Document:

exv4w1

 

Exhibit 4.1

LIQUIDATION TRUST AGREEMENT

This LIQUIDATION TRUST
 AGREEMENT is made and entered into as of the
 23rd day of October, 2001, by and among Hechinger Investment Company of
 Delaware, Inc., a Delaware corporation (“Hechinger”), and
 each of the other Debtors (as such term is defined in the Plan (as hereinafter
 defined)) (such other Debtors, together with Hechinger, being referred to
 herein as the “Debtors”), the official committee of unsecured creditors
 appointed in the Debtors’ Chapter 11 Cases (the “Committee”) and
 Conrad F. Hocking (the “Liquidation Trustee”). Capitalized terms
 used herein and not otherwise defined herein shall have the meanings ascribed
 to them in the Plan (as hereinafter defined).

R E C I T A L S:

WHEREAS, on
 June 11, 1999, the Debtors filed voluntary petitions for
 reorganization under chapter 11 of title 11, United States Code
 (the “Bankruptcy Code”), in the United States Bankruptcy Court
 for the District of Delaware (the “Bankruptcy Court”); and

WHEREAS, on
 June 25, 2001, the Committee filed a consolidated plan of
 liquidation (as the same may be amended or modified from time to
 time, the “Plan”) pursuant to the Bankruptcy Code; and

WHEREAS, by
 order dated October 5, 2001, the Bankruptcy Court confirmed the Plan; and

WHEREAS, under
 the terms of the Plan, all cash and other property of the Debtors as of the
 Plan Effective Date will be transferred to and held by the Liquidation Trust
 created by this Agreement (the “Liquidation Trust”) so that, among
 other things: (i) the Trust Assets (defined below) can be disposed of in
 an orderly and expeditious manner, including prosecution of Litigation Claims; (ii) objections
 to claims can be pursued, and disputed claims can be resolved; and (iii) distributions
 can be made to the beneficiaries of the Liquidation Trust in accordance with the Plan; and

WHEREAS, the Plan
 also provides for the appointment of the Liquidation Trustee to administer the
 Liquidation Trust to and for the benefit of creditors of the Debtors as provided
 in the Plan, and to provide administrative services relating to the implementation of the Plan; and

WHEREAS, the
 Liquidation Trustee has agreed to serve as such upon the terms
 and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in
 accordance with the Plan and in consideration of the
 promises and of the mutual covenants and agreements contained herein, the parties hereto agree
 as follows:

 

DECLARATION OF TRUST

The Debtors hereby
 absolutely assign to the Liquidation Trust, and to its successors
 in trust and its successors and assigns, all right, title and interest of the Debtors in and
 to the Trust Assets (as defined below);

TO HAVE AND TO HOLD unto the
 Liquidation Trust and its successors in trust and its successors and assigns forever;

IN TRUST NEVERTHELESS
 upon the terms and subject to the conditions set forth herein and for
 the benefit of the holders of Allowed Claims, as and to the extent provided in
 the Plan, and for the performance of and compliance with the terms hereof and of the Plan;

PROVIDED,
 HOWEVER, that upon termination of the Liquidation Trust in accordance
 with Article V hereof, this Agreement shall cease, terminate and be of no further
 force and effect; and

IT IS HEREBY
 FURTHER COVENANTED AND DECLARED that the Trust Assets are
 to be held and applied by the Liquidation Trustee upon the further covenants and
 terms and subject to the conditions herein set forth.

I.             NAME; PURPOSE; TRUST
 ASSETS

1.1.    
     Name of Trust. The trust created by this Agreement shall be known as
 the “Hechinger Liquidation Trust” or sometimes herein
 as the “Liquidation Trust”. The Liquidation Trust is authorized
 to retain Otterbourg, Steindler, Houston & Rosen, P.C. and Pepper Hamilton LLP
 as co-counsel and such other professional persons retained by the Committee or by the
 Debtors as have previously been approved by the Bankruptcy Court, or as necessary and
 appropriate, who shall be compensated from the Trust Assets on a monthly basis.

1.2.     
    Purpose. The purpose of the Liquidation Trust is to hold and effectuate
 an orderly disposition of the Trust Assets and to distribute or pay over the
 Trust Assets or proceeds thereof in accordance with this Agreement and
 the Plan, with no objective or authority to engage in any trade or business.

1.3.     
    Transfer of Trust Assets. In accordance with the provisions of the Plan,
 on the Effective Date, the Debtors and their Chapter 11 estates shall be deemed to have
 transferred, assigned and conveyed to the Liquidation Trust any and all assets of the Debtors,
 including but not limited to the Litigation Claims (all such assets, together with the income,
 proceeds, rents, offspring, products and profit therefrom, being the “Trust
 Assets”), to be held by the Liquidation Trustee in trust for the
 holders, from time to time, of Allowed Claims as and to
 the extent provided in the Plan (such holders collectively the “Trust
 Beneficiaries”), on the terms and subject to the conditions set forth
 herein and in the Plan. In addition, and as also provided for in the Plan, the
 claims asserted by HSBC Bank USA on behalf of the holders of Senior Notes
 and Senior Debentures in the Bondholder Action shall also be assigned to the Liquidation Trust
 and be deemed Trust Assets.

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1.4.    
     Acceptance by the Liquidation Trustee. The Liquidation Trustee is
 willing and hereby accepts the appointment to serve as Liquidation Trustee pursuant to this
 Agreement and the Plan and agrees to observe and perform all duties and obligations imposed
 upon the Liquidation Trustee by this Agreement and under the Plan, including, without
 limitation, to accept and hold and administer the Trust Assets and otherwise to carry out the
 purpose of the Liquidation Trust in accordance with the terms and subject to the conditions set
 forth herein. The Liquidation Trustee shall have the fiduciary duties to the beneficiaries of the
 Liquidation Trust in the same manner that members of an official committee of creditors
 appointed pursuant to section 1102 of the Bankruptcy Code have fiduciary duties to the creditor
 constituents represented by such a committee.

1.5.    
     New Committee.

(a)    
      Pursuant to the Plan, prior to the Plan Effective Date, the Committee
 shall appoint up to six members of the Creditors Committee as of the Confirmation Date to remain and
 serve on the Committee after the Effective Date (the “New Committee”). The other members of
 the Committee shall be deemed to have resigned as of the Effective Date. Any member of the
 New Committee may resign upon reasonable notice to the Liquidation Trustee and other
 members of the New Committee and may be removed by the Bankruptcy Court for cause.
 Twenty (20) days prior written notice shall constitute reasonable notice under this section. In the
 event of a vacancy on the New Committee, the remaining members of the New Committee,
 without further order of the Court but upon 7 business days prior notice to the U.S. Trustee, the
 Liquidation Trustee and any party who serves the New Committee with written request for such
 notice, shall select a proposed member who, to the extent reasonably possible, shall be a holder
 of an Allowed General Unsecured Claim that has been classified in Class 4B under the Plan.
 The New Committee is authorized to retain Otterbourg, Steindler, Houston & Rosen, P.C. as
 counsel and such other professional persons as have previously been approved by the
 Bankruptcy Court, including counsel for the Debtors, or as it deems necessary and appropriate,
 who shall be compensated from the Trust Assets on a monthly basis. Members of the New
 Committee shall have fiduciary duties to the beneficiaries of the Liquidation Trust in the same
 manner that members of an official committee of creditors appointed pursuant to section 1102 of
 the Bankruptcy Code have fiduciary duties to the creditor constituents represented by such
 committee.

(b)    
      A majority of members of the New Committee must be present to
 constitute a quorum, and no business of the New Committee may be conducted absent a quorum.
 Meetings may be held in person, telephonically or electronically, as determined by the New
 Committee as appropriate. The New Committee shall elect a chairperson who shall be charged
 with the responsibility of scheduling, arranging for minutes to be kept and overseeing
 administration of all New Committee matters. Any member of the New Committee shall not
 participate in and shall abstain from any discussion of or vote with respect to any New
 Committee matter, claim objection or litigation involving such New Committee member. The
 New Committee shall meet at least quarterly during the first year after the Plan Effective Date,
 and at least semi-annually thereafter, unless the New Committee, in its discretion, elects to meet
 more or less frequently. The New Committee shall adopt the existing Committee By-Laws or
 adopt new By-Laws addressing its conduct.

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(c)     
      The Liquidation Trustee shall report to the New Committee on at least a
 monthly basis, or such other period as subsequently agreed to between the New Committee and
 the Liquidation Trustee, as to the status of all material litigations and claims objections, and all
 other material matters affecting the Liquidation Trust. The Liquidation Trustee shall obtain
 approval of the New Committee prior to taking any action regarding the following matters:

(i)  All
 settlements for which prior procedures approved by the Bankruptcy Court required
 approval by the Committee;

(ii)  All
 distributions to creditors made pursuant to the terms of the Plan;

(iii) Engaging and compensating consultants,
 agents, employees and all professional persons to assist the Liquidation Trustee
 with respect to the Liquidation Trustee’s responsibilities, other than those
 professionals and persons already approved by the Bankruptcy Court to be retained by the
 Debtors; and

(iv) All other material matters and decisions.

For purposes of this Section, the Liquidation
 Trustee’s failure to receive objections from a
 majority of the members of the New Committee within ten (10) days after written notice is
 provided to the New Committee of such proposed action (which notice may be in the form of the
 monthly report submitted to the Committee) shall be deemed approval of the New Committee for
 purposes of this Section.

II.           RIGHTS, POWERS AND DUTIES OF
 LIQUIDATION TRUSTEE

2.1.    
     General. As of the Effective Date, the Liquidation Trustee shall take
 charge of the Trust Assets and, subject to the provisions hereof and the Plan, shall have full right,
 power and discretion to manage the affairs of the Liquidation Trust, subject to Section 1.5.(c.)
 above. Except as otherwise provided herein and in the Plan, the Liquidation Trustee shall have
 the right and power to enter into any covenants or agreements binding the Liquidation Trust and
 in furtherance of the purpose hereof and to execute, acknowledge and deliver any and all
 instruments which are necessary or deemed by the Liquidation Trustee to be consistent with and
 advisable in connection with the performance of his duties hereunder. In addition, subject to
 Section 1.5.(c.) above, the Liquidation Trustee shall have the power and responsibility to do all
 acts contemplated by the Plan to be done by the Liquidation Trustee and all other acts that may
 be necessary or appropriate in connection with the disposition of the Trust Assets and the
 distribution of the proceeds thereof in consultation with the New Committee, as contemplated by
 the Plan, including, without limitation:

(a)         To exercise all
 power and authority that may be or could have been
 exercised, commence all proceedings that may be or could have been commenced
 and take all actions that may be or could have been taken by any officer, director
 or shareholder of the Debtors with like effect as if authorized, exercised and taken
 by unanimous action of such officers, directors and shareholders; including,
 without limitation, amendment of the certificates of incorporation and by-laws of
 the Debtors, merger of any Debtor into another Debtor and the dissolution of any
 Debtor;

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(b)         To maintain
 escrows and other accounts, make Distributions to holders
 of Allowed Claims and take other actions consistent with the Plan and the implementation
 hereof, including the establishment, re-evaluation, adjustment and maintenance of
 appropriate reserves, in the name of the Debtors or the Liquidation Trust, even in the event
 of the dissolution of the Debtors;

(c)         To make decisions in
 consultation with the New Committee, without further Court approval,
 regarding the retention or engagement of professionals, employees and consultants by the
 Liquidation Trust and to pay, from the Wind-down Reserve, the fees and charges incurred
 by the Liquidation Trust on or after the Effective Date for fees of
 professionals, disbursements, expenses or related support services relating to the winding
 down of the Debtors and implementation of the Plan and this Agreement without
 application to the Court;

(d)         To enter into
 any agreement or execute any document required
 by or consistent with the Plan and this Agreement and perform all of the obligations of
 the Debtors or the Liquidation Trustee thereunder;

(e)         To implement
 and/or enforce all provisions of the Plan;

(f)          To invest Cash
 in accordance with section 345 of the Bankruptcy
 Code or as otherwise permitted by a Final Order of the Court and as deemed appropriate by
 the Liquidation Trustee;

(g)          To collect
 and liquidate any accounts receivable or other claims or
 assets of the Debtors or the Estates pursuant to the Plan and this Agreement or not
 otherwise disposed of pursuant to the Plan;

(h)          To prosecute and/or settle
 Litigation Claims and exercise, participate
 in or initiate any proceeding before the Court or any other court of appropriate jurisdiction
 and participate as a party or otherwise in any administrative, arbitrative or
 other nonjudicial proceeding and litigate or settle such Litigation Claims on behalf
 of the Liquidation Trust, and pursue to settlement or judgment such actions;

(i)          To utilize Trust
 Assets to purchase or create and carry all
 appropriate insurance policies and pay all insurance premiums and costs he deems
 necessary or advisable to insure the acts and omissions
 of the Liquidation Trustee, and if appropriate, the Committee;

(j)          To object to
 any Claims (Disputed or otherwise), including, without
 limitation, as discussed in Section 10.1 of the Plan, in consultation
 with the New Committee and to defend, compromise and/or settle any Claims,
 and to seek Court approval if required by existing Order of the Court;

(k)          To pay fees
 incurred pursuant to 28 U.S.C. § 1930(a)(6) and to File with
 the Bankruptcy Court
 and serve on the United States Trustee monthly financial

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reports until
 such time as a final decree is entered closing these Cases or the Cases are converted or
 dismissed, or the Bankruptcy Court orders otherwise;

(1)          To maintain
 appropriate books and records;

(m)         To cause, on behalf
 of the Liquidation Trust, the Debtors and
 the Estates, all necessary tax returns and all other appropriate or necessary documents related
 to municipal, State, Federal or other tax law to be prepared or filed timely;

(n)          To provide the New
 Committee, as soon as reasonably
 practicable after the end of each month, with a monthly report setting forth (i) the receipt and
 disposition by the Liquidation Trustee of property of the Estates or the Debtors during the prior
 month, including the disposition of funds in the Liquidation Trust, the Wind-down Reserve and
 Distribution Fund; (ii) all Disputed Claims resolved by the Liquidation Trustee during such period
 and all remaining Disputed Claims; (iii) all known material non-Cash assets of the Debtors
 remaining to be disposed of; (iv) an itemization of all expenses the Liquidation Trustee
 anticipates will become due and payable within the subsequent three months; and (v) the Liquidation
 Trustee’s forecast of cash receipts and disbursements for the subsequent three months;

(o)          To abandon in any
 commercially reasonable manner, including
 abandonment or donation to a charitable organization of the Liquidation Trustee’s choice, any
 assets that the Liquidation Trustee concludes, in consultation with the New Committee, are of no
 benefit to creditors of the Estates or, at the conclusion of the Chapter 11 Cases, are determined
 to be too impractical to distribute;

(p)          To administer
 the winding-up of the affairs of the Debtors including, but
 not limited to, causing the dissolution of each Debtor and closing the Chapter 11
 Cases; and

(q)          To do all other
 acts or things not inconsistent with the provisions of the
 Plan and this Agreement that the Liquidation Trustee deems reasonably necessary
 or desirable with respect to implementing the Plan and this Agreement.

Other than the obligations of the Liquidation
 Trustee enumerated or referred
 to herein or under the Plan, the Liquidation Trustee shall have no duties or obligations of any
 kind or nature respecting the implementation of the Plan or this Agreement. The Liquidation Trust
 and the Liquidation Trustee, as applicable, shall have the same authority as the Debtors pursuant
 to those certain orders (a) pursuant to section 105(a) of the Bankruptcy Code and Bankruptcy Rule
 9019(b) authorizing the establishment of procedures to settle certain prepetition claims against
 the Debtors’ estates, dated July 12, 2000 and (b) authorizing and establishing procedures for
 certain future preference claim settlements in these cases, dated May 15, 2001.

2.2.         Costs. Upon the Effective Date, the
 Liquidation Trustee shall
 reserve from the Trust Assets an amount necessary in his discretion to be held in a Liquidation
 Trust wind-down fund (hereunder the “Wind-down Fund”). Amounts held in the Wind-down Fund shall be
 used to pay amounts payable to the Liquidation Trustee pursuant to Section 2.7 hereof

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and the fees and expenses
 of any counsel, consultant or other advisor or
 agent retained by the Liquidation Trustee pursuant to this Agreement as well as other expenses of
 the liquidation process. In the event that amounts held in the Wind-down Fund, together with
 proceeds of any disposition of Trust Assets available for such purpose, are insufficient to make
 payments as provided in this Section 2.2, the Liquidation Trustee shall, unless funds sufficient
 for such purpose have otherwise been made available from any other sources including other accounts
 held by the Liquidation Trustee, have no obligation to make such payments.

2.3.         Distributions. Pursuant to
 the Plan, the Liquidation Trustee shall
 record and account for all proceeds received upon any disposition of Trust Assets (after deduction
 therefrom of amounts payable or reasonably estimated to be payable as provided in Section 2.2 or
 2.7 hereof), for distribution in accordance with the provisions of the Plan.

2.4.         Limitations on Investment
 Powers of Liquidation Trustee. Funds in
 the Liquidation Trust shall be invested consistent with the liquidity needs of the Liquidation
 Trust in accordance with section 345 of the Bankruptcy Code or as otherwise provided in an order of
 the Bankruptcy Court.

2.5.         Liability of
 Liquidation Trustee.

(a)          Standard of Care. Except
 in the case of willful misconduct, gross
 negligence or fraud, the Liquidation Trustee shall not be liable for any loss or damage by reason
 of any action taken or omitted by it pursuant to the discretion, powers and authority conferred, or
 in good faith believed by the Liquidation Trustee to be conferred, on the Liquidation Trustee by
 this Agreement or the Plan.

(b)          No Liability for
 Acts of Predecessors. No successor Liquidation Trustee
 shall be in any way responsible for the acts or omissions of any Liquidation Trustee in office
 prior to the date on which such successor becomes the Liquidation Trustee, unless a successor
 Liquidation Trustee expressly assumes such responsibility.

(c)          No Implied
 Obligations. Subject to Section 1.4 hereof, the Liquidation
 Trustee shall not be liable except for the performance of such duties and obligations as are
 specifically set forth herein, and no implied covenants or obligations shall be read into this
 Agreement against the Liquidation Trustee.

(d)          No Liability
 for Good Faith Error of Judgment. The Liquidation Trustee
 shall not be liable for any error of judgment made in good faith, unless it shall be proved that the
 Liquidation Trustee was grossly negligent in ascertaining the pertinent facts.

(e)          Reliance by Liquidation
 Trustee on Documents or Advice of Counsel or
 Other Persons. Except as otherwise provided herein, the Liquidation Trustee may rely and shall
 be protected in acting upon any resolution, certificate, statement, instrument, opinion, report,
 notice, request, consent, order or other paper or document believed by the Liquidation Trustee to
 be genuine and to have been signed or presented by the proper party or parties. The Liquidation
 Trustee also may engage and consult with legal counsel for the Liquidation Trust and other
 agents and advisors and shall not be liable for any action taken or suffered by the Liquidation
 Trustee in reliance upon the advice of such counsel, agents or advisors. The Liquidation Trustee

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shall have the right at any
 time to seek instructions from the
 Bankruptcy Court concerning the administration or disposition of the Trust Assets.

(f)          No Personal Obligation
 for Trust Liabilities. Persons dealing with the Liquidation Trustee, or seeking to assert claims
 against the Debtors, shall look only to the Trust Assets to satisfy any liability incurred by the
 Liquidation Trustee to any such Person in carrying out the terms of this Agreement, and the
 Liquidation Trustee shall have no personal, individual obligation to satisfy any such liability.

2.6.         Selection of Agents. Subject
 to Bankruptcy Court approval of the
 retention of bankruptcy professionals (to the extent that the Debtors or the Committee did not
 previously obtain approval by the Bankruptcy Court), the Liquidation Trustee may employ employees
 of the Debtors or other Persons, and also may employ or retain brokers, banks, custodians,
 investment and financial advisors, attorneys (including existing counsel to the Committee or the
 Debtors), accountants (including existing accountants for the Committee or the Debtors) and other
 advisors and agents. The Liquidation Trustee may pay the salaries, fees and expenses of such
 Persons from amounts in the Wind-down Fund, or, if such amounts are insufficient therefor, out of
 the Trust Assets or proceeds thereof. In addition, the parties acknowledge that Trust Assets may
 be advanced to satisfy such salaries, fees and expenses. The Liquidation Trustee shall not be
 liable for any loss to the Liquidation Trust or any Person interested therein by reason of any
 mistake or default of any such Person referred to in this Section 2.6 selected by the Liquidation
 Trustee in good faith and without gross negligence.

2.7.         Liquidation
 Trustee’s Compensation, Indemnification and Reimbursement.

(a)          As compensation for
 services in the administration of this
 Liquidation Trust, the Liquidation Trustee shall be compensated as specified on Schedule A hereto.
 The Liquidation Trustee shall also be reimbursed for all documented actual, reasonable and
 necessary out-of-pocket expenses incurred in the performance of its duties hereunder.

(b)          In addition, the
 Liquidation Trustee shall be indemnified by and
 receive reimbursement from the Trust Assets against and from any and all loss, liability, expense
 (including attorneys’ fees) or damage which the Liquidation Trustee incurs or sustains, in good
 faith and without gross negligence, acting as Liquidation Trustee under this Agreement.

(c)          It is anticipated and intended
 that the Liquidation Trustee devote
 his attention to the prompt and orderly administration of the Liquidation Trust and Plan.
 Accordingly, for a period of one year after the Plan Effective Date or as otherwise mutually agreed
 between the Liquidation Trustee and Committee as described herein (the “Initial Period”), it is
 intended that the Liquidation Trustee be retained full-time under this Agreement. After such
 Initial Period, it is anticipated and intended that the Liquidation Trustee may be able to fulfill
 his/her obligations under this Agreement and the Plan by devoting a portion of each work-day or
 work-week to performing the services set forth herein. Thus, subject to re-evaluation at such
 time, the Liquidation Trustee would be retained only on a part-time basis on terms to be agreed
 upon between the Liquidation Trustee and New Committee. The Liquidation Trustee may accept
 employment elsewhere during such period (other than the said Initial Period) in which the

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Liquidation Trustee is performing services
 pursuant to this Agreement, provided such additional employment does not result
 in a conflict of interest with his obligations hereunder. Either the New Committee
 or the Liquidation Trustee may provide twenty days prior written notice to the other
 party notifying such party that the New Committee or Liquidation Trustee as applicable,
 believes that the Liquidation Trustee’s full-time employment hereunder is no
 longer required, whereupon the parties agree to in good faith negotiate satisfactory
 part time employment terms. If within such twenty-day notice period the New Committee
 and Liquidation Trustee cannot agree upon mutually agreed upon part time employment
 terms, the New Committee or Liquidation Trustee may opt to have the Liquidation
 Trustee’s employment deemed terminated as of thirty days after the expiration
 of the twenty-day notice period, or when the appointment of a successor Liquidation
 Trustee becomes effective.

(d)          The Liquidation
 Trustee is hereby authorized to obtain all reasonable necessary insurance coverage
 for himself, his agents, representatives, employees or independent contractors,
 including, without limitation, coverage with respect to the liabilities, duties
 and obligations of the Liquidation Trustee and his agents, representatives, employees
 or independent contractors under the Plan and this Agreement.

(e)          It is
 agreed that as of the Effective Date of the Plan, Conrad F. Hocking shall have irrevocably
 earned his severance pursuant to that certain Retention Program approved by the
 Bankruptcy Court by order dated September 10, 1999 (the “Severance
 Payment”). Mr. Hocking has agreed to defer receipt of such payment until the earliest
 of (i) his resignation as Liquidation Trustee, (ii) termination of his appointment
 or removal as Liquidation Trustee, or (iii) reduction of his duties as Liquidation
 Trustee to a part-time basis of less than forty hours per week.

2.8.         Tax Treatment
 and Obligation to File Returns.

(a)          It is
 intended that the Liquidation Trust qualify as a grantor trust for federal income
 tax purposes, all of the interests which are owned by the Trust Beneficiaries, such
 that all items of income, gain, loss, deduction and credit will be included in the
 income of the Trust Beneficiaries as if such items had been recognized directly
 by the Trust Beneficiaries in the proportions in which they own beneficial interests
 in the Liquidation Trust.

(b)          The Liquidation
 Trustee shall comply with all tax reporting requirements and, in connection therewith,
 the Liquidation Trustee may require Trust Beneficiaries to provide certain tax information
 as a condition to receipt of distributions, including, without limitation, filing
 returns for the Liquidation Trust as a grantor trust pursuant to Treasury Regulation
 s1.671-4(a).

2.9.          Conflicting
 Claims. In the event that the Liquidation Trustee becomes aware of any disagreement
 or conflicting claims with respect to the Trust Assets, or if the Liquidation Trustee
 in good faith is in doubt as to any action that should be taken under this Agreement,
 the Liquidation Trustee shall have the absolute right to do any or all of the following:

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(i)            to the
 extent of such disagreement or conflict, or to the extent deemed by the Liquidation
 Trustee necessary or appropriate in light of such disagreement or conflict, withhold
 or stop all further performance under this Agreement with respect to the matter
 of such dispute (except, in all cases, the safekeeping of the Trust Assets) until
 the Liquidation Trustee is satisfied that such disagreement or conflicting claims
 have been fully and finally resolved; or

(ii)           file
 a suit in interpleader or in the nature of interpleader in the Bankruptcy Court
 and obtain an order requiring all Persons involved to litigate in the Bankruptcy
 Court their respective claims arising out of or in connection with this Agreement;
 or

(iii)          file
 any other appropriate motion for relief in the Bankruptcy Court.

2.10.        Records
 of Liquidation Trustee. The Liquidation Trustee shall maintain accurate records
 of receipts and disbursements and other activity of the Liquidation Trust, and duly
 authorized representatives of the New Committee shall have reasonable access to
 the records of the Liquidation Trust.

III.           RIGHTS,
 POWERS AND DUTIES OF BENEFICIARIES.

3.1.          Interests
 of Beneficiaries. The Trust Beneficiaries shall have beneficial interests in the
 Trust Assets as provided in the Plan. The Trust Beneficiaries’ proportionate
 interests in the Trust Assets as thus determined shall not be transferable except
 upon notice acceptable to the New Committee or Liquidation Trustee or pursuant to
 the laws of descent and distribution or otherwise by operation of law.

3.2.          Interests
 Beneficial Only. The ownership of a beneficial interest hereunder shall not entitle
 any Trust Beneficiary to any title in or to the Trust Assets as such (which title
 shall be vested in the Liquidation Trustee) or to any right to call for a partition
 or division of Trust Assets or to require an accounting.

IV.           AMENDMENT
 OF TRUST OR CHANGE IN TRUSTEE.

4.1.          Resignation
 of the Liquidation Trustee. The Liquidation Trustee may resign by an instrument
 in writing signed by the Liquidation Trustee and filed with the Bankruptcy Court
 with notice to the New Committee, provided that the Liquidation Trustee shall continue
 to serve as such after his resignation until the time when appointment of his successor
 shall become effective in accordance with Section 4.3 hereof.

4.2.          Removal
 of the Liquidation Trustee. Twenty days after a request of the majority of the
 New Committee, or immediately upon cause, the Liquidation Trustee shall be removed.
 Upon removal of the Liquidation Trustee by the New Committee in accordance with
 this Section 4.2 other than for cause, the Liquidation Trustee shall be entitled
 to a lump sum payment equal to $100,000 which payment shall be made from the Wind-down
 Fund within 10 days of the removal of the Liquidation Trustee. For purposes of
 this Agreement, “cause” shall mean (a) the willful and continued refusal
 by the Liquidation Trustee to perform his duties as set forth herein (other than
 due to physical illness or disability); or (b) gross negligence, gross misconduct,
 fraud, embezzlement or theft.

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4.3.          Appointment
 of Successor Liquidation Trustee. In the event of the death, resignation, termination,
 incompetence or removal of the Liquidation Trustee, the New Committee may appoint
 a successor Liquidation Trustee and shall obtain Bankruptcy Court approval of such
 appointment. Every successor Liquidation Trustee appointed hereunder shall execute,
 acknowledge and deliver to the Bankruptcy Court and to the predecessor Liquidation
 Trustee (if practicable) an instrument accepting such appointment and the terms
 and provisions of this Agreement, and thereupon such successor Liquidation Trustee,
 without any further act, deed or conveyance, shall become vested with all the rights,
 powers and duties of the retiring Liquidation Trustee.

4.4.          Continuity.
 Unless otherwise ordered by the Bankruptcy Court, the death, resignation, incompetence
 or removal of the Liquidation Trustee shall not operate to terminate or to remove
 any existing agency created pursuant to the terms of this Agreement or invalidate
 any action theretofore taken by the Liquidation Trustee. In the event of the resignation
 or removal of the Liquidation Trustee, the Liquidation Trustee shall promptly execute
 and deliver such documents, instruments and other writings as may be reasonably
 requested from time to time by the Bankruptcy Court, the New Committee or the successor
 Liquidation Trustee.

4.5.          Amendment
 of Agreement. This Agreement may be amended, modified, terminated, revoked or altered
 only upon (i) order of the Bankruptcy Court and (ii) agreement of the Liquidation
 Trustee and the New Committee.

V.            TERMINATION
 OF TRUST

5.1.          The Liquidation
 Trust shall terminate upon the earliest to occur of (a) the fulfillment of the Liquidation
 Trust’s purpose by the liquidation of all of the Trust Assets and the distribution
 of the proceeds of the liquidation thereof in accordance with the Plan; or (b) four
 (4) years after the Effective date (the “Termination Date”). Reasonable
 efforts shall be made to see to it that the Termination Date shall be no later than
 the time reasonably necessary to accomplish the Liquidation Trust’s purpose
 of liquidating assets and discharging liabilities. Notwithstanding the foregoing,
 however, if warranted by the facts and circumstances and subject to the approval
 of the Bankruptcy Court, upon proper notice to interested parties who have requested
 such notice, upon a finding that the extension is necessary to the purpose of the
 Liquidation Trust, the term of the Liquidation Trust may be extended for a finite
 term based on its particular facts and circumstances. Each extension must be approved
 by the Bankruptcy Court within six (6) months of the beginning of the extended term.

VI.           RETENTION
 OF JURISDICTION

6.1.          The Bankruptcy
 Court shall have exclusive jurisdiction over the Liquidation
 Trust, the Liquidation Trustee and the Trust Assets as provided in the Plan, including
 the determination of all controversies and disputes arising under or in connection
 with the Liquidation Trust or this Agreement.

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VII.          MISCELLANEOUS

7.1.          Applicable
 Law. The Liquidation Trust created by this Agreement shall
 be construed in accordance with and governed by the laws of the State of Delaware,
 subject to applicable provisions of the Bankruptcy Code.

7.2.          Waiver.
 No failure or delay of any party to exercise any right or remedy pursuant to this
 Agreement shall affect such right or remedy or constitute a waiver by such party
 of any right or remedy pursuant to this Agreement.

7.3.          Relationship
 Created. Nothing contained herein shall be construed to constitute any relationship
 created by this Agreement as an association, partnership or joint venture of any
 kind.

7.4.          Interpretation.
 Section and paragraph headings contained in this Agreement are for convenience
 of reference only and shall not affect the meaning or interpretation of any provision
 hereof.

7.5.          Savings
 Clause. If any clause or provision of this Agreement shall for any reason be held
 invalid or unenforceable by any court or governmental agency of competent jurisdiction,
 such invalidity or unenforceability shall not affect any other clause or provision
 hereof, but this Agreement shall be construed, to the extent consistent with the
 purpose hereof, as if such invalid or unenforceable provision had never been contained
 herein.

7.6.          Entire
 Agreement. This Agreement and the Plan constitute the entire agreement by and among
 the parties and there are no representations, warranties, covenants or obligations
 with respect to the subject matter hereof except as set forth herein or therein.
 This Agreement together with the Plan supersedes all prior and contemporaneous
 agreements, understandings, negotiations and discussions, written or oral, of the
 parties hereto, relating to such subject matter. Not withstanding the foregoing,
 this Agreement shall have no effect on that certain Retention Program approved by
 the Bankruptcy Court pursuant to an order dated September 10, 1999. Except as otherwise
 authorized by the Court or specifically provided in this Agreement or in the Plan,
 nothing in this Agreement is intended or shall be construed to confer upon or to
 give any Person other than the parties hereto, the Committee, and the Trust Beneficiaries
 any rights or remedies under or by reason of this Agreement.

7.7.          Counterparts.
 This Agreement may be executed in any number of counterparts, each of which when
 so executed and delivered shall be an original document, but all of which counterparts
 shall together constitute one and the same instrument.

7.8.          Notices.
 (a) All notices, requests or other communications required or permitted to be
 made in accordance with this Agreement shall be in writing and shall be mailed by
 first class mail or delivered by courier service or such other means that shall
 be reasonable and appropriate under the circumstances:

(i)            if to the
 Liquidation Trust or Liquidation Trustee:

-12-

 

Conrad F. Hocking

Hechinger

1801 McCormick Drive

Largo, Maryland 20774

with a copy
 to:

Otterbourg, Steinder, Houston & Rosen, P.C.

230 Park Avenue, 30th Floor

New York, New York 10169

Attn: Scott L. Hazan, Esq.

and

Pepper Hamilton LLP

1201 Market Street

Suite 1600

Wilmington DE 19801

Attn: David B. Stratton, Esq.

and

Pepper Hamilton LLP

100 Renaissance Center

Suite 3600

Detroit, MI 48243

Attn: Kay
 Standridge Kress, Esq.

(ii)            if to
 the Debtors:

Hechinger

1801 McCormick Drive

 Largo, Maryland 20774

 Attn: Conrad F. Hocking

with a copy
 to:

Willkie Farr & Gallagher

 787 Seventh Avenue

 New York, New York 10019

 Attn: Tonny K. Ho, Esq.

(iii)           if to the
 New Committee:

-13-

 

Otterbourg, Steinder, Houston & Rosen, P.C.

230 Park Avenue, 30th Floor

New York, New York 10169

Attn: Scott L. Hazan, Esq.

and

Pepper Hamilton LLP

1201 Market Street

Suite 1600

Wilmington DE 19801

Attn: David B. Stratton, Esq.

and

Pepper Hamilton LLP

100 Renaissance Center

Suite 3600

Detroit, MI 48243

Attn: Kay Standridge Kress, Esq.

(ii)           If to
 any Trust Beneficiary, to such address as such Trust Beneficiary shall have furnished
 to the Debtors in writing prior to the Effective Date.

(b)           Any Person
 may change the address at which it is to receive notices under this Agreement by
 furnishing written notice to the Liquidation Trustee.

7.9.          Effective
 Date. This Agreement shall become effective as of the Effective Date.

7.10.        Tax
 Identification Numbers. The Liquidation Trustee may require any Trust Beneficiary
 to furnish to the Liquidation Trustee its employer or taxpayer identification number
 as assigned by the Internal Revenue Service, and the Liquidation Trustee may condition
 any distribution to any Trust Beneficiary upon such receipt of such identification
 number and any other information required for the Liquidation Trustee to comply
 with Internal Revenue Service requirements.

7.11.        Successors
 and Assigns. This Agreement shall be binding upon each of the parties hereto and
 their respective successors and assigns and shall inure to the benefit of the parties,
 Committee, the Trust Beneficiaries and, subject to the provisions hereof, their
 respective successors and assigns.

-14-

 

7.12.        Conflict
 with the Plan. In the event of any conflict between the terms of this Agreement
 and the Plan, the terms of the Plan shall govern.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be

executed as of the day and year first above written.

	 
	
HECHINGER INVESTMENT COMPANY OF
DELAWARE, INC., ET AL.

	 
	 
	
By: /s/ Conrad F. Hocking

	 
	

	 
	 
	
/s/ Conrad F. Hocking

	 
	

	 
	
CONRAD F. HOCKING, as Liquidation
Trustee

	 
	 
	
THE OFFICIAL COMMITTEE OF

	 
	
UNSECURED CREDTORS OF HECHINGER
INVESTMENT CO. OF DELAWARE, INC.,
ET AL.

	 
	 

	 
	
By: /s/ Brett H. Miller.

	 
	

	 
	
BRETT H. MILLER

Otterbourg, Steindler, Houston & Rosen, P.C.

Counsel to the Official Committee of

Unsecured Creditors

-15-

 

SCHEDULE A

TERMS OF COMPENSATION
 AND REIMBURSEMENT OF EXPENSES OF THE
LIQUIDATION TRUSTEE

1.          COMPENSATION

(a)          Beginning
 at the Effective Date (as defined in the Plan), the Liquidation Trustee shall remain
 employed full-time and be compensated at his current salary, until the occurrence
 of (b) below.

(b)          After
 determination by the New Committee or the Liquidation Trustee that the Liquidation
 Trustee is required solely on a part-time basis, in accordance with the Liquidation
 Trust Agreement, the Liquidation Trustee shall be employed part-time and be compensated
 at the rate of $190.00 per hour.

2.          COMPUTATION
 OF HOURS; RECORDKEEPING

(a)          For the
 purpose of calculating the days and hours in respect of which the Liquidation Trustee
 may receive compensation under Section 1 above, travel times shall be included in
 the number of hours expended only if such travel is for the purpose of conducting
 Liquidation Trustee activities. Travel by the Liquidation Trustee for personal
 reasons, including travel to and from any residence of the Liquidation Trustee,
 shall not be included in the number of hours expended.

(b)          The Liquidation
 Trustee shall maintain a record of his time expended in his capacity as Liquidation
 Trustee, which shall include a brief description for such activities. The record
 shall be available for inspection and copying by the New Committee. Beginning with
 the first full calendar month ending after the Effective Date, the Liquidation Trustee
 shall report to the New Committee as to the amount of time so expended during the
 month and each month thereafter.

3.          REIMBURSEMENT OF EXPENSES

The Liquidation Trustee shall be entitled
 to reimbursement for documented actual and reasonable expenses incurred in performing
 his duties as the Liquidation Trustee, and shall submit a report of said expenses
 with each report under Section 2 above.<PAGE>
                                                                     EXHIBIT 4.2

                               CENTEX CORPORATION

                                     Issuer

                                       and

                               JPMORGAN CHASE BANK

                       (formerly The Chase Manhattan Bank)

                                     Trustee

                           INDENTURE SUPPLEMENT NO. 12

                          Dated as of January 28, 2003

                                       to

                                    INDENTURE

                           Dated as of October 1, 1998

                    4.750% Senior Notes due January 15, 2008

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
ARTICLE ONE  DEFINITIONS..........................................................................................1

ARTICLE TWO  TERMS AND ISSUANCE OF THE NOTES......................................................................3
         Section 2.01.     Issuance and Designation...............................................................3
         Section 2.02.     Form and Other Terms of Notes; Incorporation of Terms..................................3
         Section 2.03.     Place and Method of Payment............................................................3

ARTICLE THREE  ADDITIONAL COVENANTS...............................................................................4
         Section 3.01.     Limitation on Liens....................................................................4
         Section 3.02.     Limitation on Sale and Lease-Back Transactions.........................................6

ARTICLE FOUR  DEFEASANCE..........................................................................................6
         Section 4.01.     Option to Effect Legal Defeasance or Covenant Defeasance...............................6
         Section 4.02.     Legal Defeasance.......................................................................6
         Section 4.03.     Covenant Defeasance....................................................................7
         Section 4.04.     Conditions to Covenant Defeasance......................................................7

ARTICLE FIVE  MISCELLANEOUS.......................................................................................8
         Section 5.01.     Ratification of Indenture..............................................................8
         Section 5.02.     Redemption.............................................................................8
         Section 5.03.     Conflict with Trust Indenture Act......................................................8
         Section 5.04.     Effect of Headings.....................................................................8
         Section 5.05.     Counterparts...........................................................................8
         Section 5.06.     Severability...........................................................................8
         Section 5.07.     Benefits of Indenture Supplement.......................................................8
         Section 5.08.     Acceptance of Trusts...................................................................9
         Section 5.09.     Governing Law..........................................................................9

EXHIBIT A         -        Form of Note
</Table>

                                        i
<PAGE>

                  INDENTURE SUPPLEMENT NO. 12 ("Indenture Supplement"), dated as
of January 28, 2003, between CENTEX CORPORATION, a Nevada corporation (together
with its successors and assigns as provided in the Indenture referred to below,
the "Company"), and JPMORGAN CHASE BANK, a New York banking corporation
(formerly, The Chase Manhattan Bank, successor to Chase Bank of Texas, National
Association) (together with its successors in trust thereunder as provided in
the Indenture referred to below, the "Trustee"), as trustee under an Indenture
dated as of October 1, 1998 (the "Indenture").

                              PRELIMINARY STATEMENT

                  Section 2.02 of the Indenture provides, among other things,
that the Company may, when authorized by its Board of Directors, and the Trustee
may at any time and from time to time, enter into a series supplement to the
Indenture for the purpose of authorizing one or more Series of Senior Debt
Securities and to specify certain terms of each such Series of Senior Debt
Securities. The Board of Directors of the Company has duly authorized the
creation of a Series of Senior Debt Securities to be known as the Company's
4.750% Senior Notes due 2008 (the "Notes"), and the Company and the Trustee are
executing and delivering this Indenture Supplement in order to provide for the
issuance of the Notes.

                                   ARTICLE ONE

                                   Definitions

                  Except to the extent such terms are otherwise defined in this
Indenture Supplement or the context clearly requires otherwise, all terms used
in this Indenture Supplement which are defined in the Indenture or the form of
Note attached hereto as Exhibit A, either directly or by reference therein,
shall have the meanings assigned to them therein.

                  As used in this Indenture Supplement, the following terms
shall have the following meanings:

CONSOLIDATED NET TANGIBLE ASSETS:

                  The term "Consolidated Net Tangible Assets" shall mean the
aggregate amount of assets included on the most recent consolidated balance
sheet of the Company and its subsidiaries, less applicable reserves and other
properly deductible items and after deducting therefrom (a) all current
liabilities and (b) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense, and other like intangibles, all in accordance with
generally accepted accounting principles consistently applied.

DEPOSITARY:

                  The term "Depositary" shall mean, unless otherwise specified
by the Company, The Depository Trust Company, New York, New York, or any
successor thereto registered as a Clearing Agency under the Securities Exchange
Act of 1934, as amended, or any successor statute or regulation.

<PAGE>

FUNDED INDEBTEDNESS:

                  The term "Funded Indebtedness" shall mean notes, bonds,
debentures or other similar evidences of indebtedness for money borrowed which
by their terms mature at or are extendible or renewable at the option of the
obligor to a date more than 12 months after the date of the creation of such
debt.

GLOBAL SECURITY:

                  The term "Global Security" shall mean a single Note that is
issued to evidence Notes having identical terms and provisions, which is
delivered to the Depositary or pursuant to instructions of the Depositary and
which shall be registered in the name of the Depositary or its nominee.

INTEREST PAYMENT DATE:

                  The term "Interest Payment Date" means the Stated Maturity of
an installment of interest on the Notes.

MATURITY DATE:

                  The term "Maturity Date," when used with respect to any Note,
shall mean the date on which the principal of such Note becomes due and payable
in accordance with its terms and the terms of this Indenture as therein or
herein provided, whether at Stated Maturity, upon declaration of acceleration,
call for redemption or otherwise.

NOTEHOLDER; HOLDER:

                  The terms "Noteholder" or "Holder" shall mean any Person in
whose name at the time a particular Note is registered in the Senior Debt
Security Register kept for that purpose in accordance with the terms hereof.

REGULAR RECORD DATE:

                  The term "Regular Record Date" for the interest payable on any
Interest Payment Date shall mean the day which is fifteen calendar days
immediately prior to such Interest Payment Date, whether or not such day is a
business day.

REDEMPTION DATE:

                  The term "Redemption Date" for a Note shall mean the date
fixed for the redemption of such Note in accordance with the provisions of this
Indenture Supplement.

                                       2
<PAGE>

SPECIAL RECORD DATE:

                  The term "Special Record Date" for the payment of any
defaulted interest means a date which is not less than ten and not more than
fifteen calendar days immediately preceding the Interest Payment Date of
defaulted interest on such Note established by notice given by first class mail
by or on behalf of the Company to the Holder of such Note not less than fifteen
calendar days prior to such Special Record Date.

STATED MATURITY:

                  The term "Stated Maturity" means, when used with respect to
any Note or any installment of interest thereon (including defaulted interest),
the date specified in such Note as the fixed date upon which the principal of
such Note or such installment of interest is due and payable.

                                   ARTICLE TWO

                         Terms and Issuance of the Notes

                  Section 2.01. Issuance and Designation. A Series of Senior
Debt Securities which shall be designated as the Company's "4.750% Senior Notes
due 2008" shall be executed, authenticated and delivered in accordance with the
provisions of, and shall in all respects be subject to, the terms, conditions
and covenants of, the Indenture and this Indenture Supplement (including the
form of Note set forth in Exhibit A). The aggregate principal amount of the
Notes which may be authenticated and delivered under this Indenture Supplement
shall not, except as permitted by the provisions of the Indenture, exceed
$300,000,000, provided that the Company may, without the consent of the Holders
of the Notes, reopen this Series and issue additional Notes under the Indenture
and this Indenture Supplement in addition to the $300,000,000 of Notes
authorized as of the date hereof.

                  Section 2.02. Form and Other Terms of Notes; Incorporation of
Terms. The Notes shall be substantially in the form attached hereto as Exhibit
A. The terms of such Notes are herein incorporated by reference and are part of
this Indenture Supplement.

                  Section 2.03. Place and Method of Payment. The place of
payment in respect of the Notes will be at the principal office or agency of the
Company in Dallas, Texas or at the office or place of business of the Trustee or
its successor in trust under the Indenture, which, at the date hereof, is
located at Chase Global Trust, 450 W. 33rd Street, 15th Floor, New York, New
York 10001. Payments in respect of principal or premium, if any, on Notes will
be made only against surrender of such Notes at such office. Payments of
interest on each Interest Payment Date with respect to each Note will be made to
the Person in whose name such Note is registered at the close of business on the
Regular Record Date immediately preceding such Interest Payment Date by U.S.
dollar check drawn on a bank in the City of New York or, for Holders of at least
$1,000,000 of Notes, by wire transfer to a dollar account maintained by the
payee with a bank in the United States; provided that a written request from
such Holder to such effect

                                       3
<PAGE>

designating such account is received by the Trustee or the Paying Agent no later
than 30 calendar days preceding such Interest Payment Date. Unless such
designation is revoked, any such designation made by such Holder with respect to
such Note payable to such Holder will remain in effect with respect to any
further interest payments with respect to such Note payable to such Holder. The
Company will pay any administrative costs imposed by banks in connection with
making interest payments by wire transfer.

                  So long as the Depositary continues to make its "Same-Day
Funds Settlement System" available to the Company, payments due on Notes
represented by a Global Security registered in the name of the Depositary or its
nominee will be made in immediately available funds to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Notes. The Company expects that the Depositary or its nominee,
upon receipt of any payment, will credit immediately participants' accounts with
payments in same-day funds in amounts proportionate to their respective
beneficial interests in such payments, as shown on the records of the Depositary
or its nominee. The Company also expects that payments by participants and
indirect participants to owners of beneficial interests in such Global Security
held through such Persons will be governed by standing instructions and
customary practices, as is now the case with securities registered in the name
of nominees for such customers, and will be the responsibility of such
participants and indirect participants.

                                  ARTICLE THREE

                              Additional Covenants

                  Section 3.01. Limitation on Liens. The following provisions
shall apply to the Notes:

                  (a) The Company will not itself, and will not permit any of
         its subsidiaries (other than Centex Financial Services, Inc. and its
         subsidiaries) to, issue, assume or guarantee any indebtedness for
         borrowed money ("Indebtedness") if such borrowed money is secured by a
         mortgage, pledge, security interest, lien or other encumbrance (any
         such mortgage, pledge, security interest, lien or other encumbrance
         being hereinafter in this Section 3.01 referred to as a "Lien") on or
         with respect to any of the properties or assets of the Company or any
         such subsidiary or on any shares of capital stock or other equity
         interests of any subsidiary that owns properties or assets (other than
         Centex Financial Services, Inc. and its subsidiaries), whether, in each
         case, owned at the date of this Indenture Supplement or thereafter
         acquired, unless the Company makes effective provision whereby the
         Notes are secured by such Lien equally and ratably with any and all
         other borrowed money thereby secured; provided, however, that the
         foregoing restrictions shall not be applicable to:

                           (i) any Lien existing on any of the Company's
                  properties or assets or shares of capital stock or other
                  equity interests at the date of this Indenture Supplement;

                                       4
<PAGE>

                           (ii) any Lien created by a subsidiary of the Company
                  in favor of the Company or any wholly-owned subsidiary;

                           (iii) any Lien on any property or asset of any
                  corporation or other entity (or on any accession or
                  improvement to such asset or any proceeds thereof) existing at
                  the time such corporation or other entity becomes a subsidiary
                  of the Company or is merged or consolidated with or into the
                  Company or any of its subsidiaries;

                           (iv) any Lien on any property or asset existing at
                  the time of acquisition thereof (or on any accession or
                  improvement to such property or asset or any proceeds thereof)
                  by the Company or any of its subsidiaries;

                           (v) any Lien on any property or asset (or on any
                  accession or improvement to such property or asset or any
                  proceeds thereof) securing Indebtedness incurred or assumed
                  for the purpose of financing all or any part of the cost of
                  acquiring such property or asset or the making of any
                  improvement thereof; provided that such Lien attaches to such
                  property or asset concurrently with or within 180 days after
                  the acquisition thereof or the making of such improvement;

                           (vi) any Lien incurred in connection with pollution
                  control, industrial revenue or any similar financing;

                           (vii) any Lien arising out of the refinancing,
                  extension, renewal or replacement of any of the Liens
                  permitted by any of clauses (i) through (vi) above; provided
                  that the principal amount of the Indebtedness secured by the
                  Lien being refinanced, extended, reviewed or replaced is not
                  increased and is not secured by any additional properties or
                  assets; and

                           (viii) any Lien imposed by law.

                  (b) Notwithstanding the provisions of subsection (a) of this
         Section 3.01, the Company or any of its subsidiaries may issue, assume
         or guarantee Indebtedness secured by a Lien which would otherwise be
         subject to the foregoing restrictions in an aggregate amount which,
         together with all other such secured borrowings of the Company and its
         subsidiaries and the Attributable Debt (as defined below) in respect of
         Sale and Lease-Back Transactions (as defined in Section 3.02) existing
         at such time (other than Sale and Lease-Back Transactions not subject
         to the limitation contained in Section 3.02), does not at the time
         exceed twenty percent (20%) of the Consolidated Net Tangible Assets of
         the Company and its subsidiaries, as shown on the audited consolidated
         balance sheet contained in the latest annual report to stockholders of
         the Company. The term "Attributable Debt" as used in this paragraph
         shall mean, as of any particular time, the present value of the
         obligation of a lessee for rental payments during the remaining term of
         any lease (including any period for which such lease has been extended
         or may, at the option of the lessor, be extended).

                                       5
<PAGE>

                  Section 3.02. Limitation on Sale and Lease-Back Transactions.
The Company will not, nor will it permit any of its subsidiaries to, enter into
any arrangement with any Person (other than the Company) providing for the
leasing by the Company or a subsidiary of any of its properties or assets
(except for temporary leases for a term of not more than three (3) years and
except for sales and leases of model homes), which property or asset has been or
is to be sold or transferred by the Company or such subsidiary to such Person
(herein referred to as a "Sale and Lease-Back Transaction"), unless (a) the net
proceeds to the Company or such subsidiary from such sale or transfer equal or
exceed the fair value (as determined by the Board of Directors, the Chairman of
the Board, the Vice Chairman, the President or the principal financial officer
of the Company) of the property or asset so leased, (b) the Company or such
subsidiary would be entitled to incur Indebtedness secured by a Lien on the
property or asset to be leased pursuant to Section 3.01, (c) the Company shall,
and in any such case the Company covenants that it will, apply an amount equal
to the fair value (as determined by the Board of Directors, the Chairman of the
Board, the Vice Chairman, the President or the principal financial officer of
the Company) of the property or asset so leased to the retirement (other than
any mandatory retirement), within 180 days of the effective date of any such
Sale and Lease-Back Transaction, of Funded Indebtedness of the Company, (d) such
Sale and Lease-Back Transaction relates to a sale which occurred within 180 days
from the date of acquisition of such property or asset by the Company or a
subsidiary or the date of the completion of construction or commencement of full
operations on such property, whichever is later, or (e) such transaction was
consummated prior to the date of this Indenture Supplement.

                                  ARTICLE FOUR

                                   Defeasance

                  Section 4.01. Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at any time, with respect to the Notes, elect to
have either Section 13.01 of the Indenture or Section 4.03 of this Indenture
Supplement be applied to all outstanding Notes upon compliance with the
conditions set forth in Article Thirteen of the Indenture and below in this
Article Four.

                  Section 4.02. Legal Defeasance. Upon the Company's exercise
under Section 4.01 of the option applicable to Section 13.01 of the Indenture,
the Company may terminate its obligations under the Notes, the Indenture and
this Indenture Supplement by complying with the terms and conditions of Section
13.01 of the Indenture; provided, however, that the Opinion of Counsel delivered
to the Trustee will also state that either (A) the Company has received from, or
there has been published by, the Internal Revenue Service, a ruling or (B) since
the date hereof, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.

                                       6
<PAGE>

                  Section 4.03. Covenant Defeasance. Upon the Company's exercise
under Section 4.01 of the option applicable to this Section 4.03, the Company
shall be released from its obligations under the covenants contained in Article
Three of this Indenture Supplement with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied ("Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default, but, except as
specified above, the remainder of the Indenture and such Notes shall be
unaffected thereby. In addition, the Company's exercise under Section 4.01 of
the option applicable to this Section 4.03 shall not constitute an Event of
Default.

                  Section 4.04. Conditions to Covenant Defeasance. The following
shall be the conditions to the application of Section 4.03 to the outstanding
Notes:

                  (1) the Company shall irrevocably have deposited or caused to
         be deposited with the Trustee under the terms of an irrevocable trust
         agreement in form and substance satisfactory to the Trustee, as trust
         funds in trust solely for the benefit of the Holders of such Notes for
         that purpose, money or direct non-callable obligations of, or
         non-callable obligations guaranteed by, the United States of America
         for the payment of which guarantee or obligation the full faith and
         credit of the United States is pledged ("U.S. Government Obligations")
         maturing as to principal and interest in such amounts and at such times
         as are sufficient, as verified in a Certificate of a Firm of
         Independent Public Accountants, without consideration of any
         reinvestment of such interest, to pay principal of and interest on the
         outstanding Notes to maturity or redemption as the case may be,
         provided that the Trustee or any paying agent shall have been
         irrevocably instructed to apply such money or the proceeds of such U.S.
         Government Obligations to the payment of said principal and interest
         with respect to the Notes. The Company may make an irrevocable deposit
         pursuant to this Section 4.04 only if at such time the Company shall
         have delivered to the Trustee and any such paying agent an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         herein precedent to the satisfaction and discharge of this Indenture
         have been complied with and the Opinion of Counsel further states that
         the making of such deposit (i) does not contravene or violate any
         provision of any indenture, mortgage, loan agreement or other similar
         agreement known to such counsel to which the Company is a party or by
         which it or any of its property is bound, (ii) does not require
         registration by the deposit referred to above under the Investment
         Company Act of 1940, as amended, and (iii) to the effect that the
         Holders of the outstanding Notes will not recognize income, gain or
         loss for federal income tax purposes as a result of such defeasance and
         will be subject to federal income tax in the

                                       7
<PAGE>

         same amount, in the same manner and at the same times as would have
         been the case if such defeasance had not occurred.

                  (2) Notwithstanding the foregoing paragraph, the Company's
         obligations in Sections 2.06, 2.08, 5.01, 5.02, 5.05, 6.01, 8.06, 8.10,
         13.04 and 13.05 of the Indenture shall survive until the Notes are no
         longer outstanding. Thereafter, the Company's obligations in Sections
         8.06, 13.04 and 13.05 of the Indenture shall survive.

                                  ARTICLE FIVE

                                  Miscellaneous

                  Section 5.01. Ratification of Indenture. As supplemented by
this Indenture Supplement, the Indenture is in all respects ratified and
confirmed and the Indenture as so supplemented by this Indenture Supplement
shall be read, taken and construed as one and the same instrument.

                  Section 5.02. Redemption. Notwithstanding anything contained
in the Indenture, the Company may redeem any of the Notes upon the terms and
conditions contained in the Notes directly or indirectly from or in anticipation
of money borrowed having an interest cost to the Company of less than the
interest rate applicable to the Notes.

                  Section 5.03. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required to be included in this Indenture Supplement by any of the
provisions of the Trust Indenture Act, such required provisions shall control.

                  Section 5.04. Effect of Headings. The article and section
headings herein are included for convenience only and shall not affect the
construction hereof.

                  Section 5.05. Counterparts. This Indenture Supplement may be
executed in any number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.

                  Section 5.06. Severability. In case any provision of this
Indenture Supplement or in the Notes shall be found invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                  Section 5.07. Benefits of Indenture Supplement. Nothing in
this Indenture Supplement or in the Notes, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture Supplement.

                                       8
<PAGE>

                  Section 5.08. Acceptance of Trusts. The Trustee hereby accepts
the trusts in this Indenture Supplement declared and provided, upon the terms
and conditions herein and in the Indenture set forth.

                  Section 5.09. Governing Law. This Indenture Supplement and
each Note issued hereunder shall be deemed to be a contract made under the laws
of the State of Texas, and for all purposes shall be construed in accordance
with the laws of said State.

                                       9
<PAGE>

                  IN WITNESS WHEREOF, the Company and the Trustee have caused
this Indenture Supplement to be duly executed by their respective officers
thereunto duly authorized and their respective seals duly attested to be
hereunto affixed all as of the day and year first above written.

                                       CENTEX CORPORATION
[SEAL]

                                       By: /s/ Lawrence Angelilli
                                          --------------------------------------
                                          Name:  Lawrence Angelilli
                                          Title: Senior Vice President - Finance

Attest:

/s/ Paul Johnston
------------------------------------
Name: Paul Johnston
Title: Associate General Counsel and
       Assistant Secretary

                                       JPMORGAN CHASE BANK
                                       (f/k/a The Chase Manhattan Bank), as
                                       Trustee
[SEAL]

                                       By: /s/ Carol Logan
                                          --------------------------------------
                                          Name:  Carol Logan
                                          Title: Vice President
Attest:

/s/ Rebecca A. Newman
------------------------------------
Name:  Rebecca A. Newman
Title: Vice President and Trust Officer

                                       10
<PAGE>

STATE OF TEXAS             )
                           )
COUNTY OF DALLAS           )

                  BEFORE ME, the undersigned authority, a Notary Public in and
for said state, on this day personally appeared Paul Johnston and Lawrence
Angelilli, known to me to be the persons and officers whose names are subscribed
to the foregoing instrument and acknowledged to me that the same was the act of
the said CENTEX CORPORATION, a Nevada corporation, and that they executed the
same as the act of said corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.

                  GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28th day of
January, 2003.

                                     /s/ Candie C. Nelson
                                     -------------------------------------------
                                     Notary Public in and for the State of Texas

                                     Candie C. Nelson
                                     -------------------------------------------
                                     Printed Name of Notary Public

My commission expires:

1/18/05
-------------------

STATE OF TEXAS             )
                           )
COUNTY OF HARRIS           )

                  BEFORE ME, the undersigned authority, a Notary Public in and
for said state, on this day personally appeared Rebecca A. Newman and Carol
Logan, known to me to be the persons and officers whose names are subscribed to
the foregoing instrument and acknowledged to me that the same was the act of the
said JPMORGAN CHASE BANK, a New York banking corporation, and that they executed
the same as the act of said New York banking corporation for the purposes and
consideration therein expressed, and in the capacity therein stated.

                  GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28th day of
January, 2003.

                                     /s/ Treva Bushnell
                                     -------------------------------------------
                                     Notary Public in and for the State of Texas

                                     Treva Bushnell
                                     -------------------------------------------
                                     Printed Name of Notary Public

My commission expires:
5/18/06
-------------------

                                       11
<PAGE>

                                                                       EXHIBIT A

                             [FORM OF FACE OF NOTE]

       [The following legend shall appear on the face of each global Note:

         THIS SECURITY IS A Global SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN the
LIMITED CIRCUMSTANCES DESCRIBED IN the INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

                  UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, 55 WATER STREET, NEW
YORK, NEW YORK ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  UNLESS AND UNTIL THIS GLOBAL NOTE IS EXCHANGED IN WHOLE OR IN
PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A 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.]

<PAGE>

                                                         CUSIP No.:_____________

                                                               PRINCIPAL AMOUNT:
REGISTERED NO. _____________                                $___________________

                               CENTEX CORPORATION

                           ___% SENIOR nOTES DUE 20__

                  Centex Corporation, a corporation duly organized and existing
under the laws of the State of Nevada (herein called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to) for
value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of __________ United States Dollars on _________, 20__ and to pay
interest thereon, in such coin or currency commencing __________, 2003 and
continuing semi-annually thereafter on ______ and ______ of each year, from
__________, 2002 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, at the rate per annum provided in the title
hereof, until the principal hereof is paid or made available for payment. The
interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the Regular Record Date which shall be ________ or ________ (whether
or not a business day), as the case may be, next preceding such Interest Payment
Date; provided, however, that interest payable on the Maturity Date or, if
applicable, upon redemption, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and shall be paid on the date
fixed therefor by the Company to the Person in whose name this Note is
registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Company, notice whereof shall be
given to Noteholders not less than fifteen calendar days prior to such Special
Record Date.

                  The Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of Texas.

                  REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.

                  Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, directly or through a
duly appointed and authorized authenticating agent, by manual or facsimile
signature of an authorized signatory, this Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

                                      A-2
<PAGE>

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

                                       CENTEX CORPORATION
[SEAL]

                                       By:
                                          ---------------------------
                                          Name:
                                          Title:
ATTEST:

-----------------------------
Name:
Title:

TRUSTEE'S CERTIFICATE
   OF AUTHENTICATION

This is one of the Senior Debt Securities referred to in the within-mentioned
Indenture.

JPMORGAN CHASE BANK
(f/k/a The Chase Manhattan Bank), as Trustee

By:
   --------------------------
   Authorized Signatory

                                      A-3
<PAGE>

                            [FORM OF REVERSE OF NOTE]

                  This Note is one of a duly authorized issue of Senior Debt
Securities of the Company designated as its ___% Senior Notes due 20__ (herein
called the "Notes"), issued and to be issued in one or more Series under an
Indenture dated as of October 1, 1998 (herein called the "Indenture") between
the Company and JPMorgan Chase Bank (f/k/a The Chase Manhattan Bank), as Trustee
(herein called the "Trustee," which term includes any successor Trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
(including the Indenture Supplement dated as of _______ ___, 2003 which
authorizes the Notes) reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes, and of the terms upon which the Notes
are, and are to be, authenticated and delivered.

                  All terms used in this Note which are defined in the Indenture
or in any indenture supplemental thereto but are not defined in this Note shall
have the meanings assigned to them in the Indenture or in any indenture
supplemental thereto.

                  The indebtedness evidenced by the Notes is, to the extent and
in the manner provided in the Indenture and the Indenture Supplement, senior in
right of payment to certain indebtedness of the Company.

                  Interest on this Note will be payable on the Interest Payment
Date or Interest Payment Dates as specified on the face hereof and, in either
case, on the Maturity Date. Unless otherwise specified on the face hereof,
payments on this Note with respect to any particular Interest Payment Date or
the Maturity Date will include interest accrued from and including
______________, 2003, or from and including the most recent Interest Payment
Date to which interest has been paid or duly provided for, to but excluding the
particular Interest Payment Date or the Maturity Date. Interest on this Note
will be computed and paid on the basis of a 360-day year of twelve 30-day
months.

                  If an Interest Payment Date or the Maturity Date for this Note
falls on a day that is not a business day, payment of principal, premium, if
any, and interest to be made on such day with respect to this Note will be made
on the next succeeding day that is a business day with the same force and effect
as if made on the due date, and no additional interest will be payable on the
date of payment for the period from and after the due date as a result of such
delayed payment.

                  The Notes will be redeemable, in whole or in part, from time
to time at the option of the Company, on any date (a "Redemption Date") at a
redemption price equal to the greater of (a) 100% of the principal amount of the
Notes to be redeemed and (b) the sum of the present values of the Remaining
Scheduled Payments (as hereinafter defined) of principal and interest thereon
(exclusive of interest accrued to such Redemption Date) discounted to such
Redemption Date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as hereinafter defined) plus ___
basis points, plus accrued and unpaid interest on the principal amount being
redeemed to such Redemption Date; provided, however, that installments of
interest on the Notes that are due and payable on an Interest Payment Date
falling on or prior to the relevant Redemption Date shall be payable to the
Holders of such Notes,

                                      A-4
<PAGE>

registered as such at the close of business on the relevant Regular Record Date
or Special Record Date, as the case may be, according to their terms and the
provisions of the Indenture.

                  "Comparable Treasury Issue" means the United States Treasury
security selected by the Independent Investment Banker (as hereinafter defined)
as having a maturity comparable to the remaining term of the Notes to be
redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Notes.

                  "Comparable Treasury Price" means, with respect to any
Redemption Date, (1) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding such Redemption Date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (2) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations (as hereinafter defined) for such
Redemption Date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations.

                  "Independent Investment Banker" means Salomon Smith Barney
Inc.

                  "Reference Treasury Dealer" means Salomon Smith Barney Inc.
and its successors and, at the option of the Company, other primary U.S.
government securities dealers in New York City selected by the Company.

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

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

                  "Treasury Rate" means, with respect to any Redemption Date for
the Notes, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption Date.

                  Notice of any redemption by the Company will be mailed at
least 30 days but not more than 60 days before any Redemption Date to each
Holder of Notes to be redeemed. If less than all the Notes are to be redeemed at
the option of the Company, the Trustee shall select the Notes to be redeemed in
whole or in part by random lot.

                                      A-5
<PAGE>

                  This Note is not subject to a sinking fund. Holders of Notes
will not be permitted to require the Company to redeem or repurchase the Notes
at their option.

                  In case an Event of Default shall have occurred and be
continuing with respect to the Notes, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture. The Indenture
provides that in certain events such declaration and its consequences may be
waived by the Holders of a majority in aggregate principal amount of the Notes
then outstanding. An Event of Default with respect to the Senior Debt Security
of any other Series issued under the Indenture, including the failure to make
any payment of principal or interest with respect thereto when and as due, will
not necessarily be an Event of Default with respect to the Notes.

                  The Indenture, as supplemented by the Indenture Supplement
relating to the Notes, contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the Holders of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Notes, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable on the redemption thereof,
without the consent of the Holder of each Note so affected, or (ii) reduce the
aforesaid percentage of Notes, the consent of the Holders of which is required
for any such supplemental indenture, without the consent of the Holders of all
Notes then outstanding. The Indenture also provides that the Holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the Holders of all the Notes waive any past default under the
Indenture and its consequences, except a default in the payment of the principal
of or premium, if any, or interest on any of the Notes. Any such consent or
waiver by the Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and of any Note issued in exchange or substitution herefor,
whether or not any notation of such consent or waiver is made upon this Note.

                  As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of default in respect
of the Notes and of the continuance thereof, and unless the Holders of not less
than 25 percent in aggregate principal amount of the Notes then outstanding
shall have made written request upon the Trustee to institute such action or
proceedings in its own name as Trustee hereunder and shall have furnished to the
Trustee such reasonable indemnity as it may require, and the Trustee shall have
failed to institute such proceeding within 60 calendar days; provided, however,
that such limitations do not apply to a suit instituted by the Holder hereof for
the enforcement of payment of the principal of and any premium or interest on
this Note on or after the respective due dates expressed herein.

                                      A-6
<PAGE>

                  As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is registrable in the
Senior Debt Security Register upon surrender of this Note for registration of
transfer at the office or agency maintained by the Company for such purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Senior Debt Security Registrar duly executed
by the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

                  The Notes are issued only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. A Holder may
transfer or exchange Notes in accordance with the Indenture.

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

                  No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Note at the times, places and rates, and in the coin or
currency, herein prescribed.

                  The Indenture, as supplemented by the Indenture Supplement
relating to the Notes, contains provisions for legal defeasance at any time of
the entire indebtedness of this Note or defeasance of certain restrictive
covenants with respect to this Note, in each case upon compliance by the Company
with certain conditions set forth therein.

                  The Company, the Trustee, any paying agent and any Senior Debt
Security Registrar for the Notes may deem and treat the Holder hereof as the
absolute owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or any such Senior Debt Security Registrar), for the
purpose of receiving payment hereof or on account hereof and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
such Senior Debt Security Registrar shall be affected by any notice to the
contrary.

                  No recourse shall be had for the payment of the principal of,
or premium, if any, or interest on, this Note, or for any claim based hereon or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

                                      A-7
<PAGE>

                                 ABBREVIATIONS

                  The following abbreviations, when used in the inscription of
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
                  TEN ENT           =        as tenants by the entireties
                  JT TEN            =        as joint tenants with right of
                                             survivorship and not as tenants in
                                             common
                  UNIF GIFT MIN ACT =        under Uniform Gifts to Minors Act
                                             (Cust)                   (Minor)
                                             State

                  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 OTHER
IDENTIFYING NUMBER OF ASSIGNEE

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

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

Please print or typewrite name and address including postal zip code of assignee

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

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

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

Dated:
      ----------------------------          ------------------------------------

                                            NOTICE: The signature(s) to this
                                            assignment must correspond with the
                                            name(s) as written upon the face of
                                            the within instrument in every
                                            particular, without alteration or
                                            enlargement or any change whatever.
                                            The signature(s) must be guaranteed
                                            by an "eligible guarantor
                                            institution" that is a member or
                                            participant in the Securities
                                            Transfer Agents Medallion Program,
                                            the Stock Exchange Medallion Program
                                            or the New York Stock Exchange, Inc.
                                            Medallion Program.

                                      A-8

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