exv4w24






Exhibit 4.24




EXECUTION VERSION




 





PURCHASE CONTRACT AGREEMENT




Dated as of February 9, 2011




among




HOVNANIAN ENTERPRISES, INC.




and




K. HOVNANIAN ENTERPRISES, INC.




and




WILMINGTON TRUST COMPANY,




as Purchase Contract Agent,



as Attorney-in-Fact for the Holders from time to time as provided herein



and as Trustee under the Indenture referred to herein



 




 









 





TABLE OF CONTENTS




 




	 	 	 	 	 
	 	 	Page
	ARTICLE 1

	Definitions and Other Provisions of General Application

	 
	 	 	 	 
	Section 1.01. Definitions

	 	 	1	 
	Section 1.02. Compliance Certificates and Opinions

	 	 	15	 
	Section 1.03. Notices

	 	 	17	 
	Section 1.04. Effect of Headings and Table of Contents

	 	 	17	 
	Section 1.05. Successors and Assigns

	 	 	17	 
	Section 1.06. Separability Clause

	 	 	18	 
	Section 1.07. Benefits of Agreement

	 	 	18	 
	Section 1.08. Governing Law

	 	 	18	 
	Section 1.09. Conflict Indenture

	 	 	18	 
	Section 1.10. Legal Holidays

	 	 	18	 
	Section 1.11. Counterparts

	 	 	18	 
	Section 1.12. Inspection of Agreement

	 	 	18	 
	Section 1.13. Calculations

	 	 	18	 
	Section 1.14. UCC

	 	 	19	 
	 
	 	 	 	 
	ARTICLE 2

	Unit and Purchase Contract Forms

	 
	 	 	 	 
	Section 2.01. Forms of Units and Purchase Contracts Generally

	 	 	19	 
	Section 2.02. Form of Certificate of Authentication

	 	 	20	 
	Section 2.03. Global Securities; Separation of Units

	 	 	21	 
	Section 2.04. Recreation of Units

	 	 	21	 
	 
	 	 	 	 
	ARTICLE 3

	The Units and Purchase Contracts

	 
	 	 	 	 
	Section 3.01. Amount and Denominations

	 	 	22	 
	Section 3.02. Rights and Obligations Evidenced by the Equity-Linked
Securities

	 	 	23	 
	Section 3.03. Execution, Authentication, Delivery and Dating

	 	 	23	 
	Section 3.04. Temporary Equity-Linked Securities

	 	 	24	 
	Section 3.05. Registration; Registration of Transfer and Exchange

	 	 	25	 
	Section 3.06. Book-Entry Interests

	 	 	27	 
	Section 3.07. Notices to Holders

	 	 	27	 
	Section 3.08. Appointment of Successor Depositary

	 	 	27	 
	Section 3.09. Definitive Securities

	 	 	27	 






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	 	 	Page
	Section 3.10. Section 382 Ownership Blocker

	 	 	28	 
	Section 3.11. Mutilated, Destroyed, Lost and Stolen Securities

	 	 	30	 
	Section 3.12. Persons Deemed Owners

	 	 	31	 
	Section 3.13. Cancellation

	 	 	33	 
	 
	 	 	 	 
	ARTICLE 4

	Settlement of the Purchase Contracts

	 
	 	 	 	 
	Section 4.01. Settlement Rate

	 	 	34	 
	Section 4.02. Representations and Agreements of Holders

	 	 	34	 
	Section 4.03. Purchase Contract Settlement Fund

	 	 	35	 
	Section 4.04. Settlement Conditions

	 	 	36	 
	Section 4.05. Mandatory Settlement on the Mandatory Settlement Date

	 	 	36	 
	Section 4.06. Early Settlement

	 	 	36	 
	Section 4.07. Early Settlement Upon a Fundamental Change

	 	 	38	 
	Section 4.08. Early Mandatory Settlement at the Company’s Election

	 	 	42	 
	Section 4.09. Acceleration of Mandatory Settlement Date

	 	 	44	 
	Section 4.10. Section 382 Settlement Blocker

	 	 	44	 
	Section 4.11. Registration of Underlying Shares and Transfer Taxes

	 	 	45	 
	Section 4.12. Return of Purchase Contract Settlement Fund

	 	 	45	 
	Section 4.13. No Fractional Shares

	 	 	46	 
	 
	 	 	 	 
	ARTICLE 5

	Adjustments

	 
	 	 	 	 
	Section 5.01. Adjustments to the Fixed Settlement Rates

	 	 	46	 
	Section 5.02. Reorganization Events

	 	 	55	 
	 
	 	 	 	 
	ARTICLE 6

	Concerning the Holders of Purchase Contracts

	 
	 	 	 	 
	Section 6.01. Evidence of Action Taken by Holders

	 	 	58	 
	Section 6.02. Proof of Execution of Instruments and of Holding of Securities

	 	 	58	 
	Section 6.03. Purchase Contracts Deemed Not Outstanding

	 	 	58	 
	Section 6.04. Right of Revocation of Action Taken

	 	 	59	 
	Section 6.05. Record Date for Consents and Waivers

	 	 	59	 
	 
	 	 	 	 
	ARTICLE 7

	Remedies

	 
	 	 	 	 
	Section 7.01. Unconditional Right of Holders to Receive Shares of Class A Common Stock

	 	 	60	 
	Section 7.02. Notice To Purchase Contract Agent; Limitation On Proceedings

	 	 	60	 






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	 	 	Page
	Section 7.03. Restoration of Rights and Remedies

	 	 	60	 
	Section 7.04. Rights and Remedies Cumulative

	 	 	61	 
	Section 7.05. Delay or Omission Not Waiver

	 	 	61	 
	Section 7.06. Undertaking for Costs

	 	 	61	 
	Section 7.07. Waiver of Stay or Execution Laws

	 	 	61	 
	Section 7.08. Control by Majority

	 	 	62	 
	 
	 	 	 	 
	ARTICLE 8

	The Purchase Contract Agent and Trustee

	 
	 	 	 	 
	Section 8.01. Certain Duties and Responsibilities

	 	 	62	 
	Section 8.02. Notice of Default

	 	 	63	 
	Section 8.03. Certain Rights of Purchase Contract Agent

	 	 	63	 
	Section 8.04. Not Responsible for Recitals

	 	 	66	 
	Section 8.05. May Hold Units and Purchase Contracts

	 	 	66	 
	Section 8.06. Money Held in Custody

	 	 	66	 
	Section 8.07. Compensation, Reimbursement and Indemnification

	 	 	66	 
	Section 8.08. Corporate Purchase Contract Agent Required; Eligibility

	 	 	67	 
	Section 8.09. Resignation and Removal; Appointment of Successor

	 	 	67	 
	Section 8.10. Acceptance of Appointment by Successor

	 	 	69	 
	Section 8.11. Merger; Conversion; Consolidation or Succession to Business

	 	 	69	 
	Section 8.12. Preservation of Information; Communications to Holders

	 	 	70	 
	Section 8.13. No Other Obligations of Purchase Contract Agent or Trustee

	 	 	70	 
	Section 8.14. Tax Compliance

	 	 	71	 
	 
	 	 	 	 
	ARTICLE 9

	Supplemental Agreements

	 
	 	 	 	 
	Section 9.01. Supplemental Agreements Without Consent of Holders

	 	 	71	 
	Section 9.02. Supplemental Agreements With Consent of Holders

	 	 	72	 
	Section 9.03. Execution of Supplemental Agreements

	 	 	73	 
	Section 9.04. Effect of Supplemental Agreements

	 	 	73	 
	Section 9.05. Reference to Supplemental Agreements

	 	 	73	 
	Section 9.06. Notice of Supplemental Agreements

	 	 	74	 
	 
	 	 	 	 
	ARTICLE 10

	Consolidation, Merger, Conveyance, Transfer or Lease

	 
	 	 	 	 
	Section 10.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except Under Certain Conditions

	 	 	74	 
	Section 10.02. Rights and Duties of Successor Entity

	 	 	74	 
	Section 10.03. Officers’ Certificate and Opinion of Counsel Given to Purchase Contract Agent

	 	 	75	 






iii









 






	 	 	 	 	 
	 	 	Page
	ARTICLE 11

	Covenants of the Company and the Note Issuer

	 
	 	 	 	 
	Section 11.01. Performance Under Purchase Contracts

	 	 	75	 
	Section 11.02. Maintenance of Office Or Agency

	 	 	75	 
	Section 11.03. Statements of Officers of the Company as to
Default; Notice of Default

	 	 	76	 
	Section 11.04. Existence

	 	 	76	 
	Section 11.05. Company to Reserve Class A Common Stock

	 	 	76	 
	Section 11.06. Covenants as to Class A Common Stock

	 	 	77	 
	Section 11.07. Tax Treatment

	 	 	77	 
	 
	 	 	 	 
	EXHIBITS

	 
	 	 	 	 
	Exhibit A: Form of Unit 
	 	 	A-1	 
	Exhibit B: Form of Purchase Contract 
	 	 	B-1	 







iv











 





     PURCHASE CONTRACT AGREEMENT, dated as of February 9, 2011 among HOVNANIAN ENTERPRISES,
INC., a Delaware corporation (the “Company”), K. HOVNANIAN ENTERPRISES, INC., a California
corporation (the “Note Issuer”), and WILMINGTON TRUST COMPANY, a Delaware banking corporation
acting as purchase contract agent and attorney-in-fact for the Holders of Purchase Contracts (as
defined herein) from time to time (the “Purchase Contract Agent”) and as trustee under the
Indenture (as defined herein).



RECITALS OF THE COMPANY AND THE NOTE ISSUER




     The Company and the Note Issuer have duly authorized the execution and delivery of this
Agreement and the Units and Purchase Contracts issuable hereunder.



     All things necessary to make the Units and the Purchase Contracts, when such are executed by
the Company and, in the case of the Units, by the Note Issuer, and authenticated on behalf of the
Holders and delivered by the Purchase Contract Agent, as provided in this Agreement, the valid
obligations of the Company and, in the case of the Units, of the Note Issuer, and to constitute
this Agreement a valid agreement of the Company and the Note Issuer, in accordance with its terms,
have been done. For and in consideration of the premises and the purchase of the Units (including
the constituent parts thereof) by the Holders thereof, it is mutually agreed as follows:



ARTICLE 1

Definitions and Other Provisions of General Application




     Section 1.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:



     (a) the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular, and nouns and pronouns of the masculine gender include
the feminine and neuter genders;



     (b) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States;



     (c) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision;
and



     (d) the following terms have the meanings given to them in this Section 1.01(d):



 









 





     “Acceleration Date” has the meaning set forth in Section 4.09.



     “Acquiring Person” has the meaning set forth in the Rights Plan (for the avoidance of doubt,
regardless of whether the Rights Plan is then in effect).



     “Affiliate” means, when used with reference to a specified Person, any Person directly or
indirectly controlling, or controlled by or under direct or indirect common control with the Person
specified.



     “Agreement” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the
applicable provisions hereof.



     “Applicable Market Value” (i) with respect to Class A Common Stock, means the average of the
Closing Prices of the Class A Common Stock on each of the 20 consecutive Trading Days beginning on,
and including, the 23rd Scheduled Trading Day immediately preceding the Scheduled Mandatory
Settlement Date, subject to adjustment as provided in Article 5 and (ii) with respect to any
Exchange Property, has the meaning set forth in Section 5.02(a).



     “Applicants” has the meaning set forth in Section 8.12(b).



     “Bankruptcy Event” means the occurrence of one or more of the following events:



     (a) a decree or order by a court having jurisdiction in the premises shall have been entered
adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization of the Company under any Bankruptcy Law and if such decree or order shall have been
entered more than 60 days prior to the last Trading Day of the 20 consecutive Trading Day during
which the Applicable Market Value is determined, such decree or order shall have continued
undischarged and unstayed for a period of 60 days;



     (b) a decree or order by a court having jurisdiction in the premises for the appointment of a
receiver or liquidator or trustee or assignee (or other similar official) in bankruptcy or
insolvency of the Company or of all or substantially all of its property, or for the winding up or
liquidation of its affairs, shall have been entered and if such decree or order shall have been
entered more than 60 days prior to the last Trading Day of the 20 consecutive Trading Day during
which the Applicable Market Value is determined, such decree or order shall have continued
undischarged and unstayed for a period of 60 days; or



2









 






(c) the Company shall institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization under any Bankruptcy Law, or shall
consent to the filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or assignee (or other similar official) in bankruptcy or
insolvency of it or of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as they
become due.



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



     “Beneficial Holder” means, with respect to a Book-Entry Interest, a Person who is the
beneficial owner of such Book-Entry Interest as reflected on the books of the Depositary or on the
books of a Person maintaining an account with the Depositary (directly as a Depositary Participant
or as an indirect participant, in each case in accordance with the rules of the Depositary).



     “Beneficially Own” shall have the meaning set forth in the Rights Plan (for the avoidance of
doubt, regardless of whether the Rights Plan is then in effect). For the avoidance of doubt, for
the purposes of administering the Section 382 Ownership Blocker and the Section 382 Settlement
Blocker, a Person shall not be deemed to Beneficially Own any shares of another Person (and the
first Person shall not be treated as an “Affiliate” or an “Associate” (as such terms are defined in
the Rights Plan) of the second Person) solely by reason of the shares of such Persons being
aggregated and treated as owned by the same public group as defined under Treasury Regulation
section 1.382-2T(f)(13).



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



     “Board Resolution” means (a) one or more resolutions, certified by the secretary or an
assistant secretary of the Company to have been duly adopted or consented to by the Board of
Directors and to be in full force and effect, or (b), with respect to the Notes, a certificate
signed by the director or directors and/or officer or officers to whom the Board of Directors or
any duly authorized committee of that Board shall have duly delegated its authority, in each case
delivered to the Purchase Contract Agent.



     “Book-Entry Interest” means a beneficial interest in a Global Security, registered in the name
of a Depositary or a nominee thereof, ownership and



3









 




transfers of which shall be maintained and made through book entries by such Depositary as
described in Section 3.06.




     “Business Day” means any day other than a Saturday, Sunday or any day on which banking
institutions in New York, New York are authorized or obligated by applicable law or executive order
to close or be closed.



     “Capital Stock” means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of or in such Person’s capital stock or
other equity interests, and options, rights or warrants to purchase such capital stock or other
equity interests, whether now outstanding or issued after the Issue Date.



     “Certificate of Incorporation” means the Certificate of Incorporation of the Company as in
effect on the Issue Date.



     “Class A Common Stock” means the Class A common stock, par value $0.01 per share, of the
Company as it existed on the date of this Agreement, subject to Section 5.02.



     “Clearing Agency” means an organization registered as a “Clearing Agency” pursuant to Section
17A of the Exchange Act.



     “close of business” means 5:00 p.m. (New York City time).



     “Closing Price” with respect to any Exchange Property, has the meaning set forth in Section
5.02; and with respect to a share of the Class A Common Stock on any given date, means:



     (a) the reported closing price on that date or, if no closing price is reported, the last
reported sale price of shares of Class A Common Stock on the NYSE on that date;



     (b) if the Class A Common Stock is not traded on the NYSE, the closing price on that date as
reported in composite transactions for the principal U.S. national or regional securities exchange
on which the Class A Common Stock is so traded or, if no closing price is reported, the last
reported sale price of the Class A Common Stock on the principal U.S. national or regional
securities exchange on which the Class A Common Stock is so traded;



     (c) if the Class A Common Stock is not traded on a U.S. national or regional securities
exchange, the last quoted bid price on that date for the Class A Common Stock in the
over-the-counter market as reported by Pink OTC Markets Inc. or a similar organization; or



4









 





     (d) if the Class A Common Stock is not so quoted by Pink OTC Markets Inc. or a similar
organization, the market value of the Class A Common Stock on that date as determined by the Board
of Directors.



     All references herein to the closing price of Class A Common Stock and the last reported sale
price of Class A Common Stock on the NYSE shall be such closing price and such last reported sale
price as reflected on the website of the NYSE (www.nyse.com) and as reported by Bloomberg
Professional Service; provided that, in the event that there is a discrepancy between the closing
price and the last reported sale price as reflected on the website of the NYSE and as reported by
Bloomberg Professional Service, the closing price and the last reported sale price on the website
of the NYSE shall govern.



     “Code” means the Internal Revenue Code of 1986 (title 26 of the United States Code), as
amended from time to time.



     “Common Equity” of any Person means Capital Stock of such Person that is generally entitled
(a) to vote in the election of directors of such Person or (b) if such Person is not a corporation,
to vote or otherwise participate in the selection of the governing body, partners, managers or
others that will control the management or policies of such Person.



     “Company” means the Person named as the “Company” in the first paragraph of this Agreement
until a successor shall have become such pursuant to Article 10, and thereafter “Company” shall
mean such successor.



     “Component Note” means a Note, in global form and attached to a Global Unit, that (a) shall
evidence the number of Notes specified therein that are components of the Units evidenced by such
Global Unit, (b) shall be registered on the security register for the Notes in the name of the
Purchase Contract Agent, as attorney-in-fact of holder(s) of the Units of which such Notes form a
part, and (c) shall be held by the Purchase Contract Agent as attorney-in-fact of such holder(s),
together with such Global Unit, as custodian of such Global Unit for the Depositary.



     “Component Purchase Contract” means a Purchase Contract, in global form and attached to a
Global Unit, that (a) shall evidence the number of Purchase Contracts specified therein that are
components of the Units evidenced by such Global Unit, (b) shall be registered on the Security
Register in the name of the Purchase Contract Agent, as attorney-in-fact of holder(s) of the Units
of which such Purchase Contract forms a part, and (c) shall be held by the Purchase Contract Agent
as attorney-in-fact of such holder(s), together with such Global Unit, as custodian of such Global
Unit for the Depositary.



5









 





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



     “Corporate Trust Office” means the principal corporate trust office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Rodney Square North, 1100 North Market
Street, Wilmington, DE 19890.



     “Current Market Price” per share of Class A Common Stock on any date means:



     (a) for purposes of Section 5.01(a)(ii), the average of the Closing Prices of the Class A
Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of the issuance or distribution requiring such
computation;



     (b) for purposes of Section 5.01(a)(iv) (in the event of an adjustment not relating to a
Spin-Off) and Section 5.01(a)(v), the average of the Closing Prices of the Class A Common Stock
over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately
preceding the earlier of the Ex-Date and the Record Date for the issuance or distribution requiring
such computation;



     (c) for purposes of Section 5.01(a)(iv) (in the event of an adjustment relating to a Spin-Off
only), the average of the Closing Prices of the Class A Common Stock over the 10 consecutive
Trading Day period commencing on, and including, the effective date of such Spin-Off; and



     (d) for purposes of adjustments pursuant to Section 5.01(a)(vi), the average of the Closing
Prices of the Class A Common Stock over the 10 consecutive Trading Day period commencing on, and
including, the Trading Day immediately following the Tender Offer Expiration Date for the relevant
tender offer or exchange offer.



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



     “default” means any failure to comply with terms of this Agreement or any covenant contained
herein.



     “Definitive Equity-Linked Security” means an Equity-Linked Security in definitive form.



6









 






“Definitive Security” means any Security in definitive form.



     “Depositary” means a Clearing Agency that is acting as a depositary for the Equity-Linked
Securities and in whose name, or in the name of a nominee of that organization, shall be registered
one or more Global Securities and which shall undertake to effect book-entry transfers of the
Equity-Linked Securities as contemplated by Section 3.06, Section 3.07, Section 3.08 and Section
3.09.



     “Depositary Participant” means a broker, dealer, bank, other financial institution or other
Person for whom from time to time the Depositary effects book-entry transfers of securities
deposited with the Depositary.



     “Determination Date” means each of (a) the last Trading Day of the 20 Trading Day period
during which the Applicable Market Value is determined, (b) any Early Settlement Date, (c) any
Early Mandatory Settlement Notice Date, (d) any date on which the Fundamental Change Early
Settlement Right is exercised, and (e) the day immediately preceding any Acceleration Date.



     “DTC” means The Depository Trust Company.



     “DWAC System” has the meaning set forth in Section 2.03(a).



     “Early Mandatory Settlement Date” has the meaning set forth in Section 4.08(a).



     “Early Mandatory Settlement Notice” has the meaning set forth in Section 4.08(b).



     “Early Mandatory Settlement Notice Date” has the meaning set forth in Section 4.08(b)(ii).



     “Early Mandatory Settlement Rate” shall be the Maximum Settlement Rate on the Early Mandatory
Settlement Notice Date, unless the Closing Price of the Class A Common Stock for 20 or more Trading
Days in a period of 30 consecutive Trading Days ending on the Trading Day immediately preceding the
Early Mandatory Settlement Notice Date exceeds 130% of the Threshold Appreciation Price in effect
on each such Trading Day, in which case the “Early Mandatory Settlement Rate” shall be the Minimum
Settlement Rate on the Early Mandatory Settlement Notice Date.



     “Early Mandatory Settlement Right” has the meaning set forth in Section 4.08(a).



7









 





     “Early Settlement” means, in respect of any Purchase Contract, that the Holder of such
Purchase Contract has elected to settle such Purchase Contract early pursuant to Section 4.06 or
Section 4.07, as the case may be.



     “Early Settlement Right” has the meaning set forth in Section 4.06(a).



     “Early Settlement Date” has the meaning set forth in Section 4.06(c).



     “Early Settlement Notice” has the meaning set forth in Section 4.06(b)(i).



     “Early Settlement Rate” means, for any Purchase Contract in respect of which Early Settlement
is applicable, the Minimum Settlement Rate, unless the Holder of such Purchase contract has elected
to settle such Purchase Contract early in connection with a Fundamental Change pursuant to Section
4.07, in which case the “Early Settlement Rate” for such Purchase Contract means the Fundamental
Change Early Settlement Rate.



     “Effective Date” has the meaning set forth in Section 4.07(d).



     “Equity-Linked Security” means a Unit or a Purchase Contract, as applicable.



     “Excess Equity-Linked Securities” has the meaning set forth in Section 3.10(c).



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any statute
successor thereto, in each case as amended from time to time, together with the rules and
regulations promulgated thereunder.



     “Exchange Property” has the meaning set forth in Section 5.02.



     “Ex-Date” when used with respect to any issuance or distribution, means the first date on
which the shares of Class A Common Stock trade on the applicable exchange or in the applicable
market, regular way, without the right to receive the issuance or distribution in question from the
Company or, if applicable, from the seller of the Class A Common Stock on such exchange or market
(in the form of due bills or otherwise) as determined by such exchange or market.



     “Fair Market Value” means, with respect to any asset, the price (after taking into account any
liabilities relating to such assets) that would be negotiated in an arm’s-length transaction for
cash between a willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction, as such price is determined in good faith by the Board of
Directors, as evidenced by a resolution of the Board of Directors.



8









 





     “Fixed Settlement Rate” has the meaning set forth in Section 4.01(c).



     “Fundamental Change” shall be deemed to have occurred upon the occurrence of any of the
following:



     (a) the Class A Common Stock (or other common stock receivable upon settlement of the Purchase
Contracts, if applicable) is neither listed for trading on a United States national securities
exchange nor approved for trading on an established automated over-the-counter trading market in
the United States;



     (b) the consummation of any acquisition (whether by means of a liquidation, share exchange,
tender offer, consolidation, recapitalization, reclassification, merger of the Company or any sale,
lease or other transfer of all or substantially all of the consolidated assets of the Company and
its Subsidiaries) or a series of related transactions or events pursuant to which:




     (i) 90% or more of the Class A Common Stock is exchanged for, converted into or
constitutes solely the right to receive cash, securities or other property; and




     (ii) more than 10% of such cash, securities or other property does not consist of
shares of common stock that are, or that upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States; or



     (c) any “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other
than the Company, any of its Subsidiaries and any of their employee benefit plans, has become the
direct or indirect “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of Class A
Common Stock representing more than 50% of the voting power of the Class A Common Stock.



     “Fundamental Change Early Settlement Date” has the meaning set forth in Section 4.07(b).



     “Fundamental Change Early Settlement Period” has the meaning set forth in Section 4.07(a).



     “Fundamental Change Early Settlement Rate” has the meaning set forth in Section 4.07(d).



     “Fundamental Change Early Settlement Right” has the meaning set forth in Section 4.07(a).



9









 





     “Global Note” means a Note, as defined in the Indenture, in global form that (a) shall
evidence the number of Separate Notes specified therein, (b) shall be registered on the security
register for the Notes in the name of the Depositary or its nominee, and (c) shall be held by the
Trustee as custodian for the Depositary.



     “Global Purchase Contract” means a Purchase Contract in global form that (a) shall evidence
the number of Separate Purchase Contracts specified therein, (b) shall be registered on the
Security Register in the name of the Depositary or its nominee, and (c) shall be held by the
Purchase Contract Agent as custodian for the Depositary.



     “Global Security” means a Global Unit, a Global Purchase Contract or a Global Note, as
applicable.



     “Global Unit” means a Unit in global form that (a) shall evidence the number of Units
specified therein, (b) shall be registered on the Security Register in the name of the Depositary
or its nominee, (c) shall include, as attachments thereto, a Component Note and a Component
Purchase Contract, evidencing, respectively, a number of Notes and a number of Purchase Contracts,
in each case, equal to the number of Units evidenced by such Unit in global form, and (d) shall be
held by the Purchase Contract Agent as custodian for the Depositary.



     “Holder” means, with respect to a Unit or Purchase Contract, the Person in whose name the Unit
or Purchase Contract, as the case may be, is registered in the Security Register, and with respect
to a Note, the Person in whose name the Note is registered as provided for in the Indenture;
provided, however, that in determining whether the Holders of the requisite number of Units or
Purchase Contracts, as the case may be, have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Units or Purchase Contracts,
as the case may be, remain in the form of one or more Global Securities and if the Depositary that
is the registered holder of such Global Security has sent an omnibus proxy assigning voting rights
to the Depositary Participants to whose accounts the Units or Purchase Contracts, as the case may
be, are credited on the related record date, the term “Holder” shall mean such Depositary
Participant acting at the direction of the Beneficial Holders.



     “Indenture” means the Senior Subordinated Indenture, dated as of February 9, 2011, among the
Note Issuer, the Company and the Trustee (including any provisions of the TIA that are deemed
incorporated therein), as supplemented by the First Supplemental Indenture, dated as of February 9,
2011, among the Note Issuer, the Company, the other Guarantors from time to time party thereto, and
the Trustee, pursuant to which the Notes will be issued.



     “Installment Payment” has the meaning set forth in the Indenture.



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     “Issue Date” means February 9, 2011.



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



     “Mandatory Settlement Date” means the Scheduled Mandatory Settlement Date, subject to
acceleration pursuant to Section 4.09; provided that, if one or more of the 20 Scheduled Trading
Days beginning on, and including, the 23rd Scheduled Trading Day immediately preceding the
Scheduled Mandatory Settlement Date is not a Trading Day, the “Mandatory Settlement Date” shall be
postponed until the third Scheduled Trading Day immediately following the last Trading Day of the
20 Trading Day period during which the Applicable Market Value is determined.



     “Maximum Settlement Rate” has the meaning set forth under Section 4.01(b)(iii), subject to
adjustment pursuant to the terms of Article 5.



     “Minimum Settlement Rate” has the meaning set forth under Section 4.01(b)(i), subject to
adjustment pursuant to the terms of Article 5.



     “Minimum Stock Price” has the meaning set forth under Section 4.07(f).



     “Notes” means the series of notes designated as the 12.072% Senior Subordinated Amortizing
Notes due February 15, 2014 to be issued by the Note Issuer under the Indenture, and “Note” means
each note of such series having an initial principal amount of $4.526049.



     “NYSE” means the New York Stock Exchange, Inc.



     “Officers’ Certificate” means a certificate signed by the chairman of the Board of Directors,
the president or chief executive officer, or any vice president and by the chief financial officer,
the treasurer, any assistant treasurer, the controller, any assistant controller, the secretary or
any assistant secretary of the Company. Each such certificate shall include the statements
provided for in Section 1.02 if and to the extent required by the provisions of such Section 1.02.



     “open of business” means 9:00 a.m. (New York City time).



     “Opinion of Counsel” means an opinion in writing signed by the chief counsel of the Company or
the Note Issuer or by such other legal counsel who may be an employee of or counsel to the Company
or the Note Issuer and who shall be reasonably satisfactory to the Purchase Contract Agent and/or
the Trustee,



11









 




as applicable. Each such opinion shall include the statements provided for in Section 1.02 if
and to the extent required by the provisions of such Section 1.02.




     “Outstanding Purchase Contracts” means, subject to the provisions of Section 6.03, as of the
date of determination, all Purchase Contracts theretofor executed, authenticated on behalf of the
Holder and delivered under this Agreement (including, for the avoidance of doubt, Purchase
Contracts held as a component of Units and Separate Purchase Contracts), except:



     (a) Purchase Contracts theretofor cancelled by the Purchase Contract Agent or delivered to the
Purchase Contract Agent for cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and



     (b) Purchase Contracts in exchange for or in lieu of which other Purchase Contracts have been
executed, authenticated on behalf of the Holder and delivered pursuant to this Agreement, other
than any such Purchase Contract in respect of which there shall have been presented to the Purchase
Contract Agent proof satisfactory to it that such Purchase Contract is held by a protected
purchaser in whose hands the Purchase Contracts are valid obligations of the Company.



     “Participant” has the meaning set for in Section 2.03(a).



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



     “Prospectus Supplement” means the preliminary prospectus supplement dated January 31, 2011, as
supplemented by the pricing term sheet dated February 3, 2011, relating to the offering and sale of
the Units.



     “Purchase Contract” means a prepaid stock purchase contract obligating the Company to deliver
shares of Class A Common Stock on the terms and subject to the conditions set forth herein.



     “Purchase Contract Agent” means the Person named as the “Purchase Contract Agent” in the first
paragraph of this Agreement until a successor Purchase Contract Agent shall have become such
pursuant to Article 8, and thereafter “Purchase Contract Agent” shall mean such Person.



     “Purchase Contract Settlement Fund” has the meaning set forth in Section 4.03.



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     “Record Date” means, when used with respect to any dividend, distribution or other transaction
or event in which the holders of the Class A Common Stock (or other applicable security) have the
right to receive any cash, securities or other property or in which the Class A Common Stock (or
other applicable security) is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for determination of holders of the Class A Common Stock (or
other applicable security) entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract or otherwise).



     “Reference Price” means $4.30, subject to adjustment pursuant to Section 5.01(f).



     “Reorganization Event” has the meaning set forth in Section 5.02(a).



     “Repurchase Date” has the meaning set forth in the Indenture.



     “Repurchase Price” has the meaning set forth in the Indenture.



     “Repurchase Right” has the meaning set forth in the Indenture.



     “Responsible Officer” means any officer of the Purchase Contract Agent with direct
responsibility for the administration of this Agreement.



     “Rights Plan” means the Rights Agreement, dated as of August 14, 2008, between the Company and
National City Bank, as Rights Agent.



     “Scheduled Mandatory Settlement Date” means February 15, 2014.



     “Scheduled Trading Day” is a day that is scheduled to be a Trading Day on the U.S. national or
regional securities exchange or association or over-the-counter market on which the Class A Common
Stock is listed or admitted for trading. If the Class A Common Stock is not so listed or admitted
for trading, “Scheduled Trading Day” means a Business Day.



     “Section 382 Ownership Blocker” has the meaning set forth in Section 3.10(a).



     “Section 382 Settlement Blocker” has the meaning set forth in Section 4.10.



     “Securities Act” means the Securities Act of 1933, as amended, and any statute successor
thereto, in each case as amended from time to time, and the rules and regulations promulgated
thereunder.



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     “Security” means a Unit, a Purchase Contract or a Note, as applicable.



     “Security Register” has the meaning set forth in Section 3.05.



     “Security Registrar” has the meaning set forth in Section 3.05.



     “Separate Note” has the meaning set forth in Section 2.03(a).



     “Separate Purchase Contract” has the meaning set forth in Section 2.03(a).



     “Settlement Date” means any Fundamental Change Early Settlement Date, Early Settlement Date,
Early Mandatory Settlement Date, or Mandatory Settlement Date.



     “Settlement Rate” has the meaning set forth in Section 4.01(b).



     “Spin-Off” means the Company makes a dividend or other distribution to all or substantially
all holders of Class A Common Stock consisting of Capital Stock of, or similar equity interests in,
or relating to, a Subsidiary or other business unit of the Company that, upon issuance, will be
traded on a U.S. national securities exchange.



     “Stated Amount” means $25.



     “Stock Price” has the meaning set forth in Section 4.07(d).



     “Subsidiary” of any Person means any corporation or other entity of which a majority of the
Capital Stock having ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions of such corporation or other entity is at the time directly or
indirectly owned or controlled by such Person.



     “Tender Offer Expiration Date” has the meaning set forth in Section 5.01(a)(vi).



     “Tender Offer Expiration Time” has the meaning set forth in Section 5.01(a)(vi)(A)(2).



     “Threshold Appreciation Price” means an amount equal to the Stated Amount, divided by the
Minimum Settlement Rate (such quotient rounded to the nearest $0.0001). The Threshold Appreciation
Price shall initially be $5.2460.



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     “TIA” means the Trust Indenture Act of 1939, as amended from time to time.



     “Trading Day” means a day on which shares of the Class A Common Stock (a) are not suspended
from trading on any U.S. national or regional securities exchange or association or
over-the-counter market at the close of business and (ii) have traded at least once on the U.S.
national or regional securities exchange or association or over-the-counter market that is the
primary market for the trading of the Class A Common Stock. If the Class A Common Stock (or any
other security for which the Closing Price must be determined) is not listed or admitted for
trading on any U.S. national or regional securities exchange or association or over-the-counter
market, “Trading Day” means a Business Day.



     “Trustee” means Wilmington Trust Company, as trustee under the Indenture, or any successor
thereto.



     “Underwriters” has the meaning set forth in the Underwriting Agreement.



     “Underwriting Agreement” means the Underwriting Agreement, dated as of February 3, 2011,
between the Company, the Note Issuer, the Guarantors named in Schedule B thereto and the
Underwriters named therein relating to the Units.



     “Unit” means the collective rights of a Holder of a unit consisting of a single Purchase
Contract and a single Note prior to separation pursuant Section 2.03 or subsequent to recreation
pursuant to Section 2.04.



     “Valuation Period” has the meaning set forth in Section 5.01(a)(iv)(B)(1).



     Section 1.02. Compliance Certificates and Opinions. Except as otherwise expressly
provided by this Agreement, upon any application or request by the Company to the Purchase Contract
Agent and/or Trustee to take any action in accordance with any provision of this Agreement, the
Company or the Note Issuer, as applicable, shall furnish to the Purchase Contract Agent and/or
Trustee, as applicable, an Officers’ Certificate stating that all conditions precedent, if any,
provided for in this Agreement relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or opinion need be
furnished.



     Every Officers’ Certificate or opinion with respect to compliance with a condition or covenant
provided for in this Agreement shall include:



15









 






     (i) a statement that each individual signing such Officers’ Certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;




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




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




     (iv) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.



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



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



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



16









 





     Section 1.03. Notices. Any notice or demand which by any provision of this
Agreement is required or permitted to be given or served by the Purchase Contract Agent or by the
Holders to or on the Company or the Note Issuer may be given or served by being deposited postage
prepaid, first class mail (except as otherwise specifically provided herein) addressed (until
another address of the Company or the Note Issuer is filed by the Company or the Note Issuer with
the Purchase Contract Agent) (a) in the case of the Company, to Hovnanian Enterprises, Inc., 110
West Front Street, P.O. Box 500, Red Bank, New Jersey 07701, and (b) in the case of the Note
Issuer, to K. Hovnanian Enterprises, Inc., 110 West Front Street, P.O. Box 500, Red Bank, New
Jersey 07701. Any notice, direction, request or demand by the Company, the Note Issuer or any
Holder to or upon the Purchase Contract Agent or the Trustee shall be deemed to have been
sufficiently given or served by being deposited postage prepaid, first class mail (except as
otherwise specifically provided herein) addressed (until another address of the Purchase Contract
Agent or Trustee is filed by the Purchase Contract Agent or Trustee with the Company and the Note
Issuer) to Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, DE
19890.



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



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



     Section 1.04. Effect of Headings and Table of Contents. The Article and Section
headings herein and in the Table of Contents are for convenience only and shall not affect the
construction hereof.



     Section 1.05. Successors and Assigns. All covenants and agreements in this
Agreement by the Company, the Note Issuer and the Purchase Contract Agent shall bind their
respective successors and assigns, whether so expressed or not.



17









 





     Section 1.06. Separability Clause. In case any provision in this Agreement or in
the Purchase Contracts shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.



     Section 1.07. Benefits of Agreement. Nothing contained in this Agreement or in the
Purchase Contracts, express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall
be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and
of the Purchase Contracts by their acceptance of delivery of such Purchase Contracts.



     Section 1.08. Governing Law. This Agreement, the Units and the Purchase Contracts,
and any claim, controversy or dispute arising under or related to this Agreement, the Units or the
Purchase Contracts, shall be governed by, and construed in accordance with, the laws of the State
of New York.



     Section 1.09. Conflict Indenture. To the extent that any provision of this
Purchase Contract Agreement relating to or affecting the Notes conflicts with or is inconsistent
with the Indenture, the Indenture shall govern.



     Section 1.10. Legal Holidays. In any case where any Settlement Date shall not be a
Business Day, notwithstanding any other provision of this Agreement or the Purchase Contracts, the
settlement of the Purchase Contracts shall not be effected on such date, but instead shall be
effected on the next succeeding Business Day with the same force and effect as if made on such
Settlement Date, and no interest or other amounts shall accrue or be payable by the Company or to
any Holder in respect of such delay.



     Section 1.11. Counterparts. This Agreement may be executed in any number of
counterparts by the parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together constitute one and
the same instrument.



     Section 1.12. Inspection of Agreement. A copy of this Agreement shall be available
at all reasonable times during normal business hours at Hovnanian Enterprises, Inc., 110 West Front
Street, Red Bank, New Jersey 07701 for inspection by any Holder or Beneficial Holder.



     Section 1.13. Calculations. The solicitation of any necessary bids and the
performance of any calculations to be made hereunder shall be the sole obligation of the Company,
and the Purchase Contract Agent shall have no obligation to make such calculations. These
calculations include, but are not limited to, determination of the applicable Settlement Rate, the
Fixed Settlement Rates, the



18









 




Early Settlement Rate, the Early Mandatory Settlement Rate, the Fundamental Change Early
Settlement Rate, the Applicable Market Value, the Closing Price and the Current Market Price, as
the case may be. All such calculations made by the Company or its agent hereunder shall be made in
good faith and, absent manifest error, be final and binding on the Purchase Contract Agent, the
Trustee, each Paying Agent and the Holders. For any calculations to be made by the Company or its
agent hereunder, the Company shall provide a schedule of such calculations to the Purchase Contract
Agent and the Trustee, and each of the Purchase Contract Agent and the Trustee shall be entitled to
conclusively rely upon the accuracy of the calculations by the Company or its agent without
independent verification, shall have no liability with respect thereto and shall have no liability
to the Holders for any loss any of them may incur in connection with no independent verification
having been done.




     Section 1.14. UCC. Each Purchase Contract (whether or not included in a Unit) is a
security governed by Article 8 of the Uniform Commercial Code as in effect in the State of New York
on the date hereof.



ARTICLE 2

Unit and Purchase Contract Forms 




     Section 2.01. Forms of Units and Purchase Contracts Generally. (a) The Units and
Purchase Contracts shall be in substantially the forms set forth in Exhibit A and Exhibit B hereto,
respectively, which shall be incorporated in and made a part of this Purchase Contract Agreement,
with such letters, numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Units or Purchase Contracts, as the case may be, are (or may in
the future be) listed or any depositary therefor, or as may, consistently herewith, be determined
by the officers of the Company and Note Issuer executing such Units and Purchase Contracts, as the
case may be, as evidenced by their execution thereof.



     (b) The Units and Purchase Contracts shall be issuable only in registered form and only in
denominations of a single Unit or Purchase Contract, as the case may be, and any integral multiple
thereof.



     (c) The Units will initially be issued in the form of one or more fully registered Global
Units as set forth in Section 3.06. The Purchase Contracts will initially be issued as Component
Purchase Contracts substantially in the form of Attachment 3 to the form of Global Unit attached as
Exhibit A hereto, and will be attached to the related Global Unit and registered in the name of
Wilmington Trust Company, as attorney-in-fact of the holder(s) of such Global Unit.




19












 





     (d) Definitive Securities shall be printed, lithographed or engraved with steel engraved
borders or may be produced in any other manner, all as determined by the officers of the Company
and Note Issuer executing the Units or Purchase Contracts, as the case may be, evidenced by such
Definitive Securities, consistent with the provisions of this Agreement, as evidenced by their
execution thereof.



     (e) Every Global Unit and Global Purchase Contract executed, authenticated on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the following form:



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



     UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO [THE
COMPANY AND THE NOTE ISSUER / THE COMPANY] OR [THEIR / ITS] [AGENTS / AGENT] FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.”



     Section 2.02. Form of Certificate of Authentication. The form of certificate of
authentication of the Units and Purchase Contracts shall be in substantially the form set forth in
the form of Unit or form of Purchase Contract, respectively, attached hereto.



20









 





     Section 2.03. Global Securities; Separation of Units.



     (a) On any Business Day during the period beginning on, and including, the Business Day
immediately following the Issue Date to, but excluding, the third Scheduled Trading Day immediately
preceding the Scheduled Mandatory Settlement Date or any Early Mandatory Settlement Date, a Holder
or Beneficial Holder of a Unit may separate such Unit into its constituent Purchase Contract and
Note (each such separated Purchase Contract and separated Note, a “Separate Purchase Contract” and
“Separate Note,” respectively), which will thereafter trade under their respective CUSIP numbers
(442487 138) and (442488 201), and that Unit will cease to exist. Beneficial interests in a Unit,
and after separation, the Separate Purchase Contract and Separate Note, will be shown on and
transfers will be effected through direct or indirect participants in DTC. Beneficial interests in
Units, Separate Purchase Contracts and Separate Notes will be evidenced by Global Units, Global
Purchase Contracts and Global Notes, respectively. In order to separate a Unit into its component
parts, a Beneficial Holder must deliver written instruction to the broker or other direct or
indirect participant (the “Participant”) through which it holds an interest in such Unit to notify
DTC through DTC’s Deposit/Withdrawal at Custodian System (the “DWAC System”) of such Beneficial
Holder’s election to separate such Unit, following which the Purchase Contract Agent or Trustee, as
applicable, shall register (i) a decrease in the number of Units represented by the Global Unit and
the number of Purchase Contracts and Notes represented by the Component Purchase Contract and the
Component Note attached to the Global Unit as Attachments 3 and 4, respectively, as set forth in
Schedule A to each such attachment, and (ii) a corresponding increase in the number of Purchase
Contracts and Notes represented by the Global Purchase Contract and the Global Note, respectively.
If, however, such Unit is in the form of a Definitive Security in accordance with Section 3.09, the
Holder thereof must deliver to the Purchase Contract Agent such Unit, together with a separation
notice, in the form set forth in Attachment 1 to the form of Unit attached hereto as Exhibit A.
Upon the receipt of such separation notice, the Company shall promptly cause delivery, in
accordance with the delivery instructions set forth in such separation notice, of one Separate
Purchase Contract and one Separate Note for each such Unit. Separate Purchase Contracts and
Separate Notes will be transferable independently from each other.



     (b) Holders which elect to separate the Note and related Purchase Contract in accordance with
this Section 2.03 shall be responsible for any fees or expenses payable in connection with such
separation, and neither the Company, the Purchase Contract Agent nor the Trustee shall be liable
for any such fees or expenses.



21









 





     Section 2.04. Recreation of Units.



     (a) On any Business Day during the period beginning on, and including, the Business Day
immediately following the Issue Date to, but excluding, the third Scheduled Trading Day immediately
preceding the Mandatory Settlement Date or any Early Mandatory Settlement Date, a Holder or Beneficial Holder of a Separate
Purchase Contract and a Separate Note may recreate a Unit (which will thereafter trade under the
CUSIP number 44248W 208 for the Units), and each such Separate Purchase Contract and Separate Note
will cease to exist. In order to recreate a Separate Purchase Contract and Separate Note into a
Unit, a Beneficial Holder must deliver written instruction to the Participant through which it
holds an interest in such Separate Purchase Contract and Separate Note to notify DTC through the
DTC’s DWAC System of such Beneficial Holder’s election to recreate a Unit, following which the
Purchase Contract Agent or Trustee, as applicable, shall register (i) an increase in the number of
Units represented by the Global Unit and the number of Purchase Contracts and Notes represented by
the Component Purchase Contract and the Component Note attached to the Global Unit as Attachments 3
and 4, respectively, as set forth in Schedule A to each such attachment, and (ii) a corresponding
decrease in the number of Purchase Contracts and Notes represented by the Global Purchase Contract
and Global Note, respectively. If, however, such Separate Purchase Contract and Separate Note are
in the form of Definitive Securities, the Holder thereof must deliver to the Purchase Contract
Agent such Definitive Securities, together with a recreation notice, in the form set forth in
Attachment 2 to the form of Unit attached hereto as Exhibit A. Upon the receipt of such recreation
notice, the Company shall promptly cause delivery, in accordance with the delivery instructions set
forth in such recreation notice, of one Unit in definitive form for such Definitive Securities.



     (b) Holders that recreate Units in accordance with this Section 2.04 shall be responsible for
any fees or expenses payable in connection with such recreation, and neither the Company, the
Purchase Contract Agent nor the Trustee shall be liable for any such fees or expenses.



ARTICLE 3

The Units and Purchase Contracts 




     Section 3.01. Amount and Denominations. The aggregate number of Units and Separate
Purchase Contracts evidenced by Equity-Linked Securities executed, authenticated on behalf of the
Holders and delivered hereunder is limited to 3,000,000 (as increased by a number equal to the
aggregate number of additional Units, if any, purchased by the Underwriters pursuant to the
exercise of their option to purchase additional Units as set forth in the Underwriting Agreement),
except for Units and Separate Purchase Contracts executed, authenticated and delivered upon
registration of transfer of, in exchange for, or in lieu of, other



22









 




Units and Separate Purchase
Contracts pursuant to Section 3.04, Section 3.05, Section 3.11 or Section 9.05.




     Equity-Linked Securities that are not in the form of Global Securities shall be issuable in
denominations of one Equity-Linked Security and integral multiples in excess thereof.



     Section 3.02. Rights and Obligations Evidenced by the Equity-Linked Securities.
Each Equity-Linked Security shall evidence the number of Units or Separate Purchase Contracts, as
the case may be, specified therein, with (a) each such Unit representing the rights and obligations
of the Holder thereof and of the Company under one Purchase Contract, and the rights and
obligations of the Holder thereof and of the Note Issuer under one Note, and (b) each such Separate
Purchase Contract representing the rights and obligations of the Holder thereof and of the Company
under one Separate Purchase Contract. In the case of a Unit, the Holder of such Unit shall, for
all purposes hereunder and under the Indenture, be deemed to be the Holder of the Note and Purchase
Contract that are components of such Unit.



     Prior to the close of business on the last Trading Day of the 20 Trading Day period during
which the Applicable Market Value is determined with respect to any Purchase Contract or, if
applicable, any earlier Determination Date with respect to such Purchase Contract (in each case,
whether such Purchase Contract is held as a component of a Unit or as a Separate Purchase
Contract), the shares of Class A Common Stock underlying such Purchase Contract shall not be
outstanding, and such Purchase Contract shall not entitle the Holder thereof to any of the rights
of a holder of Class A Common Stock, including, without limitation, the right to vote or receive
any dividends or other payments or to consent or to receive notice as a shareholder in respect of
the meetings of shareholders or for the election of directors for any other matter, or any other
rights whatsoever as a shareholder of the Company.



     Section 3.03. Execution, Authentication, Delivery and Dating. Upon the execution
and delivery of this Agreement, and at any time and from time to time thereafter, the Company and,
in the case of Units, the Note Issuer, may deliver Equity-Linked Securities executed by the
Company, the Note Issuer (in the case of Units) and the Purchase Contract Agent as attorney-in-fact
for the Holders of Purchase Contracts from time to time (in the case of Purchase Contracts), to the
Purchase Contract Agent and Trustee for authentication on behalf of the Holders and delivery,
together with the Issuer Order for authentication of such Equity-Linked Securities, and the
Purchase Contract Agent and Trustee in accordance with such Issuer Order shall authenticate on
behalf of the Holders and deliver such Equity-Linked Securities.



23









 





     The Equity-Linked Securities shall be executed on behalf of the Company and the Note Issuer by
any authorized officer of the Company and the Note Issuer, respectively, and in the case of the
Purchase Contracts, shall be executed on behalf of the Holders by any authorized officer of the
Purchase Contract Agent as attorney-in-fact for the Holders of Purchase Contracts from time to
time. The signature of any such officer on the Equity-Linked Securities may be manual or facsimile.



     Equity-Linked Securities bearing the manual or facsimile signature of an individual who was at
any time the proper officer of the Company, the Note Issuer or, in the case of the Purchase
Contracts, the Purchase Contract Agent, shall bind the Company, the Note Issuer, and the Holders of
Purchase Contracts, as the case may be, notwithstanding that such individual has ceased to hold
such offices prior to the authentication and delivery of such Equity-Linked Securities or did not
hold such offices at the date of such Equity-Linked Securities.



     Each Equity-Linked Security shall be dated the date of its authentication.



     No Equity-Linked Security shall be entitled to any benefit under this Agreement or be valid or
obligatory for any purpose unless there appears on such Equity-Linked Security a certificate of
authentication substantially in the form provided for herein executed by an authorized officer of
the Purchase Contract Agent and Trustee (if applicable) by manual signature, and such certificate
upon any Equity-Linked Security shall be conclusive evidence, and the only evidence, that such
Equity-Linked Security has been duly authenticated and delivered hereunder.



     Section 3.04. Temporary Equity-Linked Securities. Pending the preparation of
Definitive Equity-Linked Securities, the Company and, in the case of Units, the Note Issuer, shall
execute and deliver to the Purchase Contract Agent and, in the case of Units, Trustee, and the
Purchase Contract Agent and, if applicable, Trustee shall authenticate on behalf of the Holders,
and deliver, in lieu of such Definitive Equity-Linked Securities, temporary Equity-Linked
Securities that are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the
case may be, with such letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be required by the rules
of any securities exchange on which the Units or Separate Purchase Contracts, as the case may be,
are listed, or as may, consistently herewith, be determined by the officers of the Company
executing such Equity-Linked Securities, as evidenced by their execution of the Equity-Linked
Securities.



     If temporary Equity-Linked Securities are issued, the Company and, if applicable, the Note
Issuer will cause Definitive Equity-Linked Securities to be



24









 




prepared without unreasonable delay.
After the preparation of Definitive Equity-Linked Securities, the temporary Equity-Linked
Securities shall be exchangeable for Definitive Equity-Linked Securities upon surrender of the
temporary Equity-Linked Securities at the Corporate Trust Office, at the expense of the Company
and, if applicable, the Note Issuer and without charge to the Holder or the Purchase Contract
Agent. Upon surrender for cancellation of any one or more temporary Equity-Linked Securities, the
Company and, if applicable, the Note Issuer shall execute and deliver to the Purchase Contract Agent and Trustee, and the Purchase
Contract Agent and, if applicable, the Trustee shall authenticate on behalf of the Holder, and
deliver in exchange therefor, one or more Definitive Equity-Linked Securities of like tenor and
denominations and evidencing a like number of Units or Separate Purchase Contracts, as the case may
be, as the temporary Equity-Linked Security or Equity-Linked Securities so surrendered. Until so
exchanged, the temporary Equity-Linked Securities shall in all respects evidence the same benefits
and the same obligations with respect to the Units or Separate Purchase Contracts, as the case may
be, evidenced thereby as Definitive Equity-Linked Securities.




     Section 3.05. Registration; Registration of Transfer and Exchange. The Company
shall cause to be kept at the Corporate Trust Office a register (the “Security Register”) in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Equity-Linked Securities and of transfers of Equity-Linked Securities. The Purchase
Contract Agent is hereby initially appointed Security Registrar (the “Security Registrar”) for the
purpose of registration of Equity-Linked Securities and transfers of Equity-Linked Securities as
provided herein. The Security Registrar shall record separately the registration and transfer of
the Equity-Linked Securities evidencing Units and Separate Purchase Contracts.



     Upon surrender for registration of transfer of any Equity-Linked Security at the Corporate
Trust Office, the Company shall execute and deliver to the Purchase Contract Agent and Trustee, and
the Purchase Contract Agent and Trustee shall authenticate on behalf of the designated transferee
or transferees, and deliver, in the name of the designated transferee or transferees, one or more
new Equity-Linked Securities of any authorized denominations, of like tenor, and evidencing a like
number of Units or Separate Purchase Contracts, as the case may be.



     At the option of the Holder, Equity-Linked Securities may be exchanged for other Equity-Linked
Securities, of any authorized numbers and evidencing a like number of Units or Separate Purchase
Contracts, as the case may be, upon surrender of the Equity-Linked Securities to be exchanged at
the Corporate Trust Office. Whenever any Equity-Linked Securities are so surrendered for exchange,
the Company and, in the case of Units, the Note Issuer shall execute and deliver



25









 




to the Purchase
Contract Agent and Trustee, and the Purchase Contract Agent and, in the case of Units, the Trustee
shall authenticate on behalf of the Holder, and deliver the Equity-Linked Securities which the
Holder making the exchange is entitled to receive.




     All Equity-Linked Securities issued upon any registration of transfer or exchange of an
Equity-Linked Security shall evidence the ownership of the same number of Units or Separate
Purchase Contracts, as the case may be, and be entitled to the same benefits and subject to the
same obligations, under this Agreement as the Units or Separate Purchase Contracts, as the case may be, evidenced by the
Equity-Linked Security surrendered upon such registration of transfer or exchange.



     Every Equity-Linked Security presented or surrendered for registration of transfer or exchange
shall (if so required by the Purchase Contract Agent) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the Purchase Contract Agent
duly executed by the Holder thereof, or its attorney duly authorized in writing.



     No service charge shall be made for any registration of transfer or exchange of an
Equity-Linked Security, but the Company or the Purchase Contract Agent on behalf of the Company may
require payment from the Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or exchange of Equity-Linked
Securities, other than any exchanges pursuant to Section 3.06 and Section 9.05 not involving any
transfer.



     Notwithstanding the foregoing, the Company and, in the case of Units, the Note Issuer shall
not be obligated to execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent and, in the case of Units, the Trustee shall not be obligated to authenticate on behalf of
the Holder or deliver any Equity-Linked Security in exchange for any other Equity-Linked Security
presented or surrendered for registration of transfer or for exchange on or after the Business Day
immediately preceding the Scheduled Mandatory Settlement Date or any earlier Settlement Date with
respect to such Equity-Linked Security. In lieu of delivery of a new Equity-Linked Security, upon
satisfaction of the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Purchase Contract Agent
shall, if a Settlement Date with respect to such Equity-Linked Security has occurred, deliver or
cause to be delivered the shares of Class A Common Stock deliverable in respect of the Purchase
Contracts evidenced by such Equity-Linked Security (together with the Separate Note, if such
Equity-Linked Security is a Unit and if the Repurchase Right is not applicable or, if applicable,
not exercised).



26









 





     Section 3.06. Book-Entry Interests. The Units, on original issuance, will be
issued in the form of one or more fully registered Global Units, to be delivered to the Depositary
or its custodian by, or on behalf of, the Company. The Company hereby designates DTC as the initial
Depositary. Such Global Units shall initially be registered on the books and records of the Company
in the name of Cede & Co., the nominee of DTC, and no Beneficial Holder will receive a Definitive
Unit representing such Beneficial Holder’s interest in such Global Unit, except as provided in
Section 3.09. Unless and until definitive, fully registered Securities have been issued to
Beneficial Holders pursuant to Section 3.09:




     (i) the provisions of this Section 3.06 shall be in full force and effect;




     (ii) except as contemplated in the definition of “Holders” in Section 1.01(d), the
Company shall treat the Depositary for all purposes of this Agreement (including settling
the Purchase Contracts and receiving approvals, votes or consents hereunder) as the Holder
of the Global Units and Global Purchase Contracts and shall have no obligation to the
Beneficial Holders;




     (iii) to the extent that the provisions of this Section 3.06 conflict with any other
provisions of this Agreement, the provisions of this Section 3.06 shall control; and




     (iv) the rights of the Beneficial Holders shall be exercised only through the
Depositary and shall be limited to those established by law and agreements between such
Beneficial Holders and the Depositary or the Depositary Participants.



     Section 3.07. Notices to Holders. Whenever a notice or other communication to the
Holders is required to be given under this Agreement, the Company or the Company’s agent shall give
such notices and communications to the Holders and, with respect to any Units or Purchase Contracts
registered in the name of the Depositary or the nominee of the Depositary, the Company or the
Company’s agent shall, except as set forth herein, have no obligations to the Beneficial Holders.



     Section 3.08. Appointment of Successor Depositary. If the Depositary elects to
discontinue its services as securities depositary with respect to the Units or Purchase Contracts,
the Company may, in its sole discretion, appoint a successor Depositary with respect to such Units
or such Purchase Contracts, as the case may be.



27









 





     Section 3.09. Definitive Securities. If:




     (i) the Depositary is unwilling or unable to continue as depositary for the Global
Securities and the Company is unable to find a qualified replacement for such Depository
within 90 days;




     (ii) at any time the Depositary ceases to be a Clearing Agency registered under the
Exchange Act; or




     (iii) an Event of Default (as defined in the Indenture), or any failure on the part
of the Company or the Note Issuer to observe or perform any covenant or agreement in the
Purchase Contracts or the Purchase Contract Agreement, has occurred and is continuing and
a Beneficial Holder requests that its Securities be issued in physical, certificated
form,


then, in each case the Company and/or the Note Issuer, as applicable, shall execute, and the
Purchase Contract Agent and/or the Trustee, as applicable, upon receipt of an Issuer Order for the
authentication and delivery of Definitive Securities, shall authenticate and deliver Definitive
Securities representing an aggregate number of Securities with respect to the Global Security or
Securities representing such Securities (or representing an aggregate number of Securities equal to
the aggregate number of Securities in respect of which such Beneficial Holder has requested the
issuance of Definitive Securities pursuant to clause (iii) above) in exchange for such Global
Security or Securities (or portion thereof). Each Definitive Security so delivered shall evidence
Units or Purchase Contracts or Notes, as the case may be, of the same kind and tenor as the Global
Security so surrendered in respect thereof. Notwithstanding the foregoing, the exchange of Global
Notes for Notes in definitive form shall be governed by the Indenture.




     Section 3.10. Section 382 Ownership Blocker. (a) Notwithstanding anything to the
contrary in this Agreement, no Person may purchase or otherwise acquire any Equity-Linked
Securities, and no Beneficial Holder of Equity-Linked Securities shall be permitted to purchase or
otherwise acquire any additional Equity-Linked Securities, if, as a result of such purchase or
acquisition, such Person or Beneficial Holder, as the case may be, would Beneficially Own 4.9% or
more of the Class A Common Stock then outstanding (such restriction, the “Section 382 Ownership
Blocker”). To determine whether 4.9% or more of the Class A Common Stock then outstanding is
Beneficially Owned by such Person or Beneficial Holder, as the case may be, such Person or
Beneficial Holder shall:




     (i) take into account all shares of Class A Common Stock Beneficially Owned by such
Person or Beneficial Holder, as the case may be;




     (ii) assume that such Person or Beneficial Holder, as the case may be, Beneficially
Owns the number of shares of Class A Common



28









 






Stock issuable upon settlement of such Equity-Linked Securities based on the Maximum Settlement Rate;




     (iii) deem the number of shares of Class A Common Stock calculated pursuant to clause
(ii) above to be outstanding for purposes of the calculation with respect to such Person
or Beneficial Holder, as the case may be,


in the case of clauses (ii) and (iii), without taking into account the Section 382 Settlement
Blocker.




     (b) Notwithstanding anything to the contrary in this Agreement, if a Beneficial Holder of
Equity-Linked Securities purchases or otherwise acquires shares or additional shares of Class A Common Stock, as applicable, such Beneficial Holder may
not beneficially own any Equity-Linked Securities to the extent that such purchase or acquisition
of shares of Class A Common Stock causes such Beneficial Holder to Beneficially Own 4.9% or more of
the outstanding shares of Class A Common Stock, calculated for this purpose in the same manner
described in Section 3.10(a).



     (c) Any purported acquisition of any Equity-Linked Security in violation of the Section 382
Ownership Blocker shall be void as of the date of the purported acquisition (or, in the case of an
indirect acquisition, the ownership of the Beneficial Holder of such Equity-Linked Security shall
terminate simultaneously with such indirect acquisition). The purported acquirer (or, in the case
of an indirect acquisition, the Beneficial Holder) of any Equity-Linked Security purportedly
acquired in violation of the Section 382 Ownership Blocker (such Equity-Linked Security, an “Excess
Equity-Linked Security”) shall not be recognized as the Beneficial Holder of such Excess
Equity-Linked Security for any purpose including, without limitation, for purposes of receiving (i)
any Installment Payment (if such Excess Equity-Linked Security is a Unit), or (ii) any other
payment on such Excess Equity-Linked Security. Any Excess Equity-Linked Security, and any
Installment Payment or other payment on such Excess Equity-Linked Security, shall be subject to
divestiture pursuant to the provisions of Paragraph Ninth of the Certificate of Incorporation as if
such Excess Equity-Linked Security were an “Excess Security” as defined in such Paragraph Ninth.



     (d) If any Equity-Linked Security becomes an Excess Equity-Linked Security, or if any
Equity-Linked Security ceases to be an Excess Equity-Linked Security, the Company shall promptly
deliver written notice thereof to the Purchase Contract Agent and the Trustee. The Purchase
Contract Agent and the Trustee shall not be charged with knowledge that any Equity-Linked Security
is an Excess Equity-Linked Security, or that any Equity-Linked Security is no longer an Excess
Equity-Linked Security, in each case, unless either (i) a



29









 




Responsible Officer of the Purchase
Contract Agent or the Trustee, as the case may be, shall have actual knowledge thereof or (ii)
written notice thereof has been provided to the Purchase Contract Agent and the Trustee by the
Company. The Purchase Contract Agent and the Trustee may, for purposes of this Agreement and the
Indenture, conclusively rely on any such notice from the Company in accordance with the provisions
of Section 8.01(b)(ii).




     (e) The Board of Directors may, in its discretion, approve any acquisition of Units or
Separate Purchase Contracts that would otherwise be restricted pursuant to this Section 3.10.



     Section 3.11. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated
Equity-Linked Security is surrendered to the Purchase Contract Agent, the Company and, if
applicable, the Note Issuer shall execute and deliver to the Purchase Contract Agent and Trustee,
and the Purchase Contract Agent and, if applicable, the Trustee shall authenticate on behalf of the Holder, and deliver in exchange
therefor, a new Equity-Linked Security, evidencing the same number of Units or Separate Purchase
Contracts, as the case may be, and bearing a security number not contemporaneously outstanding.



     If there shall be delivered to the Company, the Note Issuer (in the case of any Units), the
Purchase Contract Agent and the Trustee (in the case of any Units) (i) evidence to their
satisfaction of the destruction, loss or theft of any Equity-Linked Security, and (ii) such
security or indemnity as may be reasonable required by them to hold each of them and any agent of
any of them harmless, then, in the absence of notice to the Company, the Note Issuer, the Purchase
Contract Agent or the Trustee that such Equity-Linked Security has been acquired by a protected
purchaser, the Company and Note Issuer (in the case of any Units) shall execute and deliver to the
Purchase Contract Agent and the Trustee (in the case of any Units), and the Purchase Contract Agent
and the Trustee (in the case of any Units) shall authenticate on behalf of the Holder, and deliver
to the Holder, in lieu of any such destroyed, lost or stolen Equity-Linked Security, a new
Equity-Linked Security, evidencing the same number of Units or Separate Purchase Contracts, as the
case may be, and bearing a security number not contemporaneously outstanding.



     Notwithstanding the foregoing, the Company and, in the case of Units, the Note Issuer shall
not be obligated to execute and deliver to the Purchase Contract Agent and Trustee, and the
Purchase Contract Agent and, in the case of Units, the Trustee shall not be obligated to
authenticate on behalf of the Holder, and deliver to the Holder, an Equity-Linked Security on or
after the Business Day immediately preceding the Scheduled Mandatory Settlement Date or any earlier
Settlement Date with respect to such Equity-Linked Security. In lieu of delivery of a new
Equity-Linked Security, upon satisfaction of the applicable conditions



30









 




specified above in this
Section and receipt of appropriate registration or transfer instructions from such Holder, the
Purchase Contract Agent shall, if a Settlement Date with respect to such Equity-Linked Security has
occurred, deliver or arrange for delivery of the shares of Class A Common Stock deliverable in
respect of the Purchase Contracts evidenced by such Equity-Linked Security (together with Separate
Notes equal to the number of, and in the same form as, the Notes evidenced by such Equity-Linked
Security if such Equity-Linked Security is a Unit and if the Repurchase Right is not applicable or,
if applicable, not exercised).




     Upon the issuance of any new Equity-Linked Security under this Section 3.11, the Company and,
in the case of any new Units, the Note Issuer and the Purchase Contract Agent may require the
payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and expenses of the Purchase
Contract Agent) connected therewith.



     Every new Equity-Linked Security issued pursuant to this Section 3.11 in lieu of any
destroyed, lost or stolen Equity-Linked Security shall constitute an original additional
contractual obligation of the Company and, in the case of any new Units, the Note Issuer and of the
Holder in respect of the Unit or Separate Purchase Contract, as the case may be, evidenced thereby,
whether or not the destroyed, lost or stolen Equity-Linked Security shall be found at any time.
Such new Equity-Linked Security (and the Units or Separate Purchase Contracts, as applicable,
evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the
benefits and be subject to all the obligations of this Agreement equally and proportionately with
any and all other Equity-Linked Securities delivered hereunder.



     The provisions of this Section 3.11 are exclusive and shall preclude, to the extent lawful,
all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Equity-Linked Securities.



     Section 3.12. Persons Deemed Owners. Prior to due presentment of an Equity-Linked
Security for registration of transfer, the Company and, in the case of Units, the Note Issuer, and
the Purchase Contract Agent, and any agent of the Company, the Note Issuer or the Purchase Contract
Agent, may treat the Person in whose name such Equity-Linked Security is registered as the owner of
the Unit or Purchase Contract, as the case may be, evidenced thereby, for the purpose of
performance of the Units or Purchase Contracts, as applicable, evidenced by such Equity-Linked
Securities and for all other purposes whatsoever, and none of the Company, the Note Issuer nor the
Purchase Contract Agent, nor any agent of the Company, the Note Issuer or the Purchase Contract
Agent, shall be affected by notice to the contrary.



31









 





     Notwithstanding the foregoing, with respect to any Global Unit or Global Purchase Contract,
nothing contained herein shall prevent the Company, the Note Issuer, the Purchase Contract Agent or
any agent of the Company, the Note Issuer or the Purchase Contract Agent, from giving effect to any
written certification, proxy or other authorization furnished by the Depositary (or its nominee),
as a Holder, with respect to such Global Unit or Global Purchase Contract or impair, as between
such Depositary and the related Beneficial Holder, the operation of customary practices governing
the exercise of rights of the Depositary (or its nominee) as Holder of such Global Unit or Global
Purchase Contract.



     None of the Purchase Contract Agent, Trustee, the Paying Agent and the Security Registrar
shall have any responsibility or obligation to any Beneficial Holder in a Global Security, an agent
member or other Person with respect to the accuracy of the records of the Depositary or its nominee
or of any agent member, with respect to any ownership interest in the Securities or with respect to
the delivery to any agent member, Beneficial Holder or other Person (other than the Depositary) of
any notice or the payment of any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders under the Securities and this Agreement shall be given or
made only to or upon the order of the registered Holders (which shall be the Depositary or its
nominee in the case of a Global Security). The rights of Beneficial Holders in Global Securities
shall be exercised only through the Depositary subject to the applicable procedures. The Purchase
Contract Agent, the Trustee, the Paying Agent and the Registrar shall be entitled to rely and shall
be fully protected in relying upon information furnished by the Depositary with respect to its
members, participants and any Beneficial Holders. The Purchase Contract Agent, the Trustee, the
Paying Agent and the Security Registrar shall be entitled to deal with the Depositary, and any
nominee thereof, that is the registered Holder of any Global Security for all purposes of this
Agreement relating to such Global Security (including the payment or delivery of amounts due
hereunder and the giving of instructions or directions by or to any Beneficial Holder) as the sole
Holder of such Global Security and shall have no obligations to the Beneficial Holders thereof.
None of the Purchase Contract Agent, the Trustee, the Paying Agent and the Security Registrar shall
have any responsibility or liability for any acts or omissions of the Depositary with respect to
such Global Security, for the records of any such Depositary, including records in respect of the
Beneficial Holders of any such Global Security, for any transactions between the Depositary and any
agent member or between or among the Depositary, any such agent member and/or any Holder or
Beneficial Holder of such Global Security, or for any transfers of beneficial interests in any such
Global Security.



     Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall
prevent the Company, the Purchase Contract Agent, the Trustee, or any agent of the Company, the
Purchase Contract Agent or the Trustee



32









 




from giving effect to any written certification, proxy or
other authorization furnished by any depositary (or its nominee), as a Holder, with respect to such
Global Security or shall impair, as between such Depositary and Beneficial Holders of such Global
Security, the operation of customary practices governing the exercise of the rights of such
depositary (or its nominee) as Holder of such Global Security.




     None of the Purchase Contract Agent, the Trustee, the Paying Agent or the Registrar shall have
any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Agreement or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among participants of DTC, members or
Beneficial Holders in any Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Agreement, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.



     Section 3.13. Cancellation. All Securities surrendered for separation or
recreation and all Equity-Linked Securities surrendered for settlement or upon the
registration of transfer or exchange of an Equity-Linked Security shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase Contract Agent and, if
not already cancelled, be promptly cancelled by it; provided, however, that the Purchase Contract
Agent shall deliver any Notes or Separate Notes so surrendered to it to the Trustee and Paying
Agent (as defined in the Indenture) for disposition in accordance with the provisions of the
Indenture. In the case of a Unit or Units surrendered for settlement, subject to Section 4.08
hereof, the Note Issuer shall promptly execute and the Trustee shall promptly authenticate and
deliver in accordance with the terms of the Indenture to the Holder thereof a number of Separate
Notes equal to the number of, and in the same form as, the Notes comprising part of the Units so
surrendered. The Company may at any time deliver to the Purchase Contract Agent for cancellation
any Equity-Linked Securities previously executed, authenticated and delivered hereunder that the
Company may have acquired in any manner whatsoever, and all Equity-Linked Securities so delivered
shall, upon an Issuer Order, be promptly cancelled by the Purchase Contract Agent; provided,
however, that if the Equity-Linked Securities so delivered are Units, the Purchase Contract Agent
shall deliver the Notes comprising such Units to the Trustee and Paying Agent (as defined in the
Indenture) for disposition in accordance with the provisions of the Indenture. No Equity-Linked
Securities shall be executed, authenticated on behalf of the Holder and delivered in lieu of or in
exchange for any Equity-Linked Securities cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Equity-Linked Securities held by the Purchase
Contract Agent shall be disposed of in accordance with its customary practices.



33









 





     If the Company or any Affiliate of the Company shall acquire any Equity-Linked Security, such
acquisition shall not operate as a cancellation of such Equity-Linked Security unless and until
such Equity-Linked Security is delivered to the Purchase Contract Agent for cancellation, in which
case such Equity-Linked Security shall be accompanied by an Issuer Order and cancelled in
accordance with the immediately preceding paragraph.



ARTICLE 4

Settlement of the Purchase Contracts 




     Section 4.01. Settlement Rate. (a) Each Purchase Contract obligates the Company to
deliver, on the Mandatory Settlement Date, a number of shares of Class A Common Stock (subject to
Section 4.10 and Article 5) equal to the Settlement Rate as determined by the Company, unless such
Purchase Contract has settled prior to the Mandatory Settlement Date.



     (b) The “Settlement Rate” is equal to:




     (i) if the Applicable Market Value is equal to or greater than the Threshold
Appreciation Price, 4.7655 shares of Class A Common Stock for each Purchase Contract (the
“Minimum Settlement Rate”);




     (ii) if the Applicable Market Value is greater than the Reference Price but less than
the Threshold Appreciation Price, a number of shares of Class A Common Stock for each
Purchase Contract equal to the Stated Amount, divided by the Applicable Market Value; and




     (iii) if the Applicable Market Value is less than or equal to the Reference Price,
5.8140 shares of Class A Common Stock for each Purchase Contract (the “Maximum Settlement
Rate”).



     (c) The Maximum Settlement Rate, the Minimum Settlement Rate (each, a “Fixed Settlement Rate”)
and the Reference Price shall be subject to adjustment as provided in Article 5 and rounded upward
or downward to the nearest 1/10,000th of a share (or if there is not a nearest 1/10,000th of a
share, to the next lower 1/10,000th of a share) or nearest $0.0001, as the case may be.



     (d) The Company shall give notice of the Settlement Rate to the Purchase Contract Agent and
Holders no later than two Scheduled Trading Days prior to the Mandatory Settlement Date.



     Section 4.02. Representations and Agreements of Holders. Each Holder of an
Equity-Linked Security, by its acceptance thereof:



34









 






     (i) irrevocably authorizes and directs the Purchase Contract Agent to execute and
deliver on its behalf and perform this Agreement on its behalf and appoints the Purchase
Contract Agent as its attorney-in-fact for any and all such purposes;




     (ii) in the case of a Purchase Contract that is a component of a Unit, or that is
evidenced by a Global Purchase Contract, irrevocably authorizes and directs the Purchase
Contract Agent to execute, deliver and hold on its behalf the Global Purchase Contract or
the Component Purchase Contract evidencing such Purchase Contract and appoints the
Purchase Contract Agent its attorney-in-fact for any and all such purposes;




     (iii) consents to the provisions hereof;




     (iv) agrees with the tax treatment provided for in Section 11.07;




     (v) agrees to the Section 382 Ownership Blocker and Section 382 Settlement Blocker
and represents and warrants to the Company that it is in compliance with the ownership
limitations of the Section 382 Ownership Blocker (which representation and warranty is
part of the consideration for the issuance of such Equity-Linked Security); and




     (vi) agrees to be bound by the terms and provisions thereof.



     Section 4.03. Purchase Contract Settlement Fund. On the applicable Settlement
Date, the Company shall issue and deliver to the Purchase Contract Agent, for the benefit of the
Holders of the Outstanding Purchase Contracts (or, in the case of an Early Settlement, for the
benefit of the Holders of Purchase Contracts that have elected such Early Settlement), the
aggregate number of shares of Class A Common Stock to which such Holders of the Purchase Contracts
to be settled on such Settlement Date are entitled hereunder, registered in the name of the
Purchase Contract Agent (or its nominee) as custodian for the Holders (such shares of Class A
Common Stock, together with any dividends or distributions for which a record date and payment date
for such dividend or distribution have occurred on or after the applicable Determination Date, the
“Purchase Contract Settlement Fund”). When any shares of Class A Common Stock are required to be
delivered to Holders pursuant to this Article 4, the Purchase Contract Agent shall deliver such
shares of Class A Common Stock, together with any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement Fund (but without interest thereon) to
such Holders, in accordance with the written direction of the Company, and the Company shall cause
any such shares to be registered in the name of such Holder or such Holder’s designee pursuant to
Section 4.11.




35












 





     Section 4.04. Settlement Conditions. A Holder’s right to receive the shares of
Class A Common Stock, and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, upon settlement of any of its Purchase Contracts is
subject to the following conditions:



     (a) if such Purchase Contract or the Unit that includes such Purchase Contract is in the form
of a Definitive Security, surrendering the relevant Definitive Security to the Purchase Contract
Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank and with
duly completed settlement instructions in the form attached thereto, or if such Purchase Contract
is represented by a Global Security, surrendering the relevant Security in compliance with the
standing arrangements between the Depositary and the Purchase Contract Agent; and



     (b) the payment of any transfer or similar taxes payable pursuant to Section 4.11.



     Section 4.05. Mandatory Settlement on the Mandatory Settlement Date. On the
Mandatory Settlement Date, subject to satisfaction of the conditions set forth in Section 4.04 by a
Holder with respect to any of its Purchase Contracts and subject to Section 4.10, the Company shall
cause a number of shares of Class A Common Stock per Purchase Contract equal to the Settlement Rate
to be issued and delivered, together with payment of (i) any cash payable in lieu of fractional
shares pursuant to Section 4.13 and (ii) any dividends or distributions with respect
to such shares constituting part of the Purchase Contract Settlement Fund (but without any
interest thereon), to such Holder by book-entry transfer or other appropriate procedures pursuant
to Section 4.11. The Person in whose name any shares of Class A Common Stock shall be issuable
upon settlement of any Purchase Contract on the Mandatory Settlement Date shall become the holder
of record of such shares as of the close of business on the last Trading Day of the 20 Trading Day
period during which the Applicable Market Value is determined; provided that, if delivery of any
shares of Class A Common Stock issuable upon settlement of any Purchase Contracts is delayed as a
result of the Section 382 Settlement Blocker, the Person in whose name such shares shall be
issuable upon settlement of such Purchase Contracts shall become the holder of record of such
shares as of the close of business on the date that (i) such delivery would not result in such
Beneficial Holder being an Acquiring Person and (ii) such Beneficial Holder has given notice
thereof to the Company.



     Section 4.06. Early Settlement. (a) Subject to and upon compliance with the
provisions of this Section 4.06, on any Trading Day prior to the close of business on the third
Scheduled Trading Day immediately preceding the Scheduled Mandatory Settlement Date, a Holder may
elect to settle its Purchase



36









 







Contracts early, in whole or in part, at the Early Settlement Rate
(“Early Settlement Right”).



     (b) A Holder’s right to receive Class A Common Stock upon Early Settlement of any of its
Purchase Contracts is subject to the following conditions:




     (i) delivery of a written and signed notice of election (an “Early Settlement
Notice”) in the form attached to the Purchase Contract to the Purchase Contract Agent
electing Early Settlement of such Purchase Contract;




     (ii) satisfaction of the conditions set forth in Section 4.04.



     (c) If a Holder complies with the requirements set forth in Section 4.06(b) before the close
of business on any Business Day, then that Business Day shall be considered the “Early Settlement
Date.” If a Holder complies with the requirements set forth in Section 4.06(b) at or after the
close of business on any Business Day or at any time on a day that is not a Business Day, then the
next Business Day shall be considered the “Early Settlement Date.”



     (d) Subject to satisfaction of the conditions set forth in Section 4.06(b) by a Holder with
respect to any of its Purchase Contracts, subject to Section 4.10, the Company shall cause a number
of shares of Class A Common Stock per Purchase Contract equal to the Early Settlement Rate to be
issued and delivered, together with payment of (i) any cash payable in lieu of fractional shares
pursuant to Section 4.13 and (ii) any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund (but without any
interest thereon), to such Holder by book-entry transfer or other appropriate procedures
pursuant to Section 4.11 on the third Business Day following the Early Settlement Date. The Person
in whose name any shares of the Class A Common Stock shall be issuable upon such Early Settlement
of a Purchase Contract shall become the holder of record of such shares as of the close of business
on the relevant Early Settlement Date; provided that, if delivery of any shares of Class A Common
Stock issuable upon settlement of any Purchase Contracts is delayed as a result of the Section 382
Settlement Blocker, the Person in whose name such shares shall be issuable upon settlement of such
Purchase Contracts shall become the holder of record of such shares as of the close of business on
the date that (i) such delivery would not result in such Beneficial Holder being an Acquiring
Person and (ii) such Beneficial Holder has given notice thereof to the Company.



     (e) In the event that Early Settlement is effected with respect to Purchase Contracts that are
a component of Units, upon such Early Settlement, the Company shall execute and the Trustee shall
authenticate (pursuant to the Indenture) on behalf of the Holder and deliver to the Holder thereof,
at the expense of the Company, Separate Notes, in same form as the Notes comprising



37









 







part of the
Units, equal to the number of Purchase Contracts as to which Early Settlement was effected.



     (f) In the event that Early Settlement is effected with respect to Purchase Contracts
represented by less than all the Purchase Contracts evidenced by a Security, upon such Early
Settlement, the Company shall execute and the Purchase Contract Agent and Trustee shall
authenticate on behalf of the Holder and deliver to the Holder thereof, at the expense of the
Company, a Security evidencing the Purchase Contracts as to which Early Settlement was not
effected.



     (g) Upon receipt of any Early Settlement Notice pursuant to Section 4.06(b), the Purchase
Contract Agent shall promptly deliver a copy of such Early Settlement Notice to the Company and
Note Issuer.



     Section 4.07. Early Settlement Upon a Fundamental Change. (a) If a Fundamental
Change occurs and a Holder exercises the option to effect Early Settlement in respect of its
Purchase Contracts in connection with such Fundamental Change in accordance with the procedures set
forth in Section 4.06, such Holder shall receive a number of shares of Class A Common Stock (or
cash, securities or other property, as applicable) for each such Purchase Contract equal to the
Fundamental Change Early Settlement Rate on the date such Fundamental Change Early Settlement Right
is exercised (the “Fundamental Change Early Settlement Right”). An Early Settlement shall be deemed
for these purposes to be “in connection with” such Fundamental Change if the Holder delivers an
Early Settlement Notice to the Purchase Contract Agent, and otherwise satisfies the requirements
for effecting Early Settlement of its Purchase Contracts set forth in Section 4.06 hereof, during
the period beginning on, and including, the Effective Date of the Fundamental Change and ending at
the close of business on the 30th Business Day thereafter (or, if earlier, the third Scheduled Trading Day immediately preceding
the Scheduled Mandatory Settlement Date) (the “Fundamental Change Early Settlement Period”).



     (b) If a Holder complies with the requirements set forth in Section 4.07(a) to exercise the
Fundamental Change Early Settlement Right before the close of business on any Business Day during
the Fundamental Change Early Settlement Period, then that Business Day shall be considered the
“Fundamental Change Early Settlement Date.” If a Holder complies with the requirements set forth in
set forth in Section 4.07(a) to exercise the Fundamental Change Early Settlement Right at or after
the close of business on any Business Day during the Fundamental Change Early Settlement Period or
at any time on a day during the Fundamental Change Early Settlement Period that is not a Business
Day, then the next Business Day shall be considered the “Fundamental Change Early Settlement Date.”



38









 





     (c) The Company shall provide the Purchase Contract Agent and the Holders of Units and
Separate Purchase Contracts with a notice of a Fundamental Change within five Business Days after
its occurrence, issue a press release announcing the Effective Date and post such press release on
its website. The notice shall set forth, among other things, (i) the applicable Fundamental Change
Early Settlement Rate, (ii) if not Class A Common Stock, the kind and amount of cash, securities
and other property receivable by the Holder upon settlement and (iii) the deadline by which each
Holder’s Fundamental Change Early Settlement Right must be exercised.



     (d) The “Fundamental Change Early Settlement Rate” shall be determined by the Company by
reference to the table below, based on the date on which the Fundamental Change occurs or becomes
effective (the “Effective Date”) and the stock price (the “Stock Price”) in the Fundamental Change,
which shall be:




     (i) in the case of a Fundamental Change described in clause (b) of the definition
thereof in which holders of shares of Class A Common Stock receive only cash in the
Fundamental Change, the Stock Price shall be the cash amount paid per share of Class A
Common Stock; and




     (ii) in all other cases, the Stock Price shall be the average of the Closing Prices
of the Class A Common Stock over the 10 consecutive Trading Day period ending on the
Trading Day immediately preceding the Effective Date.



     (e) The Stock Prices set forth in the first column of the table below shall be adjusted as of
any date on which any Fixed Settlement Rate is otherwise adjusted. The adjusted Stock Prices shall
equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction,
the numerator of which is the Maximum Settlement Rate immediately prior to the adjustment giving rise to the
Stock Price adjustment and the denominator of which is the Maximum Settlement Rate as so adjusted.
The number of shares in the table below shall be adjusted in the same manner as the Fixed
Settlement Rates as set forth in Section 5.01.



     (f) The following table sets forth the Fundamental Change Early Settlement Rate per Purchase
Contract for each Stock Price and Effective Date set forth below:



39









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Effective Date	 
	 	 	February 9,	 	 	February 15,	 	 	February 15,	 	 	February 15,	 
	Stock Price	 	2011	 	 	2012	 	 	2013	 	 	2014	 
	$1.00
	 	 	5.4963	 	 	 	5.6701	 	 	 	5.7660	 	 	 	5.8140	 
	$2.00
	 	 	5.1312	 	 	 	5.3749	 	 	 	5.6578	 	 	 	5.8140	 
	$3.00
	 	 	4.9097	 	 	 	5.1021	 	 	 	5.3896	 	 	 	5.8140	 
	$4.00
	 	 	4.7882	 	 	 	4.9243	 	 	 	5.1226	 	 	 	5.8140	 
	$4.30
	 	 	4.7614	 	 	 	4.8866	 	 	 	5.0585	 	 	 	5.8140	 
	$4.50
	 	 	4.7499	 	 	 	4.8647	 	 	 	5.0204	 	 	 	5.5556	 
	$4.75
	 	 	4.7346	 	 	 	4.8405	 	 	 	4.9778	 	 	 	5.2632	 
	$5.00
	 	 	4.7214	 	 	 	4.8194	 	 	 	4.9405	 	 	 	5.0000	 
	$5.25
	 	 	4.7099	 	 	 	4.8011	 	 	 	4.9081	 	 	 	4.7655	 
	$6.00
	 	 	4.6838	 	 	 	4.7592	 	 	 	4.8353	 	 	 	4.7655	 
	$7.00
	 	 	4.6622	 	 	 	4.7245	 	 	 	4.7791	 	 	 	4.7655	 
	$8.00
	 	 	4.6495	 	 	 	4.7044	 	 	 	4.7500	 	 	 	4.7655	 
	$9.00
	 	 	4.6420	 	 	 	4.6925	 	 	 	4.7351	 	 	 	4.7655	 
	$10.00
	 	 	4.6375	 	 	 	4.6855	 	 	 	4.7275	 	 	 	4.7655	 
	$12.50
	 	 	4.6332	 	 	 	4.6779	 	 	 	4.7209	 	 	 	4.7655	 
	$15.00
	 	 	4.6330	 	 	 	4.6760	 	 	 	4.7195	 	 	 	4.7655	 
	$17.50
	 	 	4.6343	 	 	 	4.6759	 	 	 	4.7191	 	 	 	4.7655	 
	$20.00
	 	 	4.6363	 	 	 	4.6766	 	 	 	4.7190	 	 	 	4.7655	 
	$22.50
	 	 	4.6386	 	 	 	4.6776	 	 	 	4.7189	 	 	 	4.7655	 
	$25.00
	 	 	4.6412	 	 	 	4.6789	 	 	 	4.7188	 	 	 	4.7655	 






     The exact Stock Prices and Effective Dates may not be set forth in the table above, in which
case:




     (i) if the applicable Stock Price is between two Stock Prices in the table or the
Effective Date is between two Effective Dates in the table, the Fundamental Change Early
Settlement Rate shall be determined by a straight-line interpolation between the
Fundamental Change Early Settlement Rates set forth for the higher and lower Stock Prices and the earlier and
later Effective Dates, as applicable, based on a 365-day year;




     (ii) if the applicable Stock Price is greater than $25.00 per share (subject to
adjustment in the same manner as the Stock Prices set forth in the column headings of the
table above), the Fundamental Change Early Settlement Rate shall be the Minimum Settlement
Rate; or




     (iii) if the applicable Stock Price is less than $1.00 per share (subject to
adjustment in the same manner as the Stock Prices set forth in



40









 







the column headings of the table above, the “Minimum Stock Price”) the Fundamental Change Early Settlement Rate shall
be determined as if the Stock Price equaled the Minimum Stock Price, and using
straight-line interpolation, as described in clause (i) of this Section 4.07(f), if the
Effective Date is between two Effective Dates in the table.


The maximum number of shares of Class A Common Stock deliverable under a Purchase Contract is
5.8140, subject to adjustment in the same manner as the Fixed Settlement Rates as set forth under
Section 5.01.




     (g) If a Holder exercises its Fundamental Change Early Settlement Right following the
Effective Date of a Fundamental Change described in clause (b) of the definition of “Fundamental
Change,” the Company shall deliver to such Holder or the Purchase Contract Agent on behalf of such
Holder, in accordance with the provisions of Section 5.02, the kind and amount of securities, cash
or other property that such Holder would have been entitled to receive in such Fundamental Change
transaction as a holder of a number of shares of the Class A Common Stock equal to the Fundamental
Change Settlement Rate for each Purchase Contract being settled early.



     (h) Subject to satisfaction of the conditions set forth in Section 4.06(b) by a Holder with
respect to any of its Purchase Contracts and subject to Section 4.10, the Company shall cause to be
delivered a number of shares of Class A Common Stock, or securities, cash or other property, as
applicable, payable as a result of such Holder’s exercise of the Fundamental Change Early
Settlement Right in accordance with the provisions set forth in Section 4.06(d), except that (i)
such delivery shall be made on the third Business Day following the Fundamental Change Early
Settlement Date, and (ii) the Person in whose name any shares of Class A Common Stock or other
securities, if applicable, shall be issuable following exercise of a Holder’s Fundamental Change
Early Settlement Right shall become the holder of record of such shares or other securities, if
applicable, as of the close of business on the date such right is exercised; provided that, if
delivery of any shares of Class A Common Stock issuable upon settlement of any Purchase Contracts
is delayed as a result of the Section 382 Settlement Blocker, the Person in whose name such shares
shall be issuable upon settlement of such Purchase Contracts shall become the holder of record of
such shares as of the close of business on the date that (i) such delivery would not result in such Beneficial
Holder being an Acquiring Person and (ii) such Beneficial Holder has given notice thereof to the
Company.



     (i) If a Holder exercises its Fundamental Change Early Settlement Right with respect to
Purchase Contracts that are a component of Units, upon such Early Settlement in connection with a
Fundamental Change, the Company shall execute and the Trustee shall authenticate (pursuant to the
Indenture) on behalf of



41









 







the Holder and deliver to the Holder thereof, at the expense of the
Company, Separate Notes, in same form as the Notes comprising part of the Units, equal to the
number of Purchase Contracts as to which Early Settlement in connection with a Fundamental Change
was effected.



     (j) If a Holder exercises its Fundamental Change Early Settlement Right with respect to
Purchase Contracts represented by less than all the Purchase Contracts evidenced by a Security,
upon such Early Settlement in connection with a Fundamental Change, the Company shall execute and
the Purchase Contract Agent and Trustee shall authenticate on behalf of the Holder and deliver to
the Holder thereof, at the expense of the Company, a Security evidencing the Purchase Contracts as
to which Early Settlement in connection with a Fundamental Change was not effected.



     (k) If a Holder does not elect to exercise the Fundamental Change Early Settlement Right, such
Holder’s Purchase Contracts shall remain outstanding and shall be subject to normal settlement on
any subsequent Settlement Date, including, if applicable, the provisions set forth in Section 5.01.



     Section 4.08.  Early Mandatory Settlement at the Company’s Election. (a) The
Company has the right to settle the Purchase Contracts early, in whole but not in part (the “Early
Mandatory Settlement Right”), on a date fixed by it (the “Early Mandatory Settlement Date”) at the
Early Mandatory Settlement Rate on the Early Mandatory Settlement Notice Date.



     (b) If the Company elects to exercise its Early Mandatory Settlement Right, the Company shall
provide the Purchase Contract Agent and the Holders of Units, Separate Purchase Contracts and
Separate Notes with a notice of its election (the “Early Mandatory Settlement Notice”), issue a
press release announcing its election and post such press release on its website. The Early
Mandatory Settlement Notice shall specify, among other things:




     (i) the Early Mandatory Settlement Rate;




     (ii) the Early Mandatory Settlement Date, which will be at least 5 but not more than
30 Business Days following the date of the Early Mandatory Settlement Notice (the “Early
Mandatory Settlement Notice Date”);




     (iii) that Holders of Units and Separate Notes will have the right to require the
Company to repurchase their Notes that are a component of the Units or their Separate
Notes, as the case may be, pursuant to and in accordance with the Indenture (subject to
certain exceptions as provided in the Indenture);



42









 






     (iv) the Repurchase Price and Repurchase Date;




     (v) the last date on which Holders may exercise their Repurchase Right; and




     (vi) the procedures that Holders must follow to require the Company to repurchase
their Notes (which procedures shall be in accordance with the Indenture).



     (c) On the Early Mandatory Settlement Date, subject to satisfaction of the conditions set
forth in Section 4.04 by a Holder with respect to any of its Purchase Contracts and subject to
Section 4.10, the Company shall cause a number of shares of Class A Common Stock per Purchase
Contract equal to the Early Mandatory Settlement Rate to be issued and delivered, together with
payment of (i) any cash payable in lieu of fractional shares pursuant to Section 4.13 and (ii) any
dividends or distributions with respect to such shares constituting part of the Purchase Contract
Settlement Fund (but without any interest thereon), to such Holder by book-entry transfer or other
appropriate procedures pursuant to Section 4.11. The Person in whose name any shares of the Class
A Common Stock shall be issuable following exercise of the Early Mandatory Settlement Right shall
become the holder of record of such shares as of the close of business on the Early Mandatory
Settlement Notice Date; provided that, if delivery of any shares of Class A Common Stock issuable
upon settlement of any Purchase Contracts is delayed as a result of the Section 382 Settlement
Blocker, the Person in whose name such shares shall be issuable upon settlement of such Purchase
Contracts shall become the holder of record of such shares as of the close of business on the date
that (i) such delivery would not result in such Beneficial Holder being an Acquiring Person and
(ii) such Beneficial Holder has given notice thereof to the Company.



     (d) In the event that Early Mandatory Settlement is effected with respect to Purchase
Contracts that are a component of Units, upon such Early Mandatory Settlement the Company shall
execute and the Trustee shall authenticate (pursuant to the Indenture) on behalf of the Holder and
deliver to the Holder thereof, at the expense of the Company, Separate Notes in the same form and
in the same number as the Notes comprising part of the Units; provided, however, that if the
Repurchase Date occurs prior to the Early Mandatory Settlement Date, Holders will surrender the
Units on the Repurchase Date and the Company shall execute, and the Purchase Contract Agent shall
authenticate, Separate Purchase Contracts in the same form and in the same number as the Purchase
Contracts comprising part of the Units, such Separate Purchase Contracts to be settled on the Early Mandatory
Settlement Date.



43









 





     Section 4.09. Acceleration of Mandatory Settlement Date. If a Bankruptcy Event
occurs at any time on or before the last Trading Day of the 20 Trading Day period during which the
Applicable Market Value is determined (the day on which such Bankruptcy Event occurs, the
“Acceleration Date”), the Mandatory Settlement Date shall automatically be accelerated to the
Business Day immediately following the Acceleration Date and, subject to Section 4.10, Holders of
Purchase Contracts shall be entitled to receive, upon settlement of the Purchase Contracts on such
accelerated Mandatory Settlement Date, a number of shares of Class A Common Stock per Purchase
Contract equal to the Maximum Settlement Rate in effect immediately prior to the Acceleration Date
(regardless of the Applicable Market Value of the Class A Common Stock at that time). The Company
shall, subject Section 4.10, cause to be delivered the shares of Class A Common Stock, securities,
cash or other property deliverable as a result of any such acceleration of the Mandatory Settlement
Date in accordance with the provisions set forth in Section 4.05, except that (i) such delivery
shall be made on the accelerated Mandatory Settlement Date, and (ii) the Person in whose name any
shares of Class A common stock shall be issuable following such acceleration shall become the
holder of record of such shares as of the close of business on the Acceleration Date; provided
that, if delivery of any shares of Class A Common Stock issuable upon settlement of any Purchase
Contracts is delayed as a result of the Section 382 Settlement Blocker, the Person in whose name
such shares shall be issuable upon settlement of such Purchase Contracts shall become the holder of
record of such shares as of the close of business on the date that (i) such delivery would not
result in such Beneficial Holder being an Acquiring Person and (ii) such Beneficial Holder has
given notice thereof to the Company.



     Section 4.10.  Section 382 Settlement Blocker. (a) Notwithstanding anything to the
contrary in this Agreement, no Beneficial Holder of Units or Separate Purchase Contracts shall be
entitled to receive shares of Class A Common Stock upon settlement of the Purchase Contracts,
whether on any Settlement Date or otherwise, and any delivery of shares of Class A Common Stock
upon settlement of such Purchase Contracts shall be void and of no effect, to the extent (but only
to the extent) that such receipt or delivery would cause such Beneficial Holder to become an
Acquiring Person, unless such Beneficial Holder has received prior approval of the Board of
Directors (the “Section 382 Settlement Blocker”). If any delivery of shares of Class A Common Stock
owed to a Beneficial Holder upon settlement of any Purchase Contracts is not made, in whole or in
part, as a result of the Section 382 Settlement Blocker, the Company’s obligation to make such
delivery shall not be extinguished and the Company shall deliver, or cause to be delivered, such
shares as promptly as practicable after such delivery would not result in such Beneficial Holder
being an Acquiring Person and such Beneficial Holder gives notice thereof to the Company.



44









 





     (b) The Board of Directors may, in its discretion, approve delivery of any shares of Class A
Common Stock that would otherwise be restricted by the Section 382 Settlement Blocker.



     (c) If the Section 382 Settlement Blocker is applicable to any delivery of shares of Class A
Common Stock upon settlement of any Purchase Contract, the Company shall promptly deliver written
notice thereof to the Purchase Contract Agent. The Purchase Contract Agent shall not be charged
with knowledge that any such settlement of any Purchase Contract is subject to the Section 382
Settlement Blocker unless either (i) a Responsible Officer of the Purchase Contract Agent shall
have actual knowledge thereof or (ii) written notice thereof has been provided to the Purchase
Contract Agent by the Company. The Purchase Contract Agent may, for purposes of this Agreement,
conclusively rely on any such notice from the Company in accordance with the provisions of Section
8.01(b)(ii).



     Section 4.11. Registration of Underlying Shares and Transfer Taxes. The shares of
Class A Common Stock underlying the Purchase Contracts shall be registered in the name of the
Holder or the Holder’s designee as specified in the settlement instructions provided by the Holder
to the Purchase Contract Agent, and the Company will pay all documentary, stamp or similar issue or
transfer taxes attributable to the delivery thereof, unless any such tax is payable in respect of
any registration of such shares in a name of a Person other than the Person in whose name the
Security evidencing such Purchase Contract is registered, in which case the Company shall not be
required to pay any such tax and no such registration shall be made unless the Person requesting
such registration has paid any such taxes required by reason of such registration in a name of a
Person other than the Person in whose name the Security evidencing such Purchase Contract is
registered or has established to the satisfaction of the Company that such tax either has been paid
or is not payable.



     Section 4.12. Return of Purchase Contract Settlement Fund. In the event a Holder
fails to effect surrender or delivery of its Units or Purchase Contracts on or following the
applicable Settlement Date in accordance with the provisions hereof, the shares of Class A Common
Stock underlying such Purchase Contracts, and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement Fund, shall be held in the name of the
Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until the earlier
to occur of:




     (i) the surrender of the relevant Units or Separate Purchase Contracts for settlement
in accordance with the provisions hereof or receipt by the Company and the Purchase
Contract Agent from such Holder of satisfactory evidence that such Units or Separate
Purchase



45









 







Contracts have been destroyed, lost or stolen, together with any indemnity that may be required by the
Purchase Contract Agent and the Company; and




     (ii) the passage of two years from the applicable Settlement Date, as the case may
be, following which the Purchase Contract Agent shall pay to the Company such Holder’s
share of such Class A Common Stock and any and any dividends or distributions with respect
to such shares constituting part of the Purchase Contract Settlement Fund; provided,
however, that prior to receiving any such payment, the Company shall mail to each such
Holder notice that such property remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such mailing, any unclaimed
balance of such property then remaining will be repaid to the Company. After payment to
the Company, (A) Holders entitled to such property must look to the Company for payment as
general creditors, unless applicable abandoned property law designates another Person, and
(B) all liability of the Purchase Contract Agent with respect to such property shall
cease.



     Section 4.13. No Fractional Shares. No fractional shares or scrip certificates
representing fractional shares of Class A Common Stock shall be issued or delivered to Holders upon
settlement of the Purchase Contracts. In lieu of any fractional shares of Class A Common Stock that
would otherwise be issuable upon settlement of any Purchase Contracts, a Holder of a Purchase
Contract shall be entitled to receive an amount in cash equal to the fraction of a share of Class A
Common Stock, calculated on an aggregate basis in respect of the Purchase Contracts being settled,
multiplied by the Closing Price of the Class A Common Stock on the Trading Day immediately
preceding the applicable Settlement Date. The Company shall provide the Purchase Contract Agent
with sufficient funds to permit the Purchase Contract Agent to make all cash payments required by
this Section 4.13 in a timely manner.



ARTICLE 5

Adjustments




     Section 5.01. Adjustments to the Fixed Settlement Rates. (a) Each Fixed
Settlement Rate shall be subject to the following adjustments, without duplication:




     (i) Stock Dividends and Distributions. If the Company issues Class A Common Stock to
all or substantially all of the holders of Class A Common Stock as a dividend or other
distribution, each Fixed Settlement Rate in effect immediately prior to the close of
business on the Record Date for such dividend or distribution shall be divided by a
fraction:



46









 






     (A) the numerator of which is the number of shares of Class A Common Stock
outstanding immediately prior to the close of business on such Record Date, and




     (B) the denominator of which is equal to (i) the number of shares of Class
A Common Stock outstanding immediately prior to the close of business on such
Record Date, plus (ii) the total number of shares of Class A Common Stock
constituting such dividend or other distribution.




     Any adjustment made pursuant to this clause (i) will become effective immediately
after the close of business on the Record Date for such dividend or distribution. If any
dividend or distribution described in this clause (i) is declared but not so paid or made,
each Fixed Settlement Rate shall be readjusted, effective as of the date the Board of
Directors publicly announces its decision not to make such dividend or distribution, to
such Fixed Settlement Rate that would be in effect if such dividend or distribution had
not been declared. For the purposes of this clause (i), the number of shares of Class A
Common Stock outstanding immediately prior to the close of business on the Record Date for
such dividend or other distribution shall not include shares held in treasury by the
Company but shall include any shares issuable in respect of any scrip certificates issued
in lieu of fractions of shares of Class A Common Stock. The Company shall not pay any
dividend or make any distribution on shares of Class A Common Stock held in treasury by
the Company.




     (ii) Issuance of Stock Purchase Rights. If the Company issues to all or
substantially all holders of Class A Common Stock rights, options or warrants (other than
rights, options or warrants issued pursuant to a dividend reinvestment plan, shareholder
rights plan or share purchase plan or other similar plans), entitling such holders, for a
period of up to 45 calendar days from the date of issuance of such rights, options or
warrants, to subscribe for or purchase shares of Class A Common Stock at a price per share
less than the Current Market Price per share of Class A Common Stock, each Fixed
Settlement Rate in effect immediately prior to the close of business on the Record Date
for such issuance shall be multiplied by a fraction:




     (A) the numerator of which is equal to (i) the number of shares of Class A
Common Stock outstanding immediately prior to the close of business on such
Record Date, plus (ii) the number of shares of Class A Common Stock issuable
pursuant to such rights, options or warrants, and



47









 






     (B) the denominator of which is equal to (i) the number of shares of Class
A Common Stock outstanding immediately prior to the close of business on such Record Date, plus (ii)
the number of shares of Class A Common Stock equal to the quotient of the
aggregate price payable to exercise such rights, options or warrants divided by
the Current Market Price per share of Class A Common Stock.




     Any adjustment made pursuant to this clause (ii) shall be made successively whenever
any such rights, options or warrants are issued and shall become effective immediately
after the close of business on the Record Date for such issuance. In the event that such
rights, options or warrants described in this clause (ii) are not so issued, each Fixed
Settlement Rate shall be readjusted, effective as of the date the Board of Directors
publicly announces its decision not to issue such rights, options or warrants, to such
Fixed Settlement Rate that would then be in effect if such issuance had not been declared.
To the extent that such rights, options or warrants are not exercised prior to their
expiration or shares of Class A Common Stock are otherwise not delivered pursuant to such
rights, options or warrants upon the exercise of such rights, options or warrants, each
Fixed Settlement Rate shall be readjusted, effective as of the date of such expiration or
the date of such exercise, as the case may be, to such Fixed Settlement Rate that would
then be in effect had the adjustment made upon the issuance of such rights, options or
warrants been made on the basis of the delivery of only the number of shares of Class A
Common Stock actually delivered.




     In determining whether any rights, options or warrants entitle the Holders thereof to
subscribe for or purchase shares of Class A Common Stock at less than the Current Market
Price per share of Class A Common Stock, and in determining the aggregate price payable to
exercise such rights, options or warrants, there shall be taken into account any
consideration received by the Company for such rights, options or warrants and any amount
payable on exercise or conversion thereof (the value of such consideration, if other than
cash, to be determined by the Board of Directors).




     For the purposes of this clause (ii), the number of shares of Class A Common Stock at
the time outstanding shall not include shares held in treasury by the Company but shall
include any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Class A Common Stock. The Company shall not issue any such rights,
options or warrants in respect of shares of Class A Common Stock held in treasury by the
Company.



48









 






     (iii) Subdivisions and Combinations of the Class A Common Stock. If outstanding
shares of Class A Common Stock shall be subdivided into a greater number of shares of
Class A Common Stock or combined into a lesser number of shares of Class A Common Stock, each Fixed
Settlement Rate in effect immediately prior to the open of business on the effective date
of such subdivision or combination shall be multiplied by a fraction:




     (A) the numerator of which is the number of shares of Class A Common Stock
that would be outstanding immediately after, and solely as a result of, such
subdivision or combination, and




     (B) the denominator of which is the number of shares of Class A Common
Stock outstanding immediately prior to the open of busniess, on such effective
date.




     Any adjustment made pursuant to this clause (iii) shall become effective immediately
after the open of business on the effective date of such subdivision or combination.




     (iv) Debt or Asset Distribution. (A) If the Company distributes to all or
substantially all holders of Class A Common Stock evidences of its indebtedness, shares of
Capital Stock (other than Class A Common Stock), securities, cash or other assets
(excluding (1) any dividend or distribution covered by Section 5.01(a)(i), (2) any rights,
options or warrants covered by Section 5.01(a)(ii), (3) any dividend or distribution
covered by Section 5.01(a)(v) and (4) any Spin-Off as to which the provisions set forth in
Section 5.01(a)(iv)(B) apply), each Fixed Settlement Rate in effect immediately prior to
the close of business on the Record Date for such distribution shall be multiplied by a
fraction:




     (1) the numerator of which is the Current Market Price per share
of Class A Common Stock, and




     (2) the denominator of which is equal to (i) Current Market Price
per share of Class A Common Stock, minus (ii) the Fair Market Value on
such Record Date of the portion of the evidences of indebtedness,
shares of Capital Stock, securities, cash or other assets so
distributed applicable to one share of Class A Common Stock.




     Any adjustment made pursuant to subparagraph (A) of this clause (iv) shall
become effective immediately after the close of



49









 







business on the Record Date for such distribution. In the event that such distribution described in subparagraph
(A) of this clause (iv) is not so made, each Fixed Settlement Rate shall be
readjusted, effective as of the date the Board of Directors publicly announces
its decision not to pay such dividend or distribution, to such Fixed
Settlement Rate that would then be in effect if such distribution had not
been declared.




     (B) If a Spin-Off occurs, each Fixed Settlement Rate in effect immediately
prior to the close of business on the Record Date for the relevant distribution
shall instead be multiplied by a fraction:




     (1) the numerator of which is equal to (i) the Current Market
Price per share of Class A Common Stock, plus (ii) the average of the
Closing Prices of Capital Stock or similar equity interests so
distributed applicable to one share of Class A Common Stock
(determined by reference to the definition of Closing Price as if
references therein to Class A Common Stock were to such Capital Stock
or similar equity interest) over the 10 consecutive Trading Day period
commencing on, and including, the effective date of the Spin-Off (the
“Valuation Period”).




     (2) the denominator of which is the Current Market Price per
share of Class A Common Stock.




     Any adjustment made pursuant to subparagraph (B) of this clause (iv) shall
become effective immediately after the close of business on the last Trading Day
of the Valuation Period; provided that, if any Determination Date occurs during
the Valuation Period, references immediately above to 10 Trading Days shall be
deemed to be replaced with such lesser number of Trading Days as have elapsed
between the effective date of such Spin-Off and such Determination Date for
purposes of determining the Fixed Settlement Rates on such Determination Date. In
the event that such distribution described in subparagraph (B) of this clause
(iv) is not so made, each Fixed Settlement Rate shall be readjusted, effective as
of the date the Board of Directors publicly announces its decision not to pay
such distribution, to such Fixed Settlement Rate that would then be in effect if
such distribution had not been declared.



50









 






     (v) Cash Distributions. If the Company distributes an amount exclusively in cash to
all or substantially all holders of Class A Common Stock (excluding (1) any cash that is
distributed in a Reorganization Event to which Section 5.02 applies or (2) any dividend or
distribution in connection with the liquidation, dissolution or winding up of the
Company), each Fixed Settlement Rate in effect immediately prior to the close of business
on the Record Date for such distribution shall be multiplied by a fraction:




     (A) the numerator of which is the Current Market Price per share of Class A
Common Stock, and




     (B) the denominator of which is equal to (i) the Current Market Price per
share of Class A Common Stock, minus (ii) the amount of such distribution per
share of Class A Common Stock.




     Any adjustment made pursuant to this clause (v) shall become effective immediately
after the close of business on the Record Date for such distribution. In the event that
any distribution described in this clause (v) is not so made, each Fixed Settlement Rate
shall be readjusted, effective as of the date the Board of Directors publicly announces
its decision not to pay such distribution, to such Fixed Settlement Rate which would then
be in effect if such distribution had not been declared.




     (vi) Self Tender Offers and Exchange Offers. If the Company or any Subsidiary of the
Company successfully completes a tender or exchange offer pursuant to a Schedule TO or
registration statement on Form S-4 for the Class A Common Stock (excluding any securities
convertible or exchangeable for Class A Common Stock), where the cash and the value of any
other consideration included in the payment per share of Class A Common Stock validly
tendered or exchanged exceeds the Current Market Price per share of Class A Common Stock,
each Fixed Settlement Rate in effect immediately prior to the close of business on the
10th Trading Day immediately following, and including, the Trading Day immediately
following the last date on which tenders or exchanges may be made pursuant to such tender
or exchange offer (the “Tender Offer Expiration Date”) shall be multiplied by a fraction:




     (A) the numerator of which shall be equal to the sum of:




     (1) the aggregate value of all cash and the Fair Market Value on
the Tender Offer Expiration Date of any other consideration paid or
payable for shares of Class A



51









 







Common Stock validly tendered or
exchanged and not withdrawn as of the Tender Offer Expiration Date; and




     (2) the product of (x) the Current Market Price per share of Class
A Common Stock, and (y) the number of shares of Class A
Common Stock outstanding immediately after the last time tenders or exchanges may be
made pursuant to such tender or exchange offer (the “Tender Offer
Expiration Time”), after giving effect to the purchase of all shares accepted for purchase or exchange in
such tender or exchange offer; and




     (B) the denominator of which shall be equal to the product of (x) the
Current Market Price per share of Class A Common Stock, and (y) the number of
shares of Class A Common Stock outstanding immediately prior to the Tender Offer
Expiration Time on the Tender Offer Expiration Date, prior to giving effect to
the purchase of all shares accepted for purchase or exchange in such tender or
exchange offer.




     Any adjustment made pursuant to this clause (vi) shall become effective immediately
after the close of business on the 10th Trading Day immediately following the Tender Offer
Expiration Date; provided that, if any Determination Date occurs during the 10 Trading
Days immediately following, and including, the Trading Day next succeeding the Tender
Offer Expiration Date, references immediately above to 10 Trading Days shall be deemed to
be replaced with such lesser number of Trading Days as have elapsed between such Tender
Offer Expiration Date and such Determination Date for the purposes of determining the
Fixed Settlement Rates on such Determination Date. In the event that the Company or one of
its Subsidiaries is obligated to purchase shares of Class A Common Stock pursuant to any
such tender or exchange offer, but the Company or such Subsidiary is permanently prevented
by applicable law from effecting any such purchases, or all such purchases are rescinded,
then each Fixed Settlement Rate shall be readjusted to such Fixed Settlement Rate that
would then be in effect if such tender or exchange offer had not been made.



     (b) Rights to Certain Distributions. Except with respect to a Spin-Off, in cases where the
Fair Market Value of assets (including cash), debt securities or certain rights, warrants or
options to purchase securities of the Company as to which Section 5.01(a)(iv) or Section 5.01(a)(v)
apply, applicable to one share of Class A Common Stock, distributed to holders of Class A Common
Stock equals or exceeds the applicable Current Market Price per share of the Class A Common



52









 







Stock, rather than being entitled to an adjustment in each Fixed Settlement Rate, Holders shall be
entitled to receive (without settling such Holders’ Purchase Contracts) on the date on which such
assets (including cash), debt securities or rights, options or warrants are distributed to holders
of Class A Common Stock, for each Purchase Contract, the amount of such assets or securities that
such Holder would have received had such Holder owned a number of shares of Class A Common Stock
equal to the Maximum Settlement Rate on the Record Date for such distribution.



     (c) Rights Plans. To the extent that the Company has a rights plan in effect with respect to
the Class A Common Stock on any Determination Date,Holders shall receive, in addition to the Class A Common Stock, the rights under such rights
plan, unless, prior to such Determination Date, the rights have separated from the Class A Common
Stock, in which case each Fixed Settlement Rate shall be adjusted at the time of separation of such
rights as if the Company made a distribution to all holders of the Class A Common Stock as
described in Section 5.01(a)(iv), subject to readjustment in the event of the expiration,
termination or redemption of such rights.



     (d) Adjustment for Tax Reasons. The Company may make such increases in each Fixed Settlement
Rate, in addition to any other increases required by this Article 5, as the Company deems advisable
to avoid or diminish any income tax to holders of the Class A Common Stock resulting from any
dividend or distribution of shares of Class A Common Stock (or issuance of rights, options or
warrants to acquire shares of Class A Common Stock) or from any event treated as such for income
tax purposes or for any other reasons; provided that the same proportionate adjustment must be made
to each Fixed Settlement Rate.



     (e) Calculation of Adjustments. All adjustments to each Fixed Settlement Rate shall be
calculated to the nearest 1/10,000th of a share of Class A Common Stock. No adjustment in a Fixed
Settlement Rate shall be required unless such adjustment would require an increase or decrease of
at least one percent therein. If any adjustment is not required to be made by reason of this
Section 5.01(e), then such adjustment shall be carried forward and taken into account in any
subsequent adjustment; provided that on each Determination Date, adjustments to each Fixed
Settlement Rate shall be made with respect to any such adjustment carried forward and which has not
been taken into account before such Determination Date.



     (f) Adjustments to Reference Price and Applicable Market Value. Upon each adjustment to each
Fixed Settlement Rates pursuant to Section 5.01, an inversely proportional adjustment shall also be
made to the Reference Price solely for purposes of determining which of clauses (i), (ii) and (iii)
of Section 4.01(b)



53









 







shall be applicable with respect to the Mandatory Settlement Date. Such
adjustment shall be made by dividing the Reference Price by a fraction, the numerator of which
shall be the Minimum Settlement Rate immediately after such adjustment pursuant to Section 5.01 and
the denominator of which shall be such Minimum Settlement Rate immediately before such adjustment.
For the avoidance of doubt, no separate inversely proportional adjustment shall be made to the
Threshold Appreciation Price because it is equal to the Stated Amount divided by the Minimum
Settlement Rate (such quotient rounded to the nearest $0.0001). The Company shall make appropriate
adjustments to the Closing Prices prior to the relevant issuance date, Record Date, Ex-Date,
effective date or Tender Offer Expiration Date, as the case may be, used to calculate the
Applicable Market Value to account for any adjustments to the Fixed Settlement Rates and the
Reference Price that become effective during (i) the 20 consecutive Trading
Day period used for calculating the Applicable Market Value, and (ii) any period during which
the Stock Price is calculated for purposes of determining the Fundamental Change Early Settlement
Rate.



     (g) Limitation on Adjustments. No adjustment to the Fixed Settlement Rates shall be made if
Holders of Units or any separate Purchase Contracts may participate in the transaction (at a level
based on the Maximum Settlement Rate) that would otherwise give rise to an adjustment at the same
time and on the same terms as holders of the Class A Common Stock without having to settle the
Purchase Contracts. In addition, the Fixed Settlement Rates shall only be adjusted as set forth
above and shall not be adjusted:




     (A) upon the issuance of any shares of Class A Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or interest
payable on the Company’s securities and the investment of additional optional
amounts in shares of Class A Common Stock under any plan;




     (B) upon the issuance of any shares of Class A Common Stock or rights,
options or warrants to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed by the
Company or any of its subsidiaries;




     (C) upon the issuance of any shares of Class A Common Stock pursuant to any
option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the Issue Date; or




     (D) for a change in the par value or no par value of the Class A Common
Stock.



54









 





     (h) Notice of Adjustment. Whenever the Fixed Settlement Rates are adjusted, the Company
shall:




     (i) prepare and transmit to the Purchase Contract Agent an Officers’ Certificate
setting forth such adjusted Fixed Settlement Rates and/or the adjusted Fundamental Change
Settlement Rates, the method of calculation thereof in reasonable detail and the facts
requiring such adjustment and upon which such adjustment is based;




     (ii) within five Business Days following the occurrence of an event that requires an
adjustment to the Fixed Settlement Rates and/or the Fundamental Change Settlement Rates
(or if the Company is not aware of such occurrence, as soon as practicable after becoming
so aware), provide, or cause to be provided, a written notice to the Holders of the
occurrence of such event; and




     (iii) within five Business Days following the determination of such adjusted Fixed
Settlement Rates and/or Fundamental Change Settlement Rates provide, or cause to be
provided, to the Holders a statement setting forth in reasonable detail the method by
which the adjustment to such Fixed Settlement Rates and/or the Fundamental Change
Settlement Rates was determined and setting forth such adjusted Fixed Settlement Rates
and/or Fundamental Change Settlement Rates and the facts requiring such adjustment and
upon which such adjustment is based.




     Section 5.02. Reorganization Events. (a) In the event of:




     (i) any consolidation or merger of the Company with or into another Person (other
than a merger or consolidation in which the Company is the continuing or surviving
corporation and in which the Class A Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities or other property of the
Company or another Person);




     (ii) any sale, transfer, lease or conveyance to another Person of all or
substantially all of the property and assets of the Company;




     (iii) any reclassification of Class A Common Stock into securities including
securities other than Class A Common Stock; or




     (iv) any statutory exchange of securities of the Company with another Person (other
than in connection with a merger or acquisition),




55












 




in each case, as a result of which the Class A Common Stock would be converted into, or
exchanged for, securities, cash or property (each, a “Reorganization Event”), each Purchase
Contract outstanding immediately prior to such Reorganization Event shall, without the consent of
Holders, become a contract to purchase the kind of securities, cash and other property (the
“Exchange Property”) that a holder of Class A Common Stock would have been entitled to receive
immediately prior to such Reorganization Event and, prior to or at the effective time of such
Reorganization Event, the Company or the successor or purchasing Person, as the case may be, shall
execute with the Note Issuer, the Purchase Contract Agent and the Trustee a supplemental agreement
permitted under Section 9.01(iv) providing for such change in the right to settle the Purchase
Contracts. For purposes of the foregoing, the type and amount of Exchange Property in the case of
any Reorganization Event that causes the Class A Common Stock to be converted into, or exchanged
for, the right to receive more than a single type of consideration (determined based in part upon
any form of shareholder election) will be deemed to be the weighted average of the types and
amounts of consideration received by the holders of Class A Common Stock that affirmatively make
such an election. The Company shall notify the Purchase Contract Agent in writing of such weighted
average as soon as practicable after such determination is made. The number of units of Exchange
Property for each Purchase Contract settled following the effective date of such Reorganization
Event shall be determined based on the Fixed Settlement Rate then in effect on the applicable
Determination Date (without any interest thereon and without any right to dividends or
distributions thereon which have a record date that is prior to the Determination Date). Each
Fixed Settlement Rate shall be determined based upon the Applicable Market Value of a unit of
Exchange Property that a holder of one share of Class A Common Stock would have received in such
Reorganization Event.




     For purposes of this Section 5.02(a), “Applicable Market Value” shall be deemed to refer to
the Applicable Market Value of the Exchange Property and such value shall be determined (A) with
respect to any publicly traded securities that comprises all or part of the Exchange Property,
based on the Closing Price of such securities, (B) in the case of any cash that comprises all or
part of the Exchange Property, based on the amount of such cash and (C) in the case of any other
property that comprises all or part of the Exchange Property, based on the value of such property,
as determined by a nationally recognized independent investment banking firm retained by the
Company for this purpose. For purposes of this Section 5.02(a), the term “Closing Price” shall be
determined by reference to the definition of Closing Price as if references therein to Class A
Common Stock were to such publicly traded securities that comprise all or part of the Exchange
Property. For purposes of this Section 5.02(a), references to Class A Common Stock in the
definition of “Trading Day” shall be replaced by



56









 




references to any publicly traded securities that comprise all or part of the Exchange Property.




     Such supplemental agreement described in the second immediately preceding paragraph shall
provide for adjustments that shall be as nearly equivalent as is possible to the adjustments
provided for in this Article 5. If, in the case of any Reorganization Event, the Exchange Property
includes shares of stock, securities or other property or assets (including cash or any combination
thereof) of a Person other than the successor or purchasing Person, as the case may be, in such
Reorganization Event, then such supplemental agreement shall also be executed by such other Person
and shall contain such additional provisions to protect the interests of the Holders of the
Equity-Linked Securities as the Board of Directors shall reasonably consider necessary by reason of
the foregoing.



     (b) In the event the Company shall execute a supplemental agreement pursuant to Section
5.02(a), the Company shall promptly file with the Purchase Contract Agent an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset
that will comprise the Exchange Property after any such Reorganization Event, any adjustment to be
made with respect thereto and that all conditions precedent have been complied with, and shall
promptly mail notice thereof to all Holders. The Company (or any successor) shall, within 20 days
of the occurrence of any Reorganization Event or, if earlier, within 20 days of the execution of
any supplemental agreement pursuant to Section 5.02(a), provide written notice to the Purchase
Contract Agent and Holders of such occurrence of such event and of the kind and amount of the cash,
securities or other property that constitute the Exchange Property and of the execution of such
supplemental agreement, if applicable. Failure to deliver such notice shall not affect the
operation of this Section 5.02 or the legality or validity of any such supplemental agreement.



     (c) The Company shall not become a party to any Reorganization Event unless its terms are
consistent with this Section 5.02. None of the foregoing provisions shall affect the right of a
Holder of Purchase Contracts to effect Early Settlement pursuant to Section 4.06 and Section 4.07
prior to the effective date of such Reorganization Event.



     (d) The above provisions of this Section 5.02(a) shall similarly apply to successive
Reorganization Events and the provisions of Section 5.01 shall apply to any shares of Capital Stock
of the Company (or any successor) received by the holders of Class A Common Stock in any such
Reorganization Event.



57









 





ARTICLE 6

Concerning the Holders of Purchase Contracts




     Section 6.01. Evidence of Action Taken by Holders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by this Agreement to be
given or taken by a specified percentage of number of Purchase Contracts may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such specified
percentage of Holders in Person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Purchase Contract Agent. Proof of execution of any instrument or
of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and
(subject to Section 8.01 and Section 8.03) conclusive in favor of the Purchase Contract Agent, the
Company and the Note Issuer, if made in the manner provided in this Article 6.



     Section 6.02. Proof of Execution of Instruments and of Holding of Securities.
Subject to Section 8.01 and Section 8.03, the execution of any instrument by a Holder or his agent
or proxy may be proved in the following manner:



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



     (b) The ownership of the Units and the Purchase Contracts shall be proved by the Security
Register or by a certificate of the Security Registrar.



     Section 6.03. Purchase Contracts Deemed Not Outstanding. In determining whether
the Holders of the requisite number of Outstanding Purchase Contracts have concurred in any
direction, consent or waiver under this Agreement, Purchase Contracts which are owned by the
Company or by any Affiliate of the Company with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding Purchase Contracts for the purpose of any
such determination, except that for the purpose of determining whether the Purchase Contract Agent
shall be protected in relying on any such direction, consent or waiver only Purchase Contracts
which a Responsible Officer of the Purchase Contract Agent knows are so owned shall be so
disregarded. Purchase Contracts so owned which have been pledged in good faith may be



58









 







regarded as Outstanding Purchase Contracts if the pledgee establishes to the satisfaction of
the Purchase Contract Agent the pledgee’s right so to act with respect to such Purchase Contracts
and that the pledgee is not the Company or any Affiliate of the Company. In case of a dispute as
to such right, the advice of counsel shall be full protection in respect of any decision made by
the Purchase Contract Agent in accordance with such advice. Upon request of the Purchase Contract
Agent, the Company shall furnish to the Purchase Contract Agent promptly an Officers’ Certificate
listing and identifying all Purchase Contracts, if any, known by the Company to be owned or held by
or for the account of any of the above described Persons; and, subject to Section 8.01 and Section
8.03, the Purchase Contract Agent shall be entitled to accept such Officers’ Certificate as
conclusive evidence of the facts therein set forth and of the fact that all Purchase Contracts not
listed therein are Outstanding Purchase Contracts for the purpose of any such determination.



     Section 6.04. Right of Revocation of Action Taken. At any time prior to (but not
after) the evidencing to the Purchase Contract Agent, as provided in Section 6.01, of the taking of
any action by the Holders of the percentage of the number of Purchase Contracts specified in this
Agreement in connection with such action, any Holder of a Purchase Contract the serial number of
which is shown by the evidence to be included among the serial numbers of the Purchase Contracts
the Holders of which have consented to such action may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in this Article 6, revoke such action so far as
concerns such Purchase Contract; provided that such revocation shall not become effective until
three Business Days after such filing. Except as aforesaid, any such action taken by the Holder of
any Purchase Contract shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Purchase Contract and of any Purchase Contracts issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of whether or not any
notation in regard thereto is made upon any such Purchase Contract. Any action taken by the
Holders of the percentage of the number of Purchase Contracts specified in this Agreement in
connection with such action shall be conclusively binding upon the Company, the Note Issuer, the
Purchase Contract Agent, the Trustee and the Holders of all the Purchase Contracts affected by such
action.



     Section 6.05. Record Date for Consents and Waivers. The Company may, but shall not
be obligated to, establish a record date for the purpose of determining the Persons entitled to
give, make or take any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given made or taken by Holders of Purchase
Contracts. If a record date is fixed, the Holders on such record date, or their duly designated
proxies, and any such Persons, shall be entitled to give, make or take any such request, demand,
authorization, direction, notice, consent, waiver or



59









 




other action, whether or not such Holder remains a Holder after such record date; provided,
however, that unless such waiver or consent is obtained from the Holders, or duly designated
proxies, of the requisite number of Outstanding Purchase Contracts prior to the date which is the
120th day after such record date, any such waiver or consent previously given shall automatically
and, without further action by any Holder be cancelled and of no further effect.




ARTICLE 7

Remedies




     Section 7.01. Unconditional Right of Holders to Receive Shares of Class A Common
Stock. Each Holder of a Purchase Contract (whether or not included in a Unit) shall have the
right, which is absolute and unconditional, to receive the shares of Class A Common Stock pursuant
to such Purchase Contract and to institute suit for the enforcement of any such right to receive
the shares of Class A Common Stock, and such right shall not be impaired without the consent of
such Holder.



     Section 7.02. Notice To Purchase Contract Agent; Limitation On Proceedings.
Holders of not less than 25% of Outstanding Purchase Contracts, by notice given to the Purchase
Contract Agent, may request that Purchase Contract Agent to institute proceedings with respect to a
default relating to any covenant hereunder. No Holder of Purchase Contracts may institute any
proceedings, judicial or otherwise, with respect to this Agreement or for any remedy hereunder,
except in the case of failure of the Purchase Contract Agent, for 60 days, to act after the
Purchase Contract Agent has received a written request to institute proceedings in respect of a
default with respect to any covenant hereunder from the Holders of not less than 25% of the
Outstanding Purchase Contracts, as well as an offer of indemnity reasonably satisfactory to the
Purchase Contract Agent. This provision will not prevent any Holder of Purchase Contracts from
instituting suit for the delivery of Class A Common Stock deliverable upon settlement of the
Purchase Contracts on any Settlement Date.



     Section 7.03. Restoration of Rights and Remedies. If any Holder or the Purchase
Contract Agent has instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has been determined
adversely to such Holder or the Purchase Contract Agent, then and in every such case, subject to
any determination in such proceeding, the Company and the Note Issuer, as the case may be, and such
Holder or the Purchase Contract Agent shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of such Holder shall continue as though
no such proceeding had been instituted.



60









 





     Section 7.04. Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the
last paragraph of Section 3.11, no right or remedy herein conferred upon or reserved to the Holders
or the Purchase Contract Agent is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy.



     Section 7.05. Delay or Omission Not Waiver. No delay or omission of any Holder or
the Purchase Contract Agent to exercise any right or remedy upon a default hereunder shall impair
any such right or remedy or constitute a waiver of any such right. Every right and remedy given by
this Article or by law to the Holders or the Purchase Contract Agent may be exercised from time to
time, and as often as may be deemed expedient, by such Holders or the Purchase Contract Agent.



     Section 7.06. Undertaking for Costs. All parties to this Agreement agree, and each
Holder of a Purchase Contract, by its acceptance of such Purchase Contract 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 Agreement, or in any suit against the Purchase Contract Agent for any action
taken, suffered or omitted by it as Purchase Contract Agent, 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 and costs 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; provided that the provisions of this Section shall not apply
to any suit instituted by (a) the Purchase Contract Agent, (b) any Holder, or group of Holders,
holding in the aggregate more than 10% of the Outstanding Purchase Contracts, or (c) any Holder for
the enforcement of the right to receive shares of Class A Common Stock or other Exchange Property
issuable upon settlement of the Purchase Contracts held by such Holder.



     Section 7.07. Waiver of Stay or Execution Laws. The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or assume or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, that may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the



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Purchase Contract Agent or the Holders, but will suffer and permit the execution of every such
power as though no such law had been enacted.




     Section 7.08. Control by Majority. The Holders of not less than a majority in
number of the Outstanding Purchase Contracts shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Purchase Contract Agent, or of
exercising any trust or power conferred upon the Purchase Contract Agent; provided that the
Purchase Contract Agent has received indemnity satisfactory to it. Notwithstanding the foregoing,
the Purchase Contract Agent may refuse to follow any direction that is in conflict with any law or
the Purchase Contract Agreement, that may involve it in personal liability or that may be unduly
prejudicial to the Holders of Purchase Contracts not joining in the action.



ARTICLE 8

The Purchase Contract Agent and Trustee 




     Section 8.01. Certain Duties and Responsibilities. (a) Each of the Purchase
Contract Agent and Trustee undertakes to perform, with respect to the Units and Purchase Contracts,
such duties and only such duties as are specifically delegated to it and set forth in this
Agreement.



     (b) No provision of this Agreement shall be construed to relieve the Purchase Contract Agent
from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:




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




     (ii) in the absence of bad faith on the part of the Purchase Contract Agent and/or
the Trustee, as applicable, the Purchase Contract Agent and/or the Trustee, as applicable,
may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any statements, certificates or opinions furnished to the
Purchase Contract Agent and/or the Trustee, as applicable, and conforming to the
requirements of this Agreement; but in the case of any such statements, certificates or
opinions which by any provision hereof are specifically required to be furnished to the
Purchase Contract Agent and/or



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the Trustee, the Purchase Contract Agent and/or the Trustee, as applicable, shall be under
a duty to examine the same to determine whether or not they conform to the requirements of
this Agreement;




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




     (iv) the Purchase Contract Agent and/or the Trustee, as applicable, shall not be
liable with respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders pursuant to Section 7.08 relating to the
time, method and place of conducting any proceeding for any remedy available to the
Purchase Contract Agent and/or the Trustee, as applicable, or exercising any right or
power conferred upon the Purchase Contract Agent and/or the Trustee, as applicable, under
this Agreement.



     (c) This Agreement shall not be deemed to create a fiduciary relationship under state or
federal law between Wilmington Trust Company, in its capacity as the Purchase Contract Agent, and
any Holder of any Equity-Linked Security.



     None of the provisions contained in this Agreement shall require the Purchase Contract Agent
to expend or risk its own funds or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it.



     Section 8.02. Notice of Default. Within 90 days after the occurrence of any
default by the Company hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the Company and the Holders
of Purchase Contracts, as their names and addresses appear in the Security Register, notice of such
default hereunder, unless such Responsible Officer of the Purchase Contract Agent has actual
knowledge that such default shall have been cured or waived.



     Section 8.03. Certain Rights of Purchase Contract Agent. Subject to the provisions
of Section 8.01:



     (a) the Purchase Contract Agent may rely and shall be protected in acting or refraining from
acting upon any resolution, Officers’ Certificate or any



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other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;




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



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



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



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



     (f) the Purchase Contract Agent 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 Outstanding Purchase Contracts; provided that, if the payment
within a reasonable time to the Purchase Contract Agent of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Purchase
Contract Agent, not reasonably assured to the Purchase Contract Agent by the security afforded to
it by the terms of this Agreement, the Purchase Contract Agent 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 Company or, if paid by the Purchase Contract Agent or any
predecessor Purchase Contract Agent, shall be repaid by the Company upon demand;



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



     (h) the Purchase Contract Agent shall not be charged with knowledge of any default with
respect to a series of Securities unless either (i) a Responsible Officer of the Purchase Contract
Agent assigned to the Corporate Trust Office of the Purchase Contract Agent (or any successor
division or department of the Purchase Contract Agent) shall have actual knowledge of such default
or (ii) written notice of such default shall have been given to the Purchase Contract Agent by the
Company, the Note Issuer or any Holder;



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



     (j) the permissive rights of the Purchase Contract Agent hereunder shall not be construed as
duties;



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



     (l) the rights, privileges, protections, immunities and benefits given to the Purchase
Contract Agent, including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Purchase Contract Agent and the Trustee (whether or not the Trustee is
expressly referred to in connection with any such rights, privileges, protections, immunities and
benefits) in each of their capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder;



     (m) each of the Purchase Contract Agent and the Trustee may request that the Company (on
behalf of itself and the Note Issuer) deliver an Officers’ Certificate setting forth the name of
the individuals and/or titles of Officers authorized at such time to take specific actions pursuant
to this Agreement, which Officers’ Certificate may be signed by any Person authorized to sign an
Officers’ Certificate, including any Person specified as so authorized in any such Officers’
Certificate previously delivered and not superseded; and



     (n) neither the Purchase Contract Agent nor the Trustee shall not be responsible for delays or
failures in performance of its obligations hereunder resulting from acts beyond its reasonable
control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts
of war, epidemics,



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governmental regulations superimposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes, terrorist attacks or other disasters, it being understood
that each of the Purchase Contract Agent and the Trustee shall use reasonable best efforts which
are consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.




     Section 8.04. Not Responsible for Recitals. The recitals contained herein and in
the Certificates shall be taken as the statements of the Company or the Note Issuer, as the case
may be, and neither the Purchase Contract Agent nor the Trustee assumes any responsibility for
their accuracy. Neither the Purchase Contract Agent nor the Trustee makes any representations as to
the validity or sufficiency of either this Agreement or of the Purchase Contracts. Neither the
Purchase Contract Agent nor the Trustee shall be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.



     Section 8.05. May Hold Units and Purchase Contracts. Any Security Registrar or any
other agent of the Company, or the Purchase Contract Agent, the Trustee and any of their
Affiliates, in their individual or any other capacity, may become the owner of Units, Separate
Purchase Contracts and Separate Notes and may otherwise deal with the Company, the Note Issuer or
any other Person with the same rights it would have if it were not Security Registrar or such other
agent, or the Purchase Contract Agent. The Company and the Note Issuer may become the owner of
Units, Separate Purchase Contracts and Separate Notes.



     Section 8.06. Money Held in Custody. Money held by the Purchase Contract Agent in
custody hereunder need not be segregated from other funds except to the extent required by law or
provided herein. The Purchase Contract Agent shall be under no obligation to invest or pay interest
on any money received by it hereunder except as specifically instructed by the Company in an Issuer
Order.



     Section 8.07. Compensation, Reimbursement and Indemnification. The Company
covenants and agrees to pay to the Purchase Contract Agent from time to time, and the Purchase
Contract Agent shall be entitled to, such compensation as shall be agreed to in writing between the
Company and the Purchase Contract Agent and the Company covenants and agrees to pay or reimburse
the Purchase Contract Agent and each predecessor Purchase Contract Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Agreement (including the reasonable compensation and
the expenses and disbursements of its counsel and of all agents and other Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from its negligence or
bad faith. The Company also covenants to indemnify the Purchase Contract Agent



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and each predecessor Purchase Contract Agent for, and to hold it harmless against, any and all
loss, liability, damage, claim or expense, including taxes (other than taxes based on the income of
the Purchase Contract Agent), incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this Agreement and its duties hereunder,
including the costs and expenses of defending itself against or investigating any claim or
liability in the premises. The obligations of the Agreement under this Section 8.07 to compensate
and indemnify the Purchase Contract Agent and each predecessor Purchase Contract Agent and to pay
or reimburse the Purchase Contract Agent and each predecessor Purchase Contract Agent for expenses,
disbursements and advances shall survive the satisfaction and discharge of this Agreement or the
resignation or removal of the Purchase Contract Agent. The provisions of this Section 8.07 shall
survive the resignation or removal of the Purchase Contract Agent and the termination of this
Agreement. If the Purchase Contract Agent incurs any expenses, or if the Purchase Contract Agent is
entitled to any compensation for services rendered (including fees and expenses of its agent and
counsel), in each case, in connection with the performance of its obligations under this Agreement
after the occurrence of a Bankruptcy Event, then any such expenses or compensation are intended to
constitute expenses of administration under applicable Bankruptcy Laws.




     Section 8.08. Corporate Purchase Contract Agent Required; Eligibility. There shall
at all times be a Purchase Contract Agent hereunder. The Purchase Contract Agent shall at all
times be a corporation organized and doing business under the laws of the United States of America
or of any state thereof or the District of Columbia having a combined capital and surplus of at
least $25,000,000, and which is authorized under such laws to exercise corporate trust powers and
is subject to supervision or examination by federal, state or District of Columbia authority, or a
corporation or other Person permitted to act as trustee by the Commission. If such corporation
publishes reports of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any time the Purchase
Contract Agent shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect specified in this Article.



     Section 8.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Purchase Contract Agent and no appointment of a successor Purchase
Contract Agent pursuant to this Article shall become effective until the acceptance of appointment
by the successor Purchase Contract Agent in accordance with the applicable requirements of Section
8.10.



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     (b) The Purchase Contract Agent may resign at any time by giving written notice thereof to the
Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by
a successor Purchase Contract Agent required by Section 8.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of resignation, the
resigning Purchase Contract Agent may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract Agent.



     (c) The Purchase Contract Agent may be removed at any time the Holders of a majority in number
of the Outstanding Purchase Contracts. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 8.10 shall not have been delivered to the Purchase Contract
Agent within 30 days after evidence of such removal is delivered to the Company and Purchase
Contract Agent, the removed Purchase Contract Agent may petition, at the expense of the Company,
any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent.



     (d) If at any time:




     (i) the Purchase Contract Agent shall cease to be eligible under Section 8.08 and
shall fail to resign after written request therefor by the Company or by any such Holder;
or




     (ii) the Purchase Contract Agent shall be adjudged bankrupt or insolvent or a
receiver of the Purchase Contract Agent or of its property shall be appointed or any
public officer shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or liquidation, then,
in any such case, (x) the Company by a Board Resolution may remove the Purchase Contract
Agent, or (y) any Holder who has been a bona fide Holder of a Purchase Contract for at
least six months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Purchase Contract Agent and the
appointment of a successor Purchase Contract Agent.



     (e) If the Purchase Contract Agent shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Purchase Contract Agent for any cause, the Company shall
promptly appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 8.10. If no successor Purchase Contract Agent shall have been so appointed
by the Company and accepted appointment in the manner required by Section 8.10, any Holder who has
been a bona fide Holder of a Purchase Contract for at least six months, on behalf of itself and all
others similarly situated, or the Purchase



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Contract Agent may petition at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Purchase Contract Agent.




     (f) The Company shall give, or shall cause such successor Purchase Contract Agent to give,
notice of each resignation and each removal of the Purchase Contract Agent and each appointment of
a successor Purchase Contract Agent by mailing written notice of such event by first-class mail,
postage prepaid, to Holders as their names and addresses appear in the applicable Security
Register. Each notice shall include the name of the successor Purchase Contract Agent and the
address of its Corporate Trust Office.



     Section 8.10. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Purchase Contract Agent, every such successor Purchase
Contract Agent so appointed shall execute, acknowledge and deliver to the Company and to the
retiring Purchase Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become effective and such
successor Purchase Contract Agent, without any further act, deed or conveyance, shall become vested
with all the rights, powers, agencies and duties of the retiring Purchase Contract Agent. At the
request of the Company or the successor Purchase Contract Agent, such retiring Purchase Contract
Agent shall, upon its receipt of payment or reimbursement of any amounts due to it hereunder,
execute and deliver an instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and shall duly assign, transfer
and deliver to such successor Purchase Contract Agent all property and money held by such retiring
Purchase Contract Agent hereunder.



     (b) Upon request of any such successor Purchase Contract Agent, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to such successor
Purchase Contract Agent all such rights, powers and agencies referred to in paragraph (a) of this
Section.



     (c) No successor Purchase Contract Agent shall accept its appointment unless at the time of
such acceptance such successor Purchase Contract Agent shall be qualified and eligible under this
Article.



     Section 8.11. Merger; Conversion; Consolidation or Succession to Business. Any
corporation into which the Purchase Contract Agent may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Purchase Contract Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the successor of the
Purchase Contract Agent hereunder; provided that such




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corporation shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of any of the parties
hereto. If any Equity-Linked Securities shall have been authenticated on behalf of the Holders by
the Trustee and Purchase Contract Agent then in office, but not delivered, any successor by merger,
conversion or consolidation to such Purchase Contract Agent may adopt such Purchase Contract
Agent’s authentication and deliver the Equity-Linked Securities so authenticated with the same
effect as if such successor Purchase Contract Agent had itself authenticated such Equity-Linked
Securities.




     Section 8.12. Preservation of Information; Communications to Holders. (a) The
Purchase Contract Agent shall preserve, in as current a form as is reasonably practicable, the
names and addresses of Holders as received by the Purchase Contract Agent in its capacity as
Security Registrar.



     (b) If three or more Holders (such three or more Holders, the “Applicants”) apply in writing
to the Purchase Contract Agent, and furnish to the Purchase Contract Agent reasonable proof that
each such Applicant has owned a Unit or Separate Purchase Contract for a period of at least six
months preceding the date of such application, and such application states that the Applicants
desire to communicate with other Holders with respect to their rights under this Agreement or under
the Units or Separate Purchase Contracts and is accompanied by a copy of the form of proxy or other
communication that such Applicants propose to transmit, then the Purchase Contract Agent shall mail
to all the Holders copies of the form of proxy or other communication that is specified in such
request, with reasonable promptness after a tender to the Purchase Contract Agent of the materials
to be mailed and of payment, or provision for the payment, of the reasonable expenses of such
mailing.



     Section 8.13. No Other Obligations of Purchase Contract Agent or Trustee. Except
to the extent otherwise expressly provided in this Agreement, neither the Purchase Contract Agent
nor Trustee assumes any obligations, and neither the Purchase Contract Agent nor Trustee shall be
subject to any liability, under this Agreement or any Security evidencing a Unit or Purchase
Contract in respect of the obligations of the Holder of any Unit or Purchase Contract thereunder.
The Company and the Note Issuer agree, and each Holder of a Security, by his or her acceptance
thereof, shall be deemed to have agreed, that the Purchase Contract Agent’s and/or Trustee’s
authentication, as applicable, of the Securities on behalf of the Holders shall be solely as agent
and attorney-in-fact for the Holders, and that neither the Purchase Contract Agent nor Trustee
shall have any obligation to perform such Purchase Contracts (whether held as components of Units
or Separate Purchase Contracts) on behalf of the Holders, except to the extent expressly provided
in Article 3 hereof.



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     Section 8.14. Tax Compliance. (a) The Purchase Contract Agent shall comply with
all applicable certification, information reporting and withholding (including “backup”
withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any shares of Class A Common Stock
delivered upon settlement of the Purchase Contracts, any amounts paid in lieu of fractional shares
of Class A Common Stock upon settlement of the Purchase Contracts, and any other amounts included
in the Purchase Contract Settlement Fund paid to Holders upon settlement of any Purchase Contracts
or (ii) the issuance, delivery, holding, transfer or exercise of rights under the Purchase
Contracts. Such compliance shall include, without limitation, the preparation and timely filing of
required returns and the timely payment of all amounts required to be withheld to the appropriate
taxing authority or its designated agent. Notwithstanding anything to the contrary, the Purchase
Contract Agent’s obligations under this Section 8.14 shall extend only to form 1099 reporting and
any applicable income withholding unless and until the Purchase Contract Agent is otherwise
notified by the Company pursuant to paragraph (b) below.



     (b) The Purchase Contract Agent shall, in accordance with the terms hereof, comply with any
written direction received from the Company with respect to the execution or certification of any
required documentation and the application of such requirements to particular payments or Holders
or in other particular circumstances, and may for purposes of this Agreement conclusively rely on
any such direction in accordance with the provisions of Section 8.01(b)(ii).



     (c) The Purchase Contract Agent shall maintain all appropriate records documenting compliance
with such requirements, and shall make such records available, on written request, to the Company
or its authorized representative within a reasonable period of time after receipt of such request.
For the avoidance of doubt, any costs or expenses incurred by the Purchase Contract Agent in
connection with complying with its obligations under this Section 8.14 shall be covered by Section
8.07.



ARTICLE 9

Supplemental Agreements




     Section 9.01. Supplemental Agreements Without Consent of Holders. Without the
consent of any Holders, the Company, the Note Issuer, the Purchase Contract Agent and the Trustee
at any time and from time to time, may enter into one or more agreements supplemental hereto, in
form satisfactory to the Company, the Note Issuer and the Purchase Contract Agent, to:




     (i) evidence the succession of another Person to the Company or the Note Issuer, and
the assumption by any such successor of the



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covenants and obligations of the Company or
the Note Issuer under this Agreement and the Units and Separate Purchase Contracts, if
any;




     (ii) add to the covenants for the benefit of Holders or to surrender any of the
Company’s or Note Issuer’s rights or powers;




     (iii) evidence and provide for the acceptance of appointment of a successor Purchase
Contract Agent;




     (iv) make provision with respect to the rights of Holders pursuant to adjustments in
the Settlement Rate due to Reorganization Events;




     (v) conform the terms of the Purchase Contracts or the provisions of this Agreement
to the “Description of the Purchase Contracts,” “Description of the Units” and “Limitation
on Beneficial Ownership of Class A Common Stock, Units and Separate Purchase Contracts”
sections in the Prospectus Supplement;




     (vi) cure any ambiguity or manifest error, to correct or supplement any provisions
that may be inconsistent, so long as such action does not adversely affect the interest of
the Holders; or




     (vii) to make any other provisions with respect to such matters or questions, so long
as such action does not adversely affect the interest of the Holders.



     Section 9.02. Supplemental Agreements With Consent of Holders. With the consent of
the Holders of not less than a majority in number of the Outstanding Purchase Contracts, the
Purchase Contract Agent and the Trustee, the Company, when authorized by a Board Resolution, and
the Note Issuer, the Purchase Contract Agent and Trustee may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the Purchase Contracts,
or the provisions of this Agreement or the rights of the Holders in respect of the Purchase
Contracts; provided, however, that, except as contemplated herein, no such supplemental agreement
shall, without the consent of each Holder of an Outstanding Purchase Contract affected thereby:




     (i) reduce the number of shares of Class A Common Stock deliverable upon settlement
of the Purchase Contracts (except to the extent expressly provided in Section 5.01);




     (ii) change the Mandatory Settlement Date, the right to settle Purchase Contracts
early or the Fundamental Change Early Settlement Right;



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     (iii) reduce the above-stated percentage of Outstanding Purchase Contracts the
consent of the Holders of which is required for the modification or amendment of the
provisions of the Purchase Contracts or the Purchase Contract Agreement; or




     (iv) impair the right to institute suit for the enforcement of the Purchase Contract.



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



     Section 9.03. Execution of Supplemental Agreements. In executing, or accepting the
additional agencies created by, any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement, the Purchase Contract Agent and
Trustee shall be provided, and (subject to Section 8.01) shall be fully protected in relying upon,
an Officers’ Certificate and an Opinion of Counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement and does not violate the Indenture, and that
any and all conditions precedent to the execution and delivery of such supplemental agreement have
been satisfied. The Purchase Contract Agent and Trustee may, but shall not be obligated to, enter
into any such supplemental agreement that affects the Purchase Contract Agent’s or Trustee’s own
rights, duties or immunities under this Agreement or otherwise.



     Section 9.04. Effect of Supplemental Agreements. Upon the execution of any
supplemental agreement under this Article, this Agreement shall be modified in accordance
therewith, and such supplemental agreement shall form a part of this Agreement for all purposes;
and every Holder of Securities theretofore or thereafter authenticated on behalf of the Holders and
delivered hereunder, shall be bound thereby.



     Section 9.05. Reference to Supplemental Agreements. Securities authenticated on
behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to
this Article may, and shall if required by the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent as to any matter provided for in such supplemental
agreement. If the Company and the Note Issuer shall so determine, new Securities so modified as to
conform, in the opinion of the Purchase Contract Agent, the Trustee and the Company and the Note
Issuer, to any such supplemental agreement may be prepared and executed by the Company the Note
Issuer and authenticated on behalf of the Holders and delivered by the Purchase Contract Agent in
exchange for outstanding Securities.



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     Section 9.06. Notice of Supplemental Agreements. After any supplemental agreement
under this Article becomes effective, the Company shall mail to the Holders a notice briefly
describing such supplemental agreement; provided, however, that the failure to give such notice to
all Holders, or any defect therein, shall not impair or affect the validity of such supplemental
agreement.



ARTICLE 10

Consolidation, Merger, Conveyance, Transfer or Lease 




     Section 10.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease
Property Except Under Certain Conditions. The Company covenants that it will not merge with and
into, consolidate with any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person, unless:




     (i) the resulting, surviving or transferee entity (if not the Company) is a
corporation or limited liability company that is treated as a corporation for U.S. federal
income tax purposes, organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia, and such corporation or limited
liability company (if not the Company) expressly assumes in writing all of the Company’s
obligations under the Units, the Purchase Contracts and this Agreement; and




     (ii) immediately after the merger, consolidation, sale, assignment, transfer, lease
or conveyance, no default has occurred and is continuing under the Units, the Purchase
Contracts or this Agreement.



     Section 10.02. Rights and Duties of Successor Entity. In case of any such merger,
consolidation, sale, assignment, transfer or conveyance (but not any such lease) and upon any such
assumption by a successor entity in accordance with Section 10.01, such successor entity shall
succeed to and be substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor entity thereupon may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Securities evidencing Units or Purchase
Contracts issuable hereunder which theretofor shall not have been signed by the Company and the
Note Issuer (if applicable) and delivered to the Purchase Contract Agent; and, upon the order of
such successor entity, instead of the Company, and subject to all the terms, conditions and
limitations in this Agreement prescribed, the Purchase Contract Agent and Trustee (if applicable)
shall authenticate on behalf of the Holders and deliver any Securities that previously shall have
been signed and delivered by the officers of the Company and the Note Issuer to the Purchase
Contract Agent and Trustee for



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authentication, and any Security evidencing Units or Purchase
Contracts that such successor corporation thereafter shall cause to be signed and delivered to the
Purchase Contract Agent and Trustee for that purpose. All the Securities issued shall in all
respects have the same legal rank and benefit under this Agreement as the Securities theretofor or
thereafter issued in accordance with the terms of this Agreement as though all of such Securities
had been issued at the date of the execution hereof.



     In the event of any such merger, consolidation, sale, assignment, transfer, lease or
conveyance, such change in phraseology and form (but not in substance) may be made in the
Securities evidencing Units or Purchase Contracts thereafter to be issued as may be appropriate.



     Section 10.03. Officers’ Certificate and Opinion of Counsel Given to Purchase
Contract Agent. The Purchase Contract Agent, subject to Section 8.01 and Section 8.03, shall
receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such
merger, consolidation, sale, assignment, transfer, lease or conveyance, and any such assumption,
complies with the provisions of this Article and that all conditions precedent to the consummation
of any such merger, consolidation, sale, assignment, transfer, lease or conveyance have been met.



ARTICLE 11

Covenants of the Company and the Note Issuer




     Section 11.01. Performance Under Purchase Contracts. Each of the Company and the
Note Issuer covenants and agrees for the benefit of the Holders from time to time of the Units and
Purchase Contracts, as the case may be, that it will duly and punctually perform its obligations
under the Units and Purchase Contracts, as they case may be, in accordance with the terms of the
Units and Purchase Contracts and this Agreement.



     Section 11.02. Maintenance of Office Or Agency. The Company will maintain in the
Borough of Manhattan, New York City or in Delaware an office or agency where Securities may be
presented or surrendered for acquisition of shares of Class A Common Stock upon settlement of the
Purchase Contracts on any Settlement Date, and where notices and demands to or upon the Company in
respect of the Purchase Contracts and this Agreement may be served. The Company will give prompt
written notice to the Purchase Contract Agent of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Purchase Contract Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the



75









 







Corporate Trust Office,
and the Company hereby appoints the Purchase Contract Agent as its agent to receive all such
presentations, surrenders, notices and demands.



     The Company may also from time to time designate one or more other offices or agencies where
Securities may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in the Borough of
Manhattan, New York City or in Delaware for such purposes. The Company will
give prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency. The Company hereby
designates as the place of payment for the Purchase Contracts the Corporate Trust Office and
appoints the Purchase Contract Agent at its Corporate Trust Office as paying agent in such city.



     Section 11.03. Statements of Officers of the Company as to Default; Notice of
Default.. (a) The Company will deliver to the Purchase Contract Agent, within 120 days after the
end of each fiscal year of the Company (which as of the Issue Date is October 31) ending after the
date hereof, an Officers’ Certificate (one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the Company), stating
whether or not to the knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions hereof, and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of which they may have
knowledge and what action the Company is taking or proposes to take with respect thereto.



     (b) The Company shall promptly deliver to the Purchase Contract Agent written notice of the
occurrence of any default in the performance and observance of any of the terms, provisions and
conditions hereof and the status thereof.



     Section 11.04. Existence. The Company and the Note Issuer shall each do or cause
to be done all things necessary to preserve and keep in full force and effect its existence in
accordance with their respective organizational documents, and the material rights, licenses and
franchises of the Company and the Note Issuer; provided that this Section 11.04 shall not prohibit
any transaction otherwise permitted by Article 10.



     Section 11.05. Company to Reserve Class A Common Stock. The Company shall at all
times reserve and keep available out of its authorized but unissued Class A Common Stock, solely
for issuance upon settlement of the Purchase Contracts, that number of shares of Class A Common
Stock as shall from time to time be issuable upon the settlement of all Outstanding Purchase
Contracts



76









 







(whether or not included in a Unit), assuming settlement at the Maximum Settlement Rate.



     Section 11.06. Covenants as to Class A Common Stock. (a) The Company covenants
that all shares of Class A Common Stock issuable upon settlement of any Outstanding Purchase
Contract will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable,
free from all taxes, liens and charges and not subject to any preemptive rights.



     The Company further covenants that, if at any time the Class A Common Stock shall be listed on
the NYSE or any other national securities exchange, the Company will, if permitted by the rules of
such exchange, list and keep listed, so
long as the Class A Common Stock shall be so listed on such exchange, all Class A Common Stock
issuable upon settlement of the Purchase Contracts; provided, however, that, if the rules of such
exchange system permit the Company to defer the listing of such Class A Common Stock until the
first delivery of Class A Common Stock upon settlement of Purchase Contracts in accordance with the
provisions of this Agreement, the Company covenants to list such Class A Common Stock issuable upon
settlement of the Purchase Contracts in accordance with the requirements of such exchange at such
time.



     (b) The Company shall apply to list the Units on the NYSE, subject to satisfaction of the
NYSE’s minimum listing standards with respect to the Units. In addition, if (i) a sufficient
number of Units are separated into Separate Purchase Contracts and Separate Notes and traded
separately such that applicable listing requirements are met and (ii) the Holders of a sufficient
number of such Separate Purchase Contracts and Separate Notes request that the Company list such
Separate Purchase Contracts and Separate Notes, the Company may endeavor to list such Separate
Purchase Contracts and Separate Notes on an exchange of the Company’s choosing (which may or may
not be the NYSE) subject to applicable listing requirements.



     Section 11.07. Tax Treatment. The Company and the Note Issuer agree, and by
purchasing a Unit each Beneficial Holder agrees, for United States federal income tax purposes, to
(a) treat a Unit as an investment unit composed of two separate instruments, in accordance with its
form, (b) treat the Notes as indebtedness of the Note Issuer and (c) in the case of each Beneficial
Holder acquiring the Units at original issuance, allocate the Stated Amount of each Unit between
the Note and the Purchase Contract so that such Beneficial Holder’s initial tax basis in each Note
will be $4.526049 and each such Beneficial Holder’s initial tax basis in each Purchase Contract
will be $20.473951.



[SIGNATURES ON THE FOLLOWING PAGE]



77









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.



	 	 	 	 	 
	 	HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	/s/ J. Larry Sorsby
 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President
and 
Chief Financial Officer 	 
	 
	 	K. HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	/s/ J. Larry Sorsby
 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President
and 
Chief Financial Officer 	 
	 
	 	WILMINGTON TRUST COMPANY, as
      Purchase Contract
Agent

 	 
	 	By:  	/s/ Joshua C. Jones
 	 
	 	 	Name:  	Joshua C. Jones 	 
	 	 	Title:  	Financial Services Officer 	 
	 
	 	WILMINGTON TRUST COMPANY, as
      Trustee under the
Indenture

 	 
	 	By:  	/s/ Joshua C. Jones
 	 
	 	 	Name:  	Joshua C. Jones 	 
	 	 	Title:  	Financial Services Officer 	 



 









 







	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as 

     Attorney-in-Fact of the Holders from

     time to time as provided under the

     Purchase Contract Agreement

 	 
	 	By:  	/s/ Joshua C. Jones
 	 
	 	 	Name:  	Joshua C. Jones 	 
	 	 	Title:  	Financial Services Officer 	 



79









 






	 	 	 	 	 



EXHIBIT A




[FORM OF FACE OF UNIT]





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



     UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE
COMPANY AND THE NOTE ISSUER OR THEIR AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*





 




			
	*	 	Include if a Global Unit.




A-1









 










HOVNANIAN ENTERPRISES, INC.




and



K. HOVNANIAN ENTERPRISES, INC.



7.25% TANGIBLE EQUITY UNITS



			
	 	 	 
	CUSIP No. 44248W 208	 	 
	ISIN No. US44248W2089	 	 
	No. ___
	 	[Initial]* Number of Units ___________






     This Unit certifies that [CEDE & CO., as nominee of The Depository Trust Company]*[          ]**
(the “Holder”), or registered assigns, is the registered owner of the
number of Units set forth above[, which number may from time to time be reduced or increased, as
set forth on Schedule A, as appropriate, in accordance with the terms of the Purchase Contract
Agreement (as defined below), but which number, taken together with the number of all other
outstanding Units, shall not exceed 3,000,000 Units at any time (as increased by a number equal to
the aggregate number of any additional Units purchased by the Underwriters pursuant to the exercise
of their option to purchase additional Units as set forth in the Underwriting
Agreement)]*.



     Each Unit consists of (i) a Purchase Contract issued by the Company, and (ii) a Note issued by
the Note Issuer. Each Unit evidenced hereby is governed by a Purchase Contract Agreement, dated as
of February 9, 2011 (as may be supplemented from time to time, the “Purchase Contract Agreement”),
among the Company, the Note Issuer and Wilmington Trust Company, as Purchase Contract Agent
(including its successors hereunder, the “Purchase Contract Agent”), as Trustee (including its
successors hereunder, the “Trustee”) under the Indenture and as attorney-in-fact for the Holders of
Purchase Contracts from time to time.



     Reference is hereby made to the Purchase Contract Agreement and the Indenture and, in each
case supplemental agreements thereto, for a description of the respective rights, limitations of
rights, obligations, duties and immunities thereunder of the Purchase Contract Agent, the Trustee,
the Company, the Note Issuer and the Holders and of the terms upon which the Units are, and are to
be, executed and delivered.



     Upon the conditions and under the circumstances set forth in the Purchase Contract Agreement,
Holders of Units shall have the right to separate a Unit into its component parts, and a Holder of
a Separate Purchase Contract and Separate Note shall have the right to re-create a Unit.



A-2









 





     The Company and the Note Issuer agree, and by purchasing a Unit each Beneficial Holder agrees,
for United States federal income tax purposes, to (1)
treat each Unit as an investment unit composed of two separate instruments, in accordance with
its form, (2) treat each Note as indebtedness of the Note Issuer and (3) in the case of each
Beneficial Holder acquiring the Units at original issuance, allocate the Stated Amount of each Unit
between the Note and the Purchase Contract so that such Beneficial Holder’s initial tax basis in
each Note will be $4.526049 and each such Beneficial Holder’s initial tax basis in each Purchase
Contract will be $20.473951.



     This Unit is subject to the Section 382 Ownership Blocker and Section 382 Settlement Blocker,
in each case, as provided in the Purchase Contract Agreement. Each Beneficial Holder of this Unit,
by acquiring an interest in this Unit, represents and warrants to the Company that it is in
compliance with the ownership limitations of the Section 382 Ownership Blocker (which
representation and warranty is part of the consideration for the issuance of this Unit). Any
purported violation of the Section 382 Ownership Blocker shall be subject to the consequences
provided in the Purchase Contract Agreement and the Indenture.



     The Units, and any claim, controversy or dispute arising under or related to the Units, shall
be governed by, and construed in accordance with, the laws of the State of New York.



     Capitalized terms used herein and not defined have the meanings given to such terms in the
Purchase Contract Agreement.



     In the event of any inconsistency between the provisions of this Unit and the provisions of
the Purchase Contract Agreement, the Purchase Contract Agreement shall prevail.



[SIGNATURES ON THE FOLLOWING PAGE]





 




			
	*	 	Include only if a Global Unit.
	 
	**	 	Include only if not a Global Unit.




A-3









 










     IN WITNESS WHEREOF, the Company and the Note Issuer have caused this instrument to be
duly executed.


Dated:_____________




	 	 	 	 	 
	 	HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and
 Chief Financial Officer 	 
	 
	 	K. HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and
 Chief Financial Officer 	 



A-4









 






	 	 	 	 	 



UNIT CERTIFICATE OF AUTHENTICATION

OF PURCHASE CONTRACT AGENT AND TRUSTEE UNDER THE INDENTURE





     This is one of the Units referred to in the within mentioned Purchase Contract Agreement.



     Dated: _____________



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as

     Purchase Contract Agent

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 
	 	WILMINGTON TRUST COMPANY, as

     Trustee under the Indenture

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 



A-5









 






	 	 	 	 	 



[FORM OF REVERSE OF UNIT]




[Intentionally Blank]



A-6









 





SCHEDULE A




[SCHEDULE OF INCREASES OR DECREASES IN GLOBAL UNIT]*




     The initial number of Units evidenced by this Global Unit is 3,000,000. The following
increases or decreases in this Global Unit have been made:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Number of Units	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	evidenced by the	 	Signature of
	 	 	 	 	Amount of increase	 	Amount of decrease	 	Global Unit	 	authorized
	 	 	 	 	in number of Units	 	in number of Units	 	following such	 	signatory of
	 	 	 	 	evidenced by the	 	evidenced by the	 	decrease or	 	Purchase Contract
	Date	 	Global Unit	 	Global Unit	 	increase	 	Agent







 




			
	*	 	Include only if a Global Unit.




A-7









 










ATTACHMENT 1




[FORM OF SEPARATION NOTICE]




WILMINGTON TRUST COMPANY

Rodney Square North

1100 North Market Street

Wilmington, DE 19890-1600

Facsimile: 302-636-4145

Attention: Corporate Client Services



Re: Separation of [Global]* Units



The undersigned [Beneficial Holder]* hereby notifies you that it wishes to separate
_____ Units [as to which it holds a Book-Entry Interest]* (the “Relevant Units”) into a
number of Notes equal to the number of Relevant Units and a number of Purchase Contracts equal to
the number of Relevant Units in accordance with the Purchase Contract Agreement (the “Purchase
Contract Agreement”) dated February 9, 2011 among the Company, the Note Issuer and Wilmington Trust
Company, as Purchase Contract Agent, as Trustee under the Indenture and as attorney-in-fact for the
Holders of Purchase Contracts from time to time. Terms used and not defined herein have the meaning
assigned to such terms in the Purchase Contract Agreement.



The undersigned [includes herewith]** [Beneficial Holder has instructed the undersigned
Depository Participant to transfer to you its Book-Entry Interests in]* the number of
Units specified in the immediately succeeding paragraph. The undersigned [includes
herewith]** [Beneficial Holder has furnished the undersigned Depository Participant
with]* the appropriate endorsements and documents and paid all applicable transfer or
similar taxes, if any, to the extent required by the Purchase Contract Agreement.



Please [deliver to the undersigned’s address specified below]** [transfer to the account
of the undersigned Beneficial Holder with the undersigned Depositary Participant the beneficial
interests in]* (i) the number of Separate Notes and (ii) number of Separate Purchase
Contracts represented by the number of Units specified above.




[SIGNATURES ON THE FOLLOWING PAGE]





 




			
	*	 	Include only if a Global Unit.
	 
	**	 	Include only if not a Global Unit.




A-8









 










     IN WITNESS WHEREOF, the [undersigned has caused this instrument to be duly
executed]** [Depository Participant has caused this instrument to be duly executed on
behalf of itself and the undersigned Beneficial Holder]*.


Dated: _______________




	 	 	 	 	 
	 	[NAME OF BENEFICIAL HOLDER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:  	 	 



	 	 	 	 	 
	[NAME OF DEPOSITORY PARTICIPANT]*

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Address: 	 
	 


Attest By:






 




			
	*	 	Include only if a Global Unit.
	 
	**	 	Include only if not a Global Unit.




A-9









 










ATTACHMENT 2




[FORM OF RECREATION NOTICE]




WILMINGTON TRUST COMPANY

Rodney Square North

1100 North Market Street

Wilmington, DE 19890-1600

Facsimile: 302-636-4145

Attention: Corporate Client Services



Re: Recreation of [Global]* Units



The undersigned [Beneficial Holder]* hereby notifies you that it wishes to recreate
______ Units [as to which it holds a Book-Entry Interest]* (the “New Units”) from a
number of Separate Notes equal to the number of New Units and a number of Separate Purchase
Contracts equal to the number of New Units in accordance with the Purchase Contract Agreement (the
“Purchase Contract Agreement”) dated as of February 9, 2011 among the Company, the Note Issuer and
Wilmington Trust Company, as Purchase Contract Agent, as Trustee under the Indenture and as
attorney-in-fact for the Holders of Purchase Contracts from time to time. Terms used and not
defined herein have the meaning assigned to such terms in the Purchase Contract Agreement.



The undersigned [includes herewith]** [Beneficial Holder has instructed the undersigned
Depository Participant to transfer to you its Book-Entry Interests in]* the applicable
number of Separate Notes and the applicable number of Separate Purchase Contracts sufficient for
the recreation of the number of Units specified above. The undersigned [includes
herewith]** [Beneficial Holder has furnished the undersigned Depository Participant
with]* the appropriate endorsements and documents and paid all applicable transfer or
similar taxes, if any, to the extent required by the Purchase Contract Agreement.



Please [deliver to the undersigned’s address specified below]** [transfer to the account
of the undersigned Beneficial Holder with the undersigned Depositary Participant the beneficial
interests in]* the number of Units specified above.




[SIGNATURES ON THE FOLLOWING PAGE]





 




			
	*	 	Include only if a Global Unit.
	 
	**	 	Include only if not a Global Unit.




A-10









 











     IN WITNESS WHEREOF, the [undersigned has caused this instrument to be duly
executed]** [Depository Participant has caused this instrument to be duly executed on
behalf of itself and the undersigned Beneficial Holder]*.


Dated: _______________




	 	 	 	 	 
	 	[NAME OF BENEFICIAL HOLDER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:  	 	 



	 	 	 	 	 
	[NAME OF DEPOSITORY PARTICIPANT]*

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Address: 	 
	 


Attest By:






 




			
	*	 	Include only if a Global Unit.
	 
	**	 	Include only if not a Global Unit.




A-11









 










ATTACHMENT 3




HOVNANIAN ENTERPRISES, INC.




PURCHASE CONTRACTS



			
	 	 	 
	No. ___
	 	Initial Number of Purchase Contracts: __________






     This Purchase Contract certifies that, Wilmington Trust Company, as attorney-in-fact of
holder(s) of the Purchase Contracts evidenced hereby, or its registered assigns (the “Holder”) is
the registered owner of the number of Purchase Contracts set forth above, which number may from
time to time be reduced or increased as set forth on Schedule A hereto, as appropriate, in
accordance with the terms of the Purchase Contract Agreement (as defined below), but which number
of Purchase Contracts, taken together with the number of all other Outstanding Purchase Contracts,
shall not exceed 3,000,000 Purchase Contracts at any time (as increased by a number equal to the
aggregate number of any additional Units purchased by the Underwriters pursuant to the exercise of
their option to purchase additional Units as set forth in the Underwriting Agreement).



     Each Purchase Contract consists of the rights of the Holder under such Purchase Contract with
the Company. All capitalized terms used herein which are defined in the Purchase Contract Agreement
(as defined on the reverse hereof) have the meaning set forth therein.



     Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract on the Mandatory Settlement Date a number shares of Class A common stock, $0.01
par value (“Class A Common Stock”), of the Company equal to the Settlement Rate, unless such
Purchase Contract has settled prior to the Mandatory Settlement Date, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.



     This Purchase Contract is subject to the Section 382 Ownership Blocker and Section 382
Settlement Blocker, in each case, as provided in the Purchase Contract Agreement. Each Beneficial
Holder of this Purchase Contract, by acquiring an interest in this Purchase Contract, represents
and warrants to the Company that it is in compliance with the ownership limitations of the Section
382 Ownership Blocker (which representation and warranty is part of the consideration for the
issuance of this Purchase Contract). Any purported violation of the Section 382 Ownership Blocker
shall be subject to the consequences provided in the Purchase Contract Agreement.



A-12









 





     Reference is hereby made to the further provisions set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth at this place.



[SIGNATURES ON THE FOLLOWING PAGE]



A-13









 





     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.



	 	 	 	 	 
	 	HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and 
Chief Financial Officer 	 
	 


Dated: _____________







A-14









 








	 	 	 	 	 
	 	REGISTERED HOLDER(S) (as to 

     obligations of such holder(s) under the

     Purchase Contracts evidenced hereby)

 	 
	 	By:  	WILMINGTON TRUST COMPANY,
 not individually but solely as Attorney-in-Fact of such holder(s)
 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




A-15











 





PURCHASE CONTRACT CERTIFICATE OF AUTHENTICATION OF
 PURCHASE CONTRACT AGENT




     This is one of the Purchase Contracts referred to in the within-mentioned Purchase Contract
Agreement.



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as 

     Purchase Contract Agent

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 


Dated:                     







A-1









 








[REVERSE OF PURCHASE CONTRACT]





     Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as
of February 9, 2011 (as may be supplemented from time to time, the “Purchase Contract Agreement”),
among the Hovnanian Enterprises, Inc., a Delaware corporation (the “Company”), K. Hovnanian
Enterprises, Inc., a California corporation (the “Note Issuer”) and Wilmington Trust Company, as
Purchase Contract Agent (including its successors hereunder, the “Purchase Contract Agent”), as
Trustee under the Indenture and as attorney-in-fact for the Holders of Purchase Contracts from time
to time. Reference is hereby made to the Purchase Contract Agreement and supplemental agreements
thereto for a description of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company and the Holders and of the terms
upon which the Purchase Contracts are, and are to be, executed and delivered.



     Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract, on the Mandatory Settlement Date, a number of shares of Class A Common Stock
equal to the Settlement Rate, unless such Purchase Contract has settled prior to the Mandatory
Settlement Date, in either case, pursuant to the terms of the Purchase Contract Agreement.



     No fractional shares of Class A Common Stock will be issued upon settlement of Purchase
Contracts, as provided in Section 4.13 of the Purchase Contract Agreement.



     The Purchase Contracts are issuable only in registered form and only in denominations of a
single Purchase Contract and any integral multiple thereof. The transfer of any Purchase Contract
will be registered and Purchase Contracts may be exchanged as provided in the Purchase Contract
Agreement.



     The Purchase Contracts are initially being issued as part of the 7.25% Tangible Equity Units
(the “Units”) issued by the Company and the Note Issuer pursuant to the Purchase Contract
Agreement. Holders of the Units have the right to separate such Units into their constituent
parts, consisting of Separate Notes and Separate Purchase Contracts, during the times, and under
the circumstances, described in the Purchase Contract Agreement. Following separation of any Unit
into its constituent parts, the Separate Purchase Contracts are transferable independently from the
Separate Notes. In addition, Separate Purchase Contracts can be recombined with Separate Notes to
recreate Units, as provided for in the Purchase Contract Agreement.



     The Holder of this Purchase Contract, by its acceptance hereof, authorizes the Purchase
Contract Agent to enter into and perform the Purchase Contract



A-2









 




Agreement on its behalf as its attorney-in-fact and agrees to be bound by the terms and provisions thereof.




     Subject to certain exceptions set forth in the Purchase Contract Agreement, the provisions of
the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.



     The Purchase Contracts, and any claim, controversy or dispute arising under or related to the
Purchase Contracts, shall be governed by, and construed in accordance with, the laws of the State
of New York.



     The Company, the Purchase Contract Agent, and any agent of the Company or the Purchase
Contract Agent, may treat the Person in whose name this Purchase Contract is registered as the
owner of the Purchase Contracts, evidenced hereby, for the purpose of performance of the Purchase
Contracts evidenced by such Purchase Contracts and for all other purposes whatsoever, and neither
the Company nor the Purchase Contract Agent, nor any agent of the Company or the Purchase Contract
Agent, shall be affected by notice to the contrary.



     The Purchase Contracts shall not entitle the Holder to any of the rights of a holder of the
Class A Common Stock or other Exchange Property, except as provided by the Purchase Contract
Agreement.



     Each Purchase Contract (whether or not included in a Unit) is a security governed by Article 8
of the Uniform Commercial Code as in effect in the State of New York on the date hereof.



     A copy of the Purchase Contract Agreement is available for inspection at the offices of the
Company.



     In the event of any inconsistency between the provisions of this Purchase Contract and the
provisions of the Purchase Contract Agreement, the Purchase Contract Agreement shall prevail.



A-3









 






ABBREVIATIONS




     The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:



	 	 	 	 	 	 	 	 	 

	TEN COM:	 	as tenants in common	 	 	 	 
	 
	UNIF GIFT MIN ACT:

	 	 	 	 	 	Custodian	 	 
	 	 	 	 	 	 	 
	 

	 	(cust)
	 	 	 	 	 	(minor)
	 	 	Under Uniform Gifts to Minors	 	 
	 

	 	Act of	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	TENANT:	 	as tenants by the entireties	 	 
	 
	JT TEN:	 	as joint tenants with rights of survivorship and not as 

tenants in common





Additional abbreviations may also be used though not in the above list.



FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto



(Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee)



(Please Print or Type Name and Address Including Postal Zip Code of Assignee)



the within Purchase Contracts and all rights thereunder, hereby irrevocably constituting and
appointing attorney                     , to transfer said Purchase Contracts on the
books of the Company with full power of substitution in the premises.




	 	 	 	 	 	 	 	 	 

	
DATED:
               
               
               
	 	 	 	Signature	 	 
	 

	 	 

	 	 
	 	 	 	 
	 	 	 	 	 	 	Notice : The signature to this assignment must correspond with the
name as it appears upon the face of the within Purchase Contracts
in every particular, without alteration or enlargement or any
change whatsoever.
	 
	 	 	 	 	 	 	 	 
	Signature Guarantee:	 	 	 	 	 	 	 
	 	 	 	 	 	 	 





A-4









 






SETTLEMENT INSTRUCTIONS




     The undersigned Holder directs that a certificate for shares of Class A Common Stock or other
securities, as applicable, deliverable upon settlement of the number of Purchase Contracts
evidenced by this Purchase Contract be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address indicated below unless
a different name and address have been indicated below. If shares of Class A Common Stock or other
securities, as applicable, are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incidental thereto, as provided in the Purchase
Contract Agreement.



	 	 	 

	Dated:                     

	 	 
	 

	 	Signature
	 

	 	Signature Guarantee: __________
	 

	 	(if assigned to another Person)





If shares are to be registered in the name of and delivered to a Person other than the Holder,
please (i) print such Person’s name and address and (ii) provide a guarantee of your signature:




	 	 	 

	 

	 	 
	Name

	 	Name
	 
	 	 
	Address

	 	Address
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Social Security or other Taxpayer
Identification Number, if any

	 	 






A-5









 






ELECTION TO SETTLE EARLY




     The undersigned Holder of this Purchase Contract hereby irrevocably exercises the option to
effect Early Settlement (which Early Settlement may, as applicable, be deemed to be in connection
with a Fundamental Change pursuant to Section 4.07 of the Purchase Contract Agreement) in
accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts
evidenced by this Purchase Contract as specified below. The undersigned Holder directs that a
certificate for shares of Class A Common Stock or other securities, as applicable, deliverable upon
such Early Settlement be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Purchase Contract representing any Purchase Contracts evidenced
hereby as to which Early Settlement is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares of Class A Common
Stock or other securities, as applicable, are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident thereto, as provided in
the Purchase Contract Agreement.



	 	 	 	 	 	 	 	 	 

	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

Signature
	 	 





Signature Guarantee: 






A-6









 







     Number of Purchase Contracts evidenced hereby as to which Early Settlement is being elected:



	 	 	 

	If shares of Class A Common Stock or
Purchase Contracts are to be
registered in the name of and delivered to a Person other than the
Holder, please print such Person’s
name and address:

	 	REGISTERED HOLDER


Please print name and address of
Registered Holder:
	
 	 	 
	 
	 	 
	 

	 	 
	Name

	 	Name
	 
	 	 
	Address

	 	Address
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Social Security or other Taxpayer
Identification Number, if any

	 	 







A-7











 





SCHEDULE A

SCHEDULE OF INCREASES OR DECREASES

IN THE PURCHASE CONTRACT




     The initial number of Purchase Contracts evidenced by this certificate is _______. The
following increases or decreases in this certificate have been made:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Number of Purchase	 	Signature of
	 	 	 	 	Amount of increase	 	Amount of decrease	 	Contracts evidenced	 	authorized
	 	 	 	 	in number of	 	in number of	 	hereby following	 	signatory of
	 	 	 	 	Purchase Contracts	 	Purchase Contracts	 	such decrease or	 	Purchase Contract
	Date	 	 	 	evidenced hereby	 	evidenced hereby	 	increase	 	Agent





A-8









 





ATTACHMENT 4




K. HOVNANIAN ENTERPRISES, INC.




12.072% SENIOR SUBORDINATED AMORTIZING NOTES DUE 2014




	 	 	 
	No.                    
	 	Initial Number of Notes:                    






     K. HOVNANIAN ENTERPRISES, INC., a California corporation (the “Issuer”, which term includes
any successor under the Indenture hereinafter referred to), for value received, hereby promises to
pay to Wilmington Trust Company, as attorney-in-fact of holder(s) of the Notes evidenced hereby, or
its registered assigns (the “Holder”), the initial principal amount of $4.526049 for each of the
number of Notes set forth above, which number of Notes may from time to time be reduced or
increased as set forth in Schedule A hereto, as appropriate, in accordance with the terms of the
Indenture, but which number of Notes, taken together with the number of all other outstanding
Notes, shall not exceed 3,000,000 Notes at any time (as increased by a number of Notes equal to the
number of any additional Units purchased by the Underwriters pursuant to the exercise of their
option to purchase additional Units as set forth in the Underwriting Agreement), in equal quarterly
installments (except for the first such payment) (each such payment, an “Installment Payment,”
constituting a payment of interest at the rate per year of 12.072% and a partial repayment of
principal) payable on each February 15, May 15, August 15 and November 15 commencing on May 15,
2011 (each such date, an “Installment Payment Date” and the period from, and including, February 9,
2011 to, but excluding, the first Installment Payment Date and each subsequent full quarterly
period from, and including, an Installment Payment Date to, but excluding, the immediately
succeeding Installment Payment Date, an “Installment Payment Period”), all as set forth on the
reverse hereof, with the final Installment Payment due and payable on February 15, 2014.



     The Installment Payment on any Installment Payment Date shall be computed on the basis of a
360-day year consisting of twelve 30-day months. If an Installment Payment for any period shorter
than a full Installment Payment Period, such Installment Payment shall be computed on the basis of
the actual number of days elapsed per 30-day month. In the event that any Installment Payment Date
is not a Business Day, then payment of the Installment Payment on such date will be made on the
next succeeding day that is a Business Day, and without any interest or other payment in respect of
any such delay. However, if such Business Day is in the next succeeding calendar year, then such
installment payment shall be made on the immediately preceding Business Day, in each case



A-9









 




with the same force and effect as if made on the date when such Installment Payment was originally due.
Installment Payments shall be paid to the Person in whose name the Note is registered, with limited exceptions, at the close of business on the
Business Day immediately preceding the related Installment Payment Date (each, a “Regular Record
Date”). If the Notes do not remain in book-entry only form, the Issuer shall have the right to
select Regular Record Dates, noticed in writing in advance, to the Trustee and Holders, which will
be more than 14 days but less than 60 days prior to the relevant Installment Payment Date.
Installment Payments shall be payable at the office or agency of the Issuer maintained for that
purpose in the Borough of Manhattan, The City of New York or in Delaware; provided, however, that
payment of Installment Payments may be made at the option of the Issuer by check mailed to the
registered Holder at such address as shall appear in the Security Register or by wire transfer to
an account appropriately designated by the Holder entitled to payment.




     This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or
be valid or obligatory for any purpose until the Certificate of Authentication shall have been
manually signed by or on behalf of the Trustee.



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



[SIGNATURES ON THE FOLLOWING PAGE]






A-10









 







     
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.



Dated: _____________




	 	 	 	 	 
	 	K. HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and
 Chief Financial Officer 	 
	 



					
	 	


CERTIFICATE OF AUTHENTICATION



Wilmington Trust Company, as Trustee, certifies that this is one of the
Securities of the series designated herein referred to in the within mentioned
Indenture.



Dated:



WILMINGTON TRUST COMPANY, as

Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 



A-11









 






	 	 	 	 	 



REVERSE OF NOTE




K. HOVNANIAN ENTERPRISES, INC.



12.072% Senior Subordinated Amortizing Notes due 2014




     This Note is one of a duly authorized series of Securities of the Note Issuer designated as
its 12.072% Senior Subordinated Amortizing Notes due 2014 (herein sometimes referred to as the
“Notes”), issued under the Senior Subordinated Indenture, dated as of February 9, 2011, among the
Issuer, Hovnanian Enterprises, Inc. (“Hovnanian”) and Wilmington Trust Company, as trustee (the
“Trustee,” which term includes any successor trustee under the Indenture) (including any provisions
of the TIA that are deemed incorporated therein) (the “Base Indenture”), as supplemented by the
First Supplemental Indenture, dated as of February 9, 2011 (the “First Supplemental Indenture”),
among the Issuer, Hovnanian, the other Guarantors from time to time party thereto, and the Trustee
(the Base Indenture and, as supplemented by the First Supplemental Indenture, the “Indenture”), to
which Indenture reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Issuer and the Holders. The terms
of other series of Securities issued under the Indenture may vary with respect to interest rates,
issue dates, maturity, redemption, repayment, currency of payment and otherwise as provided in the
Indenture. The Indenture further provides that securities of a single series may be issued at
various times, with different maturity dates and may bear interest at different rates. This series
of Securities is limited in initial aggregate principal amount as specified in the First
Supplemental Indenture.



     Each installment shall constitute a payment of interest (at a rate of 12.072% per annum) and a
partial repayment of principal on the Note, allocated as set forth in the schedule below:



	 	 	 	 	 	 	 	 	 
	Installment Payment Date	 	Amount of Principal	 	 	Amount of Interest	 
	May 15, 2011
	 	$	0.337631	 	 	$	0.145703	 
	August 15, 2011
	 	$	0.326719	 	 	$	0.126406	 
	November 15, 2011
	 	$	0.336579	 	 	$	0.116546	 
	February 15, 2012
	 	$	0.346737	 	 	$	0.106388	 
	May 15, 2012
	 	$	0.357201	 	 	$	0.095924	 
	August 15, 2012
	 	$	0.367982	 	 	$	0.085143	 
	November 15, 2012
	 	$	0.379087	 	 	$	0.074038	 
	February 15, 2013
	 	$	0.390528	 	 	$	0.062597	 
	May 15, 2013
	 	$	0.402314	 	 	$	0.050811	 






A-12









 







	 	 	 	 	 	 	 	 	 
	Installment Payment Date	 	Amount of Principal	 	 	Amount of Interest	 
	August 15, 2013
	 	$	0.414456	 	 	$	0.038669	 
	November 15, 2013
	 	$	0.426965	 	 	$	0.026160	 
	February 15, 2014
	 	$	0.439850	 	 	$	0.013275	 






     The Notes shall not be subject to redemption at the option of the Issuer. However, a Holder
shall have the right to require the Issuer to repurchase some or all of its Notes for cash at the
Repurchase Price per Note and on the Repurchase Date, upon the occurrence of certain events and
subject to the conditions set forth in the Indenture.



     This Note is not entitled to the benefit of any sinking fund. The Indenture contains
provisions for defeasance and covenant defeasance at any time of the indebtedness on this Note upon
compliance by the Issuer with certain conditions set forth therein, which provisions apply to this
Note.



     If an Event of Default with respect to the Notes shall occur and be continuing, then (unless
no declaration of acceleration or notice is required for such Event of Default) either the Trustee
or the Holders of not less than 25% in principal amount of the Notes then outstanding may declare
the aggregate principal amount of the Notes, and all interest accrued thereon, to be due and
payable immediately, in the manner, subject to the conditions and with the effect provided in the
Indenture.



     The Indenture permits, with certain exceptions as therein provided, the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in principal amount of the
Securities at the time outstanding, to execute supplemental indentures for certain purposes as
described therein.



     No provision of this Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay Installment Payments on this Note at the time,
place and rate, and in the coin or currency, herein and in the Indenture prescribed.



     The Notes are guaranteed, on a senior subordinated basis, by the Guarantors as set forth in
the Indenture and the Guarantee endorsed hereon.



     The Notes are originally being issued as part of the 7.25% Tangible Equity Units (the “Units”)
issued by Hovnanian and the Issuer pursuant to that certain Purchase Contract Agreement, dated as
of February 9, 2011, between Hovnanian, the Issuer and Wilmington Trust Company, as Purchase
Contract Agent, as Trustee under the Indenture and as attorney-in-fact for the holders of Purchase
Contracts from time to time (the “Purchase Contract Agreement”). Holders of



A-13









 




the Units have the right to separate such Units into their constituent parts, consisting of Separate Purchase
Contracts (as defined in the Purchase Contract Agreement) and Separate Notes, during the times, and
under the circumstances,described in the Purchase Contract Agreement. Following separation of any Unit into its
constituent Separate Note and Separate Purchase Contract, the Separate Notes are transferable
independently from the Separate Purchase Contracts. In addition, Separate Notes can be recombined
with Separate Purchase Contracts to recreate Units, as provided for in the Purchase Contract
Agreement. Reference is hereby made to the Purchase Contract Agreement for a more complete
description of the terms thereof applicable to the Units and Notes.




     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note shall be registered on the Security register of the Issuer, upon due
presentation of this Note for registration of transfer at the office or agency of the Issuer in the
Borough of Manhattan, The City of New York or in Delaware, duly endorsed by, or accompanied by a
written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the Holder hereof or by his attorney duly authorized in writing, and thereupon
the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Note or Notes in authorized denominations and for a like aggregate
principal amount.



     The Notes are initially issued in registered, global form without coupons in denominations
initially equal to $4.526049 and integral multiples in excess thereof.



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



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



     This Note and the Indenture, and any claim, controversy or dispute arising under or related to
the Indenture or this Note, shall for all purposes be governed by, and construed in accordance
with, the laws of the State of New York.



A-14









 





     Capitalized terms used but not defined in this Note shall have the meanings ascribed to such
terms in the Indenture.



     No recourse shall be had for the payment of any Installment Payment on this Note, or for any
claim based hereon, or upon any obligation, covenant or agreement of the Issuer in the Indenture,
against any incorporator, stockholder, officer or director, past, present or future of the Issuer
or of any predecessor or successor, either directly or through the Issuer or of any successor,
whether by virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment of penalty or otherwise; and all such personal liability is expressly released and
waived as a condition of, and as part of the consideration for, the issuance of this Note.



     The Issuer and each Holder agrees, for United States federal income tax purposes, to treat the
Notes as indebtedness of the Issuer.



     If this Note is a component of a Unit, it shall be subject to the Section 382 Ownership
Blocker (as defined in the Purchase Contract Agreement), and any purported violation of the Section
382 Ownership Blocker shall be subject to the consequences provided in the Indenture and the
Purchase Contract Agreement.



     In the event of any inconsistency between the provisions of this Note and the provisions of
the Indenture, the Indenture shall prevail.




A-15











 





NOTATION ON NOTE RELATING TO GUARANTEE




GUARANTEE



     The undersigned (the “Guarantors”) hereby unconditionally guarantee, jointly and severally, to
each Holder and to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Issuer thereunder or under the
Notes, that (i) the due and punctual payment of the principal of, interest on the Notes (including,
without limitation, Installment Payments and the Repurchase Price of any Notes payable pursuant to
Article 11 of the First Supplemental Indenture, if applicable), and all other amounts owing with
respect to the Notes, whether on the Maturity Date, on any Repurchase Date or on any Installment
Payment Date, by acceleration or otherwise, if lawful, and all other obligations of the Issuer to
the Holders or the Trustee thereunder or under the Notes shall be promptly paid in full when due or
performed in accordance with the terms of the Indenture and the Notes, including all amounts
payable to the Trustee, and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same shall be promptly paid in full when due or to be
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise (each such guarantee, a “Guarantee”).



     The obligations of the Guarantors under this Guarantee are subordinated to all Senior
Indebtedness of a Guarantor, as set forth in Article 7 of the First Supplemental Indenture.



     No past, present or future stockholder, officer, director, employee or incorporator, as such,
of any of the Guarantors shall have any liability under the Guarantee by reason of such Person’s
status as stockholder, officer, director, employee or incorporator. Each Holder of a Note by
accepting a Note waives and releases all such liability. This waiver and release are part of the
consideration for the issuance of the Guarantee.



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



     The Guarantee shall not be valid or obligatory for any purpose until the certificate of
authentication on the Notes upon which the Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized officers.



     In the event of any inconsistency between the provisions of this Guarantee and the provisions
of the Indenture, the Indenture shall prevail.



A-16









 





     IN WITNESS WHEREOF, the Guarantors have caused this instrument to be executed.



     Dated: _____________



AUDDIE ENTERPRISES, L.L.C.

BUILDER SERVICES NJ, L.L.C.

BUILDER SERVICES NY, L.L.C.

BUILDER SERVICES PA, L.L.C.

DULLES COPPERMINE, L.L.C.

EASTERN NATIONAL TITLE AGENCY, LLC

EASTERN TITLE AGENCY, INC.

F&W MECHANICAL SERVICES, L.L.C.

FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.

FOUNDERS TITLE AGENCY, INC.

GOVERNOR’S ABSTRACT CO., INC.

HOMEBUYERS FINANCIAL SERVICES, L.L.C.

HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.

HOVNANIAN ENTERPRISES, INC.

HOVNANIAN LAND INVESTMENT GROUP OF CALIFORNIA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF TEXAS LLC

HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP, L.L.C.


K. HOV INTERNATIONAL, INC.

K. HOV IP, INC.

K. HOV IP, II, INC.

K. HOVNANIAN ACQUISITIONS, INC.

K. HOVNANIAN AT 4S, LLC

K. HOVNANIAN AT ACQUA VISTA, LLC

K. HOVNANIAN AT ALISO, LLC

K. HOVNANIAN AT ALLENTOWN, L.L.C.

K. HOVNANIAN AT ALMOND ESTATES, LLC

K. HOVNANIAN AT ANDALUSIA, LLC

K. HOVNANIAN AT ARBOR HEIGHTS, LLC

K. HOVNANIAN AT AVENUE ONE, L.L.C.

K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.

K. HOVNANIAN AT BARNEGAT I, L.L.C.

K. HOVNANIAN AT BARNEGAT II, L.L.C.

K. HOVNANIAN AT BELLA LAGO, LLC

K. HOVNANIAN AT BERKELEY, L.L.C.

K. HOVNANIAN AT BERNARDS V, L.L.C.

K. HOVNANIAN AT BLUE HERON PINES, L.L.C.

K. HOVNANIAN AT BRANCHBURG, L.L.C.

K. HOVNANIAN AT BRIDGEPORT, INC.

K. HOVNANIAN AT BRIDGEWATER I, L.L.C.

K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.

K. HOVNANIAN AT CALABRIA, INC.

K. HOVNANIAN AT CAMDEN I, L.L.C.




A-17









 





K. HOVNANIAN AT CAMERON CHASE, INC.

K. HOVNANIAN AT CAMP HILL, L.L.C.

K. HOVNANIAN AT CAPISTRANO, L.L.C.

K. HOVNANIAN AT CARLSBAD, LLC

K. HOVNANIAN AT CARMEL DEL MAR, INC.

K. HOVNANIAN AT CARMEL VILLAGE, LLC

K. HOVNANIAN AT CASTILE, INC.

K. HOVNANIAN AT CEDAR GROVE III, L.L.C.

K. HOVNANIAN AT CEDAR GROVE V, L.L.C.

K. HOVNANIAN AT CHAPARRAL, INC.

K. HOVNANIAN AT CHARTER WAY, LLC

K. HOVNANIAN AT CHESTER I, L.L.C.

K. HOVNANIAN AT CHESTERFIELD, L.L.C.

K. HOVNANIAN AT CIELO, L.L.C.

K. HOVNANIAN AT CLIFTON, L.L.C.

K. HOVNANIAN AT COASTLINE, L.L.C.

K. HOVNANIAN AT CORTEZ HILL, LLC

K. HOVNANIAN AT CRANBURY, L.L.C.

K. HOVNANIAN AT CRESTLINE, INC.

K. HOVNANIAN AT CURRIES WOODS, L.L.C.

K. HOVNANIAN AT DENVILLE, L.L.C.

K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.

K. HOVNANIAN AT DOMINGUEZ HILLS, INC.

K. HOVNANIAN AT DOVER, L.L.C.

K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.

K. HOVNANIAN AT EASTLAKE, LLC

K. HOVNANIAN AT EDGEWATER II, L.L.C.

K. HOVNANIAN AT EDGEWATER, L.L.C.

K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.

K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.

K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.

K. HOVNANIAN AT EL DORADO RANCH, L.L.C.

K. HOVNANIAN AT ELK TOWNSHIP, L.L.C.

K. HOVNANIAN AT ENCINITAS RANCH, LLC

K. HOVNANIAN AT EVERGREEN, L.L.C.

K. HOVNANIAN AT EWING, L.L.C.

K. HOVNANIAN AT FAIR OAKS, L.L.C.

K. HOVNANIAN AT FIDDYMENT RANCH, LLC

K. HOVNANIAN AT FIFTH AVENUE, L.L.C.

K. HOVNANIAN AT FLORENCE I, L.L.C.

K. HOVNANIAN AT FLORENCE II, L.L.C.

K. HOVNANIAN AT FOREST MEADOWS, L.L.C.

K. HOVNANIAN AT FRANKLIN, L.L.C.

K. HOVNANIAN AT FRANKLIN II, L.L.C.

K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.

K. HOVNANIAN AT FRESNO, LLC

K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.

K. HOVNANIAN AT GILROY, LLC

K. HOVNANIAN AT GREAT NOTCH, L.L.C.

K. HOVNANIAN AT GRIDLEY, LLC

K. HOVNANIAN AT GUTTENBERG, L.L.C.

K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.

K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.




A-18









 





K. HOVNANIAN AT HAMBURG, L.L.C.

K. HOVNANIAN AT HAWTHORNE, L.L.C.

K. HOVNANIAN AT HAZLET, L.L.C.

K. HOVNANIAN AT HERSHEY’S MILL, INC.

K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.

K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.

K. HOVNANIAN AT HILLTOP, L.L.C.

K. HOVNANIAN AT HUDSON POINTE, L.L.C.

K. HOVNANIAN AT JACKSON I, L.L.C.

K. HOVNANIAN AT JACKSON, L.L.C.

K. HOVNANIAN AT JAEGER RANCH, LLC

K. HOVNANIAN AT JERSEY CITY IV, L.L.C.

K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.

K. HOVNANIAN AT KEYPORT, L.L.C.

K. HOVNANIAN AT KING FARM, L.L.C.

K. HOVNANIAN AT LA COSTA GREENS, L.L.C.

K. HOVNANIAN AT LA COSTA, LLC

K. HOVNANIAN AT LA HABRA KNOLLS, LLC

K. HOVNANIAN AT LA LAGUNA, L.L.C.

K. HOVNANIAN AT LA PAZ, LLC

K. HOVNANIAN AT LA TERRAZA, INC.

K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.

K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC

K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.

K. HOVNANIAN AT LANDMARK, LLC

K. HOVNANIAN AT LARKSPUR, LLC

K. HOVNANIAN AT LAWRENCE V, L.L.C.

K. HOVNANIAN AT LEE SQUARE, L.L.C.

K. HOVNANIAN AT LINWOOD, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR III, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.

K. HOVNANIAN AT LIVE OAK II, LLC

K. HOVNANIAN AT LONG BRANCH I, L.L.C.

K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.

K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.

K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.

K. HOVNANIAN AT LOWER MORELAND I, L.L.C.

K. HOVNANIAN AT LOWER MORELAND II, L.L.C.

K. HOVNANIAN AT LOWER MORELAND III, L.L.C.

K. HOVNANIAN AT MACUNGIE, L.L.C.

K. HOVNANIAN AT MAHWAH VI, INC.

K. HOVNANIAN AT MALAN PARK, L.L.C.

K. HOVNANIAN AT MANALAPAN III, L.L.C.

K. HOVNANIAN AT MANSFIELD I, L.L.C.

K. HOVNANIAN AT MANSFIELD II, L.L.C.

K. HOVNANIAN AT MANSFIELD III, L.L.C.

K. HOVNANIAN AT MANTECA, LLC

K. HOVNANIAN AT MAPLE AVENUE, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.




A-19









 





K. HOVNANIAN AT MARLBORO VI, L.L.C.

K. HOVNANIAN AT MARLBORO VII, L.L.C.

K. HOVNANIAN AT MATSU, L.L.C.

K. HOVNANIAN AT MELANIE MEADOWS, LLC

K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.

K. HOVNANIAN AT MENIFEE, LLC

K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.

K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.

K. HOVNANIAN AT MIDDLETOWN II, L.L.C.

K. HOVNANIAN AT MILLVILLE I, L.L.C.

K. HOVNANIAN AT MILLVILLE II, L.L.C.

K. HOVNANIAN AT MONROE II, INC.

K. HOVNANIAN AT MONROE IV, L.L.C.

K. HOVNANIAN AT MONROE NJ, L.L.C.

K. HOVNANIAN AT MONTVALE, LLC

K. HOVNANIAN AT MONTVALE II, L.L.C.

K. HOVNANIAN AT MOSAIC, LLC

K. HOVNANIAN AT MT. OLIVE TOWNSHIP, L.L.C.

K. HOVNANIAN AT MUIRFIELD, LLC

K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.

K. HOVNANIAN AT NEW WINDSOR, L.L.C.

K. HOVNANIAN AT NORTH BERGEN. L.L.C.

K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL, L.L.C.

K. HOVNANIAN AT NORTH HALEDON, L.L.C.

K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.

K. HOVNANIAN AT NORTHAMPTON, L.L.C.

K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.

K. HOVNANIAN AT NORTHFIELD, L.L.C.

K. HOVNANIAN AT NORTHLAKE, INC.

K. HOVNANIAN AT OCEAN TOWNSHIP, INC.

K. HOVNANIAN AT OCEAN WALK, INC.

K. HOVNANIAN AT OCEANPORT, L.L.C.

K. HOVNANIAN AT OLD BRIDGE, L.L.C.

K. HOVNANIAN AT OLDE ORCHARD, LLC

K. HOVNANIAN AT PACIFIC BLUFFS, LLC

K. HOVNANIAN AT PARAMUS, L.L.C.

K. HOVNANIAN AT PARK LANE, LLC

K. HOVNANIAN AT PARKSIDE, LLC

K. HOVNANIAN AT PARSIPPANY, L.L.C.

K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.

K. HOVNANIAN AT PERKIOMEN II, INC.

K. HOVNANIAN AT PHILADELPHIA II, L.L.C.

K. HOVNANIAN AT PHILADELPHIA III, L.L.C.

K. HOVNANIAN AT PHILADELPHIA IV, L.L.C.

K. HOVNANIAN AT PIAZZA D’ORO, L.L.C.

K. HOVNANIAN AT PIAZZA SERENA, L.L.C.

K. HOVNANIAN AT PITTSGROVE, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.




A-20









 





K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.

K. HOVNANIAN AT POSITANO, LLC

K. HOVNANIAN AT PRADO, L.L.C.

K. HOVNANIAN AT RANCHO 79, LLC

K. HOVNANIAN AT RANCHO CRISTIANITOS, INC.

K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC

K. HOVNANIAN AT RANDOLPH I, L.L.C.

K. HOVNANIAN AT RAPHO, L.L.C.

K. HOVNANIAN AT READINGTON II, L.L.C.

K. HOVNANIAN AT RED BANK, L.L.C.

K. HOVNANIAN AT RIDGEMONT, L.L.C.

K. HOVNANIAN AT RIDGESTONE, L.L.C.

K. HOVNANIAN AT RIVERBEND, LLC

K. HOVNANIAN AT RIVERCREST, LLC

K. HOVNANIAN AT RODERUCK, L.L.C.

K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.

K. HOVNANIAN AT ROWLAND HEIGHTS, LLC

K. HOVNANIAN AT SAGE, L.L.C.

K. HOVNANIAN AT SAN SEVAINE, INC.

K. HOVNANIAN AT SANTA FE SPRINGS, LLC

K. HOVNANIAN AT SANTA NELLA, LLC

K. HOVNANIAN AT SARATOGA, INC.

K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.

K. HOVNANIAN AT SAWMILL, INC.

K. HOVNANIAN AT SAYREVILLE, L.L.C.

K. HOVNANIAN AT SHELDON GROVE, LLC

K. HOVNANIAN AT SHREWSBURY, LLC

K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.

K. HOVNANIAN AT SIERRA ESTATES, LLC

K. HOVNANIAN AT SILVER SPRING, L.L.C.

K. HOVNANIAN AT SKYE ISLE, LLC

K. HOVNANIAN AT SMITHVILLE III, L.L.C.

K. HOVNANIAN AT SMITHVILLE, INC

K. HOVNANIAN AT SOMERS POINT, L.L.C.

K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.

K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.

K. HOVNANIAN AT SPARTA, L.L.C.

K. HOVNANIAN AT SPRINGCO, L.L.C.

K. HOVNANIAN AT STANTON, LLC

K. HOVNANIAN AT STATION SQUARE, L.L.C.

K. HOVNANIAN AT STONE CANYON, INC.

K. HOVNANIAN AT SUNRIDGE PARK, LLC

K. HOVNANIAN AT SUNSETS, LLC

K. HOVNANIAN AT SYCAMORE, INC.

K. HOVNANIAN AT TEANECK, L.L.C.

K. HOVNANIAN AT THE CLIFFS, LLC

K. HOVNANIAN AT THE CROSBY, LLC

K. HOVNANIAN AT THE GABLES, LLC

K. HOVNANIAN AT THE MONARCH, L.L.C.

K. HOVNANIAN AT THE PRESERVE, LLC

K. HOVNANIAN AT THOMPSON RANCH, LLC




A-21









 





K. HOVNANIAN AT THORNBURY, INC.

K. HOVNANIAN AT TRAIL RIDGE, LLC

K. HOVNANIAN AT TRENTON, L.L.C.

K. HOVNANIAN AT TROVATA, INC.

K. HOVNANIAN AT UNION TOWNSHIP I, INC.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.

K. HOVNANIAN AT UPPER MAKEFIELD I, INC.

K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.

K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.

K. HOVNANIAN AT VAIL RANCH, INC.

K. HOVNANIAN AT VALLE DEL SOL, LLC

K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.

K. HOVNANIAN AT VICTORVILLE, L.L.C.

K. HOVNANIAN AT VINELAND, L.L.C.

K. HOVNANIAN AT VISTA DEL SOL, L.L.C.

K. HOVNANIAN AT WANAQUE, L.L.C.

K. HOVNANIAN AT WARMINSTER, LLC

K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.

K. HOVNANIAN AT WASHINGTON, L.L.C.

K. HOVNANIAN AT WATERSTONE, LLC

K. HOVNANIAN AT WAYNE IX, L.L.C.

K. HOVNANIAN AT WAYNE, VIII, L.L.C.

K. HOVNANIAN AT WEST BRADFORD, L.L.C.

K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.

K. HOVNANIAN AT WEST WINDSOR, L.L.C.

K. HOVNANIAN AT WESTSHORE, LLC

K. HOVNANIAN AT WHEELER RANCH, LLC

K. HOVNANIAN AT WILDROSE, INC.

K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.

K. HOVNANIAN AT WILLOW BROOK, L.L.C.

K. HOVNANIAN AT WINCHESTER, LLC

K. HOVNANIAN AT WOODCREEK WEST, LLC

K. HOVNANIAN AT WOODHILL ESTATES, L.L.C.

K. HOVNANIAN AT WOOLWICH I, L.L.C.

K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.

K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.

K. HOVNANIAN CLASSICS CIP, L.L.C.

K. HOVNANIAN CLASSICS, L.L.C.

K. HOVNANIAN COMMUNITIES, INC.

K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.

K. HOVNANIAN COMPANIES NORTHEAST, INC.

K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.

K. HOVNANIAN COMPANIES OF MARYLAND, INC.

K. HOVNANIAN COMPANIES OF NEW YORK, INC.

K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.

K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.

K. HOVNANIAN COMPANIES OF VIRGINIA, INC.

K. HOVNANIAN COMPANIES, LLC

K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.

K. HOVNANIAN CONSTRUCTION II, INC

K. HOVNANIAN CONSTRUCTION III, INC

K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.




A-22









 





K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.

K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.

K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.

K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.

K. HOVNANIAN DEVELOPMENTS OF CONNECTICUT, INC.

K. HOVNANIAN DEVELOPMENTS OF D.C., INC.

K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.

K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.

K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.

K. HOVNANIAN DEVELOPMENTS OF INDIANA, INC.

K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.

K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.

K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, INC.

K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.

K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.

K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.

K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.

K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.

K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.

K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.

K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.

K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.

K. HOVNANIAN FIRST HOMES, L.L.C.

K. HOVNANIAN FLORIDA REALTY, L.L.C.

K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC

K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC

K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC

K. HOVNANIAN GREAT WESTERN HOMES, LLC

K. HOVNANIAN HOLDINGS NJ, L.L.C.

K. HOVNANIAN HOMES — DFW, L.L.C.

K. HOVNANIAN HOMES AT CAMERON STATION, LLC

K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.

K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.

K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.

K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.

K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.

K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.

K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.

K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.

K. HOVNANIAN HOMES AT PAYNE STREET, L.L.C.

K. HOVNANIAN HOMES AT PRIMERA, L.L.C.

K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.

K. HOVNANIAN HOMES AT RUSSETT, L.L.C.

K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC

K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.

K. HOVNANIAN HOMES OF D.C., L.L.C.

K. HOVNANIAN HOMES OF DELAWARE, L.L.C.

K. HOVNANIAN HOMES OF GEORGIA, L.L.C.

K. HOVNANIAN HOMES OF HOUSTON, L.L.C.

K. HOVNANIAN HOMES OF INDIANA, L.L.C.




A-23









 





K. HOVNANIAN HOMES OF MARYLAND, L.L.C.

K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.

K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.

K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.

K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC

K. HOVNANIAN HOMES OF VIRGINIA, INC.

K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.

K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC

K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.

K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.

K. HOVNANIAN NORTHEAST SERVICES, L.L.C.

K. HOVNANIAN OF HOUSTON II, L.L.C.

K. HOVNANIAN OHIO REALTY, L.L.C.

K. HOVNANIAN OSTER HOMES, L.L.C.

K. HOVNANIAN PA REAL ESTATE, INC.

K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.

K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.

K. HOVNANIAN PROPERTIES OF RED BANK, INC.

K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.

K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.

K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.

K. HOVNANIAN STANDING ENTITY, L.L.C.

K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF MICHIGAN, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.

K. HOVNANIAN SUMMIT HOMES, L.L.C.

K. HOVNANIAN T&C HOMES AT FLORIDA, L.L.C.

K. HOVNANIAN T&C HOMES AT ILLINOIS, L.L.C.

K. HOVNANIAN T&C INVESTMENT, L.L.C.

K. HOVNANIAN T&C MANAGEMENT CO., L.L.C.

K. HOVNANIAN TIMBRES AT ELM CREEK, LLC

K. HOVNANIAN VENTURE I, L.L.C.

K. HOVNANIAN WINDWARD HOMES, LLC

K. HOVNANIAN’S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BAILEY’S GLENN, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BAKERSFIELD, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BEAUMONT, LLC

K. HOVNANIAN’S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT DULLES DISCOVERY, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT HEMET, LLC

K. HOVNANIAN’S FOUR SEASONS AT HUNTFIELD, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT KENT ISLAND, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT LOS BANOS, LLC

K. HOVNANIAN’S FOUR SEASONS AT MORENO VALLEY, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT PALM SPRINGS, LLC

K. HOVNANIAN’S FOUR SEASONS AT RENAISSANCE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT RUSH CREEK II, LLC

K. HOVNANIAN’S FOUR SEASONS AT RUSH CREEK, L.L.C.




A-24









 





K. HOVNANIAN’S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT VINT HILL, L.L.C.

K. HOVNANIAN’S FOUR SEASONS, LLC

K. HOVNANIAN’S PARKSIDE AT TOWNGATE, L.L.C.

K. HOVNANIAN’S PRIVATE HOME PORTFOLIO, L.L.C.

KHIP, L.L.C.

LANDARAMA, INC.

M&M AT CHESTERFIELD, LLC

M&M AT CRESCENT COURT, L.L.C.

M&M AT WEST ORANGE, L.L.C.

M&M AT WHEATENA URBAN RENEWAL, L.L.C.

MATZEL & MUMFORD AT EGG HARBOR, L.L.C.

MATZEL & MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.

MCNJ, INC.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF KENTUCKY, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF MICHIGAN, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES, L.L.C.

MMIP, L.L.C.

NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.

NEW LAND TITLE AGENCY, L.L.C.

PADDOCKS, L.L.C.

PARK TITLE COMPANY, LLC

PINE AYR, LLC

REAL PROPERTY HOLDING — PRINCE GEORGE’S COUNTY, MD, LLC

RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.

RIDGEMORE UTILITY, L.L.C.

SEABROOK ACCUMULATION CORPORATION

STONEBROOK HOMES, INC.

TERRAPIN REALTY, L.L.C.

THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.

THE MATZEL & MUMFORD ORGANIZATION, INC

THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC

THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.

WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.

WASHINGTON HOMES, INC.

WESTMINSTER HOMES OF ALABAMA, L.L.C.

WESTMINSTER HOMES OF MISSISSIPPI, LLC

WESTMINSTER HOMES OF TENNESSEE, INC.

WESTMINSTER HOMES, INC.

WH LAND I, INC.

WH PROPERTIES, INC.

WH/PR LAND COMPANY, L.L.C.

WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.




A-25









 





	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and

Chief Financial Officer 	 



A-26









 






	 	 	 	 	 



ASSIGNMENT



FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:



(Insert assignee’s social security or tax identification number)




(Insert address and zip code of assignee)

and irrevocably appoints




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



Date: __________




	 	 	 	 	 
	 	Signature:



Signature Guarantee:

 	 



(Sign exactly as your name appears on the other side of this Note)






A-27









 








SIGNATURE GUARANTEE



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




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	 
	as Trustee 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Attest




	 	 	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-28









 






	 	 	 	 	 



[FORM OF REPURCHASE NOTICE]



TO:   K. HOVNANIAN ENTERPRISES, INC.

         WILMINGTON TRUST COMPANY, as Trustee





     The undersigned registered Holder hereby irrevocably acknowledges receipt of a notice from K.
Hovnanian Enterprises, Inc. (the “Issuer”) regarding the right of Holders to elect to require the
Issuer to repurchase the Notes and requests and instructs the Issuer to pay, for each Note
designated below, the Repurchase Price for the such Note (determined as set forth in the
Indenture), in accordance with the terms of the Indenture and the Notes, to the registered holder
hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture. The Notes shall be repurchased by the Issuer as of the Repurchase Date
pursuant to the terms and conditions specified in the Indenture.


Dated: ______________________



Signature: ______________________


_______________________________





     NOTICE: The above signature of the Holder hereof must correspond with the name as written upon
the face of the Notes in every particular without alteration or enlargement or any change whatever.


Notes Certificate Number (if applicable): __________________



Number of Notes to be repurchased (if less than all, must be one Note or integral multiples in
excess thereof): __________________



Social Security or Other Taxpayer Identification Number: ___________________







A-29









 








SCHEDULE
A

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE




     The
initial number of Notes evidenced by this Global Note is
______. 
The following increases
or decreases in this Global Note have been made:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Number of Notes	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	evidenced hereby	 	 	 	 
	 	 	 	 	Amount of decrease	 	 	Amount of increase	 	 	following such	 	 	Signature of	 
	 	 	 	 	in number of Notes	 	 	in number of Notes	 	 	decrease (or	 	 	authorized officer	 
	Date	 	 	evidenced hereby	 	 	evidenced hereby	 	 	increase)	 	 	of Trustee	 
	 
	 






A-30











 





EXHIBIT B




[FORM OF FACE OF PURCHASE CONTRACT]




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



     UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*





 




			
	* 	 	 Include only if a Global Purchase Contract.




B-1









 










HOVNANIAN ENTERPRISES, INC.




PURCHASE CONTRACTS



CUSIP No. 442487 138

ISIN No. US4424871386

No. _______                 [Initial]* Number of Purchase Contracts: ________




     This Purchase Contract certifies that [CEDE & CO., as nominee of The Depository Trust
Company]* [______]**, or its registered assigns (the “Holder”) is the
registered owner of the number of Purchase Contracts set forth above[, which number may from time
to time be reduced or increased as set forth on Schedule A hereto, as appropriate, in accordance
with the terms of the Purchase Contract Agreement (as defined below), but which number of Purchase
Contracts, taken together with the number of all other Outstanding Purchase Contracts, shall not
exceed 3,000,000 Purchase Contracts at any time (as increased by a number equal to the aggregate
number of any additional Units purchased by the Underwriters pursuant to the exercise of their
option to purchase additional Units as set forth in the Underwriting Agreement)]*.



     Each Purchase Contract consists of the rights of the Holder under such Purchase Contract with
the Company. All capitalized terms used herein which are defined in the Purchase Contract Agreement
(as defined on the reverse hereof) have the meaning set forth therein.



     Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract on the Mandatory Settlement Date a number shares of Class A common stock, $0.01
par value (“Class A Common Stock”), of the Company equal to the Settlement Rate, unless such
Purchase Contract has settled prior to the Mandatory Settlement Date, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.



     This Purchase Contract is subject to the Section 382 Ownership Blocker and Section 382
Settlement Blocker, in each case, as provided in the Purchase Contract Agreement. Each Beneficial
Holder of this Purchase Contract, by acquiring an interest in this Purchase Contract, represents
and warrants to the Company that it is in compliance with the ownership limitations of the Section
382 Ownership Blocker (which representation and warranty is part of the consideration for the
issuance of this Purchase Contract). Any purported violation of the Section 382 Ownership Blocker
shall be subject to the consequences provided in the Purchase Contract Agreement.



     Reference is hereby made to the further provisions set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth at this place.



B-2









 





[SIGNATURES ON THE FOLLOWING PAGE]





 




			
	*  	 	Include only if a Global Purchase Contract.
	 
	**  	 	Include only if not a Global Purchase Contract.




B-3









 










     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.



	 	 	 	 	 
	 	HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and 
 Chief Financial Officer 	 
	 



Dated: _____________







B-4









 








	 	 	 	 	 
	 	REGISTERED HOLDER(S) (as to 
      obligations of such holder(s) under the 
      Purchase
Contracts evidenced hereby)

 	 
	 	By:  	WILMINGTON TRUST
 	 
	 	 	COMPANY, not individually but 	 
	 	 	solely as Attorney-in-Fact of such
holder(s) 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



B-5









 






	 	 	 	 	 



PURCHASE CONTRACT CERTIFICATE OF AUTHENTICATION OF

PURCHASE CONTRACT AGENT





     This is one of the Purchase Contracts referred to in the within-mentioned Purchase Contract
Agreement.



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as
Purchase 
    Contract Agent

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 



Dated: ____________________







B-6









 








[REVERSE OF PURCHASE CONTRACT]





     Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as
of February 9, 2011 (as may be supplemented from time to time, the “Purchase Contract Agreement”),
among Hovnanian Enterprises, Inc., a Delaware corporation (the “Company”), K. Hovnanian
Enterprises, Inc., a California corporation (the “Note Issuer”) and Wilmington Trust Company, as
Purchase Contract Agent (including its successors hereunder, the “Purchase Contract Agent”), as
Trustee under the Indenture and as attorney-in-fact for the Holders of Purchase Contracts from time
to time. Reference is hereby made to the Purchase Contract Agreement and supplemental agreements
thereto for a description of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company and the Holders and of the terms
upon which the Purchase Contracts are, and are to be, executed and delivered.



     Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract, on the Mandatory Settlement Date, a number of shares of Class A Common Stock
equal to the Settlement Rate, unless such Purchase Contract has settled prior to the Mandatory
Settlement Date, in either case, pursuant to the terms of the Purchase Contract Agreement.



     No fractional shares of Class A Common Stock will be issued upon settlement of Purchase
Contracts, as provided in Section 4.13 of the Purchase Contract Agreement.



     The Purchase Contracts are issuable only in registered form and only in denominations of a
single Purchase Contract and any integral multiple thereof. The transfer of any Purchase Contract
will be registered and Purchase Contracts may be exchanged as provided in the Purchase Contract
Agreement.



     The Purchase Contracts are initially being issued as part of the 7.25% Tangible Equity Units
(the “Units”) issued by the Company and the Note Issuer pursuant to the Purchase Contract
Agreement. Holders of the Units have the right to separate such Units into their constituent
parts, consisting of Separate Notes and Separate Purchase Contracts, during the times, and under
the circumstances, described in the Purchase Contract Agreement. Following separation of any Unit
into its constituent parts, the Separate Purchase Contracts are transferable independently from the
Separate Notes. In addition, Separate Purchase Contracts can be recombined with Separate Notes to
recreate Units, as provided for in the Purchase Contract Agreement.



     The Holder of this Purchase Contract, by its acceptance hereof, authorizes the Purchase
Contract Agent to enter into and perform the Purchase Contract



B-7









 




Agreement on its behalf as its
attorney-in-fact and agrees to be bound by the terms and provisions thereof.




     Subject to certain exceptions set forth in the Purchase Contract Agreement, the provisions of
the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.



     The Purchase Contracts, and any claim, controversy or dispute arising under or related to the
Purchase Contracts, shall be governed by, and construed in accordance with, the laws of the State
of New York.



     The Company, the Purchase Contract Agent, and any agent of the Company or the Purchase
Contract Agent, may treat the Person in whose name this Purchase Contract is registered as the
owner of the Purchase Contracts, evidenced hereby, for the purpose of performance of the Purchase
Contracts evidenced by such Purchase Contracts and for all other purposes whatsoever, and neither
the Company nor the Purchase Contract Agent, nor any agent of the Company or the Purchase Contract
Agent, shall be affected by notice to the contrary.



     The Purchase Contracts shall not entitle the Holder to any of the rights of a holder of the
Class A Common Stock or other Exchange Property, except as provided by the Purchase Contract
Agreement.



     Each Purchase Contract (whether or not included in a Unit) is a security governed by Article 8
of the Uniform Commercial Code as in effect in the State of New York on the date hereof.



     A copy of the Purchase Contract Agreement is available for inspection at the offices of the
Company.



     In the event of any inconsistency between the provisions of this Purchase Contract and the
provisions of the Purchase Contract Agreement, the Purchase Contract Agreement shall prevail.



B-8









 





ABBREVIATIONS




     The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:



	 	 	 	 	 	 	 	 	 

	TEN COM:	 	as tenants in common
	 
	UNIF GIFT MIN ACT:

	 	 	 	 	 	Custodian	 	 
	 	 	 	 	 	 	 
	 

	 	(cust)
	 	 	 	 	 	(minor)
	 	 	Under Uniform Gifts to Minors
	 

	 	Act of	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	TENANT:	 	as tenants by the entireties
	 
	JT TEN:	 	as joint tenants with rights of
survivorship and not as tenants in common





Additional abbreviations may also be used though not in the above list.



FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto



(Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee)



(Please Print or Type Name and Address Including Postal Zip Code of Assignee)



the within Purchase Contracts and all rights thereunder, hereby irrevocably constituting and
appointing attorney      , to transfer said Purchase Contracts on the
books of the Company with full power of substitution in the premises.




	 	 	 

	DATED:                     

	 	Signature ______________________________________
	 

	 	Notice : The signature to this assignment must correspond with the
name as it appears upon the face of the within Purchase Contracts
in every particular, without alteration or enlargement or any
change whatsoever.





Signature Guarantee: ______________________________







B-9









 








SETTLEMENT INSTRUCTIONS




     The undersigned Holder directs that a certificate for shares of Class A Common Stock or other
securities, as applicable, deliverable upon settlement of the number of Purchase Contracts
evidenced by this Purchase Contract be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address indicated below unless
a different name and address have been indicated below. If shares of Class A Common Stock or other
securities, as applicable, are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incidental thereto, as provided in the Purchase
Contract Agreement.



	 	 	 

	Dated:                     
	 	 
	 

	 	 
	 

	 	Signature
	 

	 	Signature Guarantee:__________
	 

	 	(if assigned to another Person)





If shares are to be registered in the name of and delivered to a Person other than the Holder,
please (i) print such Person’s name and address and (ii) provide a guarantee of your signature:




	 	 	 

	 

	 	 
	Name

	 	Name
	 
	 	 
	Address

	 	Address
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Social Security or other Taxpayer Identification Number, if any
	 	 
	 

	 	 






B-10









 






ELECTION TO SETTLE EARLY




     The undersigned Holder of this Purchase Contract hereby irrevocably exercises the option to
effect Early Settlement (which Early Settlement may, as applicable, be deemed to be in connection
with a Fundamental Change pursuant to Section 4.07 of the Purchase Contract Agreement) in
accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts
evidenced by this Purchase Contract as specified below. The undersigned Holder directs that a
certificate for shares of Class A Common Stock or other securities, as applicable, deliverable upon
such Early Settlement be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Purchase Contract representing any Purchase Contracts evidenced
hereby as to which Early Settlement is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares of Class A Common
Stock or other securities, as applicable, are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident thereto, as provided in
the Purchase Contract Agreement.



	 	 	 

	Dated:                                         
	 	 
	 

	 	 
	 

	 	Signature





Signature Guarantee:                                                             









B-11









 








     Number of Purchase Contracts evidenced hereby as to which Early Settlement is being elected:



	 	 	 

	If shares of Class A Common Stock or
Purchase Contracts are to be
registered in the name of and delivered to a Person other than the
Holder, please print such Person’s
name and address:

	 	REGISTERED HOLDER


Please print name and address of
Registered Holder:
	
	 	 
	 
	 	 
	 

	 	 
	Name

	 	Name
	 
	 	 
	Address

	 	Address
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Social Security or other Taxpayer Identification Number, if any
	 	 
	 

	 	 
	
	 	 






B-12









 






SCHEDULE A




[SCHEDULE OF INCREASES OR DECREASES

IN THE PURCHASE CONTRACT]*



     The initial number of Purchase Contracts evidenced by this certificate is _______. The
following increases or decreases in this certificate have been made:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number of Purchase	 	Signature of
	 	 	Amount of increase	 	Amount of decrease	 	Contracts evidenced	 	authorized
	 	 	in number of	 	in number of	 	hereby following	 	signatory of
	 	 	Purchase Contracts	 	Purchase Contracts	 	such decrease or	 	Purchase Contract
	Date	 	evidenced hereby	 	evidenced hereby	 	increase	 	Agent
	 
	 	 
	 	 
	 	 
	 	 







 




			
	* 	 	Include only if a Global Purchase Contract.
	 
	** 	 	Include only if not a Global Purchase Contract.






B-13