Document:

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                                                                     EXHIBIT 4.2

                          FIRST SUPPLEMENTAL INDENTURE
                      (Senior Subordinated 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 Subordinated Debt Indenture, dated as of November 19, 1996
(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 (i) by Officers' Certificates, dated as of January 27, 2003 and
February 7, 2003 the form and terms of a series of the Issuer's Securities
designated the "7 3/4% Senior Subordinated Notes due 2010" (the "2010 Notes"),
(ii) by an Officers' Certificate, dated as of December 14, 2001, the form and
terms of a series of the Issuer's Securities designated the "8 5/8% Senior
Subordinated Notes due 2008" (the "2008 Notes") and (iii) by an Officers'
Certificate, dated as of February 8, 2001, the form and terms of a series of the
Issuer's Securities designated the "9 1/2% Senior Subordinated Notes due 2011"
(the "2011 Notes," and together with the 2010 Notes and the 2008 Notes, the
"Senior Subordinated 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 Subordinated Notes and, solely insofar as relates to
the Senior Subordinated 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 Subordinated Notes as
follows:

                                   ARTICLE ONE

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                         GUARANTY AND RELATED PROVISIONS

                  SECTION 1.1 Additional Event of Default. Pursuant to Section
24(a) of each Officers' Certificate (as defined in Section 14.1 of the
Indenture), Section 5.1 of the Original Indenture was amended and restated, but
only insofar as it relates to the series of Senior Subordinated Notes issued
pursuant to such Officers' Certificate, to read in full as set forth in such
Section 24(a), and Section 5.1 as set forth in Section 24(a) of each Officers'
Certificate is hereby further amended, but only insofar as relates to the series
of Senior Subordinated Notes issued pursuant to such Officers' Certificates, 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 14.1 of this
         Indenture) of any Guarantor (as defined in Section 14.1 of this
         Indenture) with respect to the Notes 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 Fourteen of this Indenture) or is
         declared to be null and void or unenforceable or the Guaranty of any
         Guarantor with respect to the Notes is found to be invalid or a
         Guarantor denies its liability under its Guaranty with respect to the
         Notes (other than by reason of the release of such Guarantor in
         accordance with the terms of Article Fourteen 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 Subordinated 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 Subordinated Note or
         Guaranty, the right of any Holder of any Senior Subordinated Note to
         receive payment of the principal of and interest on such Senior
         Subordinated Note on or after the respective due dates expressed in
         this Indenture or such Senior Subordinated Note (and to receive such
         payment pursuant to any Guaranty of such Senior Subordinated 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 and Subordination of Guaranty. The
Original Indenture is hereby amended, but only insofar as relates to the Senior
Subordinated Notes, to add the following new Article Fourteen and Article
Fifteen, such Articles to read in full as follows:

                                "ARTICLE FOURTEEN
                                    GUARANTY

                  "SECTION 14.1 Defined Terms. Capitalized terms used in Article
         Fourteen and Article Fifteen of this Indenture have the meanings given
         them in such Articles and the Officers' Certificates (provided,
         however, if the definition of any term defined in any Officers'
         Certificate differs from the definition of such term in any other
         Officers' Certificate, then the definition of such term with respect to
         the 2008 Notes, the 2010 Note and the 2011 Notes shall be the
         definition of such term set forth in the respective

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         Officers' Certificates applicable to such series of Senior Subordinated
         Notes), or if not defined in this Article Fourteen, such Article
         Fifteen or the Officers' Certificates, in Section 1.1 of this
         Indenture.

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

                          "2008 Notes" means that series of the Issuer's
                  Securities designated as the "8 5/8% Senior Subordinated Notes
                  due 2008."

                          "2008 Officers' Certificate" means the Officers'
                  Certificate, dated as of December 14, 2001, establishing the
                  form and terms of the 2008 Notes pursuant to Article Two of
                  this Indenture.

                          "2010 Notes" means that series of the Issuer's
                  Securities designated as the "7 3/4% Senior Subordinated Notes
                  due 2010."

                          "2010 Officers' Certificates" means the Officers'
                  Certificates, dated as of January 27, 2003 and February 7,
                  2003, establishing the form and terms of the 2010 Notes
                  pursuant to Article Two of this Indenture.

                          "2011 Notes" means that series of the Issuer's
                  Securities designated as the "9 1/2% Senior Subordinated Notes
                  due 2011."

                          "2011 Officers' Certificate" means the Officers'
                  Certificate, dated as of February 8, 2001, establishing the
                  form and terms of the 2011 Notes pursuant to Article Two of
                  this Indenture.

                          "Guaranty" and "Guaranties" mean the guaranty set
                  forth in Section 14.2 of this Indenture and any guaranties
                  that are executed and delivered pursuant to Section 14.14 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 Supplemental Indenture in accordance with
                  the provisions of this Article Fourteen, but excluding in each
                  case any Person whose Guaranty has been released pursuant to
                  the terms of this Article Fourteen.

                          "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

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                  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.

                          "Officers' Certificates" means, collectively, the 2008
                  Officers' Certificate, the 2010 Officers' Certificates and the
                  2011 Officers' Certificate and "Officers' Certificate" means
                  any of the Officers' Certificates.

                          "Senior Subordinated Notes" means, collectively, the
                  2008 Notes, the 2010 Notes and the 2011 Notes.

                          "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 14.2 Unconditional Guaranty. In recognition of the
         benefits that the issuance of the Senior Subordinated 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 Subordinated 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, upon redemption at the option of the Issuer or otherwise, and
         at all times thereafter, of the principal of and premium, if any, and
         interest on the Senior Subordinated 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 Subordinated Notes arising under this Indenture or the
         Senior Subordinated 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 Subordinated Notes, this Indenture or any other
         instrument or agreement evidencing any Guarantied Obligations, or any
         question as to the authenticity of any of the Senior Subordinated
         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 14.3 Limitation of the Guarantors' Liability. Each
         Guarantor and, by its acceptance and ownership of a Senior Subordinated
         Note and by its acceptance of any

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         benefits under any Guaranty, each Holder of a Senior Subordinated 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
         Subordinated Notes, by its acceptance and ownership of Senior
         Subordinated 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 14.4 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 Fourteen.
         All payments under any Guaranty shall be made to the Trustee on behalf
         of the Holders of the applicable series of Senior Subordinated Notes.

                  "SECTION 14.5 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 14.6 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 Subordinated
         Notes, and shall forthwith be paid to the Trustee, on behalf of such
         Holders.

                  "SECTION 14.7. 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 Subordinated Notes may, at any time and from time to time, and
         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

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         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 Subordinated 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 14.8 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 14.9 Reinstatement. Notwithstanding anything in this
         Indenture or any Guaranty delivered pursuant to Section 14.14 of this
         Indenture to the contrary, the provisions of this Article Fourteen and
         of the Guaranties delivered pursuant to Section 14.14 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
         Subordinated Notes is in possession of or has released any Guarantor
         from its Guaranty and regardless of any prior revocation, rescission,
         termination or reduction.

                  "SECTION 14.10 Subordination. While an Event of Default under
         the Senior Subordinated Notes of any series 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 such Guarantor as subrogee of the
         Trustee or any Holder of Senior Subordinated 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

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         Trustee so requests or, subject to Sections 5.6 and 5.7 of this
         Indenture, the Holders of at least 25% of the outstanding principal
         amount of the Senior Subordinated Notes of any series 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 Subordinated 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 14.11 Information. While an Event of Default under
         the Senior Subordinated Notes of any series 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 14.12 Stay of Acceleration. In the event that
         acceleration of the time for payment of any of the Guarantied
         Obligations relating to any series of Senior Subordinated Notes 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 Subordinated Notes of such series, as
         the case may be.

                  "SECTION 14.13 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 14.14 Execution of Guaranty. To further evidence the
         Guaranty set forth in Section 14.2 hereof, each Guarantor hereby agrees
         to execute a Guaranty in substantially the form set forth below in
         respect of each series of Senior Subordinated Notes:

                               "[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 [INSERT REFERENCE
         TO APPLICABLE SERIES OF SENIOR SUBORDINATED NOTES] [8 5/8% Senior
         Subordinated Notes due 2008] [7 3/4% Senior Subordinated Notes due
         2010] [9 1/2% Senior Subordinated Notes due 2011] (the "Subject 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, upon redemption at the option of the Issuer

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         or otherwise, and at all times thereafter, of the principal of and
         premium, if any, and interest on any of the Subject 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 Subject Notes arising under the Senior Subordinated
         Debt Indenture dated as of November 19, 1996, 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 Subject Notes (collectively,
         the "Guarantied Obligations") in accordance with, and subject to, the
         terms set forth in Article Fourteen 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
         Subject Note and by its acceptance of any benefits under this Guaranty,
         each Holder of a Subject 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 Subject
         Notes, by its acceptance and ownership of Subject 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 Subject
         Notes and to the Trustee pursuant to its Guaranty and the Indenture are
         expressly set forth in Article Fourteen 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
         14.14, the Guarantors party thereto shall deliver such Guaranty to the
         Trustee, which shall deliver such

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         Guaranty to the Holders of the Senior Subordinated Notes of the
         applicable series as an endorsement to the Senior Subordinated Notes of
         such series held by such Holders, or alternatively hold such Guaranty
         on behalf of each such Holders.

                  "Anything in this Indenture or the Senior Subordinated Notes
         to the contrary notwithstanding, neither the validity nor the
         enforceability of any Guaranty set forth in Section 14.2 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 14.14 or otherwise) is not endorsed on any of the Senior
         Subordinated Notes or delivered to any Holder of Senior Subordinated
         Notes or the Trustee, and each Guarantor agrees that its Guaranty set
         forth in Section 14.2 of this Indenture shall remain in full force and
         effect with respect to each Senior Subordinated Note notwithstanding
         any failure of any or all of the Guarantors to execute or deliver
         Guaranties pursuant to this Section 14.14, it being understood and
         agreed by the Guarantors and the Issuer that the provisions of this
         Section 14.14 are intended merely to further evidence the Guaranties
         set forth in Section 14.2.

                  "Each Guarantor agrees that any Guaranty executed pursuant to
         this Section 14.14 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
         14.14.

                  "In case any subject officer of any Guarantor who shall have
         signed any Guaranty pursuant to this Section 14.14 shall cease to be
         such subject officer before such Guaranty shall have been delivered to
         the Holders of Senior Subordinated 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 14.14 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 14.15  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

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         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 Officers' Certificates) by
         such Guarantor of any other Indebtedness (as defined in Section 20 of
         the Officers' Certificates) of the Issuer (other than guarantees of
         Senior Indebtedness of the Issuer) and all guarantees by such Guarantor
         (other than guarantees that constitute Guarantor Senior Indebtedness of
         such Guarantor) of any Indebtedness (as defined in Section 20 of the
         Officers' Certificates) of 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 14.16  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 14.14 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 14.14
         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 14.15 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 14.14 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 14.14 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 14.15 of this

                                     - 10 -

<PAGE>

         Indenture.

                  "SECTION 14.17. 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 14.18 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, 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 FIFTEEN
                            SUBORDINATION OF GUARANTY

                  "Section 15.1 Agreement to Subordinate. Each Guarantor
         covenants and agrees, and each Holder of any Senior Subordinated Note,
         by such Holder's acceptance and ownership thereof and by such Holder's
         acceptance of any benefits under any Guaranty likewise covenants and
         agrees, that, to the extent and in the manner hereinafter set forth in
         this Article Fifteen, payment of any and all amounts by such Guarantor
         under its Guaranty of the Senior Subordinated Notes is hereby expressly
         made subordinate and subject in right of payment to the prior payment
         in full of all Guarantor Senior Indebtedness of such Guarantor.

                  "Guarantor Senior Indebtedness" means, with respect to any
         Guarantor, the principal of (and premium, if any) and unpaid interest
         (including interest accruing after the filing of a petition initiating
         any proceeding pursuant to any Bankruptcy Laws, whether or not the
         payment of such interest is permitted by law) or accrued original issue
         discount on and other amounts due on or in connection with any Debt
         incurred, assumed or guarantied by such Guarantor whether outstanding
         on the date the First Supplemental Indenture, dated as of December 18,
         2003 between the Issuer, the Trustee and the guarantors party thereto
         (the "First Supplemental Indenture") or thereafter incurred, assumed or
         guarantied and all renewals, extensions and refundings of any such
         Debt; provided, however, that the following will not constitute
         Guarantor Senior Indebtedness of such Guarantor:

                           "(a)     any Debt of such Guarantor as to which, in
                  the instrument creating the same or evidencing the same or
                  pursuant to which the same is outstanding, it is expressly
                  provided that such Debt is subordinate in right of payment to
                  all other Debt of such Guarantor not expressly subordinated to
                  such Debt;

                                     - 11 -

<PAGE>

                           "(b)     any Debt of such Guarantor which by its
                  terms refers explicitly to the Guaranties of the Senior
                  Subordinated Notes and states that such Debt shall not be
                  senior in right of payment to the Guaranties of the Senior
                  Subordinated Notes;

                           "(c)     all Guaranties of such Guarantor in respect
                  of the Senior Subordinated Notes;

                           "(d)     any Debt of such Guarantor to any Subsidiary
                  of such Guarantor or of the Issuer;

                           "(e)     any Debt of such Guarantor to any joint
                  venture or partnership, which joint venture or partnership is
                  required, under generally accepted accounting principles, to
                  be consolidated in the Issuer's or such Guarantor's
                  consolidated financial statements; and

                           "(f)     any Debt of such Guarantor which by its
                  terms ranks pari passu with or subordinate to such Guarantor's
                  Guaranties of the Senior Subordinated Notes.

         "For purposes of the foregoing definition, it is hereby expressly
         agreed and understood that all references to Debt of any Guarantor
         shall include all obligations of such Guarantor as guarantor of any
         Debt of others and, without limitation to the foregoing, any guaranty
         by such Guarantor of the Issuer's 7 3/4% Senior Notes due October 15,
         2004 shall constitute Guarantor Senior Indebtedness of such Guarantor.

                  "Section 15.2. Payment Over of Proceeds Upon Dissolution, Etc.
         Upon any distribution of assets of a Guarantor in the event of (a) any
         insolvency or bankruptcy case or proceeding, or any receivership,
         liquidation, reorganization or other similar case or proceeding in
         connection therewith, relative to such Guarantor or to its creditors,
         as such, or to its assets, or (b) any liquidation, dissolution or other
         winding up of such Guarantor, whether voluntary or involuntary, or (c)
         any assignment for the benefit of creditors or any other marshalling of
         assets and liabilities of such Guarantor, then and in such event;

                           "(1)     the holders of the Guarantor Senior
                  Indebtedness of such Guarantor shall be entitled to receive
                  payment in full of all amounts due or to become due on or in
                  respect of all such Guarantor Senior Indebtedness, or
                  provision shall be made for such payment in cash, before the
                  Holders of the Senior Subordinated Notes are entitled to
                  receive any payment under or with respect to such Guarantor's
                  Guaranty of the Senior Subordinated Notes; and

                           "(2)     any payment or distribution of assets of
                  such Guarantor of any kind or character, whether in cash,
                  property or securities, by set-off or otherwise, to which the
                  Holders of the Senior Subordinated Notes or the Trustee would
                  be entitled but for the provisions of this Article Fifteen,
                  including any such payment

                                     - 12 -

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                  or distribution which may be payable or deliverable by reason
                  of the payment of any other Debt of such Guarantor being
                  subordinated to the payment of amounts due under such
                  Guarantor's Guaranty, shall be paid, to the extent permitted
                  by law, by the liquidating trustee or agent or other Person
                  making such payment or distribution, whether a trustee in
                  bankruptcy, a receiver or liquidating trustee or otherwise,
                  directly to the holders of the Guarantor Senior Indebtedness
                  of such Guarantor or their representative or representatives
                  or to the trustee or trustees under any indenture under which
                  any instruments evidencing any such Guarantor Senior
                  Indebtedness of such Guarantor may have been issued, ratably
                  according to the aggregate amounts remaining unpaid on account
                  of the principal of, and premium, if any, and interest on the
                  Guarantor Senior Indebtedness of such Guarantor held or
                  represented by each, to the extent necessary to make payment
                  in full of all such Guarantor Senior Indebtedness of such
                  Guarantor remaining unpaid, after giving effect to any
                  concurrent payment or distribution to the holders of such
                  Guarantor Senior Indebtedness of such Guarantor.

                  "In the event that, notwithstanding the foregoing provisions
         of this Section 15.2, the Trustee or the Holder of any Senior
         Subordinated Notes shall receive any payment or distribution of assets
         of a Guarantor of any kind or character, whether in cash, property or
         securities, including any such payment or distribution which may be
         payable or deliverable by reason of the payment of any other Debt of
         the Guarantor being subordinated to the payment of the amounts due
         under such Guarantor's Guaranty, before all Guarantor Senior
         Indebtedness of such Guarantor is paid in full or payment thereof
         provided for, then and in such event such payment or distribution
         shall, to the extent permitted by law, be held in trust for the benefit
         of and paid over or delivered forthwith to the holders of Guarantor
         Senior Indebtedness of such Guarantor or their representative or
         representatives or to the trustee or trustees under any indenture under
         which any instruments evidencing any such Guarantor Senior Indebtedness
         have been issued for application to the payment of all Guarantor Senior
         Indebtedness of such Guarantor remaining unpaid in the manner provided
         in clause (2) of the immediately preceding paragraph, to the extent
         necessary to pay all such Guarantor Senior Indebtedness of such
         Guarantor in full, after giving effect to any concurrent payment or
         distribution to or for the holders of Guarantor Senior Indebtedness of
         such Guarantor.

                  "For purposes of this Article Fifteen only, the words "cash,
         property or securities" shall not be deemed to include shares of
         capital stock of any Guarantor as reorganized or readjusted, or
         securities of any Guarantor or any other corporation provided for by a
         plan of reorganization or readjustment the payment of which is
         subordinated, at least to the extent provided in this Article Fifteen
         with respect to the Guaranty of such Guarantor, to the payment of all
         Guarantor Senior Indebtedness of such Guarantor which may at the time
         be outstanding; provided, however, that (i) the Guarantor Senior
         Indebtedness of such Guarantor is assumed by the new corporation, if
         any, resulting from any such reorganization or readjustment, and (ii)
         the rights of the holders of any Guarantor Senior Indebtedness of such
         Guarantor are not, without the consent of such holders, altered by such
         reorganization or readjustment, including without limitation, such
         rights being impaired within the meaning of Section 1124 of Title 11 of
         the United States Code, or

                                     - 13 -

<PAGE>

         any impairment of the right to receive interest accruing during the
         pendency of a bankruptcy or insolvency proceeding, including
         proceedings under Title 11 of the United States Code.

                  "The consolidation of any Guarantor with, or the merger of any
         Guarantor into, another corporation or the liquidation or dissolution
         of any Guarantor following the conveyance or transfer of all or
         substantially all of its assets to another Person shall not be deemed a
         dissolution, winding up, liquidation, reorganization, assignment for
         the benefit of creditors or marshalling of assets and liabilities of
         such Guarantor for the purposes of this Section 15.2 if the corporation
         or Person formed by such consolidation or into which such Guarantor is
         merged or the Person which acquires by conveyance or transfer all or
         substantially all the assets of such Guarantor, as the case may be,
         shall, as a part of such consolidation, merger, conveyance or transfer,
         and if required by Section 14.16 of this Indenture, become a Guarantor
         in accordance with the applicable provisions of Section 14.16.

                  "SECTION 15.3. Acceleration of Senior Subordinated Notes. In
         the event that any Senior Subordinated Notes shall have been
         accelerated and declared due and payable pursuant to Section 5.1, no
         Guarantor may make any payment under its Guaranty of the Senior
         Subordinated Notes or acquire any Senior Subordinated Notes until 135
         days have passed after such acceleration occurs and may thereafter make
         payments under its Guaranty of the Senior Subordinated Notes or acquire
         Senior Subordinated Notes only if this Article Fifteen permits the
         payment or acquisition at that time.

                  "In the event that, notwithstanding the foregoing, a Guarantor
         shall make any payment to the Trustee or the Holder of any Senior
         Subordinated Notes prohibited by the foregoing provisions of this
         Section 15.3, then and in such event such payment shall, to the extent
         permitted by law, be held in trust for the benefit of and be paid over
         and delivered forthwith to the holders of Guarantor Senior Indebtedness
         of such Guarantor or their representative or representatives or to the
         trustee or trustees under any indenture under which any instruments
         evidencing the Guarantor Senior Indebtedness of such Guarantor may have
         been issued.

                  "The provisions of this Section 15.3 shall not apply to any
         payment with respect to which Section 15.2 would be applicable.

                  "SECTION 15.4. Default on Guarantor Senior Indebtedness. A
         Guarantor may not make any payment under its Guaranty of the Senior
         Subordinated Notes and may not acquire any Senior Subordinated Notes
         for cash or property if:

                           "(1)     a default on Guarantor Senior Indebtedness
                  of such Guarantor or Senior Indebtedness of the Issuer occurs
                  and is continuing that permits holders of such Guarantor
                  Senior Indebtedness or such Senior Indebtedness, as the case
                  may be, to accelerate the maturity thereof; and

                           "(2)     unless such default relates to a failure by
                  such Guarantor or the

                                     - 14 -

<PAGE>

                  Issuer to make any payment in respect of any Guarantor Senior
                  Indebtedness of such Guarantor or any Senior Indebtedness of
                  the Issuer, respectively, when due or within any applicable
                  grace period (a "Payment Default"), such default is either the
                  subject of judicial proceedings or such Guarantor or the
                  Issuer receives notice of the default. If such Guarantor or
                  the Issuer receives any such notice, then a similar notice
                  received within nine months thereafter relating to the same
                  default on the same issue of Guarantor Senior Indebtedness of
                  such Guarantor or Senior Indebtedness of the Issuer, as the
                  case may be, shall not be effective for purposes of this
                  Section 15.4.

                  "A Guarantor may resume payments under its Guaranty of the
         Senior Subordinated Notes and may acquire Senior Subordinated Notes if
         and when:

                           "(A)     (i) 135 days pass after, in the case of a
                  Payment Default, the later of the date such payment was due
                  and the expiration of any applicable grace period for such
                  payment or, in the case of any other such default, the date
                  the related judicial proceedings commence or that notice of
                  such default is given to such Guarantor or the Issuer, as the
                  case may be, and (ii) the Guarantor Senior Indebtedness of
                  such Guarantor or the Senior Indebtedness of the Issuer, as
                  the case may be, in respect of which such default exists has
                  not been declared due and payable in its entirety within such
                  135 day period or, if declared due and payable, such
                  declaration has been rescinded, waived or annulled; or

                           "(B)     the default with respect to the Guarantor
                  Senior Indebtedness of such Guarantor or the Senior
                  Indebtedness of the Issuer, as the case may be, is cured or
                  waived; and

         this Article Fifteen otherwise permits the payment or acquisition at
         that time.

                  "In the event that, notwithstanding the foregoing, any
         Guarantor shall make any payment to the Trustee or the Holder of any
         Senior Subordinated Notes prohibited by the foregoing provisions of
         this Section 15.4, then and in such event such payment shall, to the
         extent permitted by law, be held in trust for the benefit of and be
         paid over and delivered forthwith to the holders of the Guarantor
         Senior Indebtedness of such Guarantor or their representative or
         representatives or to the trustee or trustees under any indenture under
         which any instruments evidencing such Guarantor Senior Indebtedness may
         have been issued.

                  "The provisions of this Section 15.4 shall not apply to any
         payment with respect to which Section 15.2 would be applicable.

                  "Without limiting the effect of this Section 15.4, no
         Guarantor shall make any payment under its Guaranty during any period
         when the Issuer would be prohibited from making payments on the Senior
         Subordinated Notes pursuant to Section 13.4 of this Indenture.

                                     - 15 -

<PAGE>

                  "SECTION 15.5. Payment Permitted if No Default. Nothing
         contained in this Article Fifteen or elsewhere in this Indenture or in
         any of the Senior Subordinated Notes shall prevent (a) any Guarantor,
         at any time except during the pendency of any case, proceeding,
         dissolution, liquidation or other winding up, assignment for the
         benefit of creditors or other marshalling of assets and liabilities of
         such Guarantor referred to in Section 15.2 or under the conditions
         described in Section 15.3 or 15.4, from making payments at any time
         under its Guaranty of any Senior Subordinated Notes, or (b) the
         application by the Trustee of any money deposited with it hereunder to
         the payment of or on account of such Guaranty if the Trustee did not
         have, at the time provided in the proviso to the first paragraph of
         Section 15.10, written notice that such payment would have been
         prohibited by the provisions of this Article Fifteen.

                  "SECTION 15.6. Subrogation. Subject to the payment in full of
         all Guarantor Senior Indebtedness of any Guarantor, the Holders of the
         Senior Subordinated Notes shall be subrogated, to the extent of the
         payments or distributions made to the holders of the Guarantor Senior
         Indebtedness of such Guarantor pursuant to the provisions of this
         Article Fifteen, to the rights of the holders of such Guarantor Senior
         Indebtedness to receive payments or distributions of cash, property or
         securities applicable to such Guarantor Senior Indebtedness until the
         principal of or interest on the Senior Subordinated Notes shall be paid
         in full. For purposes of such subrogation, no payments or distributions
         to the holders of any Guarantor Senior Indebtedness of any Guarantor of
         any cash, property or securities to which the Holders of the Senior
         Subordinated Notes or the Trustee would be entitled except for the
         provisions of this Article Fifteen, and no payments pursuant to the
         provisions of this Article Fifteen to any Guarantor or to the holders
         any Guarantor Senior Indebtedness of such Guarantor by Holders of the
         Senior Subordinated Notes or the Trustee, shall, as between such
         Guarantor, its creditors other than holders of Guarantor Senior
         Indebtedness of such Guarantor and the Holders of the Senior
         Subordinated Notes, be deemed to be a payment or distribution by such
         Guarantor to or on account of the Guarantor Senior Indebtedness of such
         Guarantor.

                  "SECTION 15.7. Provisions Solely to Define Relative Rights.
         The provisions of this Article Fifteen are and are intended solely for
         the purpose of defining the relative rights of the Holders of the
         Senior Subordinated Notes, on one hand, and the holders of Guarantor
         Senior Indebtedness of the respective Guarantors, on the other hand.
         Nothing contained in this Article Fifteen or elsewhere in this
         Indenture or in the Senior Subordinated Notes or any Guaranty is
         intended to or shall

                           "(a)     impair, as between any Guarantor and the
                  Holders of the Senior Subordinated Notes, the obligation of
                  such Guarantor, which is absolute and unconditional, to make
                  all payment due under its Guaranty as and when the same shall
                  become due and payable in accordance with the terms of such
                  Guaranty and this Indenture and which, subject to the rights
                  under this Article Fifteen of the holders of Guarantor Senior
                  Indebtedness of such Guarantor, is intended to rank equally
                  with all other general obligations of such Guarantor, or

                           "(b)     affect the relative rights against any
                  Guarantor of the Holders of

                                     - 16 -

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                  the Senior Subordinated Notes and creditors of such Guarantor
                  other than holders of Guarantor Senior Indebtedness of such
                  Guarantor, or

                           "(c)     prevent the Trustee or the Holder of any
                  Senior Subordinated Notes from exercising all remedies
                  otherwise permitted by applicable law upon default under this
                  Indenture, subject to the rights, if any, under this Article
                  Fifteen of the holders of Guarantor Senior Indebtedness of any
                  Guarantor to receive cash, property or securities otherwise
                  payable or deliverable to the Trustee or such Holder.

                  "SECTION 15.8. Trustee to Effectuate Subordination. Each
         Holder of any Senior Subordinated Notes, by such Holder's acceptance
         and ownership thereof and such Holder's acceptance of any benefits
         under the Guaranties, authorizes and directs the Trustee on such
         Holder's behalf to take such action as may be necessary or appropriate
         to effectuate the subordination provided in this Article Fifteen and
         appoints the Trustee such Holder's attorney-in-fact for any and all
         such purposes. If the Trustee does not file a proper claim or proof of
         debt in connection with any insolvency or bankruptcy case or proceeding
         or any receivership, liquidation, reorganization or other similar case
         or proceeding in connection therewith relative to any Guarantor in
         proper form within 30 days prior to the expiration of the time to file
         such claim or proof of debt, then the holders of Guarantor Senior
         Indebtedness of such Guarantor are hereby authorized to file an
         appropriate claim for and on behalf of the Holders of the Senior
         Subordinated Notes.

                  "SECTION 15.9. No Waiver of Subordination Provisions. No right
         of any present or future holder of any Guarantor Senior Indebtedness of
         any Guarantor to enforce subordination as herein provided shall at any
         time in any way be prejudiced or impaired by any act or failure to act
         on the part of any Guarantor or by any act or failure to act, in good
         faith, by any such holder, or by any noncompliance by any Guarantor
         with the terms, provisions and covenants of this Indenture, regardless
         of any knowledge thereof any such holder may have or be otherwise
         charged with.

                  "Without in any way limiting the generality of the foregoing
         paragraph, the holders of any Guarantor Senior Indebtedness of any
         Guarantor may, at any time and from time to time, without the consent
         of, or notice to, the Trustee or the Holders of the Senior Subordinated
         Notes, without incurring responsibility to the Holders of the Senior
         Subordinated Notes and without impairing or releasing the subordination
         provided in this Article Fifteen or the obligations hereunder of the
         Holders of the Senior Subordinated Notes to the holders of Guarantor
         Senior Indebtedness of such Guarantor, do any one or more of the
         following: (i) change the manner, place or terms of payment or extend
         the time of payment of, or renew or alter, any Guarantor Senior
         Indebtedness of such Guarantor, or otherwise amend or supplement in any
         manner any Guarantor Senior Indebtedness of such Guarantor or any
         instrument evidencing the same or any agreement under which such
         Guarantor Senior Indebtedness is outstanding; (ii) sell, exchange,
         release or otherwise dispose of any property pledged, mortgaged or
         otherwise securing any Guarantor Senior Indebtedness of such Guarantor;
         (iii) release any Person liable in any manner for the collection of any
         Guarantor Senior Indebtedness of such Guarantor;

                                     - 17 -

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         and (iv) exercise or refrain from exercising any rights against such
         Guarantor and any other Person.

                  "Notwithstanding the payment in full of all Guarantor Senior
         Indebtedness of any Guarantor, the provisions of this Article Fifteen
         shall be reinstated and revived, and the enforceability of such
         provisions shall continue, in each case to the extent permitted by law,
         with respect to (and only with respect to) any amount of Guarantor
         Senior Indebtedness of any Guarantor which such Guarantor shall have
         repaid to the holders thereof (or to their representative or the
         trustee under the indenture under which the instruments evidencing such
         Guarantor Senior Indebtedness shall have been issued) following a
         demand for such repayment by such holders (or representatives or
         trustee) made pursuant to provisions set forth in the instrument
         evidencing such Guarantor Senior Indebtedness or under which such
         Guarantor Senior Indebtedness shall have been issued, which provisions
         entitle such holders (or such representative or trustee) to demand such
         repayment upon the occurrence of a Change in Control or other
         substantially similar event with respect to the Issuer specified
         therein, if such amount thereafter must be restored or returned by such
         holders of such Guarantor Senior Indebtedness (or representative or
         trustee) because it constitutes a voidable preference under Section 547
         of Title 11 of the United States Code (or any successor provision
         thereto) or under any similar provision of any other applicable
         Bankruptcy Law or a fraudulent transfer under any applicable law
         regarding fraudulent transfers.

                  "SECTION 15.10. Notice to Trustee. Each Guarantor shall give
         prompt written notice to the Trustee of any fact known to such
         Guarantor which would prohibit the making of any payment to or by the
         Trustee in respect of such Guarantor's Guaranty. Failure to give such
         notice shall not affect the subordination of such Guarantor's Guaranty
         to any Guarantor Senior Indebtedness of such Guarantor. Notwithstanding
         the provisions of this Article Fifteen or any other provision of this
         Indenture, the Trustee shall not be charged with knowledge of the
         existence of any facts which would prohibit the making of any payment
         to or by the Trustee in respect of the Guaranty of any Guarantor,
         unless and until the Trustee shall have received written notice thereof
         at the address specified in Section 11.4 from a Guarantor, the Issuer
         or a holder of Guarantor Senior Indebtedness of a Guarantor or from any
         trustee or agent therefor; and, prior to the receipt of any such
         written notice, the Trustee, subject to the provisions of Section 6.1,
         shall be entitled in all respects to assume that no such facts exist;
         provided, however, that if a Responsible Officer of the Trustee shall
         not have received, at least three Business Days prior to the date upon
         which by the terms hereof any such money may become payable for any
         purpose (including, without limitation, the payment of any Guaranty
         Obligations), the notice with respect to such money provided for in
         this Section 15.10, then, anything herein contained to the contrary
         notwithstanding, the Trustee shall have full power and authority to
         receive such money and to apply the same to the purpose for which such
         money was received and shall not be affected by any notice to the
         contrary which may be received by it within three Business Days prior
         to such date.

                  "Subject to the provisions of Section 6.1, the Trustee shall
         be entitled to rely on the delivery to it of a written notice by a
         Person representing himself to be a holder of

                                     - 18 -

<PAGE>

         Guarantor Senior Indebtedness of any Guarantor (or a trustee or agent
         on behalf of such holder) to establish that such notice has been given
         by a holder of such Guarantor Senior Indebtedness (or a trustee or
         agent on behalf of any such holder). In the event that the Trustee
         determines in good faith that further evidence is required with respect
         to the right of any Person as a holder of Guarantor Senior Indebtedness
         of any Guarantor to participate in any payment or distribution pursuant
         to this Article Fifteen, the Trustee may request such Person to furnish
         evidence to the reasonable satisfaction of the Trustee as to the amount
         of such Guarantor Senior Indebtedness held by such Person, the extent
         to which such Person is entitled to participate in such payment or
         distribution and any other facts pertinent to the rights of such Person
         under this Article Fifteen, and if such evidence is not furnished, the
         Trustee may defer any payment which it may be required to make for the
         benefit of such Person pursuant to the terms of this Indenture pending
         judicial determination as to the right of such Person to receive such
         payment.

                  "SECTION 15.11. Reliance on Judicial Order or Certificate of
         Liquidation Agent. Upon any payment or distribution of assets of any
         Guarantor referred to in this Article Fifteen, the Trustee, subject to
         the provisions of Section 6.1, and the Holders of the Senior
         Subordinated Notes shall be entitled to rely upon any order or decree
         entered by any court of competent jurisdiction in which such
         insolvency, bankruptcy, receivership, liquidation, reorganization,
         dissolution, winding up or similar case or proceeding is pending, or a
         certificate of the trustee in bankruptcy, liquidating trustee,
         custodian, receiver, assignee for the benefit of creditors, agent or
         other person making such payment or distribution, delivered to the
         Trustee or to the Holders of Senior Subordinated Notes, for the purpose
         of ascertaining the Persons entitled to participate in such payment or
         distribution, the holders of Guarantor Senior Indebtedness of such
         Guarantor and other indebtedness of such Guarantor, the amount thereof
         or payable thereon, the amount or amounts paid or distributed thereon
         and all other facts pertinent thereto or to this Article Fifteen.

                  "SECTION 15.12. Trustee Not Fiduciary for Holders of Guarantor
         Senior Indebtedness. The Trustee shall not be deemed to owe any
         fiduciary duty to the holders of Guarantor Senior Indebtedness of any
         Guarantor and not be liable to any such holders if the Trustee shall in
         good faith mistakenly pay over or distribute to Holders of Senior
         Subordinated Notes or to any Guarantor or to any other Person cash,
         property or securities to which any holders of Guarantor Senior
         Indebtedness of any Guarantor shall be entitled by virtue of this
         Article Fifteen or otherwise. The Trustee shall not be charged with
         knowledge of the existence of Guarantor Senior Indebtedness of any
         Guarantor or of any facts that would prohibit any payment pursuant to
         the Guaranty of any Guarantor unless a Responsible Officer of the
         Trustee shall have received written notice to that effect at the
         address of the Trustee set forth in Section 11.4. With respect to the
         holders of Guarantor Senior Indebtedness of any Guarantor, the Trustee
         undertakes to perform or to observe only such of its covenants or
         obligations as are specifically set forth in this Article Fifteen and
         no implied covenants or obligations with respect to holders of
         Guarantor Senior Indebtedness of any Guarantor shall be read into this
         Indenture against the Trustee.

                                     - 19 -

<PAGE>

                  "SECTION 15.13. Rights of Trustee as Holder of Guarantor
         Senior Indebtedness; Preservation of Trustee's Rights. The Trustee in
         its individual capacity shall be entitled to all the rights set forth
         in this Article Fifteen with respect to any Guarantor Senior
         Indebtedness of any Guarantor which may at any time be held by it, to
         the same extent as any other holder of such Guarantor Senior
         Indebtedness, and nothing in this Indenture shall deprive the Trustee
         of any of its rights as such holder.

                  "Nothing in this Article Fifteen shall apply to claims of, or
         payments to, the Trustee under or pursuant to Section 6.6.

                  "SECTION 15.14. Article Fifteen Applicable to Paying Agents.
         In case at any time any paying agent other than the Trustee shall have
         been appointed by the Issuer and be then acting hereunder, the term
         "Trustee" as used in this Article Fifteen shall in such case (unless
         the context otherwise requires) be construed as extending to and
         including such paying agent within its meaning as fully for all intents
         and purposes as if such paying agent were named in this Article Fifteen
         in addition to or in place of the Trustee; provided, however, that
         Section 15.10 and 15.12 shall not apply to the Issuer, any Guarantor or
         any Subsidiary or Affiliate of the Issuer or any Guarantor if the
         Issuer or such Guarantor or such Subsidiary or Affiliate acts as paying
         agent.

                  "SECTION 15.15 Limitation in Ranking of Future Indebtedness of
         the Guarantors. No Guarantor will incur any Debt which is subordinated
         by the terms of the instrument creating such Debt in right of payment
         to any other Debt of such Guarantor and which is not expressly by the
         terms of the instrument creating such Debt made pari passu with, or
         subordinate and junior in right of payment to, such Guarantor's
         Guaranty. For purposes of the foregoing sentence, it is hereby
         expressly agreed and understood that all references to Debt of any
         Guarantor shall include all obligations of such Guarantor as guarantor
         of any Debt of others.

                                   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.

                                     - 20 -

<PAGE>

                  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]

                                     - 21 -

<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:

                                     - 22 -
<PAGE>

                                     KB HOME SOUTH BAY INC., a California
                                     corporation

                                     By: _________________________
                                     Title:

                                     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:

                                     - 23 -<PAGE>
                                  EXHIBIT 10.8

                               SEVERANCE AGREEMENT

      THIS SEVERANCE AGREEMENT (hereinafter referred to as this "AGREEMENT") is
entered into as of the 1st day of July, 2003, by and between The Winton Savings
and Loan Co., a savings and loan association incorporated under Ohio law
(hereinafter referred to as "WINTON"), and Gregory P. Niesen, an individual
(hereinafter referred to as the "EMPLOYEE");

                                   WITNESSETH:

      WHEREAS, the EMPLOYEE is currently employed as the Secretary and Treasurer
of WINTON;

      WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of WINTON desires to retain the services of the
EMPLOYEE as the Secretary and Treasurer of WINTON;

      WHEREAS, the EMPLOYEE desires to continue to serve as the Secretary and
Treasurer of WINTON; and

      WHEREAS, the EMPLOYEE and WINTON desire to enter into this AGREEMENT to
set forth their understanding as to their respective rights and obligations in
the event of the termination of EMPLOYEE'S employment under the circumstances
set forth in this AGREEMENT.

      NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, WINTON and the EMPLOYEE hereby agree as follows:

      1. Term. This AGREEMENT shall commence on the date set forth above and
shall end twelve (12) months thereafter, subject to earlier termination as
provided herein (hereinafter referred to as the "TERM").

      2. Termination of Employment.

      (a) Termination for JUST CAUSE. In the event that WINTON terminates the
      employment of the EMPLOYEE before the expiration of the TERM because of
      the EMPLOYEE'S personal dishonesty, incompetence, willful misconduct,
      breach of fiduciary duty involving personal profit, intentional failure or
      refusal to perform the duties and responsibilities assigned in this
      AGREEMENT, willful violation of any law, rule, regulation (other than
      traffic violations or similar offenses) or final cease-and-desist order,
      conviction of a felony or for fraud or embezzlement, or material breach of
      any provision of this AGREEMENT (hereinafter collectively referred to as
      "JUST CAUSE"), the EMPLOYEE shall not receive, and shall have no right to
      receive, any compensation or other benefits for any period after such
      termination.

      (b) Termination without JUST CAUSE and without a CHANGE OF CONTROL. In the
      event that WINTON terminates the employment of the EMPLOYEE before the
      expiration of the TERM without JUST CAUSE and on a date which is more than
      six months before a CHANGE OF CONTROL (hereinafter defined) or which is
      after one year following a CHANGE OF CONTROL, the EMPLOYEE shall not
      receive, and shall have no right to receive, any compensation or other
      benefits for any period after such termination.

      (c) Termination in Connection with a CHANGE OF CONTROL.

<PAGE>

      (i) In the event that WINTON terminates the employment of the EMPLOYEE
      before the expiration of the TERM without JUST CAUSE and within six months
      before a CHANGE OF CONTROL or within one year after a CHANGE OF CONTROL,
      then the following shall occur:

            (A) WINTON shall promptly pay to the EMPLOYEE or to his dependents,
            beneficiaries or estate $85,250 within seven (7) days after such
            termination;

            (B) The EMPLOYEE, his dependents, beneficiaries and estate shall be
            covered under either the health, life and disability plans of the
            EMPLOYER or the health, life and disability plans of the successors,
            survivors or assigns of the EMPLOYERS without any material
            diminution in coverage or benefit of the expense of the EMPLOYERS or
            the successors, survivors or assigns of the EMPLOYERS as if the
            EMPLOYEE were still employed under this AGREEMENT until the earliest
            of the expiration of the TERM or the date on which the EMPLOYEE is
            included in another employer's benefit plans as a full-time
            employee; and

            (C) The EMPLOYEE shall not be required to mitigate the amount of any
            payment provided for in this AGREEMENT by seeking other employment
            or otherwise, nor shall any amounts received from other employment
            or otherwise by the EMPLOYEE offset in any manner the obligations of
            WINTON hereunder, except as specifically stated in subparagraph (B).

      (ii)The EMPLOYEE may voluntarily terminate his employment pursuant to this
      AGREEMENT within one year following a CHANGE OF CONTROL and shall be
      entitled to compensation as set forth in Section 2(c)(i) of this AGREEMENT
      in the event that:

            (A) The present capacity or circumstances in which the EMPLOYEE is
            employed are materially adversely changed (including, without
            limitation, a material reduction in responsibilities or authority,
            or the assignment of duties or responsibilities substantially
            inconsistent with those normally associated with the position of
            Secretary and Treasurer) without the EMPLOYEE's written consent;

            (B) The EMPLOYEE is no longer the Secretary and Treasurer of WINTON;

            (C) The EMPLOYEE is required to move his personal residence, or
            perform his principal executive functions, more than thirty-five
            (35) miles from his primary office as of the date of the
            commencement of the TERM of this AGREEMENT; or

            (D) WINTON otherwise breaches this AGREEMENT in any material
            respect.

      In the event that the value of the payments pursuant to this subsection
      (c), when combined with the value of other payments attributable to the
      same CHANGE OF CONTROL, would result in the imposition of a penalty tax
      pursuant to Section 280G(b)(3) of the Internal Revenue Code of 1986, as
      amended, and the regulations promulgated thereunder (hereinafter
      collectively referred to as "SECTION 280G"), such payments shall be
      reduced to the maximum amount which may be paid under SECTION 280G without
      exceeding such limits. Payments pursuant to this subsection (c) also may
      not exceed applicable limits established by the Office of Thrift
      Supervision (hereinafter

<PAGE>

      referred to as the "OTS"), as set forth in OTS Regulatory Bulletin 32-12.
      In the event a reduction in payments is necessary in order to comply with
      the requirements of this AGREEMENT relating to the limitations of SECTION
      280G or applicable OTS limits, the EMPLOYEE may determine, in his sole
      discretion, which categories of payments are to be reduced or eliminated.

      (d) Death of the EMPLOYEE. The TERM shall automatically terminate upon the
      death of the EMPLOYEE, unless the employment of EMPLOYEE has been
      terminated prior to EMPLOYEE's death pursuant to Section 2(c) of this
      AGREEMENT. In the event of such death, the EMPLOYEE'S estate shall be
      entitled to receive the compensation due the EMPLOYEE through the last day
      of the calendar month in which the death occurred, except as otherwise
      specified herein.

      (e) "Golden Parachute" Provision. Any payments made to the EMPLOYEE
      pursuant to this AGREEMENT, or otherwise, are subject to and conditioned
      upon their compliance with 12 U.S.C.Section1828(k) and FDIC regulation 12
      C.F.R. Part 359, Golden Parachute and Indemnification Payments.

      (f) Definition of "CHANGE OF CONTROL". A "CHANGE OF CONTROL" shall mean
      any one of the following events: (i) the acquisition of ownership or power
      to vote more than 25% of the voting stock of WINTON or Winton Financial
      Corporation, an Ohio corporation (hereinafter referred to as "WFC"); (ii)
      the acquisition of the ability to control the election of a majority of
      the directors of either of WINTON or WFC; (iii) during any period of two
      consecutive years, individuals who at the beginning of such period
      constitute the Board of Directors of WFC or WINTON cease for any reason to
      constitute at least a majority thereof; provided, however, that any
      individual whose election or nomination for election as a member of the
      Board of Directors of WFC or WINTON was approved by a vote of at least
      two-thirds of the directors then in office shall be considered to have
      continued to be a member of the Board of Directors of WFC or WINTON; or
      (iv) the acquisition by any person or entity of "conclusive control" of
      WINTON within the meaning of 12 C.F.R. Section574.4(a), or the acquisition
      by any person or entity of "rebuttable control" within the meaning of 12
      C.F.R. Section574.4(b) that has not been rebutted in accordance with 12
      C.F.R. Section574.4(c). For purposes of this paragraph, the term "person"
      refers to an individual or corporation, partnership, trust, association,
      or other organization, but does not include the EMPLOYEE and any person or
      persons with whom the EMPLOYEE is "acting in concert" within the meaning
      of C.F.R. Part 574.

      (g) Legal Fees. WINTON shall promptly pay all legal fees and expenses
      which the EMPLOYEE may incur as a result of the EMPLOYEE or WINTON
      contesting the validity or enforceability of this AGREEMENT if a court of
      competent jurisdiction renders a final decision in favor of the EMPLOYEE
      with respect to any such contest, or to the extent agreed to by WINTON and
      the EMPLOYEE in an agreement of settlement with respect to any such
      contest.

      3. Special Regulatory Events. Notwithstanding Section 2 of this AGREEMENT,
the obligations of WINTON to the EMPLOYEE shall be as follows in the event of
the following circumstances:

      (a) If the EMPLOYEE is suspended and/or temporarily prohibited from
      participating in the conduct of WINTON'S affairs by a notice served under
      Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act
      (hereinafter referred to as the "FDIA"), WINTON'S obligations under this
      AGREEMENT shall be suspended as of the date of service of such notice,
      unless stayed by appropriate proceedings. If the charges in the notice are
      dismissed, WINTON shall (i) pay the EMPLOYEE all of the compensation
      withheld while the obligations in this AGREEMENT were suspended and (ii)
      reinstate any of the obligations that were suspended.

      (b) If the EMPLOYEE is removed and/or permanently prohibited from
      participating in the conduct of WINTON'S affairs by an order issued under
      Section 8(e)(4) or (g)(1) of the FDIA, all obligations of WINTON

<PAGE>

      under this AGREEMENT shall terminate as of the effective date of such
      order; provided, however, that vested rights of the EMPLOYEE shall not be
      affected by such termination.

      (c) If WINTON is in default as defined in Section 3(x)(1) of the FDIA, all
      obligations under this AGREEMENT shall terminate as of the date of
      default; provided, however, that vested rights of the EMPLOYEE shall not
      be affected.

      (d) All obligations under this AGREEMENT shall be terminated, except to
      the extent of a determination that the continuation of this AGREEMENT is
      necessary for the continued operation of WINTON, (i) by the Director of
      the OTS, or his or her designee, at the time that the Federal Deposit
      Insurance Corporation enters into an agreement to provide assistance to or
      on behalf of WINTON under the authority contained in Section 13(c) of the
      FDIA; or (ii) by the Director of the OTS, or his or her designee, at any
      time the Director of the OTS, or his or her designee, approves a
      supervisory merger to resolve problems related to the operation of WINTON
      or when WINTON is determined by the Director of the OTS to be in an unsafe
      or unsound condition. No vested rights of the EMPLOYEE shall be affected
      by any such action.

      4. Consolidation, Merger or Sale of Assets. Nothing in this AGREEMENT
shall preclude WINTON from consolidating with, merging into, or transferring
all, or substantially all, of its assets to another corporation that assumes all
of WINTON'S obligations and undertakings hereunder. Upon such a consolidation,
merger or transfer of assets, the term "WINTON" as used herein shall mean such
other corporation or entity and this AGREEMENT shall continue in full force and
effect; provided, however, that the assumption of the EMPLOYERS' obligations and
undertakings hereunder shall not affect the EMPLOYEE'S right to payments
pursuant to Section 2(c)(i)(A) of this AGREEMENT in connection with such
consolidation, merger or transfer of assets.

      5. Confidential Information. The EMPLOYEE acknowledges that during his
employment he will learn and have access to confidential information regarding
WINTON and WFC, and their customers and businesses. The EMPLOYEE agrees and
covenants not to disclose or use for his own benefit, or the benefit of any
other person or entity, any confidential information, unless or until WINTON and
WFC consent to such disclosure or use or such information becomes common
knowledge in the industry or is otherwise legally in the public domain. The
EMPLOYEE shall not knowingly disclose or reveal to any unauthorized person any
confidential information relating to WINTON and WFC, their parents, subsidiaries
or affiliates, or to any of the businesses operated by them, and the EMPLOYEE
confirms that such information constitutes the exclusive property of WINTON and
WFC. The EMPLOYEE shall not otherwise knowingly act or conduct himself (a) to
the material detriment of WINTON and WFC, their parents, subsidiaries or
affiliates, or (b) in a manner which is inimical or contrary to the interests of
WINTON and WFC.

      6. Nature of Employment. Nothing contained in this AGREEMENT shall create
any employment relationship between WINTON and the EMPLOYEE other than an
employment relationship which is terminable "at will." WINTON may terminate the
EMPLOYEE'S employment at any time, subject to providing any payments specified
herein in accordance with the terms hereof.

      7. Nonassignability. Neither this AGREEMENT nor any right or interest
hereunder shall be assignable by the EMPLOYEE, his beneficiaries or his legal
representatives without WINTON'S prior written consent; provided, however, that
nothing in this Section 7 shall preclude (a) the EMPLOYEE from designating a
beneficiary to receive any benefits payable hereunder upon his death, or (b) the
executors, administrators, or other legal representatives of the EMPLOYEE or his
estate from assigning any rights hereunder to the person or persons entitled
thereto.

      8. No Attachment. Except as required by law, no right to receive payment
under this AGREEMENT shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy, or similar process of assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

<PAGE>

      9. Binding Agreement. This AGREEMENT shall be binding upon, and inure to
the benefit of, the EMPLOYEE and WINTON and their respective permitted
successors and assigns.

      10. Amendment of AGREEMENT. This AGREEMENT may not be modified or amended,
except by an instrument in writing signed by the parties hereto.

      11. Waiver. No term or condition of this AGREEMENT shall be deemed to have
been waived, nor shall there be an estoppel against the enforcement of any
provision of this AGREEMENT, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver, unless specifically stated therein, and each waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.

      12. Severability. If, for any reason, any provision of this AGREEMENT is
held invalid, such invalidity shall not affect the other provisions of this
AGREEMENT not held so invalid, and each such other provision shall, to the full
extent consistent with applicable law, continue in full force and effect.

      13. Headings. The headings of the paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this AGREEMENT.

      14. Governing Law; Regulatory Authority. This AGREEMENT has been executed
and delivered in the State of Ohio and its validity, interpretation, performance
and enforcement shall be governed by the laws of the State of Ohio, except to
the extent that federal law is governing. References to the OTS included herein
shall include any successor primary federal regulatory authority of WINTON.

      15. Effect of Prior Agreements. This AGREEMENT contains the entire
understanding between the parties hereto and supersedes any other prior
agreement between WINTON or any predecessor of WINTON and the EMPLOYEE.

      16. Notices. Any notice or other communication required or permitted
pursuant to this AGREEMENT shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:

      If to WINTON:

            President
            The Winton Savings and Loan Co.
            5511 Cheviot Road
            Cincinnati, Ohio  45247-7095

      With copies to:

            John C. Vorys, Esq.
            Vorys, Sater, Seymour and Pease LLP
            Suite 2000, Atrium Two
            221 East Fourth Street
            Cincinnati, Ohio  45202

      If to the EMPLOYEE:

            Gregory P. Niesen
            --------------------------
            Cincinnati, Ohio

<PAGE>

      IN WITNESS WHEREOF, WINTON has caused this AGREEMENT to be executed by its
duly authorized officer, and the EMPLOYEE has signed this AGREEMENT, each as of
the day and year first above written.

Attest:                                     THE WINTON SAVINGS AND LOAN CO.

/s/ Gregory J. Bollin                       By  /s/ Robert L. Bollin
---------------------------------               --------------------------------
                                                its     President
                                                --------------------------------

Attest:

/s/ Mary Beth Doll                          /s/ Gregory P. Niesen
---------------------------------           ------------------------------------
                                                 Gregory P. Niesen

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