted Subsidiary" means:

         (a) the Mortgage Finance Subsidiary,

         (b) any Subsidiary of the Mortgage Finance Subsidiary on the Closing
     Date,

         (c) any other Subsidiary of the Issuer which is designated as an
     Unrestricted Subsidiary by the Issuer's Board of Directors, as provided
     below, and

         (d) any Subsidiary of an Unrestricted Subsidiary;

provided that, in each case referred to in clause (a), (b), (c) or (d), the
creditors of such Subsidiary have no direct or indirect recourse (including, but
not limited to, recourse with respect to the payment of principal of or interest
on Indebtedness of such Subsidiary) to the Issuer or any of its Restricted
Subsidiaries.

The Board of Directors of the Issuer may designate an Unrestricted Subsidiary to
be a Restricted Subsidiary; provided that no such designation shall result in
any Restricted Subsidiary becoming a Subsidiary of any Unrestricted Subsidiary;
and provided, further that:

         (1) any such designation shall be deemed to be an incurrence by the
     Issuer and its Restricted Subsidiaries, as of the date of such designation,
     of the consolidated Indebtedness (if any) of such designated Subsidiary and
     its Subsidiaries (if any) which are or are being designated as Restricted
     Subsidiaries, determined in accordance with GAAP, for purposes of the
     covenant described above in Section 16(a) of this Officers' Certificate,

         (2) immediately after giving effect to such designation and the deemed
     incurrence of any such additional Indebtedness (A) no Default or Event of
     Default shall have occurred and shall be continuing, (B) the Issuer could
     incur $1.00 of additional


                                       23



<PAGE>   24

     Indebtedness pursuant to the first paragraph of the covenant described
     above in Section 16(a) of this Officers' Certificate and (C) without
     limitation to clause (A) above, such designated Subsidiary and its
     Subsidiaries (if any) which are or are being designated as Restricted
     Subsidiaries are in compliance with the covenant described above in Section
     16(b) of this Officers' Certificate.

Subject to the foregoing, the Board of Directors of the Issuer also may
designate any Restricted Subsidiary (together with its Subsidiaries (if any)) to
be an Unrestricted Subsidiary; provided that:

         (1) the consolidated shareholders' equity (determined in accordance
     with GAAP) of such designated Subsidiary and its Subsidiaries (if any) at
     the time of such designation shall be deemed to be an Investment by the
     Issuer in an Unrestricted Subsidiary at the time of such designation and
     shall reduce the amount of Investments which the Issuer and its Restricted
     Domestic Subsidiaries shall be permitted to make under the covenant
     described above in Section 16(e) of this Officers' Certificate and

         (2) immediately after giving effect to such designation and reduction
     of amounts available for Investments under such covenant, (A) no Default or
     Event of Default shall have occurred and shall be continuing, (B) the
     Issuer could incur $1.00 of additional Indebtedness pursuant to the first
     paragraph of the covenant described above in Section 16(a) of this
     Officers' Certificate and (C) the Issuer could make $1.00 of additional
     Investments in Unrestricted Subsidiaries pursuant to the covenant described
     above in Section 16(e) of this Officers' Certificate.

Any designation by the Board of Directors described above shall be evidenced to
the Trustee by the filing with the Trustee of a certified copy of the resolution
of the Issuer's Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions and setting forth the underlying calculations supporting
such certification. As of the date of this Officers' Certificate, the only
Unrestricted Subsidiaries are the Mortgage Finance Subsidiary and its
Subsidiaries.

     "Voting Stock" means, with respect to any Person, the capital stock of such
Person having general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).

     "Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any directors' qualifying shares or Investments by foreign nationals mandated by
applicable law) by such Person or one or more other Wholly Owned Subsidiaries of
such Person.

     "Weighted Average Life to Maturity" means, when applied to any Indebtedness
or portion thereof at any date, the number of years obtained by dividing:


         (1) the then outstanding principal amount of such Indebtedness or
     portion thereof, as the case may be, into


                                       24



<PAGE>   25

         (2) the sum of the products obtained by multiplying (a) the amount of
     each then remaining installment, sinking fund, serial maturity or other
     required payment of principal of such Indebtedness or portion thereof, as
     the case may be, including payment at final maturity, in respect thereof,
     by (b) the number of years (calculated to the nearest one-twelfth) that
     will elapse between such date and the making of such payment.

     (21) The Global Notes will be in substantially the form attached hereto as
Exhibit A, and any Notes in definitive form will be in substantially the form
attached hereto as Exhibit B, and said terms are hereby incorporated herein and
in the Indenture by reference.

     (22) SunTrust Bank, as successor to SunTrust Bank, Atlanta, shall be the
initial Trustee, paying agent, transfer agent and registrar for the Notes and
shall be empowered so to act through its agent in the Borough of Manhattan, The
City of New York.

     (23) Terms, whether or not capitalized, used in this Officers' Certificate
and not defined herein which are defined in the Indenture shall have the
respective meanings given them in the Indenture.

     (24) Any deletions from, modifications of or additions to the defined
terms, Events of Default, covenants and other provisions of the Indenture with
respect to the Notes:

         (a) Section 5.1 of the Indenture is hereby amended and restated, but
     only insofar as it relates to the Notes, to read in full as follows, and
     the term "Event of Default", insofar (but only insofar) as such term
     relates to the Notes, shall have the meaning set forth below:

             SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
         Waiver of Default. "Event of Default" with respect to the Notes,
         wherever used herein, means each one of the following events which
         shall have occurred and be continuing (whatever the reason for such
         Event of Default and whether it shall be voluntary or involuntary or be
         effected by operation of law or pursuant to any judgment, decree or
         order of any court or any order, rule or regulation of any
         administrative or governmental body):

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

                 (b) default in the payment of all or any part of the principal
             of any of the Notes as and when the same shall become due and
             payable, either at maturity, upon any redemption at the option of
             the Issuer or repurchase at the option of the Holders, by
             declaration of acceleration or otherwise; or

                 (c) failure on the part of the Issuer duly to observe or
             perform any other of the covenants or agreements on the part of the
             Issuer in the Notes or in this Indenture contained (other than a
             covenant or warranty in respect of the Notes a default in the
             performance or breach of which is


                                       25


<PAGE>   26

             elsewhere in this Section 5.1 specifically dealt with or which has
             expressly been included in this Indenture solely for the benefit of
             one or more series of Securities other than the Notes) for a period
             of 60 days (or for 10 days in the case of any of the other
             covenants insofar as they relate to the repurchase of Notes
             following a Change of Control, set forth in Section 7, 8, 9,10 or
             11 of the Officers' Certificate dated February 8, 2001 establishing
             the form and terms of the Notes) after the date on which written
             notice specifying such failure, stating that such notice is a
             "Notice of Default" hereunder and demanding that the Issuer remedy
             the same, shall have been given by registered or certified mail,
             return receipt requested, or by overnight courier or by hand
             delivery with evidence of the receipt of such overnight courier or
             hand delivery by the Issuer, to the Issuer by the Trustee, or to
             the Issuer and the Trustee by the Holders of at least 25% in
             aggregate principal amount of the Notes then Outstanding; or

                 (d) a court having jurisdiction in the premises shall enter a
             decree or order for relief in respect of the Issuer or any of its
             Restricted Significant Subsidiaries in an involuntary case under
             any applicable bankruptcy, insolvency or other similar law now or
             hereafter in effect, or appointing a receiver, liquidator,
             assignee, custodian, trustee, sequestrator (or similar official) of
             the Issuer or any of its Restricted Significant Subsidiaries or for
             any substantial part of the property of the Issuer or any of its
             Restricted Significant Subsidiaries or ordering the winding up or
             liquidation of the affairs of the Issuer or any of its Restricted
             Significant Subsidiaries, and such decree or order shall remain
             unstayed and in effect for a period of 60 consecutive days; or

                 (e) the Issuer or any of its Restricted Significant
             Subsidiaries shall commence a voluntary case under any applicable
             bankruptcy, insolvency or other similar law now or hereafter in
             effect, or consent to the entry of an order for relief in an
             involuntary case under any such law, or consent to the appointment
             or taking possession by a receiver, liquidator, assignee,
             custodian, trustee, sequestrator (or similar official) of the
             Issuer or any of its Restricted Significant Subsidiaries or for any
             substantial part of the property of the Issuer or any of its
             Restricted Significant Subsidiaries, or make any general assignment
             for the benefit of creditors; or

                 (f) a default under any mortgage, indenture or other instrument
             or agreement (including this Indenture with respect to any other
             series of Securities) under which there may be issued or by which
             there may be secured or evidenced any Indebtedness (other than
             Non-Recourse Indebtedness) of the Issuer or any Restricted
             Subsidiary, whether such indebtedness existed on February 8, 2001
             or shall be created thereafter, if (a) such default results from
             the failure to pay any such Indebtedness when due (provided that no
             such failure to pay Indebtedness when due shall be deemed to have
             occurred so long as the Issuer or such Restricted



                                       26


<PAGE>   27

             Subsidiary, as the case may be, shall be contesting whether such
             Indebtedness is due in good faith by appropriate proceedings) or as
             a result of such default the maturity of such Indebtedness has been
             accelerated prior to its expressed maturity and (b) the sum of (x)
             the principal amount of such Indebtedness plus (y) the aggregate
             principal amount of all other such Indebtedness in default for
             failure to pay any such Indebtedness when due or the maturity of
             which has been so accelerated equals $20,000,000 or more,
             individually, or $40,000,000 or more, in the aggregate, without
             such Indebtedness having been discharged or such acceleration
             having been rescinded or annulled within a period of 30 days after
             notice thereof shall have been given to the Issuer by the Trustee,
             or to the Issuer and the Trustee by the Holders of at least 25% in
             aggregate principal amount of the Notes then Outstanding.

             If an Event of Default occurs and is continuing, then, and in each
         and every such case, either the Trustee or the Holders of not less than
         25% in aggregate principal amount of the Notes then Outstanding
         hereunder, by notice in writing to the Issuer (and to the Trustee if
         given by Holders of the Notes), may declare the principal of all Notes
         and interest accrued thereon, if any, to be due and payable immediately
         and, upon any such declaration the same shall become immediately due
         and payable.

             The foregoing provisions, however, are subject to the condition
         that if, at any time after the principal of the Notes shall have been
         so declared due and payable, and before any judgment or decree for the
         payment of the moneys due shall have been obtained or entered as
         hereinafter provided, the Issuer shall pay or shall deposit with the
         Trustee a sum sufficient to pay all matured installments of interest
         upon all the Notes and the principal of any and all of the Notes which
         shall have become due otherwise than by acceleration (with interest
         upon such principal and, to the extent that payment of such interest is
         enforceable under applicable law, on overdue installments of interest,
         at the same rate as the rate of interest borne by the Notes to the date
         of such payment or deposit) and such amount as shall be sufficient to
         cover reasonable compensation to the Trustee and each predecessor
         Trustee, its agents, attorneys and counsel, and all other expenses and
         liabilities incurred, and all advances made, by the Trustee and each
         predecessor Trustee except as a result of negligence or bad faith, and
         if any and all Events of Default with respect to the Notes, other than
         the non-payment of the principal of Notes which shall have become due
         by acceleration, shall have been cured, waived or otherwise remedied as
         provided herein, then and in every such case the Holders of a majority
         in aggregate principal amount of all of the Notes then Outstanding, by
         written notice to the Issuer and to the Trustee, may waive all defaults
         with respect to the Notes and rescind and annul such declaration and
         its consequences, but no such waiver or rescission and annulment shall
         extend to or shall affect any subsequent default or shall impair any
         right consequent thereon.

         (b) Section 5.6 of the Indenture is hereby amended and restated, but
     only insofar as it relates to the Notes, to read in full as follows:


                                       27


<PAGE>   28

             SECTION 5.6 Limitations on Suits by Securityholders. No Holder of
         any Notes shall have any right by virtue or by availing of any
         provision of this Indenture to institute any action or proceeding at
         law or in equity or in bankruptcy or otherwise upon or under or with
         respect to this Indenture, or for the appointment of a trustee,
         receiver, liquidator, custodian or other similar official or for any
         other remedy hereunder, except actions or proceedings for payment of
         overdue principal or interest, unless such Holder previously shall have
         given to the Trustee written notice of default and of the continuance
         thereof, as hereinbefore provided, and unless also the Holders of not
         less than 25% in aggregate principal amount of the Notes then
         Outstanding shall have made written request upon the Trustee to
         institute such action or proceedings in its own name as trustee
         hereunder and shall have offered to the Trustee such reasonable
         indemnity as it may require against the reasonable costs, expenses and
         liabilities to be incurred therein or thereby and the Trustee for 60
         days after its receipt of such notice, request and offer of indemnity
         shall have failed to institute any such action or proceeding and no
         direction inconsistent with such written request by the Holders of a
         majority in principal amount of the Notes then Outstanding shall have
         been given to the Trustee pursuant to Section 5.9; it being understood
         and intended, and being expressly covenanted by the taker and Holder of
         every Note with every other taker and Holder of any Note and the
         Trustee, that no one or more Holders of Notes shall have any right in
         any manner whatever by virtue or by availing of any provision of this
         Indenture to affect, disturb or prejudice the rights of any such Holder
         of Notes, or to obtain or seek to obtain priority over or preference to
         any other such Holder or to enforce any right under this Indenture,
         except in the manner herein provided and for the equal, ratable and
         common benefit of all Holders of Notes. For the protection and
         enforcement of the provisions of this Section, each and every Holder of
         Notes and the Trustee shall be entitled to such relief as can be given
         either at law or in equity.

         (c) Section 5.9 of the Indenture is hereby amended and restated, but
     only insofar as it relates to the Notes, to read in full as follows:

             SECTION 5.9 Control by Holders of Notes. The Holders of a majority
         in aggregate principal amount of the Notes at the time Outstanding
         shall have the right to direct the time, method, and place of
         conducting any proceeding for any remedy available to the Trustee, or
         exercising any trust or power conferred on the Trustee with respect to
         the Notes by this Indenture; provided that such direction shall not be
         otherwise than in accordance with law and the provisions of this
         Indenture and provided further that (subject to the provisions of
         Section 6.1) the Trustee shall have the right to decline to follow any
         such direction if the Trustee, being advised by counsel, shall
         determine that the action or proceeding so directed may not lawfully be
         taken or if the Trustee in good faith by its board of directors, the
         executive committee, or a trust committee of directors or Responsible
         Officers of the Trustee shall determine that the action or proceedings
         so directed would involve the Trustee in personal liability or if the
         Trustee in good faith shall so determine that the actions or
         forbearances specified in or pursuant to such direction would be unduly
         prejudicial to the interests of Holders


                                       28


<PAGE>   29

         of the Notes not joining in the giving of said direction, it being
         understood that (subject to Section 6.1) the Trustee shall have no duty
         to ascertain whether or not such actions or forbearances are unduly
         prejudicial to such Holders.

             Nothing in this Indenture shall impair the right of the Trustee in
         its discretion to take any action deemed proper by the Trustee and
         which is not inconsistent with such direction or directions by Holders
         of the Notes.

         (d) Section 5.10 of the Indenture is hereby amended and restated, but
     only insofar as it relates to the Notes, to read in full as follows:

             SECTION 5.10. Waiver of Past Defaults. Prior to a declaration of
         the acceleration of the maturity of the Notes as provided in Section
         5.1, the Holders of not less than a majority in aggregate principal
         amount of the Notes at the time Outstanding may on behalf of the
         Holders of all the Notes waive any past default or Event of Default,
         except a default in respect of a covenant or provision hereof that
         cannot be modified or amended without the consent of each Holder of any
         Notes affected. In the case of any such waiver, the Issuer, the Trustee
         and the Holders of all Notes shall be restored to their former
         positions and rights hereunder, respectively; but no such waiver shall
         extend to any subsequent or other default or impair any right
         consequent thereon.

             Upon any such waiver, such default shall cease to exist and be
         deemed to have been cured and not to have occurred, and any Event of
         Default arising therefrom shall be deemed to have been cured, and not
         to have occurred for every purpose of this Indenture; but no such
         waiver shall extend to any subsequent or other default or Event of
         Default or impair any right consequent thereon.

         (e) Section 5.12 of the Indenture is hereby amended and restated, but
     only insofar as it relates to the Notes, to read in full as follows:

             SECTION 5.12. Right of Court to Require Filing of Undertaking to
         Pay Costs. All parties to this Indenture agree, and each Holder of any
         Note by his acceptance thereof shall be deemed to have agreed, that any
         court may in its discretion require, in any suit for the enforcement of
         any right or remedy under this Indenture or in any suit against the
         Trustee for any action taken, suffered or omitted by it as Trustee, the
         filing by any party litigant in such suit of an undertaking to pay the
         costs of such suit, and that such court may in its discretion assess
         reasonable costs, including reasonable attorneys' fees, against any
         party litigant in such suit, having due regard to the merits and good
         faith of the claims or defenses made by such party litigant; but the
         provisions of this Section shall not apply to any suit instituted by
         the Trustee, to any suit instituted by any Holder or group of Holders
         holding in the aggregate more than 10% in aggregate principal amount of
         the Notes then Outstanding, or to any suit instituted by any Holder for
         the enforcement of the payment of the principal of or interest on any
         Note on or after the due date expressed in such Note or any date fixed
         for redemption or repurchase.



                                       29


<PAGE>   30

         (f) Section 6.2(f) of the Indenture is hereby amended and restated, but
     only insofar as it relates to the Notes, to read in full as follows:

             (f) prior to the occurrence of an Event of Default with respect to
         the Notes hereunder and after the curing or waiving of all Events of
         Default with respect to the Notes, the Trustee shall not be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, consent, order, approval, appraisal, bond, debenture,
         note, coupon, security, or other paper or document unless requested in
         writing so to do by the Holders of not less than a majority in
         aggregate principal amount of the Notes then Outstanding; provided
         that, if the payment within a reasonable time to the Trustee of the
         costs, expenses or liabilities likely to be incurred by it in the
         making of such investigation is, in the opinion of the Trustee, not
         reasonably assured to the Trustee by the security afforded to it by the
         terms of this Indenture, the Trustee may require reasonable indemnity
         against such expenses or liabilities as a condition to proceeding; the
         reasonable expenses of every such investigation shall be paid by the
         Issuer or, if paid by the Trustee or any predecessor Trustee, shall be
         repaid by the Issuer upon demand; and

         (g) The first paragraph of Section 8.2 of the Indenture is hereby
     amended and restated, but only insofar as it relates to the Notes, to read
     in full as follows:

             SECTION 8.2. Supplemental Indentures With Consent of
         Securityholders. With the consent (evidenced as provided in Article
         Seven) of the Holders of not less than a majority in aggregate
         principal amount of the Notes at the time Outstanding, the Issuer, when
         authorized by a resolution of its Board of Directors (which resolution
         may provide general terms or parameters for such action and may provide
         that the specific terms of such action may be determined in accordance
         with or pursuant to an Issuer Order), and the Trustee may, from time to
         time and at any time, enter into an indenture or indentures
         supplemental hereto insofar as relates to the Notes for the purpose of
         adding any provisions to or changing in any manner or eliminating any
         of the provisions of this Indenture or of any supplemental indenture or
         of modifying in any manner the rights of the Holders of Notes;
         provided, that no such supplemental indenture shall (a) extend the
         final maturity of any Note or any date on which the Change of Control
         Repurchase Price of any Note is payable, or reduce the principal amount
         thereof, or reduce the rate or extend the time of payment of interest
         thereon, or reduce any amount payable on redemption or repurchase
         thereof, or make the principal thereof or interest thereon payable in
         any coin or currency other than that provided in the Notes or in
         accordance with the terms thereof, or modify the percentage of Holders
         of Notes required pursuant to Section 5.1 or 5.10 to waive any default
         or to rescind and annul any declaration of acceleration, or alter the
         provisions of Section 11.12 or impair or affect the right of any Holder
         of Notes to institute suit for the payment thereof or any right of
         repayment, repurchase or redemption at the option of the Holders of
         Notes, in each case without the consent of the Holder of each Note so
         affected, or (b) reduce the aforesaid percentage of


                                       30


<PAGE>   31

         Notes, the consent of the Holders of which is required for any such
         supplemental indenture, without the consent of the Holders of each Note
         so affected.

         (h) Section 9.1 of the Indenture is hereby amended and restated, but
     only insofar as it relates to the Notes, to read in full as follows:

             SECTION 9.1. Issuer May Consolidate, etc., on Certain Terms. The
         Issuer covenants that it will not merge or consolidate with or into any
         other Person or sell, lease or convey all or substantially all of its
         assets to any other Person, unless (i) either the Issuer shall be the
         continuing corporation, or the successor corporation (if other than the
         Issuer) or the Person which acquires by sale, lease or conveyance all
         or substantially all the assets of the Issuer shall be a corporation
         organized and existing under the laws of the United States of America
         or any State thereof or the District of Columbia and shall expressly
         assume the due and punctual payment of the principal of and interest on
         all the Notes, according to their tenor, and the due and punctual
         performance and observance of all of the covenants and conditions in
         this Indenture and the Notes to be performed or observed by the Issuer,
         by supplemental indenture satisfactory to the Trustee, executed and
         delivered to the Trustee by such corporation, (ii) immediately after
         giving effect to such transaction, no Default or Event of Default shall
         have occurred and be continuing, (iii) immediately after giving effect
         to such transaction, the Issuer or such corporation, as the case may
         be, would be able to incur at least $0.50 of additional Indebtedness
         pursuant to the first paragraph of the covenant set forth in Section
         16(a) of the Officers' Certificate dated February 8, 2001 establishing
         the form and terms of the Notes, and (iv) the Issuer shall have
         delivered to the Trustee an Officers' Certificate and Opinion of
         Counsel, each stating that such transaction and such supplemental
         indenture comply with this Indenture and the Notes, and that all
         conditions precedent relating to such transaction have been complied
         with.

         (i) Section 10.1(B)(b) of the Indenture is hereby amended, but only
     insofar as it relates to the Notes, by deleting the references therein to
     Sections 5.1(e) and (f) of the Indenture and replacing the same with
     references to Sections 5.1(d) and (e) of the Indenture, the purpose of such
     replacement being to reflect the amendment and restatement of such Section
     5.1 pursuant to Section 24(a) of this Officers' Certificate.

         (j) Section 10.1(C)(b) of the Indenture is hereby amended, but only
     insofar as it relates to the Notes, by deleting the references therein to
     Sections 5.1(e) and (f) of the Indenture and replacing the same with
     references to Sections 5.1(d) and (e) of the Indenture, the purpose of such
     replacement being to reflect the amendment and restatement of such Section
     5.1 pursuant to Section 24(a) of this Officers' Certificate.

         (k) Pursuant to Section 10.1(C) of the Indenture, it is hereby
     expressly provided that Section 9.1 of the Indenture (as amended and
     restated pursuant to Section 24(h) of this Officers' Certificate) and the
     covenants set forth in Sections 7, 8, 9, 10, 11 and 16 (other than Section
     16(h)) of this Officers' Certificate shall be subject to covenant


                                       31

<PAGE>   32

     defeasance upon the terms and subject to the conditions set forth in
     Section 10.1(C) of the Indenture.

         (l) To the extent that Section 5.1, 5.9, 5.10, 5.12, 6.2(f), or 8.2 of
     the Indenture (as set forth in the Indenture and not as amended by this
     Officers' Certificate) or any other provisions of the Indenture shall
     require the action or vote of two or more series of Securities under the
     Indenture acting together as a class, the Notes shall be excluded from such
     class for all purposes, it being expressly understood and agreed that the
     Notes shall be entitled to act alone in respect of all matters under the
     Indenture and that no other series of Securities issued under the Indenture
     shall have any right to participate in or vote in connection with any
     action, vote or other matter relating to the Notes.

         (m) All references in the Notes and in the Indenture to "the
     Indenture", "this Indenture" or to terms or provisions contained or set
     forth in the Indenture or the Notes (and all references of like import)
     shall be deemed to mean and include the terms and provisions of the Notes
     set forth in this Officers' Certificate, which shall for all purposes be
     deemed to constitute a part of the Indenture and the Notes.

         (n) For purposes of the Indenture, as amended hereby, the term "Notes"
     shall mean the series of Securities established pursuant to this Officers'
     Certificate.

     (25) Captions and headings in this Officers' Certificate are for
convenience of reference only and shall not affect the construction hereof.

     (26) Each of the undersigned hereby further certifies, pursuant to Section
2.4(3) of the Indenture, that the form and terms of the Notes have been
established pursuant to Sections 2.1 and 2.3 of the Indenture and comply with
the Indenture.

     (27) The Notes will rank pari passu with the Issuer's 9-3/8% Senior
Subordinated Notes due 2003 and 9-5/8% Senior Subordinated Notes due 2006.

     IN WITNESS WHEREOF, we have executed this Certificate on behalf of the
Issuer this 8th day of February, 2001.

[SEAL]


                              ---------------------------------------
                              Name:  Bryan A. Binyon
                              Title: Vice President and Treasurer



                              ---------------------------------------
                              Name:  Kimberly N. King
                              Title: Corporate Secretary and Director,
                                     Corporate Legal Affairs


                                       32