Document:

FORM OF INDENTURE

 

Exhibit 4.1.A

LENNAR CORPORATION

ISSUER

TO

U.S. BANK TRUST, NATIONAL ASSOCIATION

TRUSTEE

INDENTURE

DATED AS OF JUNE 25, 2004

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	SECTION 1.01. Definitions
	 	 	1	 
	SECTION 1.02. Incorporation by Reference of Trust Indenture Act
	 	 	3	 
	SECTION 1.03. Rules of Construction
	 	 	3	 
	ARTICLE TWO THE SECURITIES
	 	 	3	 
	SECTION 2.01. Form and Dating
	 	 	3	 
	SECTION 2.02. Amount Unlimited; Issuable in Series
	 	 	4	 
	SECTION 2.03. Denominations
	 	 	4	 
	SECTION 2.04. Execution and Authentication
	 	 	4	 
	SECTION 2.05. Registrar and Paying Agent
	 	 	5	 
	SECTION 2.06. Paying Agent to Hold Money in Trust
	 	 	5	 
	SECTION 2.07. Securityholder Lists
	 	 	5	 
	SECTION 2.08. Transfer and Exchange
	 	 	5	 
	SECTION 2.09. Replacement Securities
	 	 	6	 
	SECTION 2.10. Outstanding Securities
	 	 	6	 
	SECTION 2.11. Temporary Securities
	 	 	6	 
	SECTION 2.12. Cancellation
	 	 	7	 
	SECTION 2.13. Defaulted Interest
	 	 	7	 
	ARTICLE
THREE REDEMPTION
	 	 	7	 
	SECTION 3.01. Company’s Option to Redeem
	 	 	7	 
	SECTION 3.02. Notices to Trustee
	 	 	7	 
	SECTION 3.03. Selection of Securities to be Redeemed
	 	 	7	 
	SECTION 3.04. Notice of Redemption at the Company’s Option
	 	 	8	 
	SECTION 3.05. Effect of Notice of Redemption
	 	 	8	 
	SECTION 3.06. Deposit of Redemption Price
	 	 	8	 
	SECTION 3.07. Holder’s Right to Require Redemption
	 	 	9	 
	SECTION 3.08. Procedure for Requiring Redemption
	 	 	9	 
	SECTION 3.09. Securities Redeemed in Part
	 	 	9	 
	ARTICLE FOUR COVENANTS
	 	 	9	 
	SECTION 4.01. Payment of Securities
	 	 	9	 
	SECTION 4.02. Reporting
	 	 	9	 
	SECTION 4.03. Corporate Existence
	 	 	10	 

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TABLE OF CONTENTS 

(continued)

	 	 	 	 	 
	 	 	Page
	SECTION 4.04. Compliance Certificate
	 	 	10	 
	SECTION 4.05. Further Instruments and Acts
	 	 	10	 
	ARTICLE FIVE SUCCESSOR CORPORATION 13
	 	 	10	 
	SECTION 5.01. Company May Consolidate, etc., Only on Certain Terms
	 	 	10	 
	SECTION 5.02. Successor Corporation Substituted
	 	 	11	 
	ARTICLE SIX DEFAULTS AND REMEDIES
	 	 	11	 
	SECTION 6.01. Events of Default
	 	 	11	 
	SECTION 6.02. Acceleration
	 	 	12	 
	SECTION 6.03. Other Remedies
	 	 	12	 
	SECTION 6.04. Waiver of Existing Defaults
	 	 	13	 
	SECTION 6.05. Control by Majority
	 	 	13	 
	SECTION 6.06. Payments of Securities on Default; Suit Therefor
	 	 	13	 
	SECTION 6.07. Limitation on Suits
	 	 	14	 
	SECTION 6.08. Rights of Holders to Receive Payment and to Demand Conversion
	 	 	14	 
	SECTION 6.09. Collection Suit by Trustee
	 	 	14	 
	SECTION 6.10. Trustee May File Proofs of Claim
	 	 	14	 
	SECTION 6.11. Restoration of Positions
	 	 	14	 
	SECTION 6.12. Priorities
	 	 	15	 
	SECTION 6.13. Undertaking for Costs
	 	 	15	 
	SECTION 6.14. Stay, Extension or Usury Laws
	 	 	15	 
	SECTION 6.15. Liability of Stockholders, Officers, Directors and Incorporators
	 	 	15	 
	ARTICLE
SEVEN TRUSTEE
	 	 	16	 
	SECTION 7.01. Duties of Trustee
	 	 	16	 
	SECTION 7.02. Rights of Trustee
	 	 	17	 
	SECTION 7.03. Individual Rights of Trustee
	 	 	17	 
	SECTION 7.04. Trustee’s Disclaimer
	 	 	17	 
	SECTION 7.05. Notice of Defaults
	 	 	17	 
	SECTION 7.06. Reports by Trustee
	 	 	18	 
	SECTION 7.07. Compensation and Indemnity
	 	 	18	 
	SECTION 7.08. Replacement of Trustee
	 	 	18	 
	SECTION 7.09. Successor Trustee by Merger, etc.
	 	 	19	 
	SECTION 7.10. Eligibility; Disqualification
	 	 	20	 

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TABLE OF CONTENTS 

(continued)

	 	 	 	 	 
	 	 	Page
	SECTION 7.11. Preferential Collection of Claims
	 	 	20	 
	ARTICLE
EIGHT DISCHARGE OF INDENTURE
	 	 	20	 
	SECTION 8.01. Termination of the Company’s Obligations
	 	 	20	 
	SECTION 8.02. Application of Trust Money
	 	 	21	 
	SECTION 8.03. Repayment to the Company
	 	 	21	 
	ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS
	 	 	21	 
	SECTION 9.01. Without Consent of Holders
	 	 	21	 
	SECTION 9.02. With Consent of Holders
	 	 	21	 
	SECTION 9.03. Compliance with Trust Indenture Act
	 	 	22	 
	SECTION 9.04. Revocation and Effect of Consents
	 	 	22	 
	SECTION 9.05. Notation on or Exchange of Securities
	 	 	23	 
	SECTION 9.06. Trustee to Sign Amendments, etc.
	 	 	23	 
	ARTICLE TEN
CONVERSION OR EXCHANGE OF SECURITIES
	 	 	23	 
	SECTION 10.01. Provisions Relating to Conversion or Exchange of Securities
	 	 	23	 
	ARTICLE
ELEVEN SINKING OR PURCHASE FUNDS
	 	 	23	 
	SECTION 11.01. Provisions Relating to Sinking or Purchase Funds
	 	 	23	 
	ARTICLE
TWELVE MISCELLANEOUS
	 	 	24	 
	SECTION 12.01. Trust Indenture Act Controls
	 	 	24	 
	SECTION 12.02. Supplemental Indentures Contract
	 	 	24	 
	SECTION 12.03. Notices
	 	 	24	 
	SECTION 12.04. Communication by Holders with Other Holders
	 	 	24	 
	SECTION 12.05. Certificate and Opinion as to Conditions Precedent
	 	 	25	 
	SECTION 12.06. When Treasury Securities Disregarded
	 	 	25	 
	SECTION 12.07. Rules by Trustee, Paying Agent, Registrar
	 	 	26	 
	SECTION 12.08. Legal Holidays
	 	 	26	 
	SECTION 12.09. Governing Law and Submission to Jurisdiction
	 	 	26	 
	SECTION 12.10. Actions by the Company
	 	 	26	 
	SECTION 12.11. No Adverse Interpretation of Other Agreements
	 	 	26	 
	SECTION 12.12. Successors
	 	 	26	 
	SECTION 12.13. Duplicate Originals
	 	 	26	 
	SECTION 12.14. Table of Contents, Headings, etc.
	 	 	26	 

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     INDENTURE,
dated as of June 25, 2004, between Lennar Corporation (the
“Company”), a Delaware corporation having its principal office at 700 N.W.
107th Avenue, Miami, Florida 33172, and U.S. Bank Trust, National Association
(the “Trustee”), a national banking association, organized under
the laws of the United States of America which has its corporate trust office
at 100 Wall Street, Suite 1600, New York, NY 10005. Each party agrees as
follows for the benefit of each other party and for the equal and ratable
benefit of the Holders of the Company’s debentures, notes or other evidences of
unsecured indebtedness to be issued in one or more series (“Securities”):

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

     “Board Resolution” means a resolution by the Board of Directors or
Executive Committee of the Company certified by its Secretary or an Assistant
Secretary as being duly adopted and in full force and effect.

     “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a Legal Holiday.

     “Capital Stock” means common or preferred stock entitled to share in the
equity or profits of a Corporation. “Common Stock” means the common stock, par
value $.10 per share, of the Company, as that stock may be reconstituted from
time to time, except that

     “Common Stock” will not include the Company’s Class B Common Stock.
“Company” means the Person named as such in this Indenture until a successor
replaces it and after that means the successor.

     “Corporate Trust Office” means the principal office of the Trustee at
which at any particular time its corporate trust business is principally
administered (which at the date of this Indenture is at the location set forth
in the first paragraph of this Indenture).

     “Corporation” includes corporations, associations, companies and business
trusts.

     “Custodian” has the meaning provided in Section 6.01.

     “Default” means any event which, upon the giving of notice or passage of
time, or both, would be an Event of Default.

     “$” means the lawful currency of the United States.

     “Event of Default” has the meaning provided in Section 6.01.

     “Fiscal Year” means the period commencing on December 1 of a year and
ending on the next November 30 or such other period (not to exceed 12 months or
53 weeks) as the Company may from time to time adopt as its fiscal year.

     “Holder” or “Securityholder” means a Person in whose name a Security is
registered on the Registrar’s books.

 

 

     “Indenture” means this Indenture as amended or supplemented from time to
time and will include the form and terms of the Securities of each series
established as contemplated by Section 2.01.

     “Interest Payment Date” means the date on which an installment of interest
on the Securities is due and payable.

     “Legal Holiday” has the meaning provided in Section 12.08.

     “Maturity Date” means the date the principal of Securities is due and
payable. “Officer” means the Chairman of the Board, any Vice Chairman of the
Board, the President, any Vice President, the Treasurer, the Secretary, the
Controller or any Assistant Secretary of a Person.

     “Officers’ Certificate” when used with respect to the Company means a
certificate signed by two Officers. Each such certificate will comply with
Section 314 of the TIA and include the statements described in Section 12.05.

     “Opinion of Counsel” means a written opinion from legal counsel who is
acceptable to the Trustee. That counsel may be an employee of or counsel to
the Company or the Trustee. Each such opinion will include the statements
described in Section 12.05 if and to the extent required by that Section.

     “Paying Agent” has the meaning provided in Section 2.05.

     “Person” means any individual, corporation, partnership, joint venture,
joint-stock company, trust, unincorporated organization or government or any
government agency or political subdivision.

     “Registrar” has the meaning provided in Section 2.05.

     “SEC” means the Securities and Exchange Commission.

     “Securities” means the debentures, notes or other evidences of unsecured
indebtedness to be issued in one or more series by the Company.

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

     “Securities Exchange Act of 1934” means the Securities Exchange Act of
1934, as amended. “State” means any state of the United States or the District
of Columbia.

     “Subsidiary” means a corporation of which a majority of the voting stock
is owned by the Company, by a Subsidiary of the Company or by the Company and
one or more Subsidiaries of the Company.

     “Supplemental Indenture” means an indenture between the Company and the
Trustee which supplements this Indenture.

     “TIA” means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture.

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     “Trustee” means the Person named as such in this Indenture and, subject to
the provisions of Article 7, any successor to that person.

     “Trust Officer” means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

     “United States” means the United
States of America.

SECTION 1.02. Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. In addition, the provisions of
Sections 310 to and including 317 of the TIA that impose duties on any person
are incorporated by reference in, and form a part of, this Indenture. The
following TIA terms mean the following when used in this Indenture:

     “Commission” means the SEC;

     “indenture securities” means the Securities;

     “indenture securityholder” means a Holder;

     “indenture to be qualified” means this Indenture;

     “indenture trustee” or “institutional trustee” means the Trustee; and

     “obligor” on the indenture securities means the Company.

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

SECTION 1.03. Rules of Construction. Unless the context otherwise requires:

	(1)	 	a term has the meaning assigned to it;
	 
	(2)	 	an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States;
	 
	(3)	 	“or” is not exclusive; and
	 
	(4)	 	words in the singular include the plural, and in the plural
include the singular.

ARTICLE TWO

THE SECURITIES

SECTION 2.01. Form and Dating. (a) The Securities of each series will be
substantially in the form established by a Supplemental Indenture relating to
the Securities of that series. The Securities may have notations, legends or
endorsements required by law, stock exchange rules or usage. The Company will
approve the form of the Securities and any notation, legend or endorsement on
them. Each Security will be dated the date of its authentication. (b) The
Trustee’s certificate of authentication will be substantially in the form of
Exhibit A.

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SECTION 2.02. Amount Unlimited; Issuable in Series. The aggregate principal
amount of the Securities which may be authenticated and delivered under this
Indenture is unlimited. The Securities may be issued in one or more series.
Prior to the issuance of Securities of a series, the Company and the Trustee
will execute a Supplemental Indenture which will set forth as to the Securities
of that series, to the extent applicable:

	(1)	 	the title of the Securities;
	 
	(2)	 	any limit upon the aggregate principal amount of Securities
which may be issued;
	 
	(3)	 	the date or dates on which the Securities will mature and the
amounts to be paid upon maturity of the Securities;
	 
	(4)	 	the rate or rates (which may be fixed or variable) at which
the Securities will bear interest, if any, the dates from which
interest will accrue, the dates on which interest will be payable
and the record date for the interest payable on any interest payment
date;
	 
	(5)	 	the currency or currencies in which principal, premium, if
any, and interest, if any, will be payable;
	 
	(6)	 	the place or places where principal of, premium, if any, and
interest, if any, on the Securities will be payable;
	 
	(7)	 	any provisions regarding the right of the Company to redeem
Securities or of holders to require the Company to redeem
Securities;
	 
	(8)	 	the right, if any, of holders of the Securities to convert
them into stock or other securities of the Company, including any
provisions intended to prevent dilution of those conversion rights;
	 
	(9)	 	any provisions by which the Company will be required or
permitted to make payments to a sinking fund which will be used to
redeem Securities or a purchase fund which will be used to purchase
Securities;
	 
	(10)	 	the percentage of the principal amount of the Securities
which is payable if maturity of the Securities is accelerated
because of a default; and
	 
	(11)	 	any other terms of the Securities.

SECTION 2.03. Denominations. Unless otherwise provided in the Supplemental
Indenture relating to a series of Securities, the Securities of each series
will be issuable in registered form without coupons in denominations of $1,000
and multiples of $1,000.

SECTION 2.04. Execution and Authentication. Two Officers will sign the
Securities of each series for the Company by manual or facsimile signature.
The Company’s seal will be reproduced on the Securities. If an Officer whose
signature is on a Security no longer holds office at the time the Trustee
authenticates the Security, the Security will be valid nonetheless. A Security
will not be valid until an authorized signatory of the Trustee manually signs
the certificate of authentication on the Security. The signature will be
conclusive evidence that the Security has been authenticated under this
Indenture.

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SECTION 2.05. Registrar and Paying Agent. The Company will maintain an office
or agency where Securities of each series may be presented for conversion,
registration of transfer or for exchange (the “Registrar”) and an office or
agency where Securities of each series may be presented for payment (“Paying
Agent”). The Registrar will keep a register of the Securities of each series
and of their transfer and exchange. The Company may have one or more
co-registrars and one or more additional paying agents. The term “Paying
Agent” includes any additional paying agent.

     The Company will enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture which
will incorporate the terms of the TIA. The agreement will implement the
provisions of this Indenture that relate to that agent. The Company will
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee will act as such.
The Company or any Subsidiary may act as Paying Agent, Registrar, co-registrar
or transfer agent.

     The Company initially appoints the Trustee to act as Registrar and Paying
Agent in connection with the Securities of each series, except in instances in
which the Supplemental Indenture relating to a series of Securities appoints a
different Registrar or Paying Agent.

SECTION 2.06. Paying Agent to Hold Money in Trust. Prior to each due date of
the principal of, premium, if any, or interest, if any, on any Security, the
Company will deposit with the Paying Agent a sum sufficient to pay that
principal, premium or interest when due. The Paying Agent will hold in trust
for the benefit of the Holders of the Securities of a series, and if the Paying
Agent is not the Trustee, in trust for the benefit of the Trustee, all sums
held by the Paying Agent for the payment of principal, premium or interest on
the Securities of that series and, in the case of a Paying Agent other than the
Trustee, the Paying Agent will give the Trustee notice of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it will segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent will have no further liability for the money.

SECTION 2.07. Securityholder Lists. The Trustee will preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of the Holders of the Securities of each series. If the
Trustee is not the Registrar, the Company will furnish to the Trustee in
writing at least five Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing all information in the
possession or control of the Company or its Paying Agent as to the names and
addresses of Holders of the Securities of a series.

SECTION 2.08. Transfer and Exchange. Unless otherwise provided in the
Supplemental Indenture relating to Securities of a series, Securities which are
issued in registered form will be transferred only upon the surrender of the
Securities for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the
Registrar will register the transfer as requested if the requirements of
Article 8 of the New York Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them
for an equal principal amount of Securities of the same series of other
denominations, the Registrar will make the exchange as requested if the same
requirements are met. To permit registration of transfers and exchanges, the
Company will execute and the Trustee will authenticate Securities at the
Registrar’s or co-registrar’s request. The Company will not charge a fee for
transfers or exchanges.

- 5 -

 

     The Company will not be required to make, and the Registrar need not
register, transfers or exchanges of (i) Securities selected for redemption
(except, in the case of Securities to be redeemed in part, transfers or
exchanges of the portion of the Securities not to be redeemed) or (ii) any
Securities of a series for a period of 15 days before the first mailing of a
notice of the Securities of that series which are to be redeemed.

     Prior to the due presentation for registration or transfer of any Security
which was issued in registered form, the Company, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the person in whose
name the Security is registered as the absolute owner of the Security for all
purposes, and none of the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar will be affected by notice to the contrary.

SECTION 2.09. Replacement Securities. If a mutilated Security which had been
issued in registered form is surrendered to the Registrar or if the Holder
presents evidence to the satisfaction of the Company and the Trustee that a
Security which had been issued in registered form has been lost or destroyed,
the Company will issue and the Trustee will authenticate a replacement Security
of the same series if the requirements of Section 8-405 of the New York Uniform
Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, the
replacement Security will not be issued until the Holder furnishes an indemnity
bond sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent and the Registrar or any co-registrar
from any loss which any of them may suffer if the Security is replaced. The
Company may charge the Holder for its expenses in replacing a Security.

     Every replacement Security will be an obligation of the Company, even if
the replaced Security is subsequently found.

SECTION 2.10. Outstanding Securities. The Securities outstanding at any time
will be all the Securities authenticated by the Trustee, except those cancelled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding
because the Company or its affiliate holds the Security.

     If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser (in which case
the replaced Security will be treated as outstanding to the extent permitted by
Section 8-210 of the New York Uniform Commercial Code).

     If the Paying Agent (other than the Company or a Subsidiary) segregates
and holds in trust, in accordance with this Indenture, on a redemption date or
Maturity Date money sufficient to pay all principal, premium, if any, and
interest, if any, payable on that date with respect to the Securities to be
redeemed or maturing, as the case may be, then on that date those Securities
will cease to be outstanding and interest on them will cease to accrue.

SECTION 2.11. Temporary Securities. Until definitive Securities of a series
are ready for delivery, the Company may prepare and the Trustee will
authenticate temporary Securities of that series. Temporary Securities will be
substantially in the form of definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company will prepare and the Trustee will authenticate
definitive Securities and deliver them in exchange for temporary Securities.

- 6 -

 

SECTION 2.12. Cancellation. The Company at any time may deliver Securities of
a series to the Trustee for cancellation and the Trustee will reduce
accordingly the aggregate amount of the Securities of that series which are
outstanding. The Registrar and the Paying Agent will forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange,
payment, or conversion. The Trustee and no one else will cancel and destroy
(subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment,
conversion or cancellation and deliver certificates of such destruction to the
Company unless the Company directs the Trustee to deliver the cancelled
Securities to the Company. Subject to Section 2.09, the Company may not issue
new Securities of a series to replace Securities of the series it has redeemed,
paid, converted or delivered to the Trustee for cancellation.

SECTION 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on the Securities of a series, it will pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) to the persons who
are Holders of the Securities of that series on a subsequent special record
date, which date will be at least five Business Days prior to the payment date.
The Company will fix the special record date and payment date, and, at least
15 days before the special record date, the Company will mail to each Holder of
Securities of that series a notice that states the special record date, the
payment date and the amount of defaulted interest and any interest on that
defaulted interest which is to be paid. Notwithstanding the foregoing, the
Company may pay defaulted interest in any other lawful manner.

ARTICLE THREE

REDEMPTION

SECTION 3.01. Company’s Option to Redeem. The Company will have the option to
redeem Securities of a series only to the extent, if any, and only on the
terms, set forth in the Supplemental Indenture relating to the Securities of
that series. If the Company has the option to redeem Securities of a series,
unless otherwise provided in the Supplemental Indenture relating to the series,
the terms of the redemption will include those set forth in Sections 3.02
through 3.06.

SECTION 3.02. Notices to Trustee. If the Company elects to redeem Securities
of a series, it will notify the Trustee of the redemption date and the
principal amount and series of Securities to be redeemed. The Company will
give each notice provided for in this Section at least 45 days before the
redemption date. If fewer than all the Securities of a series are to be
redeemed, the record date for determining which Securities of the series are to
be redeemed will be selected by the Company, which will give notice of the
record date to the Trustee at least 15 days before the record date.

SECTION 3.03. Selection of Securities to be Redeemed. If fewer than all the
Securities of a series are to be redeemed at the Company’s option, the Trustee
will select the Securities of that series to be redeemed by lot or, in its sole
discretion, pro-rata. The Trustee will make the selection from outstanding
Securities of that series not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities that have
denominations larger than the minimum denomination in which Securities of the
applicable series may be issued. Securities and portions of Securities the
Trustee selects will be in amounts equal to the minimum denomination in which
Securities of the applicable series may be issued and multiples of that amount.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption. The Trustee will
notify the Company promptly of the Securities or portions of Securities to be
redeemed.

- 7 -

 

SECTION 3.04. Notice of Redemption at the Company’s Option. At least 30 days
and not more than 60 days before a date set for redemption at the Company’s
option, the Company will mail a notice of redemption by first-class mail to
each Holder of Securities to be redeemed in whole or in part. The notice will
identify the principal amount and series of each Security to be redeemed and
will state:

	(1)	 	the redemption date;
	 
	(2)	 	the redemption price plus accrued interest, if any;
	 
	(3)	 	the name and address of the Paying Agent;
	 
	(4)	 	that Securities called for redemption in whole or in part
must be surrendered to the Paying Agent to collect the redemption
price plus accrued interest, if any;
	 
	(5)	 	that, unless the Company defaults in making the redemption
payment, interest on Securities (or portions of Securities) called
for redemption will cease to accrue on the redemption date and, if
applicable, that those Securities (or the portions of then called
for redemption) will cease on the redemption date (or such other
date as is provided in the Supplemental Indenture relating to the
Securities) to be convertible into, or exchangeable for, other
securities or assets; and
	 
	(6)	 	if applicable, the current conversion or exchange price.

     At the Company’s request, the Trustee will give the notice of redemption
in the Company’s name and at the Company’s expense. In such event, the Company
will provide the Trustee with the information required by clauses (1) through
(3) and (6).

SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities, or portions of Securities called for redemption will become
due and payable on the redemption date and at the redemption price. Upon
surrender to the Paying Agent, those Securities will be paid at the redemption
price, plus accrued and unpaid interest to the redemption date. On and after
the date fixed for redemption (unless the Company defaults in the payment of
the redemption price, together with interest accrued to the redemption date)
interest on the Securities, or portions of them, which are redeemed will cease
to accrue and any right to convert those Securities into, or exchange them for,
other securities or assets will terminate and those Securities will cease to be
convertible or exchangeable. Failure to give notice or any defect in the
notice to any Holder will not affect the validity of the notice to any other
Holder.

SECTION 3.06. Deposit of Redemption Price. No later than the Business Day
prior to the redemption date specified in a notice of redemption, the Company
will deposit with the Paying Agent (or, if the Company or a Subsidiary is the
Paying Agent, segregate and hold in trust) money sufficient to redeem on the
redemption date all the Securities called for redemption on that redemption
date at the appropriate redemption price, together with accrued interest to the
redemption date, other than Securities or portions of Securities called for
redemption which have been delivered by the Company to the Trustee for
cancellation or Securities which have been surrendered for conversion or
exchange. If any Securities called for redemption are converted or exchanged,
any money deposited with the Paying Agent for redemption of those Securities
will be paid to the Company upon its request, or, if the money is held in trust
by the Company or a Subsidiary as Paying Agent, the money will be discharged
from the trust.

- 8 -

 

SECTION 3.07. Holder’s Right to Require Redemption. Holders of Securities of a
series will have the right to require the Company to redeem those Securities
only to the extent, and only on the terms, set forth in the Supplemental
Indenture relating to the Securities of that series. If Holders of Securities
of a series have the right to require the Company to redeem those Securities,
unless otherwise provided in the Supplemental Indenture relating to the
Securities of that series, the terms of the redemption will include those set
forth in Section 3.08.

SECTION 3.08. Procedure for Requiring Redemption. If a Holder has the right to
require the Company to redeem Securities, to exercise that right, the Holder
must deliver the Securities to the Paying Agent, endorsed for transfer and with
the form on the reverse side entitled “Option to Require Redemption” completed.
Delivery of Securities to the Paying Agent as provided in this Section will
constitute an irrevocable election to cause the specified principal amount of
Securities to be redeemed. When Securities are delivered to the Paying Agent
as provided in this Section, unless the Company fails to make the payments due
as a result of the redemption within 20 days after the Securities are delivered
to the Paying Agent as provided in this Section interest on the Securities will
cease to accrue and, if the Securities are convertible or exchangeable, the
Holder’s right to convert or exchange the Securities will terminate.

     The Company’s determination of all questions regarding the validity,
eligibility (including time of receipt) and acceptance of any Security for
redemption will be final and binding.

SECTION 3.09. Securities Redeemed in Part. Upon surrender of a Security that
is redeemed in part, the Company will execute and the Trustee will authenticate
and deliver to the Holder (at the Company’s expense) a new Security equal of
the same series in principal amount equal to the unredeemed portion of the
Security which was surrendered.

ARTICLE FOUR

COVENANTS

SECTION 4.01. Payment of Securities. The Company will promptly pay or cause to
be paid the principal of, premium, if any, and interest, if any, on each of the
Securities of a series at the places and time and in the manner provided in the
Securities and in the Supplemental Indenture relating to the series. An
installment of principal, premium or interest will be considered paid on the
date it is due if the Trustee or Paying Agent holds on that date in accordance
with this Indenture or the applicable Supplemental Indenture money designated
for and sufficient to pay the installment then due.

     The Company will pay or cause to be paid interest on overdue principal at
the rate specified in the Securities; it will also pay interest on overdue
installments of interest at the same rate (or such other rate as is provided in
the applicable Supplemental Indenture), to the extent lawful.

SECTION 4.02. Reporting. The Company will file with the Trustee within 15 days
after filing with the SEC, copies of its annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the Company
is required to file with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”). The Company also will
comply with the other provisions of TIA Section 314(a).

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SECTION 4.03. Corporate Existence. Subject to Article 5, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Company will not be required to preserve any such
right or franchise if the Board of Directors determines that the preservation
of the right or franchise is no longer desirable in the conduct of the business
of the Company and that its loss will not be disadvantageous in any material
respect to the Holders of Securities of any series.

SECTION 4.04. Compliance Certificate. The Company will deliver to the Trustee
within 120 days after the end of each fiscal year of the Company an Officers’
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Company they would normally have knowledge of
any default by the Company and whether or not the signers know of any default
that occurred during the fiscal year. If they do, the certificate will
describe the default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also will comply with TIA
Section 314(a)(4).

SECTION 4.05. Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.

ARTICLE FIVE

SUCCESSOR CORPORATION 13

SECTION 5.01. Company May Consolidate, etc., Only on Certain Terms. The
Company will not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets substantially as an
entirety to any person, unless:

	(1)	 	the corporation formed by the consolidation or into which the
Company is merged or the person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety will be a corporation organized and
existing under the laws of the United States of America, a State of
the United States of America or the District of Columbia and
expressly assumes, by a one or more supplemental indentures,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of, premium,
if any, and interest, if any, on all the Securities of each series
and the performance of every covenant of this Indenture and of all
Supplemental Indentures to be performed or observed by the Company;
	 
	(2)	 	immediately after giving effect to the transaction, no Event
of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, will have occurred and be
continuing; and
	 
	(3)	 	the Company has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that the
consolidation, merger, conveyance, transfer or lease and the
supplemental indenture (or the supplemental indentures together)
comply with this Article and that all the conditions precedent
relating to the transaction set forth in this Section have been
fulfilled.

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SECTION 5.02. Successor Corporation Substituted. Upon any event described in
Section 5.01, the successor corporation will succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture and all the Supplemental Indentures relating to outstanding series of
Securities, and the predecessor corporation will be relieved of all obligations
and covenants under this Indenture and each of those Supplemental Indentures.

ARTICLE SIX

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default. An “Event of Default” occurs if:

	(1)	 	The Company defaults in the payment of interest on any
Security of any series when it becomes due and payable and the
default continues for a period of 30 days (or such other period,
which may be no period) as is specified in the Supplemental
Indenture relating to the series;
	 
	(2)	 	The Company defaults in the payment of the principal of, or
premium, if any, on any Security of any series as and when it
becomes due and payable at its stated maturity or upon redemption,
acceleration or otherwise and, if provided in the Supplemental
Indenture relating to a series, the default continues for a period
specified in the Supplemental Indenture;
	 
	(3)	 	The Company fails to comply with any of its other covenants
or agreements with regard to Securities of a series or this
Indenture (other than a covenant or agreement, a default in whose
performance or whose breach is dealt with specifically elsewhere in
this Section) and that failure continues for a period of 60 days
after the date of the notice specified below;
	 
	(4)	 	the Company, pursuant to any Bankruptcy Law applicable to the
Company:

	(A)	 	commences a voluntary case;
	 
	(B)	 	consents to the entry of an order for relief
against it in an involuntary case;
	 
	(C)	 	consents to the appointment of a Custodian of it
or for any substantial part of its property; or
	 
	(D)	 	makes a general assignment for the benefit of its
creditors; or

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

	(A)	 	for relief in an involuntary case;
	 
	(B)	 	appointing a Custodian of the Company or for any
substantial part of its property; or

	(C)	 	ordering its winding up or liquidation; and the
order or decree remains unstayed and in effect for 90 days.

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     Each of the occurrences described in clauses (1) through (5) will
constitute an Event of Default whatever the reason for the occurrence and
whether it is voluntary or involuntary or is effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body.

     The term “Bankruptcy Law” means Title 11 of the United States Code or any
similar United States Federal or State law for the relief of debtors. The term
“Custodian” means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.

     A Default under clause (3) of this Section is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
principal amount of the then outstanding Securities of a series with regard to
which the Company has failed to comply with a covenant or agreement notify the
Company and the Trustee, of the Default and the Company does not cure the
Default within 45 days after the giving of the notice. The notice must specify
the Default, demand that it be remedied and state that the notice is a “Notice
of Default.”

     A Default under clause (1), (2) or (3) with regard to Securities of a
series will not constitute a Default with regard to Securities of any other
series except to the extent, if any, provided in the Supplemental Indenture
relating to the other series.

     The Company will deliver to the Trustee, within 20 days after it occurs,
written notice in the form of an Officers’ Certificate of any event of which
the Company is aware which with the giving of notice and the lapse of time
would become an Event of Default under clause (3), its status and what action
the Company is taking or proposes to take with respect to it.

SECTION 6.02. Acceleration. If an Event of Default as to the Securities of a
series occurs and is continuing, unless the principal of all of the Securities
of the series has already become due and payable, the Trustee by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities of the series then outstanding by notice to the Company and the
Trustee, may declare the principal of and accrued interest, if any, on all the
Securities of the series to be due and payable. Upon such a declaration, that
principal and interest will be due and payable immediately. If an Event of
Default specified in Section 6.01(4) or (5) occurs, the principal of, premium,
if any, and accrued interest, if any, on all the Securities will automatically
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Securityholders. The Holders of a majority
in principal amount of the Securities of a series then outstanding, on behalf
of the Holders of all the Securities of the series, by notice to the Trustee
may rescind an acceleration and its consequences if all existing Events of
Default have been cured or waived except nonpayment of principal, premium, if
any, or interest, if any, that has become due solely because of acceleration,
and if the rescission would not conflict with any judgment or decree. No such
rescission will affect any subsequent default or impair any consequent right.

SECTION 6.03. Other Remedies. If an Event of Default as to a series occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of, premium, if any, and interest, if any, on the
Securities of the series or to enforce the performance of any provision under
this Indenture or any applicable Supplemental Indenture.

- 12 -

 

     The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

SECTION 6.04. Waiver of Existing Defaults. The Holders of a majority in
aggregate principal amount of the Securities of a series then outstanding, on
behalf of the Holders of all the Securities of that series, by notice to the
Trustee may consent to the waiver of any past Default with regard to Securities
of the series and its consequences except (i) a default in the payment of
interest or premium, if any, on, or the principal of, Securities of the series,
or (ii) a default in respect of a covenant or a provision that under Section
9.02 cannot be modified or amended without the consent of the Holders of all
Securities of the series then outstanding. The defaults described in clauses
(i) and (ii) in the previous sentence may be waived with the consent of the
Holders of all Securities of the series then outstanding. When a Default or
Event of Default is waived, it is deemed cured and not continuing, but no
waiver will extend to any subsequent or other Default or impair any consequent
right.

SECTION 6.05. Control by Majority. The Holders of a majority in principal
amount of the Securities of a series then outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee with regard to the Securities of that series or of exercising any trust
or power conferred on the Trustee with regard to the Securities of that series.
However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture or, subject to Section 7.01, that the Trustee determines
is unduly prejudicial to the rights of other Securityholders or that would
involve the Trustee in personal liability provided, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action as a result of a direction
given under this Section, the Trustee will be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused by taking or not taking that action.

SECTION 6.06. Payments of Securities on Default; Suit Therefor. The Company
covenants that upon the occurrence of an Event of Default described in Section
6.01(1) or (2), then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Securities in all series, the
whole amount that will then have become due and payable on all such Securities
for principal, premium, if any, and interest, with interest on the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) on the overdue installments of interest at
the rate borne by the Securities in all series; and, in addition, such further
amount as will be sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any expenses or liabilities incurred by the Trustee hereunder
other than through its negligence or bad faith. Until such demand by the
Trustee, the Company may pay the principal of and premium, if any, and interest
on the Securities of all series to the registered Holders, whether or not the
Securities in that series are overdue.

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SECTION 6.07. Limitation on Suits. A Securityholder may not pursue any remedy
with respect to this Indenture unless:

	(1)	 	the Holder gives to the Trustee written notice stating that
an Event of Default as to a series is continuing;
	 
	 	 	enforcement of the liability of any stockholder or subscriber
to Capital Stock in respect of shares of Capital Stock which have not been
fully paid up.

	(2)	 	the Holders of at least 25% in principal amount of the
Securities of the series then outstanding make a written request to
the Trustee to pursue the remedy;
	 
	(3)	 	such Holder or Holders offer to the Trustee reasonable
security or indemnity satisfactory to the Trustee against any loss,
liability or expense;
	 
	(4)	 	the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity,
and the Event of Default has not been waived; and
	 
	(5)	 	the Trustee has received no contrary direction from the
Holders of a majority in principal amount of the Securities of the
series then outstanding during such 60-day period.

     A Securityholder may not use this Indenture to prejudice the rights of
another Holder of the same series of Securities or to obtain a preference or
priority over another Holder of the same series of Securities.

SECTION 6.08. Rights of Holders to Receive Payment and to Demand Conversion.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security of any series to receive payment of principal of, premium, if
any, and interest, if any, on the Security (and interest on overdue principal
and interest on overdue installments of interest, if any, as provided in
Section 4.01), on or after the respective due dates expressed in the Security
or, in the case of redemption, on or after the redemption date, or in the case
of conversion or exchange, to receive the security issuable upon conversion or
exchange or to institute suit for the enforcement of any such payment,
conversion or exchange on or after the applicable due date, redemption date or
conversion or exchange date, as the case may be, against the Company, will not
be impaired or affected without the consent of the Holder.

SECTION 6.09. Collection Suit by Trustee. If an Event of Default in payment of
principal, premium, if any, or interest, if any, specified in clause (1) or (2)
of Section 6.01 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company for the
whole amount of principal, premium, if any, and interest remaining unpaid
(together with interest on that unpaid interest to the extent lawful) and the
amounts provided for in Section 7.07.

SECTION 6.10. Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Holders of the Securities of
any or all series allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, if the Trustee consents to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee
under Section 7.07.

SECTION 6.11. Restoration of Positions. If a judicial proceeding by the
Trustee or a Securityholder to enforce any right or remedy under this Indenture
or any Supplemental Indenture is dismissed or decided favorably to the Company,
except as otherwise provided in the judicial proceeding, the Company, the
Trustee and the Securityholders will be restored to the positions they would
have been in if the judicial proceeding had not been instituted.

- 14 -

 

SECTION 6.12. Priorities. If the Trustee collects any money pursuant to this
Article 6 with respect to Securities of a series, subject to Article 11, it
will pay out the money or property in the following order:

	 	 	 	 	 
	

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

	 	SECOND:
	 	to Securityholders for amounts due and unpaid on the Securities
of the series for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities of the series for principal and interest,
respectively; and
	 
	 	 	 	 
	

	 	THIRD:
	 	to the Company.

     The Trustee may fix a record date and payment date for any payment to
Holders of Securities of a series pursuant to this Section. At least 15 days
before the record date, the Company will mail to each Holder of Securities of
the series and the Trustee a notice that states the record date, the payment
date and the amount to be paid.

SECTION 6.13. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or any Supplemental Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant. This Section
6.13 does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07, or a suit by Holders of in aggregate more than 10% in principal
amount of the Securities of a series then outstanding, or to any suit
instituted by any Holder for the enforcement of the payment of the principal
of, premium, if any, or interest on any Security held by that Holder on or
after the due date provided in the Security or to any suit for the enforcement
of the right to convert or exchange any Security in accordance with the
provisions of a Supplemental Indenture applicable to that Security.

SECTION 6.14. Stay, Extension or Usury Laws. The Company agrees (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim, and will resist any and all efforts to be
compelled to take the benefit or advantage of, any stay or extension law or any
usury or other law, wherever enacted, now or at any subsequent time in force,
which would prohibit or forgive the Company from paying all or any portion of
the principal of, premium, if any, and/or interest on any of the Securities as
contemplated in this Indenture or a Supplemental Indenture, or which may affect
the covenants or performance of this Indenture, and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and agrees that it will not hinder, delay or impede the execution
of any power granted to the Trustee in this Indenture or any Supplemental
Indenture, but (to the extent that it may lawfully do so) will suffer and
permit the execution of any such power as though no such law had been enacted.

SECTION 6.15. Liability of Stockholders, Officers, Directors and Incorporators.
No stockholder, officer, director or incorporator, as such, past, present or
future, of the Company, or any of its successor
corporations, will have any personal liability in respect of the Company’s
obligations under this Indenture or any Securities by reason of his or its
status as such stockholder, officer, director or incorporator; provided,
however, that nothing in this Indenture or in the Securities will prevent
recourse to and enforcement of the liability of any stockholder or subscriber
to Capital Stock which have not been fully paid up.

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ARTICLE SEVEN

TRUSTEE

SECTION 7.01. Duties of Trustee.

     (a) If an Event of Default has occurred and is continuing, the Trustee
will exercise the rights and powers vested in it by this Indenture and any
applicable Supplemental Indenture and use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.

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

          (i) the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture and any Supplemental Indentures
and no implied covenants or obligations will be read into this Indenture or any
Supplemental Indenture against the Trustee; and

          (ii) the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed in them, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture in the absence of bad faith on the Trustee’s part; provided, however,
that the Trustee will examine the certificates and opinions to determine
whether or not they substantially conform to the requirements of this
Indenture.

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

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

          (2) the Trustee will not be liable for any error of judgment made in good
faith by a Trust Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts;

          (3) the Trustee will not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05; and

          (4) the Trustee will not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
under this Indenture or any Supplemental Indenture or in the exercise of any of
its rights or powers, if it has reasonable grounds to believe repayment of the
funds or adequate indemnity against the risk or liability is not reasonably
assured to it.

     (d) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee is subject to the
provisions of this Section 7.01 and to the provisions of the TIA.

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

- 16 -

 

     (f) The Trustee will not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money and Government
Obligations held in trust by the Trustee need not be segregated from other
funds or items except to the extent required by law.

SECTION 7.02. Rights of Trustee.

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

     (b) Before the Trustee acts or refrains from acting, it may require an
Officers’ Certificate or an Opinion of Counsel which conforms to Section 12.05.
The Trustee will not be liable for any action it takes or omits to take in
good faith in reliance on such an Officers’ Certificate or Opinion of Counsel.

     (c) The Trustee may act through agents and will not be responsible for the
misconduct or negligence of any agent appointed with due care.

     (d) The Trustee will not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers, except conduct which constitutes wilful misconduct, negligence or bad
faith.

     (e) The Trustee may consult with counsel, and the Trustee will not be
liable for any action it takes or omits in reliance on, and in accordance with,
written advice of counsel.

     (f) The Trustee will not be required to investigate any facts or matters
stated in any document, but if it decides to investigate any matters or facts,
the Trustee or its agents or attorneys will be entitled to examine the books,
records and premises of the Company.

SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or any of its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.

SECTION 7.04. Trustee’s Disclaimer. The Trustee (i) is not responsible for and
makes no representation as to the validity or adequacy of this Indenture, (ii)
will not be responsible for and will not make any representation as to the
validity or adequacy of any Supplemental Indenture, (iii) will not be
accountable for the Company’s use of the proceeds from the Securities of any
series, and (iv) will not be responsible for any statement of the Company in
this Indenture or any Supplemental Indenture, other than the Trustee’s
certificate of authentication, or in any prospectus used in the sale of any of
the Securities, other than statements, if any, provided in writing by the
Trustee for use in such a prospectus.

SECTION 7.05. Notice of Defaults. The Trustee will give to the Holders of the
Securities of a series notice of any Default with regard to the Securities of
that series known to the Trustee, within 90 days after it occurs; provided,
that, except in the case of a Default in the payment of the principal of, or
premium, if any, or interest on any Security, the Trustee will be protected in
withholding notice of the
Default if and so long as a committee of its Trust Officers in good faith
determines that the withholding of the notice is in the interests of the
Holders of the Securities of the series.

- 17 -

 

SECTION 7.06. Reports by Trustee. Within 60 days after each May 15 beginning
with the May 15 following the date of this Indenture, the Trustee will mail to
each Securityholder, at the name and address which appears on the registration
books of the Company, and to each Securityholder who has, within the two years
preceding the mailing, filed that person’s name and address with the Trustee
for that purpose and each Securityholder whose name and address have been
furnished to the Trustee pursuant to Section 2.07, a brief report dated as of
that May 15 which complies with TIA Section 313(a). The Trustee also will
comply with TIA Section 313(b).

     A copy of each report will at the time of its mailing to Securityholders
be filed with each stock exchange on which Securities are listed and also with
the SEC. The Company will promptly notify the Trustee when the Securities of
any series are listed on any stock exchange and of any delisting of Securities
of any series.

SECTION 7.07. Compensation and Indemnity. The Company will pay to the Trustee
from time to time reasonable compensation for its services. The Trustee’s
compensation will not be limited by any law on compensation of a trustee of an
express trust. The Company will reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Those expenses
will include the reasonable compensation and expenses, disbursements and
advances of the Trustee’s agents, counsel, accountants and experts. The
Company will indemnify the Trustee against any and all loss, liability or
expense (including reasonable attorneys’ fees) incurred by it in connection
with the administration of the trust created by this Indenture or any
Supplemental Indenture and the performance of its duties under this Indenture
or any Supplemental Indenture. The Trustee will notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company will not relieve the Company of its obligations under this Section.
The Company will defend the claim and the Trustee may have separate counsel
and the Company will pay the fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent. The Company need not
reimburse any expense or indemnify against any loss, expense or liability
incurred by the Trustee to the extent it is due to the Trustee’s own wilful
misconduct, negligence or bad faith.

     To secure the Company’s obligation to make payments to the Trustee under
this Section 7.07, the Trustee will have a lien prior to the Securities on all
money or property held or collected by the Trustee, other than money or
property held in trust to pay principal or interest on particular Securities.
Those obligations of the Company will survive the satisfaction and discharge of
this Indenture.

     When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (4) or (5) of Section 6.01 occurs, the expenses and
the compensation for the services of the Trustee are intended to constitute
expenses of administration under any Bankruptcy Law.

     For purposes of this Section 7.07, “Trustee” will include any predecessor
Trustee, but the wilful misconduct, negligence or bad faith of any Trustee will
not affect the rights of any other Trustee under this Section 7.07.

SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in aggregate principal amount
of the Securities of all series then
outstanding may remove the Trustee by so notifying the Trustee and the Company
and may appoint a successor Trustee. The Company may remove the Trustee if:

- 18 -

 

	(1)	 	the Trustee fails to comply with Section 7.10;
	 
	(2)	 	the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any bankruptcy
law;
	 
	(3)	 	a receiver or other public officer takes charge of the
Trustee or its property; or
	 
	(4)	 	the Trustee becomes incapable of acting.

     If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of Securities of all series then
outstanding may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.

     No removal or appointment of a Trustee will be valid if that removal or
appointment would conflict with any law applicable to the Company.

     A successor Trustee will deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee will, subject to the lien provided for in Section 7.07,
transfer all property held by it as a Trustee to the successor Trustee, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture and all Supplemental Indentures. A successor Trustee will
mail notice of its succession to each Securityholder.

     If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in aggregate principal amount of Securities of all
series then outstanding may petition any court of competent jurisdiction for
the appointment of a successor Trustee.

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

     Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company’s obligations under Section 7.07 will continue for the benefit of
the retiring Trustee.

SECTION 7.09. Successor Trustee by Merger, etc. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust assets to, another Person, the resulting, surviving or
transferee Person will, without any further act, be the successor Trustee.

     If at the time a successor by merger, conversion or consolidation to the
Trustee succeeds to the trusts created by this Indenture any of the Securities
have been authenticated but not delivered, the successor to the Trustee may
adopt the certificate of authentication of the predecessor Trustee, and deliver
the Securities which were authenticated by the predecessor Trustee; and if at
that time any of the Securities have not been authenticated, the successor to
the Trustee may authenticate those Securities either in the name of the
predecessor or in its own name as the successor to the Trustee; and in either
case the certificates of authentication will have the full force provided in
this Indenture for certificates of authentication.

- 19 -

 

SECTION 7.10. Eligibility; Disqualification. The Trustee will at all times
satisfy the requirements of TIA Section 310(a). The Trustee will at all times
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recently published annual report of condition, which will be deemed for
this paragraph to be its combined capital and surplus. The Trustee will comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9).

SECTION 7.11. Preferential Collection of Claims. The Trustee will comply with
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed will be subject to TIA
Section 311(a) to the extent indicated.

ARTICLE EIGHT

DISCHARGE OF INDENTURE

SECTION 8.01. Termination of the Company’s Obligations. When (i) the Company
delivers to the Trustee all outstanding Securities of all series (other than
Securities replaced pursuant to Section 2.09) for cancellation or (ii) all
outstanding Securities of all series have become due and payable, or are due
and payable within one year or are to be called for redemption within one year,
under arrangements satisfactory to the Trustee for giving the notice of
redemption, and the Company irrevocably deposits in trust with the Trustee
(subject to Article Eleven) money or U.S. Government Obligations sufficient to
pay the principal, premium, if any, and interest, if any, on the Securities of
all series to maturity or redemption, as the case may be, and if, in the case
of either (i) or (ii) above the Company also pays or causes to be paid all
other sums payable by the Company under this Indenture, then this Indenture
will cease to be of further effect.

     Notwithstanding the foregoing, the Company’s obligations to pay principal,
premium, if any, and interest, if any, on the Securities and the Company’s
obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in Article
Ten will survive until all the Securities of all series are no longer
outstanding. Thereafter, the Company’s obligations in Section 7.07 will
survive.

     Before or after a deposit the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities of a series at a future date to
the extent the Securities are redeemable in accordance with Article Three and
the applicable Supplemental Indenture.

     After a deposit pursuant to this Section 8.01 or after all outstanding
Securities of all series have been delivered to the Trustee for cancellation,
the Trustee upon request from the Company, accompanied by an Officers’
Certificate and an Opinion of Counsel which complies with Section 12.05, and at
the cost of the Company, will acknowledge in writing the satisfaction and
discharge of the Company’s obligations under the Securities of all series and
this Indenture except for those surviving obligations specified above.

     In order to have money available on payment dates to pay principal,
premium, if any, or interest, if any, on the Securities of a series, the U.S.
Government Obligations will be payable as to principal, premium, if any, or
interest on or before those payment dates in amounts sufficient to provide the
necessary money. U.S. Government Obligations used for this purpose may not be
callable at the issuer’s option.

     “U.S. Government Obligations” means:

- 20 -

 

          (1) direct obligations of the United States for the payment of which its
full faith and credit is pledged; or

          (2) obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States.

SECTION 8.02. Application of Trust Money. Subject to Article Eleven and
Section 8.03, the Trustee will hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01. It will apply the
deposited money and the money from the U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture and any applicable
Supplemental Indentures to the payment of principal of, premium, if any, and
interest, if any, on the Securities with regard to which the money or U.S.
Government Obligations were deposited.

SECTION 8.03. Repayment to the Company. The Trustee and the Paying Agent will
promptly pay to the Company upon request any excess money or securities held by
them at any time. The Trustee and the Paying Agent will pay to the Company
upon request any money held by them for the payment of principal, premium or
interest that remains unclaimed for two years. After such payment, all
liability of the Trustee and the Paying Agent with respect to that money will
cease.

ARTICLE NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 9.01. Without Consent of Holders. The Company and the Trustee may
amend or supplement this Indenture or the Securities without notice to or
consent of any Securityholder:

	(1)	 	to cure any ambiguity, defect or inconsistency;
	 
	(2)	 	to comply with Article 5;
	 
	(3)	 	to establish the form and terms of the Securities of any
series as contemplated in Article Two of this Indenture;
	 
	(4)	 	to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
	 
	(5)	 	to make any change that does not materially adversely affect
the rights of any Securityholder.

     After an amendment under this Section becomes effective, the Company will
mail to the Securityholders a notice briefly describing the amendment. The
failure to give such notice to all Securityholders, or any defect in a notice,
will not impair or affect the validity of an amendment under this Section.

SECTION 9.02. With Consent of Holders. The Company and the Trustee may (i)
amend or supplement this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of a majority in
aggregate principal amount of the Securities of all series then outstanding or
(ii) supplement this Indenture with regard to a series of Securities, amend or
supplement a Supplemental

- 21 -

 

Indenture relating to a series of Securities, or
amend the Securities of a series, without
notice to any Securityholder but with the written consent of the Holders of a
majority in aggregate principal amount of the Securities of that series then
outstanding. The Holders of a majority in principal amount of the Securities
of all series then outstanding may waive compliance by the Company with any
provision of this Indenture or the Securities without notice to any
Securityholder. The Holders of a majority in principal amount of the
Securities of any series then outstanding may waive compliance with any
provision of this Indenture, any Supplemental Indenture or the Securities of
that series with regard to the Securities of that series without notice to any
Securityholder. However, without the consent of the Holder so affected, no
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may:

	(1)	 	extend the fixed maturity of any Security, reduce the rate or
extend the time for payment of interest on any Security, reduce the
principal amount of any Security or premium, if any, on any
Security;
	 
	(2)	 	impair or affect the right of a Holder to institute suit for
the payment of interest, if any, principal or premium, if any, on
the Securities;
	 
	(3)	 	change the currency in which the Securities are payable from
that specified in the Securities or in a Supplemental Indenture
applicable to the Securities;
	 
	(4)	 	impair the right, if any, to convert the Securities into, or
exchange the Securities for, other securities or assets;
	 
	(5)	 	reduce the percentage of Securities required to consent to an
amendment, supplement or waiver;
	 
	(6)	 	reduce the amount payable upon the redemption of any Security
or change the time at which any Security may or will be redeemed;
	 
	(7)	 	modify the provisions of any Supplemental Indenture with
respect to subordination of the Securities of a series in a manner
adverse to the Securityholders; or
	 
	(8)	 	make any change in Section 6.04 or 6.08 or the fifth sentence
of this Section.

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

SECTION 9.03. Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture, any Supplemental Indenture or the Securities will
comply with the TIA as then in effect.

SECTION 9.04. Revocation and Effect of Consents. A consent to an amendment,
supplement or waiver by a Holder of a Security will bind the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder’s Security, even if notation of the consent
is not made on any Security. However, any such Holder or subsequent Holder may
revoke the consent as to the Holder’s Security or portion of a Security. For a
revocation to be effective, the Trustee must receive notice of the revocation
before the date the amendment, supplement or waiver becomes effective. After
an amendment, supplement or waiver becomes effective in accordance with its
terms, it will bind every Holder of every Security of every series to which it
applies.

- 22 -

 

SECTION 9.05. Notation on or Exchange of Securities. If an amendment changes
the terms of a series of Securities, the Trustee may require the Holder of a
Security of the series to deliver the Holder’s Security to the Trustee, who
will place an appropriate notation about the amendment, supplement or waiver on
the Security and will return it to the Holder. Alternatively, the Company may,
in exchange for the Security, issue, and the Trustee will authenticate, a new
Security that reflects the amendment, supplement or waiver.

SECTION 9.06. Trustee to Sign Amendments, etc. The Trustee will sign any
amendment, supplement or waiver authorized pursuant to Article Two or this
Article Nine if the amendment, supplement or waiver does not adversely affect
the rights, liabilities or immunities of the Trustee. If it does adversely
affect those rights, liabilities or immunities, the Trustee may but need not
sign it. The Company may not sign an amendment or supplement until the
amendment or supplement is approved by an appropriate Board Resolution.

ARTICLE TEN

CONVERSION OR EXCHANGE OF SECURITIES

SECTION 10.01. Provisions Relating to Conversion or Exchange of Securities. Any
rights which Holders of Securities of a series will have to convert those
Securities into other securities of the Company or to exchange those Securities
for securities of other Persons or other assets, including but not limited to
the terms of the conversion or exchange and the circumstances, if any, under
which those terms will be adjusted to prevent dilution or otherwise, will be
set forth in a Supplemental Indenture relating to the series of Securities. In
the absence of provisions in a Supplemental Indenture relating to a series of
Securities setting forth rights to convert or exchange the Securities of that
series into or for other securities or assets, Holders of the Securities of
that series will not have any such rights.

ARTICLE ELEVEN

SINKING OR PURCHASE FUNDS

SECTION 11.01. Provisions Relating to Sinking or Purchase Funds. Any
requirements that the Company make, or rights of the Company to make at its
option, payments prior to maturity of the Securities of a series which will be
used as a fund with which to redeem or to purchase Securities of that series,
including but not limited to provisions regarding the amount of the payments,
when the Company will be required, or will have the option, to make the
payments and when the payments will be applied, will be set forth in a
Supplemental Indenture relating to the series of Securities. In the absence of
provisions in a Supplemental Indenture relating to a series of Securities
setting forth requirements that the Company make, or rights of the Company to
make at its option, payments to be used as a fund with which to redeem or
purchase Securities of the series, the Company will not be subject to any such
requirements and will not have any such rights. However, unless otherwise
specifically provided in a Supplemental Indenture relating to a series of
Securities, the Company will at all times have the right to purchase Securities
from Holders in market transactions or otherwise.

- 23 -

 

ARTICLE TWELVE

MISCELLANEOUS

SECTION 12.01. Trust Indenture Act Controls. If any provision of this Indenture
or any Supplemental Indenture limits, qualifies or conflicts with the duties
imposed by Section 310 through 317 of the TIA, the imposed duties will control.

SECTION 12.02. Supplemental Indentures Contract. If any provision of a
Supplemental Indenture relating to a series of Securities is inconsistent with
any provision of this Indenture, the provision of the Supplemental Indenture
will control with regard to the Securities of the series to which it relates.

SECTION 12.03. Notices. Any notice or communication under or relating to this
Indenture or any Supplemental Indenture will be sufficiently given if in
writing and delivered in person or mailed by first-class mail, certified or
registered, return receipt requested, addressed as follows:

	 	 	 
	if to the Company:

	 	Lennar Corporation
	

	 	700 N.W. 107th Avenue
	

	 	Miami, Florida 33172
	

	 	Attention: Treasurer
	 
	 	 
	if to the Trustee:

	 	U.S. Bank Trust, National Association
	

	 	100 Wall Street, Suite 1600
	

	 	New York, New York 10006
	

	 	Attn: Beverly A. Freeney

     Either the Company or the Trustee by a notice to the other may designate
additional or different addresses for subsequent notices or communications.

     Any notice or communication mailed to a Securityholder will be mailed to
the Securityholder at the Securityholder’s address as it appears on the
registration books of the Registrar and will be sufficiently given to the
Securityholder if so mailed within the time prescribed.

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

     If by reason of the suspension of regular mail service, or by reason of
any other cause, it is impossible to mail any notice as required by this
Indenture or any Supplemental Indenture, then any method of notification which
is approved by the Trustee will constitute a sufficient mailing of the notice.

     The Company may set a record date for purposes of determining the identity
of Securityholders entitled to vote or consent to any action by vote or consent
authorized or permitted by Sections 6.04 and 6.05. The record date will be the
later of 30 days prior to the first solicitation of consents or the date of the
most recent list of Holders furnished to the Trustee pursuant to Section 2.07
prior to the solicitation.

SECTION 12.04. Communication by Holders with Other Holders. Securityholders may
communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture

- 24 -

 

or the Securities. Each of the
Company, the Trustee, the Registrar and anyone else will have the protection of
TIA Section 312(c).

SECTION 12.05. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture or any Supplemental Indenture, the Company will furnish to the
Trustee:

	(1)	 	an Officers’ Certificate stating that, in the opinion of the
signer, all conditions precedent, if any, provided for in this
Indenture or any Supplemental Indenture relating to the proposed
action have been complied with;
	 
	(2)	 	an Opinion of Counsel stating that, in the opinion of such
counsel, all those conditions precedent have been complied with; and
	 
	(3)	 	such other opinions and certificates as may be required by
applicable provisions of this Indenture or the Supplemental
Indenture.

     Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture or a Supplemental Indenture will
include:

     (i) a statement that the person making the certificate or opinion has read
the covenant or condition;

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

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

     (iv) a statement as to whether or not, in the opinion of that person, the
condition or covenant has been complied with.

     Nothing in this Section 12.05 will be construed as requiring that the
Company furnish to the Trustee any evidence of compliance with the conditions
and covenants provided for in this Indenture or any Supplemental Indenture
other than the evidence specified in this Section 12.05.

SECTION 12.06. When Treasury Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company, or anyone under
direct or indirect control or under direct or indirect common control with the
Company will be disregarded and deemed not to be outstanding, except that for
the purposes of determining whether the Trustee will be protected in relying on
any such direction, waiver or consent, only Securities which the Trustee knows
are so owned will be so disregarded. Securities so owned which have been
pledged in good faith will not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right to act with respect to the
Securities and that the pledgee is not the Company or a person directly or
indirectly controlling or controlled by, or under common control with, the
Company. Nothing in this Section 12.06 will be construed as requiring that the
Company furnish to the Trustee any evidence of compliance with the conditions
and covenants provided for in the Indenture other than the evidence specified
in this Section 12.06.

- 25 -

 

SECTION 12.07. Rules by Trustee, Paying Agent, Registrar. The Trustee may make
reasonable rules for action by or at a meeting of Securityholders. The Paying
Agent or Registrar may make reasonable rules for its functions.

SECTION 12.08. Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday, or a
day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest on the sum being paid will accrue for the intervening
period.

SECTION 12.09. Governing Law and Submission to Jurisdiction. The laws of the
State of New York will govern this Indenture, each Supplemental Indenture and
the Securities. The Company submits to the jurisdiction of the courts of the
State of New York sitting in the Borough of Manhattan, City of New York, and of
the United States District Court for the Southern District of New York, in any
action or proceeding to enforce any of its obligations under this Indenture or
any Supplemental Indenture or with regard to the Securities, and agrees not to
seek a transfer of any such action or proceeding on the basis of inconvenience
of the forum or otherwise (but the Company will not be prevented from removing
any such action or proceeding from a state court to the United States District
Court for the Southern District of New York). The Company agrees that process
in any such action or proceeding may be served upon it by registered mail or in
any other manner permitted by the rules of the court in which the action or
proceeding is brought.

SECTION 12.10. Actions by the Company. Any action or proceeding brought by the
Company to enforce any right, assert any claim or obtain any relief in
connection with this Indenture, any Supplemental Indenture or the Securities
will be brought by the Company exclusively in the courts of the State of New
York sitting in the Borough of Manhattan, City of New York or in the United
States District Court for the Southern District of New York.

SECTION 12.11. No Adverse Interpretation of Other Agreements. Neither this
Indenture nor any Supplemental Indenture may be used to interpret another
indenture, loan or debt agreement of the Company or any Subsidiary. No such
indenture, loan or debt agreement may be used to interpret this Indenture or
any Supplemental Indenture.

SECTION 12.12. Successors. All agreements of the Company in this Indenture, any
Supplemental Indentures and the Securities will bind its successors. All
agreements of the Trustee in this Indenture and any Supplemental Indentures
will bind its successors.

SECTION 12.13. Duplicate Originals. The parties may sign any number of copies
of this Indenture or any Supplemental Indenture. Each signed copy will be an
original, but all of them together will represent the same agreement.

SECTION 12.14. Table of Contents, Headings, etc. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only. They are not
to be considered a part of this Indenture, and will in no way modify or
restrict any of the terms or provisions of this Indenture.

- 26 -

 

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

	 	 	 	 	 
	

	 	LENNAR CORPORATION
	 
	 	 	 	 
	

	 	By:	 	/s/ Stuart Miller
	

	 	 	

	

	 	Name: Stuart Miller

Title: President

	 	 	 	 	 
	

	 	U.S. BANK TRUST, NATIONAL ASSOCIATION
	 
	 	 	 	 
	

	 	By:	 	/s/ Beverly A. Freeney
	

	 	 	

	

	 	Name: Beverly A. Freeney

Title: Vice President

- 27 -

 

EXHIBIT A

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

     This is one of the Securities of the series described in the
within-mentioned Indenture and Supplemental Indenture.

	 	 	 
	U.S. BANK TRUST, NATIONAL ASSOCIATION

	as Trustee

	 
	 	 
	By:
	 	 
	

	
 
		Authorized Signature

Exhibit A- 1WARRANTS TO PURCHASE

 

EXHIBIT 10.17

 

THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION
UNDER THE ACT UNLESS EITHER (i) THE DISPOSITION OF SUCH SECURITIES IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR (ii) THE DISPOSITION OF SUCH SECURITIES IS REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

WARRANT TO PURCHASE

COMMON STOCK OF GRAND TOYS INTERNATIONAL, INC.

     This certifies that                     (the “Holder”), for value
received, is entitled to purchase from Grand Toys International, Inc. (the
“Company”)            
        (                   ) shares of the Company’s Common Stock, $0.001
par value per share (the “Common Stock”), at a per share exercise price of
$0.53 per share (the “Per Share Exercise Price”). This right may be exercised
at any time after the six month anniversary of the date hereof up to and
including 5:00 p.m. (New York City time) on the third anniversary of the date
hereof (the “Expiration Date”).

1. Exercise.

     (a) To exercise this right the Holder shall surrender to the Company at
its principal office (or at such other location as the Company may advise the
Holder in writing) this warrant, properly endorsed, with the Subscription Form
attached hereto duly filled in and signed and, if applicable, upon payment in
cash or by check of the aggregate Per Share Exercise Price for the number of
shares for which this warrant is being exercised determined in accordance with
the provisions hereof.

     (b) In lieu of exercising this warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this warrant (or the
portion thereof being canceled) by surrender of this warrant at the principal
office of the Company, together with the properly endorsed Subscription Form
and notice of such election, in which event the Company will issue to the
Holder a number of shares of Common Stock computed using the following formula:

	 	 	 	 	 
	X

	 	=
	 	Y (A-B)
	

	 	 	 	

	

	 	 	 	      A
	 
	 	 	 	 
	Where X

	 	=
	 	the number of shares of Common Stock to be issued to the Holder
	 
	 	 	 	 
	Y

	 	=
	 	the number of shares of Common Stock purchasable under this warrant

	or, if only a portion of this warrant is being exercised, the portion of this
warrant being canceled (at the date of such calculation)

 

 

	 	 	 	 	 
	A

	 	=
	 	the Fair Market Value per share of Common Stock (at the date of such
calculation)
	 
	 	 	 	 
	B

	 	=
	 	Per Share Exercise Price (as adjusted to the date of such calculation)

     For purposes of the above calculation, Fair Market Value per share of
Common Stock will be as follows:

               (1) If the Common Stock is listed on a national securities exchange,
the Nasdaq National Market or another nationally recognized trading
system as of the exercise date, the Fair Market Value per share of Common
Stock shall be deemed to be the last reported sale prices per share of
Common Stock thereon on the trading day on which a sale was made
immediately preceding the exercise date.

               (2) If the Common Stock is not listed on a national securities
exchange, the Nasdaq National Market or another nationally recognized
trading system as of the exercise date, the Fair Market Value per share
of Common Stock shall be deemed to be the amount most recently
determined by the Board of Directors to represent the fair market value
per share of the Common Stock (including without limitation a
determination for purposes of granting Common Stock options or issuing
Common Stock under an employee benefit plan of the Company); and, upon
request of the Holder, the Board of Directors (or a representative
thereof) shall promptly notify the Holder of the Fair Market Value per
share of Common Stock . Notwithstanding the foregoing, if the Board of
Directors has not made such a determination within the three-month period
prior to the exercise date, then (A) the Board of Directors shall make a
determination of the Fair Market Value per share of Common Stock within
15 days of a request by the Holder that it do so, and (B) the exercise of
this Warrant pursuant to this subsection 1(b) shall be delayed until such
determination is made.

2. Issuance of Certificates.

     Certificates for the shares of Common Stock acquired upon exercise of this
warrant, together with any other securities or property to which the Holder is
entitled upon such exercise, will be delivered to the Holder by the Company at
the Company’s expense within a reasonable time after this warrant has been so
exercised. Each stock certificate so delivered will be in such denominations
of Common Stock as may be requested by the Holder and will be registered in the
name of the Holder. In case of a purchase of less than all the shares that may
be purchased under this warrant, the Company will cancel this warrant and
execute and deliver a new warrant or warrants of like tenor for the balance of
the shares purchasable under this warrant to the Holder within a reasonable
time after surrender of this warrant.

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3. Shares Fully-Paid, Nonassessable, Etc.

     All shares of Common Stock issued upon exercise of this warrant will, upon
issuance, be duly authorized, validly issued, fully-paid and nonassessable and
free from all preemptive rights of any shareholder and free of all taxes, liens
and charges with respect to the issue thereof. The Company will at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the exercise of this warrant, such
number of its shares of Common Stock as from time to time are sufficient to
effect the full exercise of this warrant. If at any time the number of
authorized but unissued shares of Common Stock is not sufficient to effect the
full exercise of this warrant, the Company will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as is sufficient for
such purpose. The Company will take all such action as may be necessary to
assure that such securities may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the Common Stock may be listed; provided,
however, that the Company will not be required to effect a registration under
federal or state securities laws with respect to such exercise (except as may
be set forth in a separate written agreement between the Company and the
Holder).

4. Adjustments.

     4.1 Adjustment for Stock Splits and Combinations. If the Company at any
time or from time to time during the term of this warrant effects a subdivision
of the outstanding Common Stock, the Per Share Exercise Price in effect
immediately before that subdivision will be proportionately decreased.
Conversely, if the Company at any time or from time to time during the term of
this warrant combines the outstanding shares of Common Stock into a smaller
number of shares, the Per Share Exercise Price in effect immediately before the
combination will be proportionately increased. Any adjustment under this
Section 4.1 will become effective at the close of business on the date the
subdivision or combination becomes effective.

     4.2 Adjustment for Common Stock Dividends and Distributions. If the
Company at any time or from time to time during the term of this warrant makes,
or fixes, a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in additional
shares of Common Stock, in each such event the Per Share Exercise Price that is
then in effect will be decreased as of the time of such issuance or, in the
event such record date is fixed, as of the close of business on such record
date, by multiplying the Per Share Exercise Price then in effect by a fraction
(a) the numerator of which is the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance on the close of
business on such record date, and (b) the denominator of which is the total
number of shares of Common Stock issued and outstanding immediately prior to
the time of such issuance on the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Per Share Exercise Price will be recomputed
accordingly as of the close of

- 3 -

 

business on such record date and thereafter the Per Share Exercise Price will
be adjusted pursuant to this Section 4.2 to reflect the actual payment of such
dividend or distribution.

     4.3 Adjustments for Other Dividends and Distributions. If the Company at
any time or from time to time during the term of this warrant makes, or fixes a
record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in securities of the Company
other than shares of Common Stock, in each such event provision will be made so
that the Holder will receive upon exercise of this warrant, in addition to the
number of shares of Common Stock receivable thereupon, the amount of other
securities of the Company that it would have received had this warrant been
exercised on the date of such event and had it thereafter, during the period
from the date of such event to and including the exercise date, retained such
securities receivable by them as aforesaid, subject to all other adjustments
called for during such period under this Section 4 with respect to the rights
of the Holder hereunder or with respect to such other securities by their
terms.

     4.4 Adjustment for Reclassification, Exchange and Substitution. If at any
time or from time to time during the term of this warrant the Common Stock
issuable upon the exercise of this warrant is changed into the same or a
different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a recapitalization,
subdivision, combination, reclassification or exchange provided for elsewhere
in this Section 4), the Holder will have the right thereafter to exercise this
warrant for the kind and amount of stock and other securities and property
receivable upon such recapitalization, reclassification or other change into
which the shares of Common Stock issuable upon exercise of this warrant
immediately prior to such recapitalization, reclassification or change could
have been converted, all subject to further adjustment as provided herein or
with respect to such other securities or property by the terms thereof.

     4.5 Reorganizations. If at any time or from time to time during the term
of this warrant there is a capital reorganization of the Common Stock (other
than a recapitalization, subdivision, combination, reclassification or exchange
provided for elsewhere in this Section 4), as a part of such capital
reorganization, provision will be made so that the Holder will thereafter be
entitled to receive upon exercise of this warrant the number of shares of stock
or other securities or property of the Company to which a holder of the number
of shares of Common Stock deliverable upon exercise of this warrant would have
been entitled on such capital reorganization, subject to adjustment in respect
of such stock or securities by the terms thereof.

     4.6 Certificate of Adjustment. In each case of an adjustment or
readjustment of the number of shares issuable upon exercise of this warrant or
the Per Share Exercise Price, the Company, at its expense, will compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and will mail such
certificate, by first class mail, postage prepaid, to the Holder at the
Holder’s address as shown in the Company’s books. The certificate will set
forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based, including a

- 4 -

 

statement of (a) the Per Share Exercise Price at the time in effect, and (b)
the type and amount, if any, of other property that at the time would be
received upon exercise of this warrant.

     4.7 Notices of Record Date. Upon (a) any taking by the Company of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, (b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company, any
sale of all or substantially all of the assets of the Company or any voluntary
or involuntary dissolution, liquidation or winding up of the Company or (c) a
proposed sale event, the Company will mail to the Holder at least twenty (20)
days prior to the record date specified therein a notice specifying (1) the
date on which any such record is to be taken for the purpose of such dividend
or distribution and a description of such dividend or distribution, (2) the
date on which any such reorganization, reclassification, recapitalization,
asset sale, dissolution, liquidation or winding up is expected to become
effective, and (3) the date, if any, that is to be fixed as to when the holders
of record of Common Stock (or other securities) will be entitled to exchange
their shares of Common Stock (or other securities) for securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, asset sale, dissolution, liquidation or winding up.

5. Taxes.

     The Company will pay all taxes (other than taxes based upon income) and
other governmental charges that may be imposed with respect to the issue or
delivery of shares of Common Stock upon exercise of this warrant, excluding any
tax or other charge imposed in connection with any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that in which
this warrant was registered.

6. Registration Rights

     The shares of Common Stock issuable upon exercise of this warrant shall
have the identical registration rights set forth in Section 4 of the
Subscription Agreement dated as of the date hereof between the Holder and the
Company.

7. Closing of Books.

     The Company will at no time close its transfer books against the transfer
of any warrant or of any shares of Common Stock issued or issuable upon the
exercise of any warrant in any manner that interferes with the timely exercise
of this warrant.

8. No Voting or Dividend Rights; Limitation of Liability.

     Nothing contained in this warrant will be construed as conferring upon the
Holder the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest will

- 5 -

 

be payable or accrued in respect of this warrant or the interest represented
hereby or the shares purchasable hereunder until, and only to the extent that,
this warrant has been exercised.

9. Warrants Transferable.

     Subject to compliance with applicable federal and state securities laws
and the restrictions imposed by any other written agreement between the Holder
and the Company, this warrant and all rights hereunder are transferable, in
whole or in part, without charge to the Holder (except for transfer taxes),
upon surrender of this warrant properly endorsed and in compliance with the
provisions of this warrant.

10. Modification and Waiver.

     This warrant and any provision hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against
which enforcement of the same is sought.

11. Notices.

     Any notice required by the provisions of this warrant will be in writing
and will be deemed effectively given: (a) upon personal delivery to the party
to be notified; (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient; if not, then on the next business day;
(c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All notices will be addressed to the
Holder at the address of the Holder appearing on the books of the Company.

12. Lost Warrants.

     The Company represents and warrants to the Holder that upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this warrant and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity reasonably satisfactory to
the Company, or in the case of any such mutilation upon surrender and
cancellation of such warrant, the Company, at its expense, will make and
deliver a new warrant, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated warrant.

13. Fractional Shares.

     No fractional shares of Common Stock will be issued upon exercise of this
warrant. If the conversion would result in the issuance of any fractional
share, the Company will, in lieu of issuing any fractional share, pay cash
equal to the product of such fraction multiplied by the closing bid price of
the Company’s Common Stock on the date of conversion.

- 6 -

 

14. Governing Law.

     This warrant will be construed and enforced in accordance with, and the
rights of the parties will be governed by, the laws of the State of New York
without regard to conflict of laws principles.

- 7 -

 

     The
Company has executed this warrant as of this      
              day of March, 2001.

	 	 	 	 	 	 	 
	 	 	 	 	GRAND TOYS INTERNATIONAL, INC.
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

	 
	 	 	 	 	 	 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	

	 
	 	 	 	 	 	 
	HOLDER	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	

	 	
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	

	 	
	 	 	 	 

- 8 -

 

Exhibit A to Warrant

SUBSCRIPTION FORM

Date:     
             

Grand Toys International, Inc.

Attn: President

Ladies and Gentlemen:

     The undersigned hereby elects to exercise the warrant issued to it by
Grand Toys International, Inc. (the “Company”) dated as of
                 
  and to
purchase thereunder            
                           (           
    ) shares of the Common Stock of the
Company at a purchase price of
            
    ($               
   ) per Share, for an aggregate purchase price of                       
               ($                    ) (the “Purchase Price”).

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	

	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	

- 1 -

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