Document:

EX-4.4 Form of Subscription

 

EXHIBIT 4.4

THE SHARES REFERENCED HEREIN HAVE NOT BEEN REGISTERED WITH OR APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED HEREIN.

September 15, 2003

Article I. SUBSCRIPTION AND INVESTMENT REPRESENTATION AGREEMENT

eResource Capital Group, Inc.

6836 Morrison Boulevard

Suite 200

Charlotte, North Carolina 28211

1. SUBSCRIPTION

      The
undersigned (hereinafter referred to as “Subscriber”) hereby
subscribes for and agrees to purchase
       
(   ) restricted shares of the $0.04 par value Common Stock (the
“Shares”) of eResource Capital Group, Inc., a Delaware corporation (“Company”),
and agrees to pay therefor the purchase price of One Dollar and Twelve Cents
($1.12) per share, or an aggregate purchase price of
        
Dollars ($       ), in cash or readily available funds. This
Subscription is part of an offering of up to $1,200,000. There is no minimum
amount and all funds will be immediately deposited into the treasury of
Company. Upon receipt of the purchase price, acceptance of this Subscription
and approval of the American Stock Exchange (“AMEX”), Company shall issue a
stock certificate representing the Shares registered in Subscriber’s name and
deliver same to Subscriber.

2. ACKNOWLEDGEMENTS, REPRESENTATIONS AND WARRANTIES

Subscriber hereby makes the following representations and warranties to Company
and Subscriber understands that Company is materially relying upon such
representations and warranties:

	(a)
	 	Investment Purposes. The Shares are being acquired for Subscriber’s own
account, for investment, and not with the view to, or for, division or
resale in connection with any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”), or the securities or
blue-sky laws of any state.

 

 

	(b)
	 	Restricted Stock. Subscriber understands that the Shares are being
issued pursuant to an exemption from registration under the Securities Act
and without registration under any state securities or blue-sky acts or
laws. Subscriber understands that neither the Shares, nor any portion
thereof, may, and agrees that neither the Shares, nor any portion thereof,
will, be sold, transferred, pledged, or otherwise disposed of in the
absence of an effective registration statement covering the Shares under
the Securities Act and applicable state securities laws, or unless, in the
opinion of counsel satisfactory to Company prepared at the expense of
Subscriber or its proposed transferee, exemptions from such registration
and state securities laws are available. Furthermore, Subscriber is aware
of the restrictions which may be imposed by Company or the federal or
state securities laws on the distribution of the securities, including,
but not limited to, restrictive legends on the stock certificates,
required holding periods, and stop transfer orders.

	 
	 	Subscriber understands that these substantial restrictions on
transferability mean that Subscriber must bear the economic risk of this
investment for an indefinite period of time. In the event Subscriber
requests an opinion from counsel concerning the transferability of the
Shares, or any portion thereof, Subscriber shall pay all costs,
including, without limitation, reasonable attorneys’ fees, related to
such opinion.

	(c)
	 	Restrictive Legend. Since Subscriber is not acquiring the Shares with
any view to subsequent distribution, Subscriber understands that (i) stop
transfer instructions will be given to Company’s transfer agent or the
officer in charge of Company’s stock records and noted on the appropriate
records of Company to the effect that neither the Shares, nor any portion
thereof, may be transferred out of Subscriber’s name unless approval is
first obtained from Company; and (ii) the stock certificates, which will
be issued, shall bear the following or a substantially similar legend
restricting the transfer:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS, BUT HAVE BEEN ISSUED IN
RELIANCE UPON EXEMPTIONS THEREFROM. NO TRANSFER OF THESE
SECURITIES OR ANY INTEREST THEREIN MAY BE MADE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND UNDER APPLICABLE STATE SECURITIES LAWS, UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED.

	(d)
	 	Piggyback Registration Rights. If Company shall determine to register any
of its securities under the Securities Act on any registration form
prescribed by the Securities and Exchange Commission (the “SEC”) either
for its own account or the account of a security holder or holders
exercising their respective demand registration rights, other than a
registration on Form S-4 or S-8, a registration relating solely to a Rule
145 transaction, or a registration on any registration form that does not
permit secondary sales, Company will:

	 	(i)
	 	promptly give to Subscriber written notice of the proposed
registration, including notice deadlines; and

	 	(ii)
	 	use its commercially reasonable efforts to include in such
registration (and any related filing or qualification under
applicable blue sky laws) all the Shares granted under this
Subscription (“Unregistered Securities”) which are specified in a
written request or requests made by Subscriber and received by
Company within seven (7) days after the written notice from Company
described in clause (i) above is mailed or delivered by Company;
provided, that in the event such registration is an underwritten
offering on behalf of Company and the managing underwriter(s) advise
Company that, in their opinion, the number of securities requested
to be included in such registration exceeds the number which can be
reasonably sold in such offering, or if certain marketing factors
require limitation of the number of shares to be registered, then
the number of Subscriber’s Shares which have been requested to be
included in such registration may be reduced

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	 	 	 	or excluded to the extent necessary. Subscriber’s written request
may specify all or a part of Subscriber’s Unregistered Securities
but no less than 25% of Subscriber’s Unregistered Securities.

	 
	 	Provided, however, Subscriber shall only be entitled to such piggyback
registration rights on two (2) occasions and the piggyback registration
rights granted herein shall terminate at such time all of Subscriber’s
Shares have been sold pursuant to an effective registration statement
under the Securities Act or when all of Subscriber’s Unregistered
Securities may be sold without volume restrictions pursuant to Rule 144
as determined by counsel to Company pursuant to a written opinion letter
to such effect, addressed and acceptable to Company’s transfer agent.

	(e)
	 	Access to Information. The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and in
accordance therewith files reports and other information (the “Company’s
SEC Filings”) with the SEC. Subscriber acknowledges and agrees that it
has been provided with copies of or has access to such filings and has
reviewed such filings as Subscriber has deemed necessary or desirable
including Company’s Annual Report on Form 10-KSB for the period ended June
30, 2002, Company’s Quarterly Reports on Form 10-QSB for the periods ended
September 30, 2002, December 31, 2002 and March 31, 2003, Company’s Proxy
Statement on Form 14A filed May 17, 2002, Company’s Form S-3 Registration
Statement filed on February 25, 2002, and Company’s Current Report on Form
8-K filed September 20, 2002. Subscriber and its representatives have
been afforded full and free access to books, records, contracts,
documents, and other information concerning Company and the contemplated
transaction and further have been afforded an opportunity to ask such
questions of the officers, employees, agents, accountants and
representatives of Company concerning the business, operations, financial
condition, assets, liabilities, prospects and other relevant matters as
Subscriber and its representatives have deemed necessary or desirable, and
Subscriber hereby confirms that it or its agents have been given all such
information as has been requested in order to evaluate the merits and
risks of the prospective investment contemplated hereby and that it does
not desire any additional information. Without limiting the foregoing,
Subscriber specifically acknowledges that Subscriber has had the
opportunity to review Company’s SEC Filings. Subscriber acknowledges that
certain of the information provided to Subscriber and information relating
to Company is confidential and proprietary and is being provided to
Subscriber solely for Subscriber’s confidential use with the express
understanding that Subscriber will not disclose such information to any
person or use such information other than for the purpose of evaluating
Subscriber’s purchase of the Shares.

	(f)
	 	Risk Factors. Subscriber understands and acknowledges that an
investment in the Shares is highly speculative and includes a high
degree of risk, including, but not limited to, those risks
specifically set forth in Company’s Quarterly Report or Form 10-QSB
for the period ending March 31, 2003 and Company’s Form S-3
Registration Statement filed on February 25, 2002, each of which,
by its signature below, Subscriber acknowledges it has reviewed.
Subscriber specifically acknowledges that (i) the price of Company
Common Stock has been volatile and future sales of Shares by
Company could increase such volatility, (ii) the exercise of
outstanding options and warrants could substantially dilute
existing stockholders and could have a negative effect on Company’s
stock price, (iii) the future sales of restricted securities could
have a negative effect on Company’s stock price, (iv) Company’s
Common Stock is presently listed and trading on AMEX. The Company
believes that it meets the standards for continued listing but such
a determination is subjective and no assurance can be given that
AMEX will agree or that Company will be trading on AMEX at the time
any Subscriber is able to sell the shares under applicable
securities laws, (v) Company and its subsidiaries have been
incurring operating losses and may not achieve or sustain
profitability, (vi) Company may be unable to successfully execute
its acquisition strategy, (vii) Company’s acquisition strategy has
and will continue to dilute current stockholders’ ownership, (viii)
Company depends on certain important employees, and the loss of any
of those employees may harm its business, (ix) a large portion of
debt matured in August, 2003 and Company did not have sufficient
cash to repay such debt, accordingly, Company is currently
negotiating with debt holders to extend or convert such
indebtedness and may be unsuccessful in extending a substantial
portion of the debt; alternatively, the conversion of debt by
existing debt holders of Company and its subsidiaries could
substantially dilute existing stockholders and have a negative
effect on the stock price, (x) If Company is unable to raise

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	 	funds through a private placement or obtain other financing,
Company may not be able to continue its operations, (xi) Lifestyle
Innovations, Inc. (“LFSI”) lacks an active market for its common
stock and the price of LFSI Common Stock has been volatile, (xii)
LFSI and its subsidiaries’ limited operating histories makes it
difficult to evaluate future prospects and accordingly, future
results are uncertain, (xiii) LFSI and its subsidiaries have been
incurring operating losses and may not achieve or sustain
profitability, (xiv) if LFSI is unable to raise funds through a
private placement or obtain other financing, LFSI and its
subsidiaries may not be able to continue its operations, (xv) if
Company’s aviation travel services business does not produce
revenue as forecasted, then Company will need to raise additional
capital sooner than expected, and (xvi) aviation services
contracts of Company’s aviation travel services business may
result in losses.

	(g)
	 	Independent Action. Subscriber and its representatives have been solely
responsible for Subscriber’s own “due diligence” investigation of this
investment, for Subscriber’s own analysis of the merits and risks of this
investment and for its own analysis of the fairness and desirability of
the terms of the investment. In taking any action or performing any role
relative to the arranging of the proposed investment, Subscriber has acted
solely in its own interest and neither Subscriber nor any of Subscriber’s
agents or employees has acted as an agent of Company.

	(h)
	 	Tax Effects. Subscriber acknowledges that Subscriber has relied solely
upon Subscriber’s own tax advisors with respect to all tax matters related
to this investment.

	(i)
	 	Subscriber. Subscriber represents and warrants that (i) Subscriber is an
“accredited investor” (as noted in Appendix A hereto), (ii) Subscriber has
such knowledge and experience in business and financial matters to enable
Subscriber to utilize the information given to Subscriber in connection
with this investment in order for Subscriber to evaluate the merits and
risks of the investment and to make an informed investment decision, (iii)
Subscriber has no need for liquidity in this investment, (iv) Subscriber
is aware of and able to bear the risks of the investment for an indefinite
period of time, (v) currently, and based on existing conditions,
Subscriber is able to afford a complete loss of such investment, and (vi)
this investment is not disproportionate to Subscriber’s net worth.

	(j)
	 	Shares; Reliance, etc. Subscriber acknowledges, represents and agrees
and is aware that:

	 	(1)
	 	no federal or state agency has passed upon the Shares or made
any finding or determination as to the fairness of an investment in
the Shares;

	 	(2)
	 	there are significant risks of loss of investment incidental
to the purchase of the Shares including, but not limited to, those
risks specifically set forth in Company’s Quarterly Report on Form
10-QSB for the period ending March 31, 2003 on file with the SEC and
Company’s Form S-3 Registration Statement filed with the SEC on
February 25, 2002, and those risks set forth herein;

	 	(3)
	 	there are substantial restrictions on the transferability of
the Shares and all portions thereof;

	 	(4)
	 	the representations, warranties, agreements, undertakings and
acknowledgements made by Subscriber in this Subscription are made
with the intent that they be relied upon by Company in determining
the suitability of Subscriber as a purchaser of the Shares, and
Subscriber undertakes to immediately notify Company of any change in
any representation, warranty or other information relating to
Subscriber set forth herein;

4

 

	 	(5)
	 	neither the financial performance of Company nor the value of
the Shares has been represented, guaranteed or warranted to
Subscriber by Company, its directors, officers, agents or employees
or any other person either expressly or by implication; and

	 	(6)
	 	Subscriber has not received with respect to this investment
any general or public solicitation or advertising.

	(k)
	 	Financial Position; Business Experience. Any information which
Subscriber has heretofore furnished to Company with respect to its
financial position and business experience is correct and complete as of
the date of this Subscription and if there should be any material change
in such information prior to the issuance of any portion of the Shares to
Subscriber, Subscriber will immediately furnish such revised or corrected
information to Company.

3. SUBSCRIPTION NOT REVOCABLE

Subscriber hereby acknowledges and agrees that Subscriber is not entitled to
cancel, terminate or revoke this Subscription or any agreements of Subscriber
hereunder and that this Subscription shall survive the dissolution, death or
disability of Subscriber.

4. INDEMNIFICATION OF THE COMPANY

Subscriber understands the meaning of legal consequences of the representations
and warranties contained herein and hereby agrees to indemnify Company, its
directors, officers, agents and employees from and against any and all loss,
claim, damage or liability due to or arising out of a breach of any
representation or warranty of Subscriber contained in this Subscription.

5. ARBITRATION

	(a)
	 	Arbitration of Disputes. Any dispute, claim or controversy arising out
of or relating to this Subscription, or the breach, termination or
invalidity hereof (referred to herein as a “Dispute”), shall be finally
settled exclusively by arbitration, which shall be administered by the
American Arbitration Association in accordance with its Commercial
Arbitration Rules. The interpretation and enforcement of this Section 5
shall be governed by the United States Arbitration Act, 9 U.S.C. Sections
1 et seq. All arbitrations shall take place in Charlotte, North Carolina.

	(b)
	 	Procedure. As soon as a demand for arbitration shall be made, the
parties to the Dispute shall promptly seek in good faith to agree on the
selection of a single arbitrator. If a single arbitrator is selected by
agreement and agrees to serve, the remaining provisions of this Section 5
shall apply to the proceeding, except that references herein to the
“Arbitration Panel” shall mean the single arbitrator. If no single
arbitrator has been selected and agreed to serve as provided above within
fifteen (15) business days after the demand for arbitration is received by
the respondent(s), the parties will select a panel of three (3)
arbitrators (the “Arbitration Panel”), one selected by Company, one
selected by Subscriber, and one selected by mutual agreement of the
arbitrators selected, respectively, by Company and Subscriber.

	(c)
	 	Powers of the Arbitration Panel. The Arbitration Panel shall be
empowered to render full and complete resolution of the Dispute, but shall
not be empowered to award punitive or consequential damages. Each party
shall bear the costs of its respective attorneys and will share on an
equal basis the costs of the Arbitration Panel. The Arbitration Panel
shall also have the authority and discretion to order, as it sees fit, the
payment of the attorneys’ fees of the parties to the Dispute and any and
all expenses of the arbitration, including payment of the arbitrators’
compensation. In the event the Arbitration Panel finds that any party to
the Dispute has abused or failed to comply with the applicable arbitration
or discovery provisions in this

5

 

	 
	 	Subscription or in the Commercial Arbitration Rules, the Arbitration
Panel shall be empowered to render any sanction that would otherwise be
available under the Federal Rules of Civil Procedure.

	(d)
	 	Consolidation of Arbitrations. If an arbitration is pending hereunder
and a subsequent arbitration of a Dispute is commenced under this
Subscription that arises out of or relates to the same facts or
transactions as the Dispute in the pending arbitration, the Arbitration
Panel in the pending arbitration shall, at the request of any party to
that arbitration, consolidate the subsequently filed arbitration with the
pending arbitration unless such consolidation will result in substantial
additional costs or delay or substantial prejudice to a party. If the
Arbitration Panel fails to make such an order of consolidation, then the
parties may apply to a court of competent jurisdiction for such an order.
The Arbitration Panel in the pending arbitration shall hear and finally
decide any such consolidated arbitration under the procedures provided in
this Section 5.

6. MISCELLANEOUS PROVISIONS

	(a)
	 	Governing Law; Forum Selection Clause. This Subscription shall be
governed by and construed in accordance with the laws of the State of
Delaware. Further, the parties agree that any Disputes arising hereunder
shall be governed by the arbitration provisions set forth in Section 5
hereof and any litigation relating thereto shall take place in the federal
or state courts in Charlotte, North Carolina.

	(b)
	 	Severability. Any term or provision of this Subscription which is
invalid or unenforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining terms or provisions hereof. Any
such invalidity or unenforceability in any such jurisdiction shall not
invalidate or render unenforceable such term or provision in any other
jurisdiction.

	(c)
	 	Entire Agreement. This Subscription constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and
neither this Subscription nor any provisions hereof shall be waived,
changed, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or
termination is sought.

	(d)
	 	Binding Nature. Except as otherwise provided herein, this Subscription
shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, successors, executors, administrators, legal
representatives and permitted assigns.

	(e)
	 	Limitation on Transfer. Subscriber agrees not to transfer or assign this
Subscription, or any of Subscriber’s interest or rights herein, and
further agrees that the transfer or assignment of the Shares, or any
portion thereof, shall be made only in accordance with this Subscription
and all applicable laws, rules and regulations.

	(f)
	 	Variation of Pronouns. All pronouns and any variations thereof shall be
deemed to refer to masculine, feminine, or neuter, singular or plural, as
the identity of the person or entity may require.

	(g)
	 	Survival. The representations and warranties contained on this
Subscription shall survive the closing of the transaction contemplated
hereby.

	(h)
	 	Counterparts. This Subscription may be executed in any number of
counterparts (whether by facsimile or otherwise), each of which shall be
deemed an original, but all of which together shall constitute but one and
the same agreement.

[Signatures on next page]

6

 

      IN WITNESS WHEREOF, Subscriber has executed this Subscription and
Investment Representation Agreement as of the day and year first above written.

	 	 	 
	INDIVIDUAL INVESTOR:	 	
CORPORATE (or other entity) INVESTOR:
	 
	X	 	
Name of Entity:
	 

	 	
 

	 
	Print Name:	 	
By:
	 

	 	
 

	 
	Social Security Number:	 	
Print Name:
	 

	 	
 

Title:
	 	 	
 

	 
	 	 	
EIN:
	 	 	
 

	 
	Residence Address (if an individual):	 	
Business Address (if not an individual):
	 
	 

	 	
 

	 
	Telephone:

	 	
Telephone:

	 
	Facsimile:

	 	
Facsimile:

The provisions of the foregoing Subscription and Investment Representation
Agreement are accepted and consented to by Company this    day of September, 2003.

	 	 	 
	 	 	
eRESOURCE CAPITAL GROUP, INC
	 	 	 
	 	 	 
	 	 	
By:
	 	 	

	 	 	
Name: Michael D. Pruitt

Title: President

7

 

Section 1.01 APPENDIX A

The following summarizes the applicable provisions for determining whether an
offeree is an “accredited investor” for purposes of federal securities laws.
Each offeree should check the line to the left of each provision which applies
to the offeree. After completing Appendix A, please sign and date the form
where noted on page A-2.

For purposes of federal law, “accredited investors” are defined as any person
who comes within any one of the following categories, or whom the issuer
reasonably believes comes within any one of the following categories, at the
time of the sale of the securities to that person:

	 	 	 	 	 	 	 
	   	 	

	

	(1)

	 	Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of purchase
exceeds $1,000,000;
	   	 	

	

	(2)

	 	Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income
with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year;
	   	 	

	

	(3)

	 	Any bank as defined in Section 3(a)(2) of the Act or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; any insurance company as defined in Section 15 of the
Securities and Exchange Act of 1934; any insurance company as defined in Section 2(13) of the Act; any investment company
registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political
subdivisions or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees,
if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section
3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors;
	   	 	

	

	(4)

	 	Any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
	   	 	

	

	(5)

	 	Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000;
	   	 	

	

	(6)

	 	Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any
director, executive officer, or general partner of a general partner of the issuer;
	   	 	

	

	(7)

	 	Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); or
	   	 	

	

	(8)

	 	Any entity in which all of the equity owners are accredited investors.

Subscriber represents and warrants that it is an “accredited investor” under
federal law by virtue of satisfying the category or categories checked above.

September    , 2003

	 	 	 
	 	 	
X<PAGE>

                                                                     EXHIBIT 4.1

                          FIRST SUPPLEMENTAL INDENTURE
                             (Senior Debt Indenture)

         This FIRST SUPPLEMENTAL INDENTURE, dated as of December 18, 2003, (this
"First Supplemental Indenture"), by and between KB Home, a Delaware corporation
(the "Issuer"), SunTrust Bank (successor to SunTrust Bank, Atlanta), as trustee
under the Indenture referred to below (the "Trustee"), and each of the
Guarantors (as defined below).

                              W I T N E S S E T H:

         WHEREAS, the Issuer and the Trustee have heretofore executed and
delivered a Senior Debt Indenture, dated as of October 14, 1997 (the "Original
Indenture," which term shall include the form and terms of each series of
Securities (as defined in the Original Indenture) established as contemplated
under the Original Indenture; the Original Indenture, as amended and
supplemented by this First Supplemental Indenture, is hereinafter called the
"Indenture"), providing for the issuance from time to time of the Issuer's
Securities;

         WHEREAS, pursuant to Article Two of the Original Indenture, the Issuer
has established by an Officers' Certificate, dated as of October 14, 1997, the
form and terms of a series of the Issuer's Securities designated the "7 3/4%
Senior Notes due October 15, 2004" (the "Senior Notes");

         WHEREAS, the Issuer and the Guarantors wish to supplement the Original
Indenture to provide for the guaranty by the Guarantors of the obligations of
the Issuer under the Senior Notes and, solely insofar as relates to the Senior
Notes, under the Original Indenture, and otherwise to modify the Original
Indenture on the terms set forth in this First Supplemental Indenture; and

         WHEREAS, the Issuer has requested that the Trustee execute and deliver
this First Supplemental Indenture pursuant to Section 8.1 of the Original
Indenture, and all requirements necessary to make this First Supplemental
Indenture a valid instrument in accordance with its terms have been performed
and the execution and delivery of this First Supplemental Indenture have been
duly authorized in all respects by the Issuer and each of the Guarantors.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Issuer, the Guarantors and the Trustee mutually covenant and
agree for the equal and proportionate benefit of the Holders (as defined in the
Original Indenture) from time to time of the Senior Notes as follows:

                                   ARTICLE ONE
                         GUARANTY AND RELATED PROVISIONS

         SECTION 1.1. Additional Event of Default. Pursuant to Section 24(a) of
the 7 3/4% Officers' Certificate (as defined in Section 13.1 of the Indenture),
Section 5.1 of the Original Indenture was amended and restated, but only insofar
as it relates to the Senior Notes, to read in full as set forth in such Section
24(a), and Section 5.1 as set forth in Section 24(a) of such 7 3/4% Officers'
Certificate is hereby further amended, but only insofar as relates to the Senior
Notes,

<PAGE>

by replacing the period following clause (f) with "; or" and adding the
following new clause (g) thereto, such clause to read in full as follows:

                  "(g) the Guaranty (as defined in Section 13.1 of this
         Indenture) of any Guarantor (as defined in Section 13.1 of this
         Indenture) ceases to be in full force and effect (other than by reason
         of the release of such Guarantor in accordance with the terms of
         Article Thirteen of this Indenture) or is declared to be null and void
         or unenforceable or the Guaranty of any Guarantor is found to be
         invalid or a Guarantor denies its liability under its Guaranty (other
         than by reason of the release of such Guarantor in accordance with the
         terms of Article Thirteen of this Indenture)."

         SECTION 1.2. Amendment of Section 5.7 of the Indenture. Section 5.7 of
the Original Indenture is hereby amended and restated, but only insofar as
relates to the Senior Notes, to read in full as follows:

                  "SECTION 5.7 Unconditional Right of the Securityholders to
         Institute Certain Suits. Notwithstanding any other provisions of this
         Indenture and any provision of any Senior Note or Guaranty, the right
         of any Holder of any Senior Note to receive payment of the principal of
         and interest on such Senior Note on or after the respective due dates
         expressed in this Indenture or such Senior Note (and to receive such
         payment pursuant to any Guaranty of such Senior Note), or to institute
         suit for the enforcement of any such payment on or after such
         respective dates, shall not be impaired or affected without the consent
         of such Holder."

         SECTION 1.3 Guaranty. The Original Indenture is hereby amended, but
only insofar as it relates to the Senior Notes, to add the following new Article
Thirteen, such Article to read in full as follows:

                                "ARTICLE THIRTEEN
                                    GUARANTY

                  "SECTION 13.1 Defined Terms. Capitalized terms used in this
         Article Thirteen have the meanings given them in this Section 13.1 and
         the 7 3/4% Officers' Certificate (as defined below) or, if not defined
         in this Section 13.1 or the 7 3/4% Officers' Certificate, in Section
         1.1 of this Indenture.

                  "As used in this Article Thirteen, the following terms have
the respective meanings set forth below:

                          "Guaranty" and "Guaranties" mean the guaranty set
                  forth in Section 13.2 of this Indenture and any guaranties
                  that are executed and delivered pursuant to Section 13.14 of
                  this Indenture, collectively, or all or any such guaranties,
                  as the context shall require.

                          "Guarantors" means (i) the Persons whose names appear
                  under the caption "Guarantors" on the signature pages of the
                  First Supplemental Indenture dated as of December 18, 2003
                  between the Issuer, the Trustee and the Guarantors named
                  therein and (ii) any Person that becomes a Guarantor after the
                  date of such First

                                      -2-

<PAGE>

                  Supplemental Indenture in accordance with the provisions of
                  this Article Thirteen, but excluding in each case any Person
                  whose Guaranty has been released pursuant to the terms of this
                  Article Thirteen.

                          "Loan Agreement" means that certain Revolving Loan
                  Agreement, dated as of October 24, 2003, between the Issuer,
                  the banks party thereto and Bank of America, N.A., as
                  Administrative Agent, Bank One, N.A., as Syndication Agent,
                  Fleet National Bank, Credit Lyonnais New York Branch, Wachovia
                  Bank, National Association, KeyBank National Association and
                  SunTrust Bank, as Documentation Agents, and Banc of America
                  Securities LLC, as Sole Lead Arranger and Sole Book Manager,
                  as the same may be amended, supplemented or modified from time
                  to time and including any increase in the amount of credit
                  available thereunder.

                          "7 3/4% Officers' Certificate" means the Officers'
                  Certificate dated October 14, 1997 establishing the form and
                  terms of the Senior Notes pursuant to Article Two of this
                  Indenture.

                          "Senior Notes" means that series of the Issuer's
                  Securities designated as the "Senior Notes due October 15,
                  2004."

                          "Substitute Loan Agreement" means any credit facility
                  (as the same may be amended, supplemented or modified from
                  time to time) of the Issuer which is created subsequent to
                  December 18, 2003 and which replaces all or part of the Loan
                  Agreement or a Substitute Loan Agreement (and which may
                  provide for an increase in the amount of credit available
                  thereunder), so long as the Issuer is a borrower under such
                  Substitute Loan Agreement.

                  "SECTION 13.2 Unconditional Guaranty. In recognition of the
         benefits that the issuance of the Senior Notes has conferred and will
         continue to confer, and the benefits that the issuance of the
         Guaranties will confer, upon the Issuer and the Guarantors and for
         other good and valuable consideration, the receipt and sufficiency of
         which are hereby acknowledged, each Guarantor hereby absolutely and
         unconditionally guaranties, jointly and severally, to each Holder of
         any Senior Notes and to the Trustee on behalf of each such Holder
         prompt payment when due, whether at stated maturity, upon acceleration,
         upon repurchase at the option of the Holder or otherwise, and at all
         times thereafter, of the principal of and premium, if any, and interest
         on the Senior Notes and of any and all other existing and future
         indebtedness and liabilities of every kind, nature and character,
         direct or indirect, absolute or contingent, liquidated or unliquidated,
         voluntary or involuntary, of the Issuer to the Holders of the Senior
         Notes arising under this Indenture or the Senior Notes (collectively,
         the "Guarantied Obligations"). The Trustee's books and records showing
         the amount of the Guarantied Obligations shall be admissible in
         evidence in any action or proceeding, and shall be binding upon the
         Guarantors and conclusive for the purpose of establishing the amount of
         the Guarantied Obligations, absent manifest error. The Guaranties shall
         not be affected by the validity, regularity or enforceability of the
         Guarantied Obligations or of the Senior Notes, this Indenture or any
         other instrument or agreement evidencing any Guarantied Obligations, or
         any question as

                                     - 3 -

<PAGE>

         to the authenticity of any of the Senior Notes, this Indenture or any
         other such instrument or agreement, or by the existence, validity,
         enforceability, perfection or extent of any collateral therefor, or by
         any fact or circumstance relating to the Guarantied Obligations which
         might otherwise constitute a defense to the obligations of any
         Guarantor under its Guaranty, other than payment in full by the Issuer
         or any other Person.

                  "SECTION 13.3 Limitation of the Guarantors' Liability. Each
         Guarantor and, by its acceptance and ownership of a Senior Note and by
         its acceptance of any benefits under any Guaranty, each Holder of a
         Senior Note hereby confirms that it is the intention of all parties
         that the obligations of the Guarantors under their Guaranties shall not
         constitute a fraudulent conveyance or fraudulent transfer under any
         applicable fraudulent conveyance, fraudulent transfer, bankruptcy,
         insolvency or other similar law of any applicable jurisdiction. To
         effectuate the foregoing intention, each Holder of the Senior Notes, by
         its acceptance and ownership of Senior Notes and by its acceptance of
         any benefits under any Guaranty, and each Guarantor hereby agree that
         the obligations of such Guarantor under its Guaranty are limited to the
         maximum amount as will, after giving effect to all other contingent and
         fixed liabilities of such Guarantor, result in the obligations of such
         Guarantor under its Guaranty not constituting a fraudulent conveyance
         or fraudulent transfer under applicable law. Subject to the preceding
         limitation, the obligations of each Guarantor under its Guaranty
         constitute a guaranty of payment in full when due and not merely a
         guaranty of collectability.

                  "SECTION 13.4 No Termination. Each Guaranty is a continuing
         and irrevocable guaranty of all Guarantied Obligations now or hereafter
         existing and shall remain in full force and effect until all of the
         Guarantied Obligations are paid in full or, in the case of the Guaranty
         of any Guarantor, until such time, if any, as such Guarantor is
         released from its Guaranty in accordance with this Article Thirteen.
         All payments under any Guaranty shall be made to the Trustee on behalf
         of the Holders of the Senior Notes.

                  "SECTION 13.5 Waiver of Notices. Each Guarantor waives, to the
         fullest extent permitted by law, notice of the acceptance of its
         Guaranty and of the extension or continuation of the Guarantied
         Obligations or any part thereof. Each Guarantor further waives, to the
         fullest extent permitted by law, presentment, protest, notice, dishonor
         or default, demand for payment and any other notices to which such
         Guarantor might otherwise be entitled.

                  "SECTION 13.6 Subrogation. The Guarantors shall exercise no
         right of subrogation, contribution or similar rights against the Issuer
         or any other Guarantor with respect to any payments on the Guarantied
         Obligations made under any Guaranty until all of the Guarantied
         Obligations are paid in full. If any amounts are paid to a Guarantor in
         violation of the foregoing limitation, then such amounts shall be held
         in trust for the benefit of the Holders of the Senior Notes, and shall
         forthwith be paid to the Trustee, on behalf of such Holders.

                  "SECTION 13.7 Waiver of Suretyship Defenses. Each Guarantor
         agrees, to the fullest extent permitted by law, that the Trustee or,
         subject to Sections 5.6 and 5.7 of this Indenture, the Holders of the
         Senior Notes may, at any time and from time to time, and

                                     - 4 -

<PAGE>

         without notice to such Guarantor, make any agreement with the Issuer or
         with any other Person liable on any of the Guarantied Obligations or
         providing collateral as security for the Guarantied Obligations, for
         the extension, renewal, payment, compromise, discharge or release of
         the Guarantied Obligations or any collateral (in whole or in part), or
         for any modification or amendment of the terms thereof or of any
         instrument or agreement evidencing the Guarantied Obligations or the
         provision of collateral, all without in any way impairing, releasing,
         discharging or otherwise affecting the obligations of such Guarantor
         under its Guaranty. To the fullest extent permitted by law, each
         Guarantor waives any defense arising by reason of any disability or
         other defense of the Issuer or any other Guarantor, or the cessation
         from any cause whatsoever of the liability of the Issuer (other than by
         payment in full of the Guarantied Obligations), or any claim that such
         Guarantor's obligations exceed or are more burdensome than those of the
         Issuer and waives the benefit of any statute of limitations affecting
         the liability of such Guarantor hereunder. To the fullest extent
         permitted by law, each Guarantor waives any right to enforce any remedy
         which the Trustee or any Holder of the Senior Notes now has or may
         hereafter have against the Issuer and waives any benefit of and any
         right to participate in any security now or hereafter held by the
         Trustee or any Holder of the Senior Notes until all of the Guarantied
         Obligations are paid in full. Further, each Guarantor consents, to the
         fullest extent permitted by law, to the Trustee's or any Holder's
         taking of, or failure to take, any action which might in any manner or
         to any extent vary the risks of the Guarantors under their Guaranties
         or which, but for this provision, might operate as a discharge of any
         Guarantor.

                  "SECTION 13.8 Exhaustion of Other Remedies Not Required. The
         obligations of each Guarantor under this Indenture and its Guaranty are
         those of primary obligor, and not merely as surety, and are independent
         of the Guarantied Obligations. Each Guarantor waives, to the fullest
         extent permitted by law, diligence by the Trustee or the Holders and
         action on delinquency in respect of the Guarantied Obligations or any
         part thereof, including, without limitation any provisions of law
         requiring any party to exhaust any right or remedy or to take any
         action against the Issuer, any other Guarantor or any other Person or
         property before enforcing the Guaranty against such Guarantor.

                  "SECTION 13.9 Reinstatement. Notwithstanding anything in this
         Indenture or any Guaranty delivered pursuant to Section 13.14 of this
         Indenture to the contrary, the provisions of this Article Thirteen and
         of the Guaranties delivered pursuant to Section 13.14 of this Indenture
         shall continue to be effective or be reinstated, as the case may be, if
         at any time any payment of any portion of the Guarantied Obligations is
         revoked, terminated, rescinded or reduced or must otherwise be restored
         or returned upon the insolvency, bankruptcy or reorganization of the
         Issuer or any other Person or otherwise, as if such payment had not
         been made and whether or not the Trustee or any Holder of Senior Notes
         is in possession of or has released any Guarantor from its Guaranty and
         regardless of any prior revocation, rescission, termination or
         reduction.

                  "SECTION 13.10 Subordination. While an Event of Default under
         the Senior Notes has occurred and is continuing, each Guarantor hereby
         subordinates the payment of all obligations and indebtedness of the
         Issuer owing to such Guarantor, whether now existing or hereafter
         arising, including but not limited to any obligation of the Issuer to

                                     - 5 -

<PAGE>

         such Guarantor as subrogee of the Trustee or any Holder of Senior Notes
         or resulting from such Guarantor's performance under its Guaranty,
         until such time as all Guarantied Obligations have been paid in full.
         If the Trustee so requests or, subject to Sections 5.6 and 5.7 of this
         Indenture, the Holders of at least 25% in aggregate principal amount of
         the outstanding Senior Notes so request, any such obligation or
         indebtedness of the Issuer to such Guarantor shall be enforced and
         performance received by such Guarantor as trustee for the Trustee and
         the proceeds thereof shall be paid over to the Trustee on behalf of the
         Holders of the Senior Notes on account of the Guarantied Obligations,
         but without reducing or affecting in any manner the liability of any of
         the Guarantors under their Guaranties.

                  "SECTION 13.11 Information. While an Event of Default under
         the Senior Notes has occurred and is continuing, each Guarantor shall
         furnish promptly to the Trustee any and all financial or other
         information regarding such Guarantor or its property as the Trustee may
         reasonably request in writing.

                  "SECTION 13.12 Stay of Acceleration. In the event that
         acceleration of the time for payment of any of the Guarantied
         Obligations is stayed, upon the insolvency, bankruptcy or
         reorganization of the Issuer or any other Person, or otherwise, all
         such Guarantied Obligations shall nonetheless be payable by the
         Guarantors immediately upon demand by the Trustee or the Holders of at
         least 25% of the outstanding principal amount of the Senior Notes, as
         the case may be.

                  "SECTION 13.13 Condition of the Issuer. Each Guarantor
         acknowledges and agrees that it has the sole responsibility for, and
         has adequate means of, obtaining from the Issuer such information
         concerning the financial condition, business and operations of the
         Issuer as such Guarantor requires, and that neither the Trustee nor any
         Holder has any duty, and such Guarantor is not relying on the Trustee
         or any Holder at any time, to disclose to such Guarantor any
         information relating to the business, operations or financial condition
         of the Issuer.

                  "SECTION 13.14 Execution of Guaranty. To further evidence the
         Guaranty set forth in Section 13.2 hereof, each Guarantor hereby agrees
         to execute a Guaranty, in substantially the form set forth below:

                               "[FORM OF GUARANTY]

                                    "GUARANTY

                          "For value received, each of the undersigned (the
         "Guarantors") hereby absolutely and unconditionally guaranties, jointly
         and severally, to each Holder of any of the Issuer's 7 3/4% Senior
         Notes due October 15, 2004 (the "Senior Notes") and to the Trustee on
         behalf of each such Holder prompt payment when due, whether at stated
         maturity, upon acceleration, upon repurchase at the option of the
         Holder or otherwise, and at all times thereafter, of the principal of
         and premium, if any, and interest on any of the Senior Notes and of any
         and all other existing and future indebtedness and liabilities of every
         kind, nature and character, direct or indirect, absolute or contingent,
         liquidated or

                                     - 6 -

<PAGE>

         unliquidated, voluntary or involuntary, of the Issuer to the Holders of
         the Senior Notes arising under the Senior Debt Indenture dated as of
         October 14, 1997, as amended and supplemented by the First Supplemental
         Indenture dated as of December 18, 2003, among the Issuer, Sun Trust
         Bank, as successor trustee, and the guarantors party thereto (such
         Indenture, as so amended and supplemented and as the same may be
         further amended or supplemented from time to time, the "Indenture") or
         the Senior Notes (collectively, the "Guarantied Obligations") in
         accordance with, and subject to, the terms set forth in Article
         Thirteen of the Indenture. All capitalized terms used in this Guaranty
         which are defined in the Indenture shall have the meaning assigned to
         them in the Indenture.

                          "Each Guarantor and, by its acceptance and ownership
         of a Senior Note and by its acceptance of any benefits under this
         Guaranty, each Holder of a Senior Note hereby confirms that it is the
         intention of all parties that the obligations of the Guarantors under
         their Guaranties shall not constitute a fraudulent conveyance or
         fraudulent transfer under any applicable fraudulent conveyance,
         fraudulent transfer, bankruptcy, insolvency or other similar law of any
         applicable jurisdiction. To effectuate the foregoing, each Holder of
         Senior Notes, by its acceptance and ownership of Senior Notes and by
         its acceptance of any benefits under this Guaranty, and each Guarantor
         hereby agrees that the obligations of such Guarantor under its Guaranty
         are limited to the maximum amount as will, after giving effect to all
         other contingent and fixed liabilities of such Guarantor, result in the
         obligations of such Guarantor under its Guaranty not constituting a
         fraudulent conveyance or fraudulent transfer under applicable law.
         Subject to the preceding limitation, the obligations of each Guarantor
         under its Guaranty constitute a guaranty of payment in full when due
         and not merely a guaranty of collectability.

                          "The obligations of each Guarantor to the Holders of
         Senior Notes and to the Trustee pursuant to its Guaranty and the
         Indenture are expressly set forth in Article Thirteen of the Indenture,
         and reference is hereby made to such Indenture for the precise terms
         thereof.

                          "This instrument shall be governed by and construed in
         accordance with the laws of the State of New York.

                          "IN WITNESS WHEREOF, the undersigned have caused this
         instrument to be executed by their respective duly authorized
         signatories.

                                                 [NAMES OF GUARANTORS]

                                                 By:
                                                     ---------------------------
                                                     Title:

                  "Upon execution of any Guaranty pursuant to this Section
         13.14, the Guarantors party thereto shall deliver such Guaranty to the
         Trustee, which shall hold such Guaranty on behalf of each the Holders
         of the Senior Notes.

                                     - 7 -

<PAGE>

                  "Anything in this Indenture or the Senior Notes to the
         contrary notwithstanding, neither the validity nor the enforceability
         of any Guaranty set forth in Section 13.2 of this Indenture shall be
         impaired or otherwise affected by the fact that a Guaranty (whether in
         substantially the form specified pursuant to this Section 13.14 or
         otherwise) is not endorsed on any of the Senior Notes or delivered to
         any Holder of Senior Notes or the Trustee, and each Guarantor agrees
         that its Guaranty set forth in Section 13.2 of this Indenture shall
         remain in full force and effect with respect to each Senior Note
         notwithstanding any failure of any or all of the Guarantors to execute
         or deliver Guaranties pursuant to this Section 13.14, it being
         understood and agreed by the Guarantors and the Issuer that the
         provisions of this Section 13.14 are intended merely to further
         evidence the Guaranties set forth in Section 13.2.

                  "Each Guarantor agrees that any Guaranty executed pursuant to
         this Section 13.14 shall be signed on behalf of such Guarantor by its
         president, any vice president or its treasurer or any other duly
         authorized signatory of such Guarantor (each, a "subject officer") and
         that such Guarantor's seal, or a facsimile thereof, may, but need not
         be, affixed to such Guaranty. The signature of any subject officer may
         be the manual or facsimile signature of the present or any future such
         subject officer. Typographical and other minor errors defects in any
         such reproduction of any such signature shall not effect the validity
         or enforceability of any Guaranty delivered pursuant to this Section
         13.14.

                  "In case any subject officer of any Guarantor who shall have
         signed any Guaranty pursuant to this Section 13.14 shall cease to be
         such subject officer before such Guaranty shall have been delivered to
         the Holders of Senior Notes or the Trustee, such Guaranty may
         nonetheless be delivered as though the person who signed such Guaranty
         had not ceased to be such subject officer, and any Guaranty delivered
         pursuant to this Section 13.14 may be signed on behalf of any Guarantor
         by any person who was, at the actual date of the execution of such
         Guaranty, a subject officer of such Guarantor.

                  "SECTION 13.15  Release of Guarantors.

                  "(a) For so long as the Issuer is a party to or otherwise
         bound by the terms of the Loan Agreement or any Substitute Loan
         Agreement, if a Guarantor is released from all of its guaranties under
         or pursuant to the Loan Agreement and all Substitute Loan Agreements,
         such Guarantor shall be automatically and unconditionally released and
         discharged from all of its obligations under this Indenture and its
         Guaranty without any further action required on the part of the Issuer,
         the other Guarantors, the Trustee or any Holder.

                  "(b) For so long as the Issuer is not a party to or bound by
         the terms of the Loan Agreement or any Substitute Loan Agreement, if a
         Guarantor shall cease to be either a Restricted Domestic Subsidiary or
         a Restricted Significant Subsidiary, such Guarantor shall be
         automatically and unconditionally released and discharged from all of
         its obligations under this Indenture and its Guaranty without any
         further action required on the part of the Issuer, the other
         Guarantors, the Trustee or any Holder; provided that all guarantees (as
         defined in Section 20 of the 7 3/4% Officers' Certificate) by such
         Guarantor of any other Indebtedness (as defined in Section 20 of the 7
         3/4% Officers'

                                     - 8 -

<PAGE>

         Certificate) of the Issuer and any Subsidiaries of the Issuer are
         terminated at or prior to the time of such release.

                  "(c) The Trustee shall deliver an appropriate instrument
         evidencing any such release upon receipt of a written request by the
         Issuer accompanied by an Officers' Certificate and an Opinion of
         Counsel, each to the effect that such release has been effected in
         compliance with the provisions of this Indenture.

                  "SECTION 13.16  Additional Guarantors.

                  "(a)     For so long as the Issuer is a party to or bound by
         the terms of the Loan Agreement or any Substitute Loan Agreement, if
         any Subsidiary of the Issuer that is not then a Guarantor guaranties
         any indebtedness or other obligations of the Issuer under the Loan
         Agreement or any Substitute Loan Agreement, then, contemporaneously
         with or prior to the effectiveness of such guaranty, the Issuer shall
         (i) execute and deliver, cause such Subsidiary and all other Guarantors
         to execute and deliver and use its reasonable best efforts to cause the
         Trustee to execute and deliver a supplemental indenture, in form
         satisfactory to the Trustee, pursuant to which such Subsidiary shall
         become a Guarantor under this Indenture and shall cause such Subsidiary
         and all other Guarantors to execute and deliver Guaranties pursuant to
         Section 13.14 of this Indenture and (ii) deliver to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that such
         supplemental indenture and such Guaranties pursuant to Section 13.14
         hereof comply with this Indenture. Thereafter, such Subsidiary shall be
         a Guarantor for all purposes of this Indenture unless and until
         released from its Guaranty pursuant to Section 13.15 of this Indenture.

                  "(b)     For so long as the Issuer is not a party to or bound
         by the terms of the Loan Agreement or any Substitute Loan Agreement, if
         any Subsidiary of the Issuer that is not a Guarantor is or becomes both
         a Restricted Domestic Subsidiary and a Restricted Significant
         Subsidiary, the Issuer shall (i) promptly execute and deliver, cause
         such Subsidiary and all other Guarantors to execute and deliver and use
         its reasonable best efforts to cause the Trustee to execute and deliver
         a supplemental indenture, in form satisfactory to the Trustee, pursuant
         to which such Subsidiary shall become a Guarantor under this Indenture
         and shall cause such Subsidiary and all other Guarantors to execute and
         deliver Guaranties pursuant to Section 13.14 of this Indenture and (ii)
         deliver to the Trustee an Officers' Certificate and an Opinion of
         Counsel, each stating that such supplemental indenture and such
         Guaranties pursuant to Section 13.14 hereof comply with this Indenture.
         Thereafter, such Subsidiary shall be a Guarantor for all purposes of
         the Indenture unless and until released from its Guaranty pursuant to
         Section 13.15 of this Indenture.

                  "SECTION 13.17 Notices to Guarantors. Any notice or demand to
         a Guarantor under this Indenture shall be delivered pursuant to Section
         11.4 of this Indenture to such Guarantor in care of the Issuer.

                  "SECTION 13.18 Waiver of Stay, Extension and Usury Laws. Each
         Guarantor covenants (to the extent that it may lawfully do so) that it
         will not at any time insist upon,

                                     - 9 -

<PAGE>

         plead, or in any manner whatsoever claim or take the benefit or
         advantage of, any stay or extension law or any usury law or other law
         which would prohibit or forgive such Guarantor from paying all or any
         portion of any amount due under its Guaranty as contemplated in this
         Indenture, wherever enacted, now or at any time hereafter in force, or
         which may affect the covenants or the performance of this Indenture and
         (to the extent that it may lawfully do so) each Guarantor hereby
         expressly waives all benefit or advantage of any such law and covenants
         that it will not hinder, delay or impede the execution of any power
         granted to the Trustee, but will suffer and permit the execution of
         every such power as though no such law had been enacted."

                                   ARTICLE TWO
                                  MISCELLANEOUS

         SECTION 2.1. Ratification of Indenture; First Supplemental Indenture
Part of Indenture. Except as expressly amended and supplemented hereby, the
Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect. This
First Supplemental Indenture shall form a part of the Indenture for all
purposes.

         SECTION 2.2. Concerning the Trustee. The rights and duties of the
Trustee shall be determined by the express provisions of the Indenture and
except as expressly set forth in this First Supplemental Indenture, nothing in
this First Supplemental Indenture shall in any way modify or otherwise affect
the Trustee's rights and duties thereunder. The Trustee makes no representation
or warranty as to the validity with respect to the Issuer or the Guarantors or
sufficiency of this First Supplemental Indenture and, except insofar as relates
to the validity hereof with respect to the Trustee, shall not be liable in
connection therewith.

         SECTION 2.3. New York Law to Govern. This First Supplemental Indenture
shall be deemed to be a contract under the laws of the State of New York, and
for all purposes shall be governed by and construed in accordance with the laws
of such State.

         SECTION 2.4. Separability. In case any one or more of the provisions
contained in this First Supplemental Indenture shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this First
Supplemental Indenture, but this First Supplemental Indenture shall be construed
as if such invalid, illegal or unenforceable provision had never been contained
herein.

         SECTION 2.5. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.

         SECTION 2.6. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.

                            [Signature Page Follows]

                                     - 10 -

<PAGE>

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

"Issuer"                        KB HOME, a Delaware corporation

                                By:
                                    --------------------------------------------
                                    Title:

"Trustee"                       SUNTRUST BANK, as Trustee

                                By:
                                    --------------------------------------------
                                    Title:

"Guarantors"                    KB HOME PHOENIX INC., an Arizona corporation

                                By:
                                    --------------------------------------------
                                    Title:

                                KB HOME COASTAL INC., a California corporation

                                By:
                                    -------------------------------------------
                                    Title:

                                KB HOME NORTH BAY INC., a California corporation

                                By:
                                    --------------------------------------------
                                    Title:

                                KB HOME SOUTH BAY INC., a California corporation

                                By:
                                    --------------------------------------------
                                    Title:

                                     - 11 -

<PAGE>

                                KB HOME GREATER LOS ANGELES INC., a California
                                corporation

                                 By:
                                     -------------------------------------------
                                     Title:

                                 KB HOME COLORADO INC., a Colorado corporation

                                 By:
                                     -------------------------------------------
                                     Title:

                                 KB HOME NEVADA INC., a Nevada corporation

                                 By:
                                     -------------------------------------------
                                     Title:

                                 KB HOME LONE STAR LP, a Texas limited
                                 partnership

                                 By: KBSA, Inc., a Texas corporation,
                                     Its general partner

                                 By:
                                     -------------------------------------------
                                     Title:

                                     - 12 -

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