Document:

<PAGE>   1
                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

                              WCI COMMUNITIES, INC.
             AND THE GUARANTORS LISTED ON THE SIGNATURE PAGE HERETO

                              SERIES A AND SERIES B
                                    10 5/8% SENIOR SUBORDINATED NOTES DUE 2011

                                    INDENTURE

                          Dated as of February 20, 2001

                              THE BANK OF NEW YORK

                                     Trustee
<PAGE>   2
                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
        Trust Indenture
           Act Section                                                             Indenture Section

<S>                                                                                <C>
          310(a)(1).............................................................   7.10
             (a)(2).............................................................   7.10
             (a)(3).............................................................   N.A.
             (a)(4).............................................................   N.A.
             (a)(5).............................................................   7.10
             (b)................................................................   7.10
             (c)................................................................    N.A.
          311(a)................................................................   7.11
             (b)................................................................   7.11
             (c)................................................................    N.A.
          312(a)................................................................   2.05
             (b)................................................................   13.03
             (c)................................................................   13.03
          313(a)................................................................   7.06
             (b)(2).............................................................   7.07
             (c)................................................................   7.06;13.02
             (d)................................................................   7.06
          314(a)................................................................   4.03;13.02
             (c)(1).............................................................   13.04
             (c)(2).............................................................   13.04
             (c)(3).............................................................   N.A.
             (e)................................................................   13.05
             (f)................................................................   N.A.
          315(a)................................................................   7.01
             (b)................................................................   7.05,13.02
             (c)................................................................   7.01
             (d)................................................................   7.01
             (e)................................................................   6.11
          316(a) (last sentence)................................................   2.09
             (a)(1)(A)..........................................................   6.05
             (a)(1)(B)..........................................................   6.04
             (a)(2).............................................................   N.A.
             (b)................................................................   6.07
             (c)................................................................   2.12
          317(a)(1).............................................................   6.08
             (a)(2).............................................................   6.09
             (b)................................................................   2.04
          318(a)................................................................   13.01
             (b)................................................................   N.A.
             (c)................................................................   13.01
</TABLE>

         N.A. means not applicable.
         * This Cross Reference Table is not part of this Indenture.
<PAGE>   3
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE

<S>                                                                                                             <C>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..........................................................     1

         Section 1.01.     Definitions........................................................................     1
         Section 1.02.     Other Definitions..................................................................    18
         Section 1.03.     Incorporation by Reference of Trust Indenture Act..................................    19
         Section 1.04.     Rules of Construction..............................................................    19

ARTICLE 2 THE NOTES...........................................................................................    20

         Section 2.01.     Form and Dating....................................................................    20
         Section 2.02.     Execution and Authentication.......................................................    21
         Section 2.03.     Registrar and Paying Agent.........................................................    21
         Section 2.04.     Paying Agent to Hold Money in Trust................................................    22
         Section 2.05.     Holder Lists.......................................................................    22
         Section 2.06.     Transfer and Exchange..............................................................    22
         Section 2.07.     Replacement Notes..................................................................    34
         Section 2.08.     Outstanding Notes..................................................................    34
         Section 2.09.     Treasury Notes.....................................................................    34
         Section 2.10.     Temporary Notes....................................................................    35
         Section 2.11.     Cancellation.......................................................................    35
         Section 2.12.     Defaulted Interest.................................................................    35
         Section 2.13.     CUSIP Numbers......................................................................    35

ARTICLE 3 REDEMPTION AND PREPAYMENT...........................................................................    36

         Section 3.01.     Notices to Trustee.................................................................    36
         Section 3.02.     Selection of Notes to Be Redeemed..................................................    36
         Section 3.03.     Notice of Redemption...............................................................    36
         Section 3.04.     Effect of Notice of Redemption.....................................................    37
         Section 3.05.     Deposit of Redemption Price........................................................    37
         Section 3.06.     Notes Redeemed in Part.............................................................    37
         Section 3.07.     Optional Redemption................................................................    38
         Section 3.08.     Mandatory Redemption...............................................................    38

ARTICLE 4 COVENANTS...........................................................................................    38

         Section 4.01.     Payment of Notes...................................................................    38
         Section 4.02.     Maintenance of Office or Agency....................................................    39
         Section 4.03.     Reports............................................................................    39
         Section 4.04.     Compliance Certificate.............................................................    40
         Section 4.05.     Taxes..............................................................................    40
         Section 4.06.     Stay, Extension and Usury Laws.....................................................    41
         Section 4.07.     Restricted Payments................................................................    41
         Section 4.08.     Dividend and Other Payment Restrictions Affecting Subsidiaries.....................    44
         Section 4.09.     Incurrence of Indebtedness and Issuance of Preferred Stock.........................    46
         Section 4.10.     Maintenance of Consolidated Tangible Net Worth.....................................    49
</TABLE>
<PAGE>   4
<TABLE>
<S>                                                                                                             <C>
         Section 4.11.     Transactions with Affiliates.......................................................    50
         Section 4.12.     Liens..............................................................................    51
         Section 4.13.     Business Activities................................................................    51
         Section 4.14.     Corporate Existence................................................................    51
         Section 4.15.     Offer to Repurchase Upon Change of Control.........................................    51
         Section 4.16.     No Senior Subordinated Debt........................................................    52
         Section 4.17.     Limitation on Issuances of Guarantees of Indebtedness..............................    53
         Section 4.18.     Payments for Consent...............................................................    53

ARTICLE 5 SUCCESSORS..........................................................................................    53

         Section 5.01.     Merger, Consolidation, or Sale of Assets...........................................    53
         Section 5.02.     Successor Corporation Substituted..................................................    54

ARTICLE 6 DEFAULTS AND REMEDIES...............................................................................    54

         Section 6.01.     Events of Default..................................................................    54
         Section 6.02.     Acceleration.......................................................................    56
         Section 6.03.     Other Remedies.....................................................................    56
         Section 6.04.     Waiver of Past Defaults............................................................    56
         Section 6.05.     Control by Majority................................................................    57
         Section 6.06.     Limitation on Suits................................................................    57
         Section 6.07.     Rights of Holders of Notes to Receive Payment......................................    57
         Section 6.08.     Collection Suit by Trustee.........................................................    57
         Section 6.09.     Trustee May File Proofs of Claim...................................................    58
         Section 6.10.     Priorities.........................................................................    58
         Section 6.11.     Undertaking for Costs..............................................................    58

ARTICLE 7 TRUSTEE.............................................................................................    59

         Section 7.01.     Duties of Trustee..................................................................    59
         Section 7.02.     Rights of Trustee..................................................................    60
         Section 7.03.     Individual Rights of Trustee.......................................................    61
         Section 7.04.     Trustee's Disclaimer...............................................................    61
         Section 7.05.     Notice of Defaults.................................................................    61
         Section 7.06.     Reports by Trustee to Holders of the Notes.........................................    61
         Section 7.07.     Compensation and Indemnity.........................................................    62
         Section 7.08.     Replacement of Trustee.............................................................    62
         Section 7.09.     Successor Trustee by Merger, etc...................................................    63
         Section 7.10.     Eligibility; Disqualification......................................................    63
         Section 7.11.     Preferential Collection of Claims Against Company..................................    64

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE............................................................    64

         Section 8.01.     Option to Effect Legal Defeasance or Covenant Defeasance...........................    64
         Section 8.02.     Legal Defeasance and Discharge.....................................................    64
</TABLE>

                                       ii
<PAGE>   5
<TABLE>
<S>                                                                                                             <C>
         Section 8.03.     Covenant Defeasance................................................................    64
         Section 8.04.     Conditions to Legal or Covenant Defeasance.........................................    65
         Section 8.05.     Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
                           Provisions.........................................................................    66
         Section 8.06.     Repayment to Company...............................................................    66
         Section 8.07.     Reinstatement......................................................................    67

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER....................................................................    67

         Section 9.01.     Without Consent of Holders of Notes................................................    67
         Section 9.02.     With Consent of Holders of Notes...................................................    68
         Section 9.03.     Compliance with Trust Indenture Act................................................    69
         Section 9.04.     Revocation and Effect of Consents..................................................    69
         Section 9.05.     Notation on or Exchange of Notes...................................................    70
         Section 9.06.     Trustee to Sign Amendments, etc....................................................    70

ARTICLE 10 SUBORDINATION......................................................................................    70

         Section 10.01.    Agreement to Subordinate...........................................................    70
         Section 10.02.    Liquidation; Dissolution; Bankruptcy...............................................    70
         Section 10.03.    Default on Designated Senior Debt..................................................    71
         Section 10.04.    Acceleration of Securities.........................................................    71
         Section 10.05.    When Distribution Must Be Paid Over................................................    72
         Section 10.06.    Notice by Company..................................................................    72
         Section 10.07.    Subrogation........................................................................    72
         Section 10.08.    Relative Rights....................................................................    72
         Section 10.09.    Subordination May Not Be Impaired by Company.......................................    73
         Section 10.10.    Distribution or Notice to Representative...........................................    73
         Section 10.11.    Rights of Trustee and Paying Agent.................................................    73
         Section 10.12.    Authorization to Effect Subordination..............................................    73
         Section 10.13.    Amendments.........................................................................    74

ARTICLE 11 NOTE GUARANTEES....................................................................................    74

         Section 11.01.    Guarantee..........................................................................    74
         Section 11.02.    Subordination of Note Guarantee....................................................    75
         Section 11.03.    Limitation on Guarantor Liability..................................................    75
         Section 11.04.    Execution and Delivery of Note Guarantee...........................................    75
         Section 11.05.    Guarantors May Consolidate, etc., on Certain Terms.................................    75
         Section 11.06.    Releases Following Sale of Assets..................................................    76

ARTICLE 12 SATISFACTION AND DISCHARGE.........................................................................    77

         Section 12.01.    Satisfaction and Discharge.........................................................    77
         Section 12.02.    Application of Trust Money.........................................................    77
</TABLE>

                                      iii
<PAGE>   6
<TABLE>
<S>                                                                                                             <C>
ARTICLE 13 MISCELLANEOUS......................................................................................    78

         Section 13.01.    Trust Indenture Act Controls.......................................................    78
         Section 13.02.    Notices............................................................................    78
         Section 13.03.    Communication by Holders of Notes with Other Holders of Notes......................    79
         Section 13.04.    Certificate and Opinion as to Conditions Precedent.................................    79
         Section 13.05.    Statements Required in Certificate or Opinion......................................    80
         Section 13.06.    Rules by Trustee and Agents........................................................    80
         Section 13.07.    No Personal Liability of Directors, Officers, Employees and Stockholders...........    80
         Section 13.08.    Governing Law......................................................................    80
         Section 13.09.    No Adverse Interpretation of Other Agreements......................................    80
         Section 13.10.    Successors.........................................................................    81
         Section 13.11.    Severability.......................................................................    81
         Section 13.12.    Counterpart Originals..............................................................    81
         Section 13.13.    Table of Contents, Headings, etc...................................................    81

EXHIBITS

Exhibit A-1       FORM OF NOTE
Exhibit A-2       FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B         FORM OF CERTIFICATE OF TRANSFER
Exhibit C         FORM OF CERTIFICATE OF EXCHANGE
Exhibit D         FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E         FORM OF NOTE GUARANTEE
Exhibit F         FORM OF SUPPLEMENTAL INDENTURE
</TABLE>

                                       iv
<PAGE>   7
         INDENTURE dated as of February 20, 2001 between WCI Communities, Inc.,
a Delaware corporation (the "Company"), the subsidiary guarantors listed on the
signature page hereto (collectively, the "Guarantors") and The Bank of New York,
as trustee (the "Trustee").

         The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 10 5/8% Series A Senior Subordinated Notes due 2011 (the "Series A Notes")
and the 10 5/8% Series B Senior Subordinated Notes due 2011 (the "Series B
Notes" and, together with the Series A Notes, the "Notes"):

                                    ARTICLE 1
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01. Definitions.

         "144A Global Note" means a global note substantially in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.

         "Acquired Debt" means, with respect to any specified Person, (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.

         "Additional Notes" means up to $100.0 million aggregate principal
amount of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings. Notwithstanding the foregoing, the term
"Affiliate" shall not include, with respect to the Company or any Restricted
Subsidiary, any Restricted Subsidiary.

         "Agent" means any Registrar, Paying Agent or co-registrar.

         "Amenities" means the golf courses, marinas, clubhouses and swimming,
restaurants, tennis and other recreational facilities owned and operated by the
Company or any Restricted Subsidiary and all activities reasonably related
thereto.

         "Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.

                                       1
<PAGE>   8
         "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

         "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.

         "Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.

         "Borrowing Base" means, at any time of determination, the sum of the
following, without duplication: (1) 100% of all cash and Cash Equivalents held
by the Company or any Restricted Subsidiary, including cash or Cash Equivalents
held by a title insurance company in trust for the benefit of the Company or any
Restricted Subsidiary; (2) 75% of the book value of Developed Land for which no
construction has occurred; (3) 95% of the cost of the land and construction
costs (as reasonably allocated by the Company) for all Units for which there is
an executed purchase contract with a buyer not Affiliated with the Company, less
any deposits, down payments or earnest money; (4) 80% of the cost of the land
and construction costs (as reasonably allocated by the Company) for all Units
for which construction has begun and for which there is not an executed purchase
agreement with a buyer not Affiliated with the Company; (5) 75% of Receivables;
(6) 75% of the cost of Amenities less the portion of such costs allocated on a
pro rata basis to sold memberships or marina slips; (7) 50% of the costs of
Developable Land (other than Developed Land) on which improvements have not
commenced, less CDD Obligations and mortgage Indebtedness (other than under a
Credit Facility) applicable to such land, up to the greater of $75.0 million or
30% of Consolidated Tangible Net Worth; (8) 65% of all Restricted Investments up
to $25.0 million; and (9) capitalized interest and taxes up to a maximum of 10%
of the Borrowing Base, exclusive of this clause (9) at the time of
determination.

         "Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.

         "Business Day" means any day other than a Legal Holiday.

         "Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.

         "Capital Stock" means (1) in the case of a corporation, corporate
stock, (2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited), and (4) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

         "Cash Equivalents" means (1) United States dollars, (2) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, (3)
certificates of deposit and eurodollar time deposits

                                       2
<PAGE>   9
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case with any domestic commercial bank having capital and surplus in
excess of $500 million and rated A-1 or better by Standard & Poor's Rating
Services or P-1 or better by Moody's or the equivalent of such rating by a
successor rating agency, (4) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (2) and
(3) above entered into with any financial institution meeting the qualifications
specified in clause (3) above, (5) commercial paper having the highest rating
obtainable from Moody's Investors Service, Inc. or Standard & Poor's Rating
Services and in each case maturing within one year after the date of
acquisition, and (6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of
this definition.

         "CDD Obligations" has the meaning set forth in clause (xi) of the
second paragraph of Section 4.09 hereof, to the extent that such obligation is
reflected as an obligation of the consolidated balance sheet of the Company and
its Restricted Subsidiaries in accordance with GAAP.

         "Change of Control" means the occurrence of any of the following: (1)
the direct or indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Company and its Restricted Subsidiaries taken as a whole to any "person" (as
that term is used in Section 13(d)(3) of the Exchange Act or any successor
provision) other than a Principal or a Related Party of a Principal, provided
that a transaction where the Principals and/or Related Parties of a Principal
own directly or indirectly 50% or more of all classes of Capital Stock of such
Person or group immediately after such transaction shall not be a Change of
Control; (2) the adoption of a plan relating to the liquidation or dissolution
of the Company, (3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50%
of the Voting Stock of the Company (measured by voting power rather than number
of shares) or Watermark, or (4) the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors.

         "Clearstream" means ClearStream Bank S.A.

         "Company" means WCI Communities, Inc., and any and all successors
thereto and not to any of its Subsidiaries.

         "Consolidated Coverage Ratio" means with respect to any Person for any
period, the ratio of the EBITDA of such Person and its Restricted Subsidiaries
for such period to the Consolidated Interest and Preferred Stock Dividends
Incurred of such Person and its Restricted Subsidiaries for such period. In the
event that the referent Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other than
ordinary working capital borrowings) or issues, repurchases or redeems preferred
stock subsequent to the commencement of the period for which the Consolidated
Coverage Ratio is being calculated but prior to the date on which the event for
which the calculation of the Consolidated Coverage Ratio is made (the
"Calculation Date"), then the Consolidated Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of proceeds therefrom as if the same
had occurred at the beginning of the applicable four-quarter reference period.

                                       3
<PAGE>   10
         In addition, for purposes of calculating the Consolidated Coverage
Ratio, (1) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date shall be given pro forma effect as if they had occurred on the first day of
the four-quarter reference period and EBITDA for such reference period shall be
calculated without giving effect to clause (3) of the proviso set forth in the
definition of Consolidated Net Income, and (2) the EBITDA attributable to
Discontinued Operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, and
(3) the Consolidated Interest and Preferred Stock Dividends Incurred
attributable to Discontinued Operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such
Consolidated Interest Incurred will not be obligations of the referent Person or
any of its Restricted Subsidiaries following the Calculation Date.

         "Consolidated Indebtedness" means the Indebtedness of the Company and
its Restricted Subsidiaries on a consolidated basis, calculated in accordance
with GAAP, including, without duplication, the amount of all Guarantees, letters
of credit or other items of Indebtedness that are reflected as liabilities on
the balance sheet of the Company and its Restricted Subsidiaries, including Land
Bank Obligations reflected as liabilities on the balance sheet of the Company
and its Restricted Subsidiaries excluding, however, any amounts attributable to
surety and performance bonds.

         "Consolidated Interest Incurred" means, with respect to any Person for
any period, without duplication, (1) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant to
Hedging Obligations, but excluding amortization of debt issuance costs paid on
or prior to the Issue Date), plus (2) the consolidated interest of such Person
and its Restricted Subsidiaries, that was capitalized during such period, plus
(3) any Consolidated Interest Incurred on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (subject,
however, to the amount of the guarantee or the value of the assets constituting
the Lien) (whether or not such Guarantee or Lien is called upon), plus (4) all
capitalized interest and all interest incurred in connection with Investments in
Discontinued Operations for such period; plus (5) the product of (a) all
dividends, whether paid or accrued and whether or not in cash, on any series of
preferred stock of such Person or any of its Restricted Subsidiaries, other than
dividends on Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted Subsidiary of
the Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP; minus (6) to the extent
included above, the amortization of previously capitalized interest, minus (7)
to the extent included above, the amortization of debt issuance costs paid on or
prior to the Issue Date.

         "Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that, without duplication, (1) the Net Income (or net loss)
of any Person that is not a Restricted Subsidiary or that is accounted for by
the equity method of

                                       4
<PAGE>   11
accounting shall be included only to the extent of the amount of dividends or
distributions are received in cash to the referent Person or a Restricted
Subsidiary during the referent period or receivable (without legal or
contractual restrictions) or to the extent such loss has been funded with cash
or other assets from the Company or a Restricted Subsidiary during the referent
period, (2) the Net Income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, unless such restriction with respect to the payments of dividends
or similar distributions has been waived (and when and to the extent such
dividend or other distribution is permitted, such income not previously
recognized shall then be recognized, in the period when such dividend or other
distribution was permitted and to the extent of such permission for purposes of
calculation of Net Income under Section 4.07 hereof but Net Income from prior
periods will not be included for any other purpose); (3) the Net Income or net
loss of any Person acquired in a pooling of interests transaction for any period
prior to the date of such acquisition shall be excluded, (4) the cumulative
effect of a change in accounting principles shall be excluded, and (5) the Net
Income and net loss of any Unrestricted Subsidiary shall be excluded, unless
such Net Income shall be distributed to the Company or one of its Restricted
Subsidiaries, in which case such Net Income shall be included.

         "Consolidated Net Income After Grossed-up Preferred Stock Dividends"
means, with respect to any Person for any period, the aggregate of the Net
Income of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided that, without
duplication, (1) the Net Income (or net loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions are received in cash to the referent Person or a Restricted
Subsidiary during the referent period (regardless of whether such cash
represented Net Income in such period or a prior period) or to the extent such
loss has been funded with cash or other assets from the Company or a Restricted
Subsidiary during the referent period, (2) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, unless such restriction with respect
to the payments of dividends or similar distributions has been waived (and when
and to the extent such dividend or other distribution is permitted, such income
not previously recognized shall then be recognized, in the period when such
dividend or other distribution was permitted and to the extent of such
permission for purposes of calculation of Net Income under Section 4.07 hereof
but Net Income from prior periods will not be included for any other purpose);
(3) the Net Income or net loss of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, (4) the cumulative effect of a change in accounting principles shall
be excluded, (5) the Net Income and net loss of any Unrestricted Subsidiary
shall be excluded, whether or not distributed to the Company or one of its
Restricted Subsidiaries, and (6) the product of (a) all dividends, whether paid
or accrued and whether or not in cash, on any series of preferred stock or
Disqualified Stock of such Person or any of its Restricted Subsidiaries, times
(b) a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP shall be deducted.

                                       5
<PAGE>   12
         "Consolidated Net Worth" of any Person as of any date means the
stockholders' equity (including any Preferred Stock that is classified as equity
under GAAP, other than Disqualified Stock) of such Person and its Restricted
Subsidiaries on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, less any
amount attributable to Unrestricted Subsidiaries.

         "Consolidated Tangible Assets" of the Company as of any date means the
total amount of assets of the Company and its Restricted Subsidiaries (less
applicable reserves) on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, less (1)
Intangible Assets and (2) appropriate adjustments on account of minority
interests of other Persons holding equity investments in Restricted
Subsidiaries.

         "Consolidated Tangible Net Worth" means, with respect to any Person as
of any date, the sum of (1) the consolidated equity of the common stockholders
of such Person and its consolidated Restricted Subsidiaries as of such date,
plus (2) the respective amounts reported on such Person's balance sheet as of
such date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (3) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date of this Indenture
in the book value of any asset owned by such Person or a consolidated Restricted
Subsidiary of such Person, except to the extent the write-up is a reversal of a
write-down or a previously recorded reserve, less (4) all investments as of such
date in Unrestricted Subsidiaries and in Persons that are not Subsidiaries
(except, in each case, Permitted Investments, to the extent included in
calculating the consolidated equity in clause (1)), less (5) Intangible Assets
reflected on the consolidated balance sheet of such Person or a consolidated
Restricted Subsidiary of such Person, all of the foregoing determined in
accordance with GAAP.

         "Construction Loan" means, a loan made for the purpose of financing the
construction and development of multifamily residential condominium projects or
commercial real estate projects.

         "Consultant" means a natural person who is a consultant hired by the
Company or a Restricted Subsidiary to perform services.

         "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who: (1) was a member of such
Board of Directors on the date of this Indenture, or (2) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.

         "Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.

         "Credit Agreement" means that certain Credit Agreement, dated as of
April 26, 2000 by and among the Company, Fleet National Bank and the other
parties named therein, providing for up to $450.0 million of borrowings,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.

                                       6
<PAGE>   13
         "Credit Facilities" means one or more debt facilities (including,
without limitation, the Credit Agreement and the iStar Loan) or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time. Indebtedness under Credit Facilities
outstanding on the date on which Notes are first issued and authenticated under
this Indenture shall be deemed to have been incurred on such date in reliance on
the exception provided by clause (i) of the definition of Permitted Debt.

         "Custodian" means the Trustee, as custodian for the Depositary with
respect to the Notes in global form, or any successor entity thereto.

         "Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

         "Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A-1 hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.

         "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

         "Designated Senior Debt" means (1) Indebtedness outstanding under the
Credit Agreement and the iStar Loan and (2) any other Senior Debt of the Company
permitted under this Indenture the principal amount of which is $25.0 million or
more and that has been designated by the Company as "Designated Senior Debt."

         "Developable Land" means all land of the Company and its Restricted
Subsidiaries (a) on which Units may be constructed or which may be utilized for
commercial, retail or industrial uses, in each case, under applicable laws and
regulations and (b) the intended use by the Company for which is permissible
under the applicable regional plan, development agreement or applicable zoning
ordinance.

         "Developed Land" means all Developable Land of the Company and its
Restricted Subsidiaries which is undergoing active development or is ready for
construction.

         "Discontinued Operations" with respect to the Company those operations
of the Company and its Subsidiaries which were classified as "discontinued
operations" of the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP as of the date of determination.

         "Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature, provided that only the portion of Capital Stock
which so matures or is mandatorily redeemable or redeemable at the option of the
holder thereof prior to such date will be deemed to be Disqualified Stock;
provided, however, that any Capital

                                       7
<PAGE>   14
Stock that would constitute Disqualified Stock solely because the holders
thereof have the right to require the Company to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 hereof.

         "EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (1) provision for
taxes based on income or profits of such Person and its Subsidiaries for such
period, to the extent that such provision for taxes was deducted in computing
such Consolidated Net Income, plus (2) consolidated interest expense of such
Person and its Subsidiaries for such period, whether paid or accrued, whether
expensed directly or included as a component of cost of goods sold or allocated
to Joint Ventures (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations), to the extent that any such expense was
deducted in computing such Consolidated Net Income, plus (3) depreciation,
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period occurring after the date of this Indenture) of such Person and its
Subsidiaries for such period to the extent that such depreciation, amortization
and other non-cash expenses were deducted in computing such Consolidated Net
Income, minus (4) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in accordance
with GAAP.

         Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Subsidiary of the Company shall be added to Consolidated Net
Income to compute EBITDA of the Company only to the extent that a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Subsidiary without prior governmental approval (that has not
been obtained), and without direct or indirect restriction pursuant to the terms
of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders.

         "Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

         "Equity Offerings" means any public or private sale of common stock or
preferred stock (excluding Disqualified Stock).

         "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.

                                       8
<PAGE>   15
         "Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.

         "Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.

         "Excluded Contributions" means the net cash proceeds received by the
Company after the Issue Date from (a) contributions to its equity capital other
than contributions from the issuance of Disqualified Stock or (b) the sale
(other than to a Restricted Subsidiary or to any Company, Restricted Subsidiary
or parent company management equity plan or stock option plan or any other
management or employee benefit plan or agreement) of Capital Stock (other than
Disqualified Stock) of the Company, in each case designated as Excluded
Contributions pursuant to an Officers' Certificate executed by the principal
executive officer and the principal financial officer of the Company on the date
such capital contributions are made or the date such Equity Interests are sold,
as the case may be, the cash proceeds of which are excluded from the calculation
set forth in paragraph (c) of Section 4.07 hereof.

         "Existing Indebtedness" means up to $159.6 million in aggregate
principal amount of Indebtedness of the Company and its Restricted Subsidiaries
(other than Indebtedness under the Credit Agreement) in existence on the date of
this Indenture.

         "Fair Market Value" means, with respect to any property or assets, the
fair market value thereof, as established by a responsible officer of the
Company, and, with respect to any property or asset the fair market value of
which exceeds $5.0 million, by an independent third party appraiser, accounting
firm or valuation firm with expertise in such valuation that is not affiliated
with the Company or any Subsidiary of the Company.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.

         "Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.

         "Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.

         "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.

         "Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.

         "Guarantors" means (1) each Subsidiary as of the Issue Date and (2) any
other Restricted Subsidiary that executes a Note Guarantee in accordance with
the provisions of this Indenture, and their respective successors and assigns.
Notwithstanding the foregoing, Wildcat Run of Lee County, Inc. is not a
Guarantor of the Notes.

                                       9
<PAGE>   16
         "Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (1) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (2) other agreements
or arrangements designed to protect such Person against fluctuations in interest
rates.

         "Holder" means a Person in whose name a Note is registered.

         "IAI Global Note" means the global Note substantially in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold to Institutional Accredited
Investors.

         "Indebtedness" means, with respect to any Person and without
duplication, any indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing Capital Lease Obligations or
the balance deferred and unpaid of the purchase price of any property or
representing any Hedging Obligations, if and to the extent any of the foregoing
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all Indebtedness of others secured by a Lien on any asset of such
Person, subject, however, to the Fair Market Value of the assets securing such
Indebtedness (whether or not such Indebtedness is assumed by such Person) and,
to the extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person; provided, however, Indebtedness shall not
include Indebtedness that constitutes an accrued expense, trade payables,
customer deposits or deferred income taxes. The amount of any Indebtedness
outstanding as of any date shall be (1) the accreted value thereof, in the case
of any Indebtedness issued with original issue discount, and (2) the principal
amount thereof, together with any interest thereon that is more than 30 days
past due, in the case of any other Indebtedness. Notwithstanding the foregoing,
Indebtedness shall not include (1) Indebtedness which has been defeased or
discharged, (2) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is extinguished within five business days of its incurrence or (3)
CDD Obligations, other than that portion of any CDD Obligations that is due and
payable at the time of determination.

         "Indenture" means this Indenture, as amended or supplemented from time
to time.

         "Independent Member" means, with respect to any board of directors of a
company, a member who is not an officer or employee of such company and does not
receive compensation or other payments from such company in excess of $100,000
per year and, in connection with any transaction, a member of such board of
directors who is disinterested with respect to such transaction.

         "Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.

         "Initial Notes" means the first $250.0 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.

         "Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.

                                       10
<PAGE>   17
         "Intangible Assets" means all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, write-ups of assets over their carrying value at the
date of this Indenture or the date of acquisition, if acquired subsequent
thereto, and all other items which would be treated as intangibles on the
consolidated balance sheet of such Person prepared in accordance with GAAP. For
purposes of this definition, deferred tax assets shall not be deemed to be
Intangible Assets.

         "Interest Expense" means, with respect to any fiscal period, the sum of
(a) all charges that are considered interest expense under generally accepted
accounting principles excluding amounts capitalized and including amortization
of previously capitalized interest, plus (b) the portion of rent paid by the
Company or any of its Restricted Subsidiaries (without duplication) for that
fiscal period under capital lease obligations that should be treated as interest
in accordance with financial Accounting Standards Board Statement No. 13, in
each case determined on a consolidated basis in accordance with generally
accepted accounting principles, consistently applied.

         "Interest Incurred" means for any period, the total interest paid or
accrued by the Company and its Subsidiaries (including the interest component of
any capital leases and excluding fees paid in connection with the closing of the
loans under the Credit Agreement or thereafter and excluding interest on the
Subordinated Debt and interest or fees payable under the Construction Loans to
the extent drawn under the Construction Loans).

         "Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel loans and advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Subsidiary not sold or
disposed of in an amount determined as provided in the third paragraph of
Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary
of the Company of a Person that holds an Investment in a third Person shall be
deemed to be an Investment by the Company or such Restricted Subsidiary in such
third Person in an amount equal to the fair market value of the Investment held
by the acquired Person in such third Person in an amount determined as provided
in the third paragraph of Section 4.07 hereof. Notwithstanding the foregoing,
the following are not Investments (i) Hedging Obligations entered into in the
ordinary course of business and in compliance with this Indenture; (ii)
endorsements of negotiable instruments and documents in the ordinary course of
business; and (iii) an acquisition of assets, Capital Stock or other securities
by the Company for consideration consisting exclusively of Equity Interests of
the Company (other than Disqualified Stock) and which Equity Interests are
excluded from the calculation set forth in Paragraph (c) of the first paragraph
of Section 4.07 hereof.

         "Issue Date" means February 20, 2001.

         "iStar Loan" means the credit agreement dated as of August 16, 2000 by
SFT II, Inc. in favor of CFC in the original principal amount of $72.5 million
as amended or supplemented or otherwise modified.

                                       11
<PAGE>   18
         "Joint Venture" means a corporation, partnership or other entity
engaged in one or more of the Permitted Businesses in which the Company or its
Restricted Subsidiaries does not have control but owns, directly or indirectly,
at least 10% of the Equity Interests.

         "Land Bank Obligations" means all obligations of the Company and its
Restricted Subsidiaries reflected on its balance sheet as a liability in
accordance with GAAP with respect to land sold to a third party and as to which
the Company or any Restricted Subsidiary has an option to repurchase.

         "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.

         "Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.

         "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction
provided that in no event shall any operating lease be deemed a Lien).

         "Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.

         "Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, without duplication,
(1) any gain or loss, together with any related provision for taxes on such gain
or loss, realized in connection with the disposition of any Restricted
Investment by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).

         "Non-Recourse Financing" means Indebtedness incurred in connection with
the purchase, development or construction of personal or real property useful in
the Permitted Business as to which the lender upon default (1) may seek recourse
or payment against the Company or any Restricted Subsidiary only through the
return or sale of the property so purchased and (2) may not otherwise assert a
valid claim for payment on such Indebtedness against the Company or any
Restricted Subsidiary or any other property of the Company or any Restricted
Subsidiary.

         "Non-U.S. Person"  means a Person who is not a U.S. Person.

         "Note Guarantee" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.

         "Notes" means the $250.0 million in aggregate principal amount of
Series A and Series B 10 5/8% Senior Subordinated Notes due 2011 offered hereby
together with any Additional Notes, if any, permitted to be issued in accordance
with this Indenture.

                                       12
<PAGE>   19
         "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

         "Offering" means the offering of the Notes by the Company.

         "Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.

         "Officers' Certificate" means a certificate signed by the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee.

         "Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.

         "Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).

         "Permitted Business" means the business of the Company and its
Subsidiaries engaged in as of the date of this Indenture, including but not
limited to, planning, designing, engineering, development, construction,
marketing, sale, financing, management and operation of real estate including
business and commercial projects, office buildings, residential subdivisions,
condominiums and cooperatives (including low-, mid- and high-rise condominiums),
villa developments and single family residences, timeshares, related amenity
operations, which include golf clubs, marinas, tennis facilities, restaurants,
including leisure, hospitality (hotels) and health care services, and any and
all other businesses reasonably related thereto including, but not limited to,
pest control and security services. In addition, Permitted Businesses shall
include the operation of an amenities business and other real estate services
businesses, including but not limited to, title insurance, property management,
mortgage banking, insurance brokerage, E-commerce related businesses and real
estate brokerage.

         "Permitted Investments" means: (1) any Investment in the Company or in
a Restricted Subsidiary of the Company; (2) cash and any Investment in Cash
Equivalents; (3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (a) such Person
becomes a Restricted Subsidiary of the Company or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company; (4) any acquisition of assets solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company
or Watermark; (5) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor; (6) Investments in existence on the Issue Date; (7) Investments made in
a simultaneous exchange for a prior Permitted Investment; and (8) the fair
market value of any investment in securities or other assets not constituting
cash or Cash Equivalents received in connection with the sale of assets (a)
where the securities are secured by a first priority lien on the assets sold or
(b) where at least 25% of the consideration for such sale consists of cash or
Cash Equivalents and provided that no more than an

                                       13
<PAGE>   20
aggregate amount of $10.0 million of such securities may be outstanding at any
one time under this clause 8(b).

         "Permitted Junior Securities" of a Person means (1) Equity Interests in
such Person and (2) debt securities of such Person that are subordinated to all
Senior Debt (and any debt securities issued in exchange for Senior Debt) of such
Person to substantially the same extent as, or to a greater extent than, the
Notes are subordinated to Senior Debt of the Company.

         "Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (1) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); unless such excess would be permitted by Section 4.09
hereof; (2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of the indebtedness being extended, refinanced, renewed,
replaced deferred or refunded, and is subordinated in right of payment to the
Notes on terms at least as favorable to the Holders of Notes as those contained
in the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and (4) such Indebtedness is incurred
either by the Company or by the Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.

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

         "Principals" means Alfred Hoffman, Jr., Don E. Ackerman, the Kamehameha
Activities Association, the John D. and Catherine T. MacArthur Foundation,
Citicorp Venture Capital Ltd. or any of their affiliates.

         "Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

         "Receivables" means an amount owed with respect to completed sales of
housing units, lots, parcels and amenities services sold to an unaffiliated
purchaser.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of February 20, 2001, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time,

                                       14
<PAGE>   21
relating to rights given by the Company to the purchasers of Additional Notes to
register such Additional Notes under the Securities Act.

         "Regulation S" means Regulation S promulgated under the Securities Act.

         "Regulation S Global Note" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.

         "Regulation S Permanent Global Note" means a permanent global Note in
the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.

         "Regulation S Temporary Global Note" means a temporary global Note in
the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Notes initially sold in reliance on Rule 903 of Regulation S.

         "Related Party" with respect to any Principal means (A) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).

         "Representative" means the Indenture trustee or other trustee, agent or
representative for any Senior Debt.

         "Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

         "Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.

         "Restricted Global Note" means a Global Note bearing the Private
Placement Legend.

         "Restricted Investment" means an Investment other than a Permitted
Investment.

         "Restricted Period" means the 40-day restricted period as defined in
Regulation S.

         "Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.

         "Rule 144" means Rule 144 promulgated under the Securities Act.

         "Rule 144A" means Rule 144A promulgated under the Securities Act.

                                       15
<PAGE>   22
         "Rule 903" means Rule 903 promulgated under the Securities Act.

         "Rule 904" means Rule 904 promulgated under the Securities Act.

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Senior Debt" of any Person means: (1) all Indebtedness of such Person
under Credit Facilities and all Hedging Obligations with respect thereto, (2)
any other Indebtedness of such Person permitted to be incurred under the terms
of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Notes or the Note Guarantees, as the case may be, and (3) all
Obligations with respect to the foregoing.

         Notwithstanding anything to the contrary in the foregoing, Senior Debt
will not include (a) any liability for federal, state, local or other taxes owed
or owing by such Person, (b) any Indebtedness of such Person to any of its
Subsidiaries or other Affiliates, (c) any trade payables, customer deposits,
reserves and accrued expenses, (d) any Indebtedness that is incurred in
violation of this Indenture, (e) Indebtedness represented by the Notes, the
Guarantees, the Exchange Notes or guarantees relating to the Exchange Notes, (f)
any Watermark Shareholder Debt, and (g) any CDD Obligations, other than that
portion of CDD Obligations that is due and payable at the time of determination.

         "Senior Guarantees" means the Guarantees by the Guarantors of
Obligations under the Credit Agreement or other Senior Debt.

         "Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.

         "Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof except that the standard of significance will be 10% instead of 20%.

         "Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

         "Subordinated Indebtedness" means any Indebtedness which is expressly
subordinated in right of payment to any other Indebtedness provided however that
Subordinated Indebtedness shall not include debt which would otherwise be Senior
Debt but for a junior lien on assets of the Company or any of its Subsidiaries.

         "Subsidiary" means, with respect to any Person, (1) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or

                                       16
<PAGE>   23
any combination thereof, except in each case with respect to joint ventures when
such person or Subsidiary of such person does not exercise control of the joint
venture).

         Notwithstanding the foregoing, the term "Subsidiary" shall not include
any entity referred to in (1) or (2) above to the extent the Company does not
consolidate its interest in any such entity in its consolidated financial
statements prepared in accordance with GAAP. Notwithstanding the immediately
preceding sentence, not-for-profit golf clubs and common interest realty
associations that do not guarantee our Credit Facilities are not Subsidiaries.

         "Tax Sharing Agreements" mean tax sharing agreements between or among
any of Watermark, the Company and the Subsidiaries of the Company and any
amendment or modification thereto so long as such amendments or modifications
are not adverse to the holders of Notes in any material respect.

         "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the Date on which this Indenture is qualified
under the TIA.

         "Total Assets" means the total consolidated assets of the Company and
its Restricted Subsidiaries calculated in accordance with GAAP.

         "Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

         "U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.

         "Unit" means a residence, whether single or part of a multifamily
building, whether completed or under construction, held by the Company or any
Restricted Subsidiary for sale or rental in the ordinary course of business;
provided, however, that the number of Units that are rental Units at the time of
determination shall not exceed 25% of the total Units sold or rented by the
Company and its Restricted Subsidiaries during the immediately preceding twelve
month period.

         "Unrestricted Cash" means all cash of the Company and its Restricted
Subsidiaries which is not allocated for an expenditure or distribution or held
as a deposit for a housing purchase contract or otherwise characterized as a
deposit.

         "Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.

         "Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.

         "Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution; but only to the extent that such Subsidiary: (1) has no
Indebtedness other than debt that is non-recourse to the Company or any
Restricted Subsidiary; except to the extent that any credit support or guarantee
by the Company or any Restricted Subsidiary may be incurred as Indebtedness and
a Restricted Investment; (2) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time

                                       17
<PAGE>   24
from Persons who are not Affiliates of the Company; and (3) is a Person with
respect to which neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; unless
the maximum amount of such obligation is treated as a Restricted Investment and
such Restricted Investment may be made at the time of the giving of such
obligation.

         "Valid Purchase Contract Proceeds" means valid purchase contracts for
condominium units which produce proceeds from sales (net of selling expenses and
contract deposits used for construction costs).

         "Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the board of
directors of such Person.

         "Watermark" means Watermark Communities Inc.

         "Watermark Shareholder Debt" means the approximately $30.0 million of
debt owed by WCI to shareholders of Watermark on the Issue Date.

         "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (1) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (2) the then outstanding principal
amount of such Indebtedness.

         "Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.

Section 1.02. Other Definitions.

<TABLE>
<CAPTION>
                                                                                               Defined in
        Term                                                                                   Section
        ----                                                                                   -------
<S>                                                                                            <C>
        "Affiliate Transaction"............................................................    4.11
        "Authentication Order".............................................................    2.02
        "CDD Obligations"..................................................................    4.09
        "Change of Control Offer"..........................................................    4.15
        "Change of Control Payment"........................................................    4.15
        "Change of Control Payment Date"...................................................    4.15
        "Covenant Defeasance"..............................................................    8.03
        "Deficiency Date"..................................................................    4.10
        "Event of Default".................................................................    6.01
        "incur"............................................................................    4.09
        "Legal Defeasance".................................................................    8.02
        "Minimum Tangible Net Worth".......................................................    4.10
        "Offer"............................................................................    4.10
        "Offer Amount".....................................................................    4.10
</TABLE>

                                       18
<PAGE>   25
<TABLE>
<S>                                                                                            <C>
        "Paying Agent".....................................................................    2.03
        "Payment Blockage Notice"..........................................................    10.03
        "Permitted Debt"...................................................................    4.09
        "Registrar"........................................................................    2.03
        "Restricted Payments"..............................................................    4.07
</TABLE>

Section 1.03. Incorporation by Reference of Trust Indenture Act.

         Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.

         The following TIA terms used in this Indenture have the following
meanings:

         "indenture securities" means the Notes;

         "indenture security Holder" means a Holder of a Note;

         "indenture to be qualified" means this Indenture;

         "indenture trustee" or "institutional trustee" means the Trustee; and

         "obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.

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

Section 1.04. Rules of Construction.

         Unless the context otherwise requires:

         (a) a term has the meaning assigned to it;

         (b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;

         (c) "or" is not exclusive;

         (d) words in the singular include the plural, and in the plural include
the singular;

         (e) provisions apply to successive events and transactions; and

         (f) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.

                                       19
<PAGE>   26
                                    ARTICLE 2
                                    THE NOTES

Section 2.01. Form and Dating.

         (a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A-1 or A-2 hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.

         The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.

         (b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit Exhibits A-1 or A-2 attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A-1 attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.

         (c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its Corporate Trust Office, as
custodian for the Depositary, and registered in the name of the Depositary or
the nominee of the Depositary for the accounts of designated agents holding on
behalf of Euroclear or Clearstream, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Restricted Period
shall be terminated upon the receipt by the Trustee of (i) a written certificate
from the Depositary, together with copies of certificates from Euroclear and
Clearstream certifying that they have received certification of non-United
States beneficial ownership of 100% of the aggregate principal amount of the
Regulation S Temporary Global Note (except to the extent of any beneficial
owners thereof who acquired an interest therein during the Restricted Period
pursuant to another exemption from registration under the Securities Act and who
will take delivery of a beneficial ownership interest in a 144A Global Note or
an IAI Global Note bearing a Private Placement Legend, all as contemplated by
Section 2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Company.
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in Regulation S Permanent Global Notes pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global Notes,
the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate
principal amount of the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes may from time to time be increased or decreased by

                                       20
<PAGE>   27
adjustments made on the records of the Trustee and the Depositary or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.

         (d) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Temporary Global Note and
the Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.

Section 2.02. Execution and Authentication.

         An Officer shall sign the Notes for the Company by manual or facsimile
signature.

         If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.

         A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.

         The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Notes. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.

         The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or the
Company.

Section 2.03. Registrar and Paying Agent.

         The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

         The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.

         The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.

                                       21
<PAGE>   28
Section 2.04. Paying Agent to Hold Money in Trust.

         The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.

Section 2.05. Holder Lists.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

Section 2.06. Transfer and Exchange.

         (a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.

         (b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in

                                       22
<PAGE>   29
the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:

                  (i) Transfer of Beneficial Interests in the Same Global Note.
         Beneficial interests in any Restricted Global Note may be transferred
         to Persons who take delivery thereof in the form of a beneficial
         interest in the same Restricted Global Note in accordance with the
         transfer restrictions set forth in the Private Placement Legend;
         provided, however, that prior to the expiration of the Restricted
         Period, transfers of beneficial interests in the Temporary Regulation S
         Global Note may not be made to a U.S. Person or for the account or
         benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
         interests in any Unrestricted Global Note may be transferred to Persons
         who take delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note. No written orders or instructions shall be
         required to be delivered to the Registrar to effect the transfers
         described in this Section 2.06(b)(i).

                  (ii) All Other Transfers and Exchanges of Beneficial Interests
         in Global Notes. In connection with all transfers and exchanges of
         beneficial interests that are not subject to Section 2.06(b)(i) above,
         the transferor of such beneficial interest must deliver to the
         Registrar either (A) (1) a written order from a Participant or an
         Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to credit or cause to be
         credited a beneficial interest in another Global Note in an amount
         equal to the beneficial interest to be transferred or exchanged and (2)
         instructions given in accordance with the Applicable Procedures
         containing information regarding the Participant account to be credited
         with such increase or (B) (1) a written order from a Participant or an
         Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to cause to be issued a
         Definitive Note in an amount equal to the beneficial interest to be
         transferred or exchanged and (2) instructions given by the Depositary
         to the Registrar containing information regarding the Person in whose
         name such Definitive Note shall be registered to effect the transfer or
         exchange referred to in (1) above; provided that in no event shall
         Definitive Notes be issued upon the transfer or exchange of beneficial
         interests in the Regulation S Temporary Global Note prior to (x) the
         expiration of the Restricted Period and (y) the receipt by the
         Registrar of any certificates required pursuant to Rule 903 under the
         Securities Act. Upon consummation of an Exchange Offer by the Company
         in accordance with Section 2.06(f) hereof, the requirements of this
         Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt
         by the Registrar of the instructions contained in the Letter of
         Transmittal delivered by the Holder of such beneficial interests in the
         Restricted Global Notes. Upon satisfaction of all of the requirements
         for transfer or exchange of beneficial interests in Global Notes
         contained in this Indenture and the Notes or otherwise applicable under
         the Securities Act, the Trustee shall adjust the principal amount of
         the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

                  (iii) Transfer of Beneficial Interests to Another Restricted
         Global Note. A beneficial interest in any Restricted Global Note may be
         transferred to a Person who takes delivery thereof in the form of a
         beneficial interest in another Restricted Global Note if the transfer
         complies with the requirements of Section 2.06(b)(ii) above and the
         Registrar receives the following:

                           (A) if the transferee will take delivery in the form
                  of a beneficial interest in the 144A Global Note, then the
                  transferor must deliver a certificate in the form of Exhibit B
                  hereto, including the certifications in item (1) thereof;

                                       23
<PAGE>   30
                           (B) if the transferee will take delivery in the form
                  of a beneficial interest in the Regulation S Temporary Global
                  Note or the Regulation S Global Note, then the transferor must
                  deliver a certificate in the form of Exhibit B hereto,
                  including the certifications in item (2) thereof; and

                           (C) if the transferee will take delivery in the form
                  of a beneficial interest in the IAI Global Note, then the
                  transferor must deliver a certificate in the form of Exhibit B
                  hereto, including the certifications and certificates and
                  Opinion of Counsel required by item (3) thereof, if
                  applicable.

                  (iv) Transfer and Exchange of Beneficial Interests in a
         Restricted Global Note for Beneficial Interests in the Unrestricted
         Global Note. A beneficial interest in any Restricted Global Note may be
         exchanged by any holder thereof for a beneficial interest in an
         Unrestricted Global Note or transferred to a Person who takes delivery
         thereof in the form of a beneficial interest in an Unrestricted Global
         Note if the exchange or transfer complies with the requirements of
         Section 2.06(b)(ii) above and:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the holder of the beneficial interest to be
                  transferred, in the case of an exchange, or the transferee, in
                  the case of a transfer, certifies in the applicable Letter of
                  Transmittal that it is not (1) a broker-dealer, (2) a Person
                  participating in the distribution of the Exchange Notes or (3)
                  a Person who is an affiliate (as defined in Rule 144) of the
                  Company;

                           (B) such transfer is effected pursuant to the Shelf
                  Registration Statement in accordance with the Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                           (D) the Registrar receives the following:

                                    (1) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           exchange such beneficial interest for a beneficial
                           interest in an Unrestricted Global Note, a
                           certificate from such holder in the form of Exhibit C
                           hereto, including the certifications in item (1)(a)
                           thereof; or

                                    (2) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           beneficial interest in an Unrestricted Global Note, a
                           certificate from such holder in the form of Exhibit B
                           hereto, including the certifications in item (4)
                           thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                                       24
<PAGE>   31
                  If any such transfer is effected pursuant to subparagraph (B)
         or (D) above at a time when an Unrestricted Global Note has not yet
         been issued, the Company shall issue and, upon receipt of an
         Authentication Order in accordance with Section 2.02 hereof, the
         Trustee shall authenticate one or more Unrestricted Global Notes in an
         aggregate principal amount equal to the aggregate principal amount of
         beneficial interests transferred pursuant to subparagraph (B) or (D)
         above.

                  Beneficial interests in an Unrestricted Global Note cannot be
         exchanged for, or transferred to Persons who take delivery thereof in
         the form of, a beneficial interest in a Restricted Global Note.

         (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

                  (i) Beneficial Interests in Restricted Global Notes to
         Restricted Definitive Notes. If any holder of a beneficial interest in
         a Restricted Global Note proposes to exchange such beneficial interest
         for a Restricted Definitive Note or to transfer such beneficial
         interest to a Person who takes delivery thereof in the form of a
         Restricted Definitive Note, then, upon receipt by the Registrar of the
         following documentation:

                           (A) if the holder of such beneficial interest in a
                  Restricted Global Note proposes to exchange such beneficial
                  interest for a Restricted Definitive Note, a certificate from
                  such holder in the form of Exhibit C hereto, including the
                  certifications in item (2)(a) thereof;

                           (B) if such beneficial interest is being transferred
                  to a QIB in accordance with Rule 144A under the Securities
                  Act, a certificate to the effect set forth in Exhibit B
                  hereto, including the certifications in item (1) thereof;

                           (C) if such beneficial interest is being transferred
                  to a Non-U.S. Person in an offshore transaction in accordance
                  with Rule 903 or Rule 904 under the Securities Act, a
                  certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (2) thereof;

                           (D) if such beneficial interest is being transferred
                  pursuant to an exemption from the registration requirements of
                  the Securities Act in accordance with Rule 144 under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item (3)(a)
                  thereof;

                           (E) if such beneficial interest is being transferred
                  to an Institutional Accredited Investor in reliance on an
                  exemption from the registration requirements of the Securities
                  Act other than those listed in subparagraphs (B) through (D)
                  above, a certificate to the effect set forth in Exhibit B
                  hereto, including the certifications, certificates and Opinion
                  of Counsel required by item (3) thereof, if applicable;

                           (F) if such beneficial interest is being transferred
                  to the Company or any of its Subsidiaries, a certificate to
                  the effect set forth in Exhibit B hereto, including the
                  certifications in item (3)(b) thereof; or

                           (G) if such beneficial interest is being transferred
                  pursuant to an effective registration statement under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item (3)(c)
                  thereof,

                                       25
<PAGE>   32
         the Trustee shall cause the aggregate principal amount of the
         applicable Global Note to be reduced accordingly pursuant to Section
         2.06(h) hereof, and the Company shall execute and the Trustee shall
         authenticate and deliver to the Person designated in the instructions a
         Definitive Note in the appropriate principal amount. Any Definitive
         Note issued in exchange for a beneficial interest in a Restricted
         Global Note pursuant to this Section 2.06(c) shall be registered in
         such name or names and in such authorized denomination or denominations
         as the holder of such beneficial interest shall instruct the Registrar
         through instructions from the Depositary and the Participant or
         Indirect Participant. The Trustee shall deliver such Definitive Notes
         to the Persons in whose names such Notes are so registered. Any
         Definitive Note issued in exchange for a beneficial interest in a
         Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
         the Private Placement Legend and shall be subject to all restrictions
         on transfer contained therein.

                  (ii) Beneficial Interests in Regulation S Temporary Global
         Note to Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and
         (C) hereof, a beneficial interest in the Regulation S Temporary Global
         Note may not be exchanged for a Definitive Note or transferred to a
         Person who takes delivery thereof in the form of a Definitive Note
         prior to (x) the expiration of the Restricted Period and (y) the
         receipt by the Registrar of any certificates required pursuant to Rule
         903(b)(3)(ii)(B) under the Securities Act, except in the case of a
         transfer pursuant to an exemption from the registration requirements of
         the Securities Act other than Rule 903 or Rule 904.

                  (iii) Beneficial Interests in Restricted Global Notes to
         Unrestricted Definitive Notes. A holder of a beneficial interest in a
         Restricted Global Note may exchange such beneficial interest for an
         Unrestricted Definitive Note or may transfer such beneficial interest
         to a Person who takes delivery thereof in the form of an Unrestricted
         Definitive Note only if:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the holder of such beneficial interest, in the
                  case of an exchange, or the transferee, in the case of a
                  transfer, certifies in the applicable Letter of Transmittal
                  that it is not (1) a broker-dealer, (2) a Person participating
                  in the distribution of the Exchange Notes or (3) a Person who
                  is an affiliate (as defined in Rule 144) of the Company;

                           (B) such transfer is effected pursuant to the Shelf
                  Registration Statement in accordance with the Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                           (D) the Registrar receives the following:

                                    (1) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           exchange such beneficial interest for a Definitive
                           Note that does not bear the Private Placement Legend,
                           a certificate from such holder in the form of Exhibit
                           C hereto, including the certifications in item (1)(b)
                           thereof; or

                                    (2) if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           Definitive Note that does not bear the Private

                                       26
<PAGE>   33
                           Placement Legend, a certificate from such holder in
                           the form of Exhibit B hereto, including the
                           certifications in item (4) thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  (iv) Beneficial Interests in Unrestricted Global Notes to
         Unrestricted Definitive Notes. If any holder of a beneficial interest
         in an Unrestricted Global Note proposes to exchange such beneficial
         interest for a Definitive Note or to transfer such beneficial interest
         to a Person who takes delivery thereof in the form of a Definitive
         Note, then, upon satisfaction of the conditions set forth in Section
         2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
         amount of the applicable Global Note to be reduced accordingly pursuant
         to Section 2.06(h) hereof, and the Company shall execute and the
         Trustee shall authenticate and deliver to the Person designated in the
         instructions a Definitive Note in the appropriate principal amount. Any
         Definitive Note issued in exchange for a beneficial interest pursuant
         to this Section 2.06(c)(iv) shall be registered in such name or names
         and in such authorized denomination or denominations as the holder of
         such beneficial interest shall instruct the Registrar through
         instructions from the Depositary and the Participant or Indirect
         Participant. The Trustee shall deliver such Definitive Notes to the
         Persons in whose names such Notes are so registered. Any Definitive
         Note issued in exchange for a beneficial interest pursuant to this
         Section 2.06(c)(iv) shall not bear the Private Placement Legend.

         (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

                  (i) Restricted Definitive Notes to Beneficial Interests in
         Restricted Global Notes. If any Holder of a Restricted Definitive Note
         proposes to exchange such Note for a beneficial interest in a
         Restricted Global Note or to transfer such Restricted Definitive Notes
         to a Person who takes delivery thereof in the form of a beneficial
         interest in a Restricted Global Note, then, upon receipt by the
         Registrar of the following documentation:

                           (A) if the Holder of such Restricted Definitive Note
                  proposes to exchange such Note for a beneficial interest in a
                  Restricted Global Note, a certificate from such Holder in the
                  form of Exhibit C hereto, including the certifications in item
                  (2)(b) thereof;

                           (B) if such Restricted Definitive Note is being
                  transferred to a QIB in accordance with Rule 144A under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item (1)
                  thereof;

                           (C) if such Restricted Definitive Note is being
                  transferred to a Non-U.S. Person in an offshore transaction in
                  accordance with Rule 903 or Rule 904 under the Securities Act,
                  a certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (2) thereof;

                           (D) if such Restricted Definitive Note is being
                  transferred pursuant to an exemption from the registration
                  requirements of the Securities Act in accordance with

                                       27
<PAGE>   34
                  Rule 144 under the Securities Act, a certificate to the effect
                  set forth in Exhibit B hereto, including the certifications in
                  item (3)(a) thereof;

                           (E) if such Restricted Definitive Note is being
                  transferred to an Institutional Accredited Investor in
                  reliance on an exemption from the registration requirements of
                  the Securities Act other than those listed in subparagraphs
                  (B) through (D) above, a certificate to the effect set forth
                  in Exhibit B hereto, including the certifications,
                  certificates and Opinion of Counsel required by item (3)
                  thereof, if applicable;

                           (F) if such Restricted Definitive Note is being
                  transferred to the Company or any of its Subsidiaries, a
                  certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (3)(b) thereof; or

                           (G) if such Restricted Definitive Note is being
                  transferred pursuant to an effective registration statement
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit B hereto, including the certifications in
                  item (3)(c) thereof,

         the Trustee shall cancel the Restricted Definitive Note, increase or
         cause to be increased the aggregate principal amount of, in the case of
         clause (A) above, the appropriate Restricted Global Note, in the case
         of clause (B) above, the 144A Global Note, in the case of clause (C)
         above, the Regulation S Global Note, and in all other cases, the IAI
         Global Note.

                  (ii) Restricted Definitive Notes to Beneficial Interests in
         Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
         exchange such Note for a beneficial interest in an Unrestricted Global
         Note or transfer such Restricted Definitive Note to a Person who takes
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note only if:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the Holder, in the case of an exchange, or the
                  transferee, in the case of a transfer, certifies in the
                  applicable Letter of Transmittal that it is not (1) a
                  broker-dealer, (2) a Person participating in the distribution
                  of the Exchange Notes or (3) a Person who is an affiliate (as
                  defined in Rule 144) of the Company;

                           (B) such transfer is effected pursuant to the Shelf
                  Registration Statement in accordance with the Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                           (D)      the Registrar receives the following:

                                    (1) if the Holder of such Definitive Notes
                           proposes to exchange such Notes for a beneficial
                           interest in the Unrestricted Global Note, a
                           certificate from such Holder in the form of Exhibit C
                           hereto, including the certifications in item (1)(c)
                           thereof; or

                                    (2) if the Holder of such Definitive Notes
                           proposes to transfer such Notes to a Person who shall
                           take delivery thereof in the form of a beneficial

                                       28
<PAGE>   35
                           interest in the Unrestricted Global Note, a
                           certificate from such Holder in the form of Exhibit B
                           hereto, including the certifications in item (4)
                           thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  Upon satisfaction of the conditions of any of the
         subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
         Definitive Notes and increase or cause to be increased the aggregate
         principal amount of the Unrestricted Global Note.

                  (iii) Unrestricted Definitive Notes to Beneficial Interests in
         Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
         may exchange such Note for a beneficial interest in an Unrestricted
         Global Note or transfer such Definitive Notes to a Person who takes
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note at any time. Upon receipt of a request for
         such an exchange or transfer, the Trustee shall cancel the applicable
         Unrestricted Definitive Note and increase or cause to be increased the
         aggregate principal amount of one of the Unrestricted Global Notes.

                  If any such exchange or transfer from a Definitive Note to a
         beneficial interest is effected pursuant to subparagraphs (ii)(B),
         (ii)(D) or (iii) above at a time when an Unrestricted Global Note has
         not yet been issued, the Company shall issue and, upon receipt of an
         Authentication Order in accordance with Section 2.02 hereof, the
         Trustee shall authenticate one or more Unrestricted Global Notes in an
         aggregate principal amount equal to the principal amount of Definitive
         Notes so transferred.

         (e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

                  (i) Restricted Definitive Notes to Restricted Definitive
         Notes. Any Restricted Definitive Note may be transferred to and
         registered in the name of Persons who take delivery thereof in the form
         of a Restricted Definitive Note if the Registrar receives the
         following:

                           (A) if the transfer will be made pursuant to Rule
                  144A under the Securities Act, then the transferor must
                  deliver a certificate in the form of Exhibit B hereto,
                  including the certifications in item (1) thereof;

                           (B) if the transfer will be made pursuant to Rule 903
                  or Rule 904, then the transferor must deliver a certificate in
                  the form of Exhibit B hereto, including the certifications in
                  item (2) thereof; and

                                       29
<PAGE>   36
                           (C) if the transfer will be made pursuant to any
                  other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver a certificate
                  in the form of Exhibit B hereto, including the certifications,
                  certificates and Opinion of Counsel required by item (3)
                  thereof, if applicable.

                  (ii) Restricted Definitive Notes to Unrestricted Definitive
         Notes. Any Restricted Definitive Note may be exchanged by the Holder
         thereof for an Unrestricted Definitive Note or transferred to a Person
         or Persons who take delivery thereof in the form of an Unrestricted
         Definitive Note if:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the Holder, in the case of an exchange, or the
                  transferee, in the case of a transfer, certifies in the
                  applicable Letter of Transmittal that it is not (1) a
                  broker-dealer, (2) a Person participating in the distribution
                  of the Exchange Notes or (3) a Person who is an affiliate (as
                  defined in Rule 144) of the Company;

                           (B) any such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                           (C) any such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the Registration Rights Agreement; or

                           (D) the Registrar receives the following:

                                    (1) if the Holder of such Restricted
                           Definitive Notes proposes to exchange such Notes for
                           an Unrestricted Definitive Note, a certificate from
                           such Holder in the form of Exhibit C hereto,
                           including the certifications in item (1)(d) thereof;
                           or

                                    (2) if the Holder of such Restricted
                           Definitive Notes proposes to transfer such Notes to a
                           Person who shall take delivery thereof in the form of
                           an Unrestricted Definitive Note, a certificate from
                           such Holder in the form of Exhibit B hereto,
                           including the certifications in item (4) thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests, an Opinion of Counsel in form
                  reasonably acceptable to the Company to the effect that such
                  exchange or transfer is in compliance with the Securities Act
                  and that the restrictions on transfer contained herein and in
                  the Private Placement Legend are no longer required in order
                  to maintain compliance with the Securities Act.

                  (iii) Unrestricted Definitive Notes to Unrestricted Definitive
         Notes. A Holder of Unrestricted Definitive Notes may transfer such
         Notes to a Person who takes delivery thereof in the form of an
         Unrestricted Definitive Note. Upon receipt of a request to register
         such a transfer, the Registrar shall register the Unrestricted
         Definitive Notes pursuant to the instructions from the Holder thereof.

         (f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in

                                       30
<PAGE>   37
accordance with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not broker-dealers, (y) they are not participating
in a distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the Exchange
Offer and (ii) Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the
Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.

         (g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                  (i)      Private Placement Legend.

                           (A) Except as permitted by subparagraph (B) below,
                  each Global Note and each Definitive Note (and all Notes
                  issued in exchange therefor or substitution thereof) shall
                  bear the legend in substantially the following form:

"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR (AS DEFINED IN RULE 501 (a) (1), (2), (3) or (7) UNDER THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN ONE YEAR AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE

                                       31
<PAGE>   38
COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT."

                           (B) Notwithstanding the foregoing, any Global Note or
                  Definitive Note issued pursuant to subparagraphs (c)(iii),
                  (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this
                  Section 2.06 (and all Notes issued in exchange therefor or
                  substitution thereof) shall not bear the Private Placement
                  Legend.

                  (ii) Global Note Legend. Each Global Note shall bear a legend
         in substantially the following form:

"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THIS INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THIS INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THIS
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THIS INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY."

                  (iii) Regulation S Temporary Global Note Legend. The
         Regulation S Temporary Global Note shall bear a legend in substantially
         the following form:

"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THIS INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."

         (h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

         (i) General Provisions Relating to Transfers and Exchanges.

                                       32
<PAGE>   39
                  (i) To permit registrations of transfers and exchanges, the
         Company shall execute and the Trustee shall authenticate Global Notes
         and Definitive Notes upon the Company's order or at the Registrar's
         request.

                  (ii) No service charge shall be made to a holder of a
         beneficial interest in a Global Note or to a Holder of a Definitive
         Note for any registration of transfer or exchange, but the Company may
         require payment of a sum sufficient to cover any transfer tax or
         similar governmental charge payable in connection therewith (other than
         any such transfer taxes or similar governmental charge payable upon
         exchange or transfer pursuant to Sections 2.10, 3.06, 4.10, 4.15 and
         9.05 hereof).

                  (iii) The Registrar shall not be required to register the
         transfer of or exchange any Note selected for redemption in whole or in
         part, except the unredeemed portion of any Note being redeemed in part.

                  (iv) All Global Notes and Definitive Notes issued upon any
         registration of transfer or exchange of Global Notes or Definitive
         Notes shall be the valid obligations of the Company, evidencing the
         same debt, and entitled to the same benefits under this Indenture, as
         the Global Notes or Definitive Notes surrendered upon such registration
         of transfer or exchange.

                  (v) The Company shall not be required (A) to issue, to
         register the transfer of or to exchange any Notes during a period
         beginning at the opening of business 15 days before the day of any
         selection of Notes for redemption under Section 3.02 hereof and ending
         at the close of business on the day of selection, (B) to register the
         transfer of or to exchange any Note so selected for redemption in whole
         or in part, except the unredeemed portion of any Note being redeemed in
         part or (C) to register the transfer of or to exchange a Note between a
         record date and the next succeeding Interest Payment Date.

                  (vi) Prior to due presentment for the registration of a
         transfer of any Note, the Trustee, any Agent and the Company may deem
         and treat the Person in whose name any Note is registered as the
         absolute owner of such Note for the purpose of receiving payment of
         principal of and interest on such Notes and for all other purposes, and
         none of the Trustee, any Agent or the Company shall be affected by
         notice to the contrary.

                  (vii) The Trustee shall authenticate Global Notes and
         Definitive Notes in accordance with the provisions of Section 2.02
         hereof.

                  (viii) All certifications, certificates and Opinions of
         Counsel required to be submitted to the Registrar pursuant to this
         Section 2.06 to effect a registration of transfer or exchange may be
         submitted by facsimile.

                  (ix) Each Holder agrees to indemnify the Company and the
         Trustee against any liability that may result from the transfer,
         exchange or assignment by such Holder of such Holder's Note in
         violation of any provision of this Indenture and/or applicable Unites
         States Federal or state securities law.

                  (x) The Trustee shall have no obligation or duty to monitor,
         determine or inquire as to compliance with any restrictions on transfer
         imposed under this Indenture or under applicable law with respect to
         any transfer of any interest in any Note (including any transfers
         between or among Depositary Participants or beneficial owners of
         interests in any Global Note) other than to

                                       33
<PAGE>   40
         require delivery of such certificates and other documentation or
         evidence as are expressly required by, and to do so if and when
         expressly required by the terms of, this Indenture, and to examine the
         same to determine substantial compliance as to form with the express
         requirements hereof.

Section 2.07. Replacement Notes.

         If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. An indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.

         Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

Section 2.08. Outstanding Notes.

         The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.

         If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.

         If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

         If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

Section 2.09. Treasury Notes.

         In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes as to which a Responsible Officer of the Trustee has actual knowledge
are so owned shall be so disregarded.

                                       34
<PAGE>   41
Section 2.10. Temporary Notes.

         Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.

         Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

Section 2.11. Cancellation.

         The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes in accordance with its procedures for the disposition of canceled
securities in effect as of the date of such disposition (subject to the record
retention requirement of the Exchange Act). Certification of the disposition of
all canceled Notes shall be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.

Section 2.12. Defaulted Interest.

         If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.

Section 2.13. CUSIP Numbers.

         The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.

                                       35
<PAGE>   42
                                    ARTICLE 3
                            REDEMPTION AND PREPAYMENT

Section 3.01. Notices to Trustee.

         If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.

Section 3.02. Selection of Notes to Be Redeemed.

         If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.

         The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

Section 3.03. Notice of Redemption.

         At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.

         The notice shall identify the Notes (including the CUSIP number, if
any) to be redeemed and shall state:

         (a) the redemption date;

         (b) the redemption price;

         (c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;

         (d) the name and address of the Paying Agent;

                                       36
<PAGE>   43
         (e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;

         (f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;

         (g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and

         (h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.

         At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 15 days prior to the date
of the mailing of such notice, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.

Section 3.04. Effect of Notice of Redemption.

         Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.

Section 3.05. Deposit of Redemption Price.

         One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.

         If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.

Section 3.06. Notes Redeemed in Part.

         Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.

                                       37
<PAGE>   44
Section 3.07. Optional Redemption.

         (a) Except as set forth in clause (b) of this Section 3.07, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to February 15, 2006. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the applicable redemption
date, if redeemed during the twelve-month period beginning on February 15 of the
years indicated below:

<TABLE>
<CAPTION>
        Year                                                                               Percentage
        ----                                                                               ----------
<S>                                                                                        <C>
        2006...........................................................................    105.313%
        2007...........................................................................    103.542%
        2008...........................................................................    101.771%
        2009 and thereafter............................................................    100.000%
</TABLE>

         (b) Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time on or prior to February 15, 2004, the Company may on one or more
occasions redeem up to an aggregate of 35% of the principal amount of Notes
issued under this Indenture at a redemption price equal to 110.625% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings of the Company or its parent, Watermark, to the extent the
net cash proceeds thereof are contributed to the Company as a capital
contribution to the common equity of the Company; provided that at least 65% of
the aggregate principal amount of the Notes issued remains outstanding
immediately after the occurrence of such redemption (excluding Notes held by the
Watermark Communities and its Subsidiaries) and that such redemption occurs
within 90 days of the date of the closing of such Equity Offering.

         (c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.

Section 3.08. Mandatory Redemption.

         The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.

                                    ARTICLE 4
                                    COVENANTS

Section 4.01. Payment of Notes.

         The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 12:00 noon Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

         The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable

                                       38
<PAGE>   45
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

         The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.

         The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

         The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.

Section 4.03. Reports.

         (a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes within the time periods specified in the Commission's rules and
regulations (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company and its Subsidiaries were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and its consolidated Subsidiaries and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company and its Subsidiaries were required to file
such reports. In addition, following consummation of the Exchange Offer, whether
or not required by the rules and regulations of the SEC, the Company shall file
a copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request if not then publicly
available. The Company shall at all times comply with TIA Section 314(a).
Delivery by the Company of reports, information and documents to the Trustee
pursuant to TIA Section 314(a) shall be for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

                                       39
<PAGE>   46
         (b) For so long as any Notes remain outstanding, the Company and the
Guarantors shall furnish to the Holders and to prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

         (c) Notwithstanding the foregoing, such requirements shall be deemed
satisfied prior to the commencement of the exchange offer or the effectiveness
of the shelf registration statement by the filing with the Commission the
registration statement relating to the exchange offer and/or the shelf
registration statement, and any amendments thereto, of the Securities; provided
that any such registration statement is filed within the time periods specified
in the Registration Rights Agreement.

Section 4.04. Compliance Certificate.

         (a) The Company shall deliver to the Trustee, within 100 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

         (b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

         (c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, as soon as possible, and in any event within five days
after any Officer becomes aware of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.

Section 4.05. Taxes.

         The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

                                       40
<PAGE>   47
Section 4.06. Stay, Extension and Usury Laws.

         The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.

Section 4.07. Restricted Payments.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) (other than dividends or distributions
payable in Equity Interests of the Company (other than Disqualified Stock) or
dividends or distributions to the Company or a Restricted Subsidiary of the
Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company (other than any such Equity Interests owned by
the Company, a Wholly Owned Restricted Subsidiary or any Guarantor); (iii) make
any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes
or the Note Guarantees, except payments of interest or a payment of principal at
Stated Maturity (other than Indebtedness permitted under clause (vi) of the
second paragraph of Section 4.09 hereof); or (iv) make any Restricted
Investment, (all such payments and other actions set forth in clauses (i)
through (iv) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:

         (a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;

         (b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Coverage Ratio test or the Consolidated Indebtedness to Consolidated Tangible
Net Worth ratio test set forth in the first paragraph of Section 4.09 hereof;
and

         (c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted by
clauses (ii), (iii), (iv), (v), (vii), (viii), (x), (xi), (xii), (xiii) and
(xiv) of the next succeeding paragraph), is less than the sum, without
duplication, of

                  (i) 50% of the Consolidated Net Income after Grossed Up
         Preferred Stock Dividends of the Company for the period (taken as one
         accounting period) from December 31, 2000 to the end of the Company's
         most recently ended fiscal quarter for which internal financial
         statements are available at the time of such Restricted Payment (or, if
         such Consolidated Net Income for such period is a deficit, less 100% of
         such deficit), plus

                                       41
<PAGE>   48
                  (ii) 100% of the aggregate net cash proceeds and the Fair
         Market Value as determined by an independent third party appraiser,
         accounting firm or valuation firm not affiliated with the Company of
         real property or securities constituting a controlling interest in any
         Person received by the Company since the date of this Indenture as a
         contribution to its common equity capital or from the issue or sale of
         Equity Interests of the Company (other than Disqualified Stock) or from
         the issue or sale (other than to a Restricted Subsidiary of the
         Company) of convertible or exchangeable Disqualified Stock or
         convertible or exchangeable debt securities of the Company that have
         been converted into or exchanged for such Equity Interests (other than
         Disqualified Stock), plus

                  (iii) to the extent that any Restricted Investment, in whole
         or in part, is sold or otherwise liquidated or repaid, redeemed or
         repurchased, the sum of (A) 100% of such cash proceeds and the Fair
         Market Value of other assets that do not otherwise constitute a
         Restricted Investment (net of the cost of disposition or sale, if any,
         and tax liabilities arising from such transaction) up to the aggregate
         amount invested in such Restricted Investment outstanding at such time
         plus (B) 50% of such cash proceeds and the Fair Market Value of other
         assets that do not otherwise constitute a Restricted Investment in
         excess of the aggregate amount invested in such Restricted Investment,
         in each case, to the extent not otherwise included in Consolidated Net
         Income of the Company for such period, plus

                  (iv) 50% of the amount received from any cash dividends, cash
         distributions, cash interest or other cash payments received by the
         Company or a Guarantor after the date of this Indenture from any
         Restricted Investment, to the extent that such dividends or cash
         distributions were not otherwise included in Consolidated Net Income of
         the Company for such period or in clause (iii) above and excluding any
         such payments to pay obligations and expenses of Restricted Investments
         such as income taxes which were not paid prior to the date of this
         Indenture, plus

                  (v) to the extent that any Unrestricted Subsidiary of the
         Company is redesignated as a Restricted Subsidiary after the date of
         this Indenture, the Fair Market Value of the Company's Investment in
         such Unrestricted Subsidiary as of the date of such redesignation, plus

                  (vi) 100% of the reduction or release since the date of this
         Indenture of Indebtedness under Guarantees of the Company or any
         Restricted Subsidiary which are Restricted Investments, to the extent
         that such reduction or release is not due to any payment under such
         Guarantee, plus

                  (vii) $10.0 million.

         The preceding provisions shall not prohibit: (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at date of
declaration, such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any Guarantor or
of any Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale, issuance of or contribution for,
(other than to a Restricted Subsidiary of the Company), Equity Interests of the
Company (other than Disqualified Stock); provided that the amount of any such
net cash proceeds that are utilized for any such payment, redemption,
repurchase, retirement, defeasance, other acquisition or dividend or
distribution shall be excluded from clause (c) of the preceding paragraph; (iii)
so long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the defeasance,

                                       42
<PAGE>   49
redemption, repurchase or other acquisition of subordinated Indebtedness with
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(iv) so long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the payment of any dividend or distribution by a
Restricted Subsidiary of the Company to the holders of its common Equity
Interests on a pro rata basis; (v) so long as no Default or Event of Default has
occurred and is continuing or would be caused thereby, the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company or any Restricted Subsidiary of the Company held by any present,
former or future employee, director or Consultant of the Company's (or any of
its Restricted Subsidiaries' or any parent of the Company) pursuant to any
management equity subscription agreement or stock option agreement in effect as
of the date of this Indenture or any other similar agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $2.0 million in any twelve-month period (with
unused amounts in any calendar year being carried over to succeeding calendar
years subject to a maximum (without giving effect to the following proviso) of
$4.0 million in any calendar year); provided further that such amount in any
calendar year may be increased by an amount not to exceed (A) the cash proceeds
from the sale of Equity Interests of the Company, any parent of the Company or
any of its Restricted Subsidiaries to present, former or future directors,
Consultants or employees of the Company, its Restricted Subsidiaries or any
parent of the Company that occurs after the date of this Indenture (to the
extent the cash proceeds from the sale of such Equity Interest have not
otherwise been included in clause (c) of the immediately preceding paragraph),
plus (B) the cash proceeds of key man life insurance policies received by the
Company, its Restricted Subsidiaries or any parent of the Company after the date
of this Indenture; and provided further that cancellation of Indebtedness owing
to the Company from present, former or future directors, Consultants, or
employees of the Company, any of its Restricted Subsidiaries or any parent of
the Company the proceeds of which were used solely to purchase Equity Interests
of the Company will not be deemed to constitute a Restricted Payment so long as
the value of such Equity Interests issued did not increase clause (c) of the
preceding paragraph; (vi) so long as no Default or Event of Default has occurred
and is continuing or would be caused thereby, Restricted Investments made after
the date of this Indenture having an aggregate Fair Market Value, taken together
with all other Investments made pursuant to this clause (vi) that are at that
time outstanding (without giving effect to any write-up, write-off or
write-down), not to exceed 5% of the Company's Consolidated Tangible Assets as
of the end of the fiscal quarter most recently completed (with Fair Market Value
of each Investment being measured at the time made and without giving effect to
subsequent changes in value); (vii) repurchases of Equity Interests deemed to
occur upon exercise of stock options if such Equity Interests represent a
portion of the exercise price of such options; (viii) distributions to Watermark
(A) for payments pursuant to the Tax Sharing Agreements in existence on the date
of this Indenture and (B) in amounts necessary for Watermark, Communities
Investor Limited Partnership and Communities Investor Corp. to operate in the
ordinary course, provided that such amounts that are incremental or additional
to costs and expenses incurred by the Company without regard to Watermark,
Communities Investor Limited Partnership and Communities Investor Corp. under
this clause (viii)(B) do not exceed $500,000 in any fiscal year; (ix) so long as
no Default or Event of Default has occurred and is continuing or would be caused
thereby, the payment of dividends on the Company's Capital Stock, following the
first public offering of the Company's or Watermark's Capital Stock after the
Issue Date, of up to 6% per annum of the net proceeds received by the Company or
Watermark in such public offering, other than public offerings with respect to
the Company's Capital Stock registered on Form S-8; (x) Investments in
Unrestricted Subsidiaries that are made with Excluded Contributions; (xi)
non-cash Investments in Unrestricted Subsidiaries in the form of administrative,
financial, accounting, management, or other similar services (together with a
non-cash allocation of corporate overhead), in each case in the ordinary course
of business; (xii) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, the payment of dividends on Disqualified
Stock which is issued in accordance with Section 4.09 hereof; (xiii) repayment
at any time on or prior to August 15, 2001

                                       43
<PAGE>   50
of the Watermark Shareholder Debt; and (xiv) transactions contemplated by the
offering memorandum of even date herewith in connection with the issuance of the
Notes under the caption "Use of Proceeds".

         The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment;
provided that, notwithstanding the other provisions of this Indenture, with
respect to this covenant, an MAI appraiser, accounting firm or valuation firm
with experience in such valuation and not affiliated with the Company shall be
required if the fair market value of such Restricted Payment or Restricted
Payments for any series of transactions exceeds $2.0 million. At least
quarterly, the Company shall deliver to the Trustee an Officers' Certificate
stating that all Restricted Payments during such quarter were permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.

         If a Guarantee constituted a Restricted Investment at the time made,
then the payment under such Guarantee shall not constitute an additional
Restricted Investment.

         The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default or an
Event of Default. In the event of any such designation, all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary so designated shall be deemed to be an Investment made as of the time
of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this Section 4.07 or Permitted
Investments, as applicable. All such outstanding Investments shall be deemed to
constitute Restricted Investments in an amount equal to the fair market value of
such Investments at the time of such designation. Such designation shall only be
permitted if such Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if such redesignation would not cause a Default or
an Event of Default.

         Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions and was permitted by
this Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to
meet the definition of an Unrestricted Subsidiary, it shall thereafter cease to
be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09 hereof, the Company
shall be in default of Section 4.09 hereof). The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (a) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, and (b) no Default or Event of
Default would be in existence following such designation.

Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the

                                       44
<PAGE>   51
ability of any Restricted Subsidiary to: (i) pay dividends or make any other
distributions on its Capital Stock to the Company or any of its Restricted
Subsidiaries or with respect to any other interest or participation in, or
measured by, its profits, or pay any indebtedness owed to the Company or any of
its Restricted Subsidiaries; (ii) make loans or advances to the Company or any
of its Restricted Subsidiaries; or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries.

         The foregoing restrictions shall not apply to encumbrances or
restrictions existing under or by reason of:

         (a) any agreement, including with respect to the Existing Indebtedness,
as in effect on the date of this Indenture (and all amendments thereto, so long
as such amendments are not disadvantageous to the holders of the Notes in any
material respect);

         (b) the Credit Agreement and its related documentation as in effect as
of the date of this Indenture, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other payment
restrictions than those contained in the Credit Agreement as in effect on the
date of this Indenture;

         (c) this Indenture, the Notes, the Note Guarantees and the Exchange
Notes and related Note Guarantees;

         (d) applicable law, statute, rule, regulation or governmental order;

         (e) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition) and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof are no more restrictive, taken as a whole,
with respect to such dividend and other payment restrictions than those
contained in such instruments at the time of such acquisition, which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred;

         (f) customary non-assignment provisions in leases, licenses or
contracts entered into in the ordinary course of business and consistent with
past practices;

         (g) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so acquired of the
nature described in clause (iii) above;

         (h) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary pending
its sale or other disposition;

         (i) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced;

                                       45
<PAGE>   52
         (j) Liens securing Indebtedness that limit the right of the Company or
any of its Restricted Subsidiaries to dispose of the assets subject to such
Lien;

         (k) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements, stock
sale agreements and other similar agreements entered into in the ordinary course
of business; and

         (l) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business; and

         (m) any agreement entered into in connection with the incurrence of
Indebtedness permitted under this Indenture, provided that such agreement, taken
as a whole, is not more restrictive with respect to dividend and other payment
restrictions than those existing as of the date of this Indenture.

Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock and any Guarantor may incur
Indebtedness or issue preferred stock if the Consolidated Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2 to 1, or the ratio of the Consolidated Indebtedness less
Unrestricted Cash to Consolidated Tangible Net Worth of the Company is less than
3 to 1, in each case determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.

         The first paragraph of this Section 4.09 shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):

                  (i) the incurrence by the Company and the Guarantors of
         Indebtedness or Disqualified Stock under Credit Facilities in an
         aggregate principal amount at any one time outstanding not to exceed
         the greater of (a) $450.0 million or (b) the amount of the Borrowing
         Base as of the date of such incurrence (with letters of credit being
         deemed to have a principal amount equal to the maximum potential
         liability of the Company and the Guarantors thereunder);

                  (ii) the incurrence by the Company and its Restricted
         Subsidiaries of the Existing Indebtedness;

                  (iii) the incurrence by the Company and the Guarantors of
         Indebtedness represented by the Notes and the related Note Guarantees
         to be issued on the date of this Indenture and the Exchange Notes and
         the related Note Guarantees to be issued pursuant to the Registration
         Rights Agreement;

                  (iv) the incurrence by the Company or a Restricted Subsidiary
         of Indebtedness or Disqualified Stock (1) in connection with the
         acquisition of assets or a new Subsidiary or (2) to

                                       46
<PAGE>   53
         finance the purchase, lease or improvement of property (real or
         personal) or equipment (whether through the direct purchase of assets
         or the Capital Stock of any Person owning such assets); provided that,
         in the case of clause (1), such Indebtedness or Disqualified Stock was
         incurred by the prior owner of such assets or the Company or such
         Restricted Subsidiary prior to such acquisition by the Company or a
         Restricted Subsidiary and was not incurred in connection with, or in
         contemplation of, such acquisition by the Company or a Restricted
         Subsidiary and in the case of clause (2), any such Indebtedness
         incurred may not exceed the cost of such property or equipment; and
         provided further that the principal amount (or accreted value, as
         applicable) of such Indebtedness, together with any other outstanding
         Indebtedness incurred pursuant to this clause (iv) and including all
         Permitted Refinancing Indebtedness incurred to refund, refinance or
         replace any other Indebtedness incurred pursuant to this clause (iv)
         does not exceed $30.0 million;

                  (v) the incurrence by the Company or any Guarantor of
         Permitted Refinancing Indebtedness in exchange for, or the net proceeds
         of which are used to refund, refinance or replace Indebtedness (other
         than intercompany Indebtedness) that was permitted by this Indenture to
         be incurred under the first paragraph hereof or clauses (ii), (iii),
         (iv), (ix), (xv) or (xvi) of this paragraph;

                  (vi) the incurrence by the Company or any Restricted
         Subsidiary of intercompany Indebtedness between or among the Company
         and any of its Restricted Subsidiaries; provided, however, that: (A) if
         the Company is the obligor on such Indebtedness, such Indebtedness is
         expressly subordinated to the prior payment in full in cash of all
         Obligations with respect to the Notes; and (B) (1) any subsequent
         issuance or transfer of Equity Interests that results in any such
         Indebtedness being held by a Person other than the Company or a
         Restricted Subsidiary thereof, and (2) any sale or other transfer of
         any such Indebtedness to a Person that is not either the Company or a
         Restricted Subsidiary thereof, shall be deemed, in each case, to
         constitute an incurrence of such Indebtedness by the Company or such
         Restricted Subsidiary, as the case may be, that was not permitted by
         this clause (vi);

                  (vii) the incurrence by the Company or any Guarantor of
         Hedging Obligations that are incurred for the purpose of fixing or
         hedging interest rate risk with respect to any floating rate
         Indebtedness that is permitted by the terms of this Indenture to be
         outstanding;

                  (viii) the guarantee by the Company or any Guarantor of
         Indebtedness of the Company or a Restricted Subsidiary of the Company
         that was permitted to be incurred by another provision of this
         covenant;

                  (ix) the incurrence by the Company or any Guarantor of
         additional Indebtedness in an aggregate principal amount (or accreted
         value, as applicable) at any time outstanding, including all Permitted
         Refinancing Indebtedness incurred to refund, refinance or replace any
         Indebtedness incurred pursuant to this clause (ix), not to exceed $20.0
         million (it being understood that any Indebtedness incurred under this
         clause (ix) shall cease to be deemed incurred or outstanding for
         purposes of this clause (ix) but shall be deemed to be incurred for
         purposes of the first paragraph of this Section 4.09 from and after the
         first date on which the Company could have incurred such Indebtedness
         under the first paragraph of this Section 4.09 without reliance upon
         this clause (ix));

                  (x) Non-Recourse Financing incurred by the Company or any
         Restricted Subsidiary for the acquisition, development and/or
         improvement of real property or any infrastructure related

                                       47
<PAGE>   54
         thereto; provided that such Non-Recourse Financing is at the date of
         acquisition or the commencement of the development and/or improvement
         at least 70% of the estimated cost of the assets so acquired, developed
         or improved;

                  (xi) the incurrence by the Company or any Restricted
         Subsidiary of direct obligations to repay or guarantee shortfalls in
         payments of bond financing issued by community development districts
         and local government districts to construct infrastructure improvements
         ("CDD Obligations") provided that the aggregate amount of all CDD
         Obligations of the Company and its Restricted Subsidiaries that is due
         and payable at any one time does not exceed $10.0 million;

                  (xii) the incurrence by the Company and the Restricted
         Subsidiaries of Indebtedness in connection with letters of credit
         (including, without limitation, letters of credit in respect of
         workers' compensation claims or self insurance), Indebtedness with
         respect to reimbursement type obligations regarding workers
         compensation claims, escrow agreements, bankers' acceptances and surety
         and performance bonds (in each case to the extent that such incurrence
         does not result in the incurrence of any obligation to repay any
         obligation relating to borrowed money), all in the ordinary course of
         business;

                  (xiii) shares of preferred stock of a Restricted Subsidiary
         issued to the Company or another Restricted Subsidiary; provided that
         any subsequent issuance or transfer of any Capital Stock or any other
         event which results in any such Restricted Subsidiary ceasing to be a
         Restricted Subsidiary or any other subsequent transfer of any such
         shares of preferred stock (except to the Company or another Restricted
         Subsidiary) shall be deemed, in each case to be an issuance of shares
         of preferred stock;

                  (xiv) Indebtedness arising from agreements of the Company or a
         Restricted Subsidiary providing for indemnification, adjustment of
         purchase price or similar obligations, in each case, incurred or
         assumed in connection with the acquisition or disposition of any
         business, assets or a Subsidiary, other than guarantees of Indebtedness
         incurred by any Person acquiring all or any portion of such business,
         assets or a Subsidiary for the purpose of financing such acquisition;
         provided, however, that such Indebtedness is not reflected on the
         balance sheet of the Company or any Restricted Subsidiary (contingent
         obligations referred to in a footnote to financial statements and not
         otherwise reflected on the balance sheet will not be deemed to be
         reflected on such balance sheet for purposes of this clause (xiv));

                  (xv) Indebtedness incurred by the Company or any Restricted
         Subsidiary pursuant to any Construction Loan provided that (A) at the
         time the Construction Loan is entered into or amended to include a new
         project or projects, as the case may be, the Construction Loan is not
         in excess of 85% of the estimated total cost of the projects under such
         Construction Loan taken as a whole, including land at fair market
         value, interest and soft costs (net of unrestricted deposits) and
         (B)(1) at the time any Construction Loan is entered into that relates
         to a single project, there are Valid Purchase Contracts Proceeds in
         excess of 65% of the maximum Construction Loan amount taken as a whole
         or (2) at the time any Construction Loan is entered into that relates
         to more than one project or if an existing Construction Loan is amended
         to include a new project or projects, there are Valid Purchase
         Contracts Proceeds in excess of 70% of the maximum Construction Loan
         amount taken as a whole; provided, however, that under clause (B)(2),
         for each individual project there are Valid Purchase Contract Proceeds
         for such project in excess of 30% of the maximum Construction Loan
         amount for such project, and provided, further, that in the event a
         Default or Event of Default has occurred and is continuing or would be
         caused thereby,

                                       48
<PAGE>   55
         this clause (xv) shall be unavailable to enter into a new Construction
         Loan or amend an existing Construction Loan to include a new project or
         projects; and

                  (xvi) Indebtedness incurred by the Company or any of its
         Restricted Subsidiaries pursuant to Construction Loans existing as of
         the Issue Date up to the limits of such Construction Loan existing on
         the Issue Date.

         For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (i) through (xvi)
above, or is entitled to be incurred pursuant to the first paragraph of this
Section 4.09, the Company will be permitted to classify such item of
Indebtedness on the date of its incurrence in any manner that complies with this
Section 4.09. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms will not be deemed to be an incurrence of
Indebtedness for purposes of this Section 4.09; provided, in each such case,
that the amount thereof is included in Fixed Charges of the Company as accrued.

         Indebtedness outstanding and not repaid under the Credit Facilities on
the Issue Date shall be deemed to have been incurred under clause (i) of the
second paragraph of this Section 4.09.

Section 4.10. Maintenance of Consolidated Tangible Net Worth.

         If the Company's Consolidated Tangible Net Worth declines below $125.0
million (the "Minimum Tangible Net Worth") at the end of any fiscal quarter, the
Company must deliver an Officers' Certificate to the Trustee within 55 days
after the end of that fiscal quarter (110 days after the end of any fiscal year)
to notify the Trustee. If, on the last day of each of any two consecutive fiscal
quarters (the last day of the second fiscal quarter being referred to as a
"Deficiency Date"), the Company's Consolidated Tangible Net Worth is less than
the Minimum Tangible Net Worth of the Company, then the Company shall make an
offer (an "Offer") to all Holders of Notes to purchase 10% of the aggregate
principal amount of the Notes originally issued (the "Offer Amount") at a
purchase price equal to 100% of the principal amount of the Notes, plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of purchase;
provided, however, that no such Offer shall be required if, after the Deficiency
Date but prior to the date the Company is required to make the Offer, capital in
cash or Cash Equivalents is contributed for Equity Interests of the Company
other than Disqualified Stock of the Company or its Restricted Subsidiaries
sufficient to increase the Company's Consolidated Tangible Net Worth after
giving effect to such contribution to an amount equal to or above the Minimum
Tangible Net Worth.

         The Company shall make the Offer no later than 65 days after each
Deficiency Date (120 days if such Deficiency Date is the last day of the
Company's fiscal year). The Offer is required to remain open for a period of 20
business days following its commencement (unless required to remain open for a
longer period by applicable law). The Company shall purchase the Offer Amount of
the Notes on a designated date no later than five business days after the
termination of the Offer, or if less than the Offer Amount of Notes shall have
been tendered, all Notes then tendered. The Company shall not be obligated to
purchase any Notes unless Holders of Notes of at least 10% of the Offer Amount
shall have tendered and not subsequently withdrawn their Notes for repurchase.

         If the aggregate principal amount of Notes tendered exceeds the Offer
Amount, the Company shall purchase the Notes tendered to it pro rata among the
Notes tendered (with such adjustments as may be appropriate so that only Notes
in denominations of $1,000 and integral multiples thereof shall be

                                       49
<PAGE>   56
purchased). The Company shall comply with all applicable federal and state
securities laws in connection with each Offer.

         In no event will the failure of the Company's Consolidated Tangible Net
Worth to equal or exceed the Minimum Tangible Net Worth at the end of any fiscal
quarter be counted toward the making of more than one Offer. The Company may
reduce the principal amount of Notes to be purchased pursuant to the Offer by
subtracting 100% of the principal amount (excluding premium) of the Notes
acquired, redeemed or called for redemption by the Company prior to the purchase
(otherwise than under this provision). The Company, however, may not credit
Notes that have been previously used as a credit against any obligation to
repurchase Notes pursuant to this provision. Any Offer shall be conducted in
compliance with applicable regulations under the federal securities law,
including Exchange Act Rule 14e-1.

Section 4.11. Transactions with Affiliates.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate involving aggregate consideration in excess of $50,000 (each,
an "Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms
that taken as a whole are not materially less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with a
person who is not an Affiliate; and (ii) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, an
Officers' Certificate certifying that such Affiliate Transaction complies with
this Section 4.11; (b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$2.0 million, a resolution of the Board of Directors set forth in an Officers'
Certificate to the effect that such Affiliate Transaction complies with this
Section 4.11 and has been approved by a majority of the Independent Members of
the Board of Directors or if there are no Independent Members, then such
Affiliate Transaction has received unanimous approval of the Board of Directors
and an opinion as to the fairness to the Holders of such Affiliate Transaction
from a financial point of view issued by an accounting or investment banking
firm of national standing or an appraisal from an MAI appraiser, if appropriate;
and (c) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting or investment banking firm of
national standing or an appraisal from an MAI appraiser, if appropriate.

         The following items shall not be deemed to be Affiliate Transactions
and therefore shall not be subject to the provisions of the prior paragraph: (1)
any employment, consulting or other compensation agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business, provided that any consulting or other compensation agreement entered
into with a current or former senior officer or director of the Company or any
of its Restricted Subsidiaries must be approved by a majority of the
disinterested members of the Board of Directors or the Compensation Committee
thereof or if there are no such disinterested members by unanimous approval of
the Board of Directors or such committee; (2) transactions between or among the
Company and/or its Restricted Subsidiaries; (3) sales of Equity Interests (other
than Disqualified Stock) to Affiliates of the Company; (4) Restricted Payments
that are permitted by the provisions of this Indenture described under Section
4.07 hereof; (5) the payment of reasonable and customary fees paid to, and
indemnity provided on behalf of, officers,

                                       50
<PAGE>   57
directors, employees or Consultants of the Company or any Subsidiary; (6) loans
in the ordinary course of business to officers, directors, employees or
Consultants which are approved by a majority of the disinterested Board of
Directors of the Company in good faith or, if there are no disinterested
directors, by a unanimous vote of the Board of Directors; (7) any agreement as
in effect as of the Issue Date or any amendment or modification thereto (so long
as any such amendment or modification is not disadvantageous to the holders of
the Notes in any material respect) or any transaction contemplated thereby; (8)
transactions contemplated by Tax Sharing Agreements, provided such services are
provided in exchange for Fair Market Value consideration or are permitted under
Section 4.07 hereof; and (9) agreements between the Company or any Restricted
Subsidiary and officers and directors of the Company with respect to home
purchases pursuant to a home purchase program available to officers and
directors of the Company.

Section 4.12. Liens.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Subordinated Indebtedness on any asset now
owned or hereafter acquired or any income or profit therefrom, unless all
payments due under this Indenture and the Notes are secured on an equal and
ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.

Section 4.13. Business Activities.

         The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.

Section 4.14. Corporate Existence.

         Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.

Section 4.15. Offer to Repurchase Upon Change of Control.

         (a) Upon the occurrence of a Change of Control, the Company shall make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder stating: (1)
that the Change of Control Offer is being made pursuant to this Section 4.15 and
that all Notes tendered will be accepted for payment; (2) the purchase price and
the purchase date, which shall be no earlier than 30 business days and no later
than 60 business days from the date such notice is mailed (the "Change of
Control Payment Date"); (3) that any Note not

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<PAGE>   58
tendered will continue to accrue interest; (4) that, unless the Company defaults
in the payment of the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date; (5) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to surrender
the Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day preceding
the Change of Control Payment Date; (6) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes in connection with a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.15, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.15 by virtue of such conflict.

         (b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered payment in an amount equal to the purchase price for the Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered by such Holder, if any; provided, that each
such new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.

         Prior to complying with this Section 4.15, but in any event within 90
days following a Change of Control, the Company will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of Notes
required by this Section 4.15.

         (c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 hereof and all other provisions of this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.

Section 4.16. No Senior Subordinated Debt.

         Notwithstanding the provisions of Section 4.09 hereof, the Company
shall not incur, create, issue, assume, guarantee or otherwise become liable for
any Indebtedness that is subordinate or junior in right of

                                       52
<PAGE>   59
payment to any Senior Debt of the Company and senior in any respect in right of
payment to the Notes and no Guarantor shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Senior Debt of such Guarantor and senior in
any respect in right of payment to such Guarantor's Note Guarantee.

Section 4.17. Limitation on Issuances of Guarantees of Indebtedness.

         The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to Guarantee or pledge any assets to secure the payment
of any other Indebtedness of the Company unless such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture providing for the
Guarantee of the payment of the Notes by such Restricted Subsidiary, which
Guarantee shall be senior to or pari passu with such Subsidiary's Guarantee of
or pledge to secure such other Indebtedness, unless such other Indebtedness is
Senior Debt, in which case the Guarantee of the Notes may be subordinated to the
Guarantee of such Senior Debt to the same extent as the Notes are subordinated
to such Senior Debt. Notwithstanding the preceding sentence, any Note Guarantee
of the Notes will provide by its terms that it will be automatically and
unconditionally released and discharged if (1) the Company sells or disposes of
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, (2) the Company sells or disposes of all of the Capital Stock of any
Guarantor, or (3) the Company properly designates any Restricted Subsidiary that
is a Guarantor as an Unrestricted Subsidiary or any Guarantor is released from
its Guarantees of Indebtedness of the Company such that such Guarantor would not
be required to provide a Guarantee of the Notes under this Section 4.17. The
form of the Note Guarantee is attached as Exhibit E hereto.

Section 4.18. Payments for Consent.

         Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of
any Holder of Notes for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid and is paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.

                                    ARTICLE 5
                                   SUCCESSORS

Section 5.01. Merger, Consolidation, or Sale of Assets.

         The Company and any Guarantor shall not, directly or indirectly,
consolidate or merge with or into (whether or not the Company or such Guarantor
is the surviving corporation), or sell, assign, transfer, convey or otherwise
dispose of all or substantially all of its properties or assets, in one or more
related transactions, to another Person unless: (i) the Company or such
Guarantor is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company or such Guarantor) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation or other legal entity organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company or such Guarantor) or the Person to which such
sale, assignment, transfer, conveyance or other disposition shall have been made
assumes all the obligations of the Company or such Guarantor under the
Registration Rights Agreement, the Notes and this Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately after such transaction no Default or Event of Default exists; and
(iv) except in the case of a merger of the Company or

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<PAGE>   60
a Guarantor with or into a Wholly Owned Restricted Subsidiary of the Company or
a Guarantor, or the merger or consolidation of a Restricted Subsidiary with or
into the Company or a transfer of all or substantially all of the assets of a
Restricted Subsidiary to the Company, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made (A) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction; and (B) will, immediately after such
transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof. In addition, the Company shall not,
directly or indirectly, lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person. The provisions
of this Section 5.01 shall not be applicable to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Company and the
Guarantors.

Section 5.02. Successor Corporation Substituted.

         Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale, assignment,
transfer, conveyance or other disposition of all of the Company's assets that
meets the requirements of Section 5.01 hereof.

                                    ARTICLE 6
                              DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

         An "Event of Default" occurs if:

         (a) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages, if any, with respect to, the Notes (whether
or not prohibited by the subordination provisions of this Indenture);

         (b) the Company defaults in payment when due of the principal of or
premium, if any, on the Notes (whether or not prohibited by the subordination
provisions of this Indenture);

         (c) the Company or any of its Restricted Subsidiaries fail to comply
with Sections 4.10, 4.15 or 5.01 hereof;

         (d) the Company or any of its Subsidiaries fail to comply with any
covenant, representation, warranty or other agreement in this Indenture or the
Notes for 30 days after notice to the Company by the

                                       54
<PAGE>   61
Trustee or the Holders of at least 25% in aggregate principal amount of Notes
(including Additional Notes, if any) then outstanding voting as a single class;

         (e) there is a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) (other than Indebtedness owed to the Company or any of
its Restricted Subsidiaries or Non-Recourse Financing to the extent such default
is not due to the default by the Company under any other Indebtedness) whether
such Indebtedness or guarantee now exists, or is created after the date of this
Indenture, if that default: (I) is caused by a failure to pay such Indebtedness
at its stated maturity and such Indebtedness together with other Indebtedness in
default for failure to pay principal at stated maturity (or the maturity of
which as then accelerated) exceeds $10.0 million in the aggregate (a "Payment
Default"); or (II) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $10.0 million or more;

         (f) there is failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $10.0 million
(except to the extent the judgment or judgments are in respect of Non-Recourse
Financing), which judgments are not paid, discharged or stayed for a period of
60 days;

         (g) the Company or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law:

                  (i) commences a voluntary case,

                  (ii) consents to the entry of an order for relief against it
         in an involuntary case,

                  (iii) consents to the appointment of a custodian of it or for
         all or substantially all of its property,

                  (iv) makes a general assignment for the benefit of its
         creditors, or

                  (v) generally is not paying its debts as they become due; or

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

                  (i) is for relief against the Company or any of its
         Significant Subsidiaries or any group of Restricted Subsidiaries that,
         taken together (as of the latest audited consolidated financial
         statements for the Company and its Restricted Subsidiaries), would
         constitute a Significant Subsidiary in an involuntary case;

                  (ii) appoints a custodian of the Company or any of its
         Significant Subsidiaries or any group of Restricted Subsidiaries that,
         taken together (as of the latest audited consolidated financial
         statements for the Company and its Restricted Subsidiaries), would
         constitute a Significant Subsidiary or for all or substantially all of
         the property of the Company or any of its

                                       55
<PAGE>   62
         Significant Subsidiaries or any group of Restricted Subsidiaries that,
         taken together (as of the latest audited consolidated financial
         statements for the Company and its Restricted Subsidiaries), would
         constitute a Significant Subsidiary; or

                  (iii) orders the liquidation of the Company or any of its
         Significant Subsidiaries or any group of Restricted Subsidiaries that,
         taken together (as of the latest audited consolidated financial
         statements for the Company and its Restricted Subsidiaries), would
         constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;
or

         (i) except as permitted by this Indenture, any Note Guarantee is held
in any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person acting on
behalf of any Guarantor, shall deny or disaffirm its obligations under such
Guarantor's Note Guarantee.

Section 6.02. Acceleration.

         If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Significant Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries or any group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.

Section 6.03. Other Remedies.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.

         The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults.

         Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the

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payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.

Section 6.05. Control by Majority.

         Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.

Section 6.06. Limitation on Suits.

         A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:

         (a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;

         (b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;

         (c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;

         (d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and

         (e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.

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

Section 6.07. Rights of Holders of Notes to Receive Payment.

         Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring 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 6.08. Collection Suit by Trustee.

         If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining

                                       57
<PAGE>   64
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

         The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10. Priorities.

         If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:

                  First: to the Trustee, its agents and attorneys for amounts
         due under Section 7.07 hereof, including payment of all compensation,
         expense and liabilities incurred, and all advances made, by the Trustee
         and the costs and expenses of collection;

                  Second: to Holders of Notes for amounts due and unpaid on the
         Notes for principal, premium and Liquidated Damages, if any, and
         interest, ratably, without preference or priority of any kind,
         according to the amounts due and payable on the Notes for principal,
         premium and Liquidated Damages, if any and interest, respectively; and

                  Third: to the Company or to such party as a court of competent
         jurisdiction shall direct.

         The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.

Section 6.11. Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the

                                       58
<PAGE>   65
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee or a suit by a
Holder of a Note pursuant to Section 6.07 hereof.

                                    ARTICLE 7
                                     TRUSTEE

Section 7.01. Duties of Trustee.

         (a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.

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

                  (i) the duties of the Trustee shall be determined solely by
         the express provisions of this Indenture and the Trustee need perform
         only those duties that are specifically set forth in this Indenture and
         no others, and no implied covenants or obligations shall be read into
         this Indenture against the Trustee; and

                  (ii) in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture. However, the Trustee shall examine the certificates and
         opinions to determine whether or not they conform to the requirements
         of this Indenture, but need not confirm or investigate the accuracy of
         mathematical calculations or other facts stated therein.

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

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

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

                  (iii) the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 6.05 hereof.

         (d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

         (e) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section.

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<PAGE>   66
         (f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.

Section 7.02. Rights of Trustee.

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

         (b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.

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

         (d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.

         (e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

         (f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.

         (g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it sees fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney,
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation.

         (h) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Notes and this Indenture.

         (i) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.

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         (j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any Person authorized to sign an
Officers' Certificate, including any Person specified as so authorized in any
such certificate previously delivered and not superseded.

Section 7.03. Individual Rights of Trustee.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04. Trustee's Disclaimer.

         The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, the Notes or the Note Guarantees,
it shall not be accountable for the Company's use of the proceeds from the Notes
or any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.

Section 7.05. Notice of Defaults.

         If a Default or Event of Default occurs and is continuing and if it is
actually known to a Responsible Officer of the Trustee, the Trustee shall mail
to Holders of Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of, premium, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of the Notes.

Section 7.06. Reports by Trustee to Holders of the Notes.

         Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).

         A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or of any delisting thereof.

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Section 7.07. Compensation and Indemnity.

         The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and the Trustee shall agree to in writing from time to time. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.

         The Company shall indemnify the Trustee and any predecessor Trustee and
their agents against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which shall not be
unreasonably withheld.

         The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.

         To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

         The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.

Section 7.08. Replacement of Trustee.

         A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.

         The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:

         (a) the Trustee fails to comply with Section 7.10 hereof;

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<PAGE>   69
         (b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;

         (c) a custodian or public officer takes charge of the Trustee or its
property; or

         (d) the Trustee becomes incapable of acting.

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

         If a successor Trustee does not take office within 90 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may, at the expense of the Company, petition any court of competent jurisdiction
for the appointment of a successor Trustee.

            If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

            A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Merger, etc.

         If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.

Section 7.10. Eligibility; Disqualification.

         There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.

         This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).

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Section 7.11. Preferential Collection of Claims Against Company.

         The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

                                    ARTICLE 8
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

         The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.

Section 8.02. Legal Defeasance and Discharge.

         Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes and all
obligations of the Guarantors discharged with respect to the Note Guarantees on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company and the
Guarantors shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes and the Note Guarantees, respectively,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium and
Liquidated Damages, if any, and interest on such Notes when such payments are
due, (b) the Company's obligations with respect to such Notes under Article 2
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith and (d) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03. Covenant Defeasance.

         Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from its obligations under the covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof and clause
(iv) of Section 5.01 hereof with respect to the outstanding Notes on and after
the date the conditions set forth in Section 8.04 are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the

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<PAGE>   71
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(f) and Section 6.01(i) hereof shall not constitute Events
of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance.

         The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:

         In order to exercise either Legal Defeasance or Covenant Defeasance:

         (a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium and Liquidated Damages, if any,
and interest on the outstanding Notes on the stated date for payment thereof or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;

         (b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;

         (c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;

         (d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(g) or 6.01(h)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;

         (e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which

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<PAGE>   72
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound;

         (f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that
assuming no intervening bankruptcy of the Company or any Guarantor between the
date of deposit and the 91st day following the deposit and assuming no Holder is
an "insider" of the Company under applicable Bankruptcy Law, after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;

         (g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and

         (h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.

         Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

         Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

Section 8.06. Repayment to Company.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from

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such trust; and the Holder of such Note shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.

Section 8.07. Reinstatement.

         If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium and Liquidated Damages, if any, or interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

                                    ARTICLE 9
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

         Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees or the Notes without the consent of any Holder of a Note:

         (a) to cure any ambiguity, defect or inconsistency;

         (b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof (including the
related definitions) in a manner that does not materially adversely affect any
Holder;

         (c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes by a successor to the Company pursuant
to Article 5 or Article 11 hereof;

         (d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Notes;

         (e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;

         (f) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof; or

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<PAGE>   74
         (g) to allow any Guarantor to execute a supplemental indenture and/or a
Note Guarantee with respect to the Notes.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes.

         Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture (including
Sections 4.10 and 4.15 hereof), the Note Guarantees and the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes
(including Additional Notes, if any) then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium and Liquidated Damages, if
any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture, the Note Guarantees or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes
(including Additional Notes, if any) voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes).

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.

         It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.

         After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes (including Additional Notes,
if any) then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

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         (a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;

         (b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the redemption of the Notes
except as provided above with respect to Sections 4.10 and 4.15 hereof;

         (c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;

         (d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes (including Additional Notes, if
any) and a waiver of the payment default that resulted from such acceleration);

         (e) make any Note payable in money other than that stated in the Notes;

         (f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, if any, or interest on the Notes;

         (g) waive a redemption payment with respect to any Note (other than a
payment required Section 4.10 or Section 4.15 hereof);

         (h) make any changes in Article 10 hereof if such change would
adversely affect the rights of such Holder of Notes.

         (i) make any change in the foregoing amendment and waiver provisions;

         (j) release any Guarantor from any of its obligations under its Note
Guarantee or this Indenture, except in accordance with the terms of this
Indenture.

         In addition, any amendment to Sections 4.10 and 4.15 shall require the
consent of the Holders of at least 66 2/3% in aggregate principal amount of the
Notes then outstanding if such amendment would adversely affect the rights of
Holders of Notes.

Section 9.03. Compliance with Trust Indenture Act.

         Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental indenture that complies with the TIA as
then in effect.

Section 9.04. Revocation and Effect of Consents.

         Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

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Section 9.05. Notation on or Exchange of Notes.

         The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

         Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendments, etc.

         The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.

                                   ARTICLE 10
                                  SUBORDINATION

Section 10.01.    Agreement to Subordinate.

         The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt, including Senior Debt incurred after the
date of this Indenture.

         A distribution may consist of cash, securities or other property, by
set-off or otherwise.

Section 10.02.    Liquidation; Dissolution; Bankruptcy.

         Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:

                  (i) holders of Senior Debt of the Company shall be entitled to
         receive payment in full of all Obligations due in respect of such
         Senior Debt (including interest after the commencement of any such
         proceeding at the rate specified in the applicable Senior Debt) before
         Holders of the Notes shall be entitled to receive any payment with
         respect to the Notes (except that Holders may receive (A) Permitted
         Junior Securities and (B) payments and other distributions made from
         any defeasance trust created pursuant to Section 8.01 hereof); and

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<PAGE>   77
                  (ii) until all Obligations with respect to Senior Debt (as
         provided in clause (i) above) are paid in full, any distribution to
         which Holders would be entitled but for this Article 10 shall be made
         to holders of Senior Debt (except that Holders of Notes may receive (A)
         Permitted Junior Securities and (B) payments and other distributions
         made from any defeasance trust created pursuant to Section 8.01
         hereof), as their interests may appear.

Section 10.03.    Default on Designated Senior Debt.

         (a) The Company may not make any payment or distribution to the Trustee
or any Holder in respect of Obligations with respect to the Notes and may not
acquire from the Trustee or any Holder any Notes for cash or property (other
than (A) Permitted Junior Securities and (B) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01 hereof) until
all principal and other Obligations with respect to the Senior Debt have been
paid in full if:

                  (i) a default in the payment of any principal or other
         Obligations with respect to Designated Senior Debt occurs and is
         continuing beyond any applicable grace period in the agreement,
         indenture or other document governing such Designated Senior Debt; or

                  (ii) a default, other than a payment default, on Designated
         Senior Debt occurs and is continuing that then permits holders of the
         Designated Senior Debt to accelerate its maturity and the Trustee
         receives a notice of the default (a "Payment Blockage Notice") from a
         Person who may give it pursuant to Section 10.11 hereof or the holders
         of any Designated Senior Debt. If the Trustee receives any such Payment
         Blockage Notice, no subsequent Payment Blockage Notice shall be
         effective for purposes of this Section unless and until at least 360
         days shall have elapsed since the delivery of the immediately prior
         Payment Blockage Notice. No nonpayment default that existed or was
         continuing on the date of delivery of any Payment Blockage Notice to
         the Trustee shall be, or be made, the basis for a subsequent Payment
         Blockage Notice unless such default shall have been cured or waived.

         (b) The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:

                  (i) in the case of a payment default, the date upon which the
         default is cured or waived, or

                  (ii) in the case of a default referred to in clause (ii) of
         Section 10.03(a) hereof, the earlier of the date on which such
         non-payment default is cured or waived or 179 days after the Payment
         Blockage Notice is received,

unless the maturity of any Designated Senior Debt has been accelerated, if this
Article 10 otherwise permits the payment, distribution or acquisition at the
time of such payment or acquisition. In the event that the Designated Senior
Debt is accelerated because of a default other than a payment default thereunder
in accordance with the terms of such Designated Senior Debt, and such
acceleration has not been rescinded, then the failure to make the payment
required arising from such acceleration shall constitute a payment default.

Section 10.04.    Acceleration of Securities.

         If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Debt of the acceleration.

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<PAGE>   78

Section 10.05.     When Distribution Must Be Paid Over.

         In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes (except Permitted Junior Securities or
payments and other distributions made from the defeasance trust described under
Article Eight hereof) when the payment is prohibited by Section 10.03 hereof,
such payment shall be held by the Trustee or such Holder, in trust for the
benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Debt as their interests may appear or their
Representative under this Indenture or other agreement (if any) pursuant to
which Senior Debt may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to Senior
Debt remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.

         With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.

Section 10.06.     Notice by Company.

         The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.

Section 10.07.     Subrogation.

         After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.

Section 10.08.     Relative Rights.

         This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:

                  (i) impair, as between the Company and Holders of Notes, the
         obligation of the Company, which is absolute and unconditional, to pay
         principal of and interest on the Notes in accordance with their terms;

                  (ii) affect the relative rights of Holders of Notes and
         creditors of the Company other than their rights in relation to holders
         of Senior Debt; or

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<PAGE>   79
                  (iii) prevent the Trustee or any Holder of Notes from
         exercising its available remedies upon a Default or Event of Default,
         subject to the rights of holders and owners of Senior Debt to receive
         distributions and payments otherwise payable to Holders of Notes.

         If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.

Section 10.09.     Subordination May Not Be Impaired by Company.

         No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.

Section 10.10.     Distribution or Notice to Representative.

         Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.

         Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.

Section 10.11.     Rights of Trustee and Paying Agent.

         Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.

         The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.

Section 10.12.     Authorization to Effect Subordination.

         Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.

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<PAGE>   80
Section 10.13.     Amendments.

         The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.

                                   ARTICLE II
                                 NOTE GUARANTEES

Section 11.01.     Guarantee.

         Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal
of and interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.

         The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

         If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.

         Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the

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<PAGE>   81
Guarantors for the purpose of this Note Guarantee. The Guarantors shall have the
right to seek contribution from any non-paying Guarantor so long as the exercise
of such right does not impair the rights of the Holders under the Guarantee.

Section 11.02.     Subordination of Note Guarantee.

         The Obligations of each Guarantor under its Note Guarantee pursuant to
this Article 11 shall be junior and subordinated to the Senior Guarantee of such
Guarantor on the same basis as the Notes are junior and subordinated to Senior
Debt of the Company. For the purposes of the foregoing sentence, the Trustee and
the Holders shall have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article Ten hereof.

Section 11.03.     Limitation on Guarantor Liability.

         Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 11, result
in the obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.

Section 11.04.     Execution and Delivery of Note Guarantee.

         To evidence its Note Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form included in Exhibit E shall be endorsed by an Officer of such Guarantor
on each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by an Officer.

         Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.

         If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.

         The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.

Section 11.05.     Guarantors May Consolidate, etc., on Certain Terms.

         Except as otherwise provided in Section 11.06, no Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:

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<PAGE>   82
         (a) subject to Section 11.06 hereof, the Person formed by or surviving
any such consolidation or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, this Indenture and the Note Guarantee on the terms set
forth herein or therein; and

         (b) immediately after giving effect to such transaction, no Default or
Event of Default exists.

         In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.

         Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.

Section 11.06.     Releases Following Sale of Assets.

         In the event of a sale or other disposition of all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the Capital Stock of any Guarantor, or the Company
properly designates any Restricted Subsidiary that is a Guarantor as an
Unrestricted Subsidiary or any Guarantor is released from its Guarantees of
Indebtedness of the Company such that such Guarantor would not be required to
provide a Guarantee of the Notes under Section 4.17 hereof, then such Guarantor
(in the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Note Guarantee; provided that the net proceeds of
such sale or other disposition are applied in accordance with the applicable
provisions of this Indenture. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, the Trustee shall execute any documents reasonably required in
order to evidence the release of any Guarantor from its obligations under its
Note Guarantee.

         Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 11.

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                                   ARTICLE 12
                           SATISFACTION AND DISCHARGE

Section 12.01.     Satisfaction and Discharge.

         This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:

(1)      either:

         (a)      all Notes that have been authenticated (except lost, stolen or
                  destroyed Notes that have been replaced or paid and Notes for
                  whose payment money has theretofore been deposited in trust
                  and thereafter repaid to the Company) have been delivered to
                  the Trustee for cancellation; or

         (b)      all Notes that have not been delivered to the Trustee for
                  cancellation have become due and payable by reason of the
                  making of a notice of redemption or otherwise or will become
                  due and payable within one year and the Company or any
                  Guarantor has irrevocably deposited or caused to be deposited
                  with the Trustee as trust funds in trust solely for the
                  benefit of the Holders, cash in U.S. dollars, non-callable
                  Government Securities, or a combination thereof, in such
                  amounts as will be sufficient without consideration of any
                  reinvestment of interest, to pay and discharge the entire
                  indebtedness on the Notes not delivered to the Trustee for
                  cancellation for principal, premium and Liquidated Damages, if
                  any, and accrued interest to the date of maturity or
                  redemption;

(2)      no Default or Event of Default shall have occurred and be continuing on
         the date of such deposit or shall occur as a result of such deposit and
         such deposit will not result in a breach or violation of, or constitute
         a default under, any other instrument to which the Company or any
         Guarantor is a party or by which the Company or any Guarantor is bound;

(3)      the Company or any Guarantor has paid or caused to be paid all sums
         payable by it under this Indenture; and

(4)      the Company has delivered irrevocable instructions to the Trustee under
         this Indenture to apply the deposited money toward the payment of the
         Notes at maturity or the redemption date, as the case may be.

In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

         Notwithstanding the satisfaction and discharge of this Indenture, if
money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (1) of this Section, the provisions of Section 12.02 and Section 8.06
shall survive.

Section 12.02.     Application of Trust Money.

         Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and

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<PAGE>   84
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.

         If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01; provided that if the Company has made any payment of principal
of, premium and Liquidated Damages, if any, or interest on any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.

                                   ARTICLE 13
                                  MISCELLANEOUS

Section 13.01.     Trust Indenture Act Controls.

         If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.

Section 13.02.     Notices.

         Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:

         If to the Company and/or any Guarantor:

         WCI Communities, Inc.
         24301 Walden Center Drive
         Suite 300
         Bonita Springs, Florida 34134
         Telecopier No.: (941) 498-8277
         Attention: Vivien N. Hastings, Esq.

         With a copy to:

         Simpson Thacher & Bartlett
         425 Lexington Avenue
         New York, NY  10017
         Telecopier No.: (212) 455-2502
         Attention: John Tehan, Esq.

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<PAGE>   85
         If to the Trustee:

         The Bank of New York
         101 Barclay Street, Floor 21W
         New York, NY 10286
         Telecopier No.: (212) 815-5915
         Attention: Corporate Trust Administration

         The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.

         All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

         Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

         If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

Section 13.03. Communication by Holders of Notes with Other Holders of Notes.

         Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

Section 13.04.     Certificate and Opinion as to Conditions Precedent.

         Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

         (a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and

         (b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 13.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.

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Section 13.05.     Statements Required in Certificate or Opinion.

         Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:

         (a) a statement that the Person making such certificate or opinion has
read such covenant or condition;

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

         (c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and

         (d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.

Section 13.06.     Rules by Trustee and Agents.

         The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

Section 13.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.

         No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or any Guarantor under the Notes, the Note
Guarantees, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.

Section 13.08.     Governing Law.

         THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 13.09.     No Adverse Interpretation of Other Agreements.

         This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.

                                       80
<PAGE>   87
Section 13.10.     Successors.

         All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors. All agreements of each Guarantor in this Indenture shall bind
its successors, except as otherwise provided in Section 11.05.

Section 13.11.     Severability.

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

Section 13.12.     Counterpart Originals.

         The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

Section 13.13.     Table of Contents, Headings, etc.

         The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.

                         [Signatures on following page]

                                       81
<PAGE>   88
                                   SIGNATURES

Dated as of February 20, 2001
                                       WCI COMMUNITIES, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       BAY COLONY-GATEWAY, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       FINANCIAL RESOURCES GROUP, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       FIRST FIDELITY TITLE, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       FLORIDA LIFESTYLE MANAGEMENT COMPANY

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       S-1
<PAGE>   89
                                       LIVINGSTON NAPLES, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       LIVINGSTON ROAD, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       PANTHER DEVELOPMENTS, LLC

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       SUN CITY CENTER GOLF PROPERTIES, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       SUN CITY CENTER REALTY, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       S-2
<PAGE>   90
                                       WATERMARK REALTY, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       WI ULTRACORP OF FLORIDA, INC.

                                       By:     /s/ Christopher J. Hanlon
                                          --------------------------------------
                                           Name:  Christopher J. Hanlon
                                           Title: Vice President

                                      THE COLONY AT PELICAN LANDING GOLF CLUB,
                                      INC.

                                      By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                      COMMUNITIES AMENITIES, INC.

                                      By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                      COMMUNITIES HOME BUILDERS, INC.

                                      By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                      S-3
<PAGE>   91
                                       GATEWAY COMMUNICATIONS SERVICES, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       JYC HOLDINGS, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       MARBELLA AT PELICAN BAY, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                      PELICAN LANDING GOLF RESORT VENTURES, INC.

                                      By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       SARASOTA TOWER, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                      S-4
<PAGE>   92
                                       TARPON COVE YACHT & RACQUET CLUB, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       TIBURON GOLF VENTURES, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       WATERMARK POOLS, INC.

                                       By:     /s/ Thomas McCall
                                          --------------------------------------
                                            Name:  Thomas McCall
                                            Title: Secretary

                                       WATERMARK REALTY REFERRAL, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Senior Vice President

                                       WCI COMMUNITIES PROPERTY MANAGEMENT, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                      S-5
<PAGE>   93
                                       WCI GOLF GROUP, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       WCI REALTY, INC.

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                       BAY COLONY REALTY ASSOCIATES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       BAY COLONY OF NAPLES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       CORAL RIDGE COMMUNITIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                      S-6
<PAGE>   94
                                       CORAL RIDGE PROPERTIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       CORAL RIDGE REALTY, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       CORAL RIDGE REALTY SALES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       FLORIDA DESIGN COMMUNITIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       FLORIDA NATIONAL PROPERTIES, INC.

                                       By:     /s/ Steven C. Adelman
                                          --------------------------------------
                                            Name:  Steven C. Adelman
                                            Title: Treasurer

                                      S-7
<PAGE>   95
                                       GATEWAY COMMUNITIES, INC.

                                       By:     /s/ Steven C. Adelman
                                          --------------------------------------
                                           Name:  Steven C. Adelman
                                           Title: Treasurer

                                       GATEWAY REALTY SALES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                      HERON BAY, INC.

                                      By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       HERON BAY GOLF COURSE PROPERTIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       PELICAN BAY PROPERTIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                      S-8
<PAGE>   96
                                       PELICAN LANDING COMMUNITIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       PELICAN LANDING PROPERTIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                            Name:  Vivien N. Hastings
                                            Title: Secretary

                                       PELICAN MARSH PROPERTIES, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       TARPON COVE REALTY, INC.

                                       By:     /s/ Vivien N. Hastings
                                          --------------------------------------
                                           Name:  Vivien N. Hastings
                                           Title: Secretary

                                       WCI HOMES, INC.

                                       By: /s/ Richard Vandermeer
                                         ---------------------------------------
                                           Name: Richard Vandermeer
                                           Title: Secretary

                                      S-9
<PAGE>   97
                                       COMMUNITIES FINANCE COMPANY, LLC

                                       By:     /s/ James P. Dietz
                                          --------------------------------------
                                           Name:  James P. Dietz
                                           Title: Vice President

                                      S-10
<PAGE>   98
                                        THE BANK OF NEW YORK
                                            as Trustee

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

                                      S-11
<PAGE>   99
                                   EXHIBIT A1

                                 [Face of Note]
_______________________________________________________________________________

CUSIP/CINS ____________

        10 5/8% [Series A] [Series B] Senior Subordinated Notes due 2011

No. ___  $____________

                              WCI COMMUNITIES, INC.

promises to pay to
                   ____________________________________________________________

or registered assigns,

the principal sum of
                     ___________________________________________________________

Dollars on _____________, 2011.

Interest Payment Dates:  ____________ and ____________

Record Dates:  ____________ and ____________

                                            WCI COMMUNITIES, INC.

                                            By:
                                              _____________________
                                                Name:
                                                Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

Dated: _______________, ____

THE BANK OF NEW YORK,
  as Trustee

By: __________________________________
         Authorized Signatory

____________________________________________________________________
                                      A1-1
<PAGE>   100
                                 [Back of Note]
        10 5/8% [Series A] [Series B] Senior Subordinated Notes due 2011

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

         Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

         1. INTEREST. WCI Communities, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 10
5/8% per annum from February 15, 2001 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually in arrears on February 15 and August 15 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be August 15, 2001. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

         2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the February 1 or August
1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without The City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent at least
five Business Days prior to the applicable payment date. Such payment shall be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.

         3. AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
or any of its Subsidiaries may act in any such capacity.

         4. INDENTURE. The Company issued the Notes under an Indenture dated as
of February 20, 2001 ("Indenture") between the Company, the Guarantors listed on
the signature page therein (the "Guarantors") and the Trustee. The terms of the
Notes include those stated in the Indenture and those

                                      A1-2
<PAGE>   101
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with
the express provisions of the Indenture, the provisions of the indenture shall
govern and be controlling. The Notes are obligations of the Company limited to
$350.0 million in aggregate principal amount.

         5.       OPTIONAL REDEMPTION.

         (a) Except as set forth in clause (b) of this paragraph 5, the Company
shall not have the option to redeem the Notes pursuant to this paragraph 5 prior
to February 15, 2006. Thereafter, the Company shall have the option to redeem
the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on February 15 of the
years indicated below:

<TABLE>
<CAPTION>
       Year                                           Percentage
       ----                                           ----------

       <S>                                            <C>
        2006.......................................    105.313%
        2007.......................................    103.542%
        2008.......................................    101.771%
        2009 and thereafter........................    100.000%
</TABLE>

         (b) Notwithstanding the provisions of clause (a) of this paragraph 5,
at any time prior to February 15, 2004, the Company may redeem up to an
aggregate of 35% of the principal amount of Notes with the net cash proceeds of
one or more Equity Offerings of the Company or its parent, Watermark
Communities, Inc. at a redemption price equal to 110.625% of the aggregate
principal amount thereof plus accrued and unpaid Liquidated Damages thereon, if
any; provided that at least 65% in aggregate principal amount of the Notes
issued remain outstanding immediately after the occurrence of such redemption
and that such redemption occurs within 90 days of the date of the closing of
such Equity Offering.

         6.       MANDATORY REDEMPTION.

         Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Notes.

         7.       REPURCHASE AT OPTION OF HOLDER.

         (a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.

         (b) If the Company's Consolidated Tangible Net Worth declines below
$125.0 million (the "Minimum Tangible Net Worth") at the end of any fiscal
quarter, the Company must deliver an Officers' Certificate to the Trustee within
55 days after the end of that fiscal quarter (110 days after the end of any
fiscal year) to notify the Trustee. If, on the last day of each of any two
consecutive fiscal quarters (the last day of the second fiscal quarter being
referred to as a "Deficiency Date"), the Company's Consolidated Tangible Net
Worth is less than the Minimum Tangible Net Worth of the Company, then the
Company

                                      A1-3
<PAGE>   102
shall make an offer (an "Offer") to all Holders of Notes to purchase 10% of the
aggregate principal amount of the Notes originally issued (the "Offer Amount")
at a purchase price equal to 100% of the principal amount of the Notes, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase; provided, however, that no such Offer shall be required if, after the
Deficiency Date but prior to the date the Company is required to make the Offer,
capital in cash or Cash Equivalents is contributed for Equity Interests of the
Company other than Disqualified Stock to the Company or its Restricted
Subsidiaries sufficient to increase the Company's Consolidated Tangible Net
Worth after giving effect to such contribution to an amount equal to or above
the Minimum Tangible Net Worth.

         The Company shall make the Offer no later than 65 days after each
Deficiency Date (120 days if such Deficiency Date is the last day of the
Company's fiscal year). The Offer is required to remain open for a period of 20
business days following its commencement (unless required to remain open for a
longer period by applicable law). The Company shall purchase the Offer Amount of
the Notes on a designated date no later than five business days after the
termination of the Offer, or if less than the Offer Amount of Notes shall have
been tendered, all Notes then tendered. The Company shall not be obligated to
purchase any Notes unless Holders of Notes of at least 10% of the Offer Amount
shall have tendered and not subsequently withdrawn their Notes for repurchase.

         If the aggregate principal amount of Notes tendered exceeds the Offer
Amount, the Company shall purchase the Notes tendered to it pro rata among the
Notes tendered (with such adjustments as may be appropriate so that only Notes
in denominations of $1,000 and integral multiples thereof shall be purchased).
The Company shall comply with all applicable federal and state securities laws
in connection with each Offer.

         In no event will the failure of the Company's Consolidated Tangible Net
Worth to equal or exceed the Minimum Tangible Net Worth at the end of any fiscal
quarter be counted toward the making of more than one Offer. The Company may
reduce the principal amount of Notes to be purchased pursuant to the Offer by
subtracting 100% of the principal amount (excluding premium) of the Notes
acquired, redeemed or called for redemption by the Company prior to the purchase
(otherwise than under this provision). The Company, however, may not credit
Notes that have been previously used as a credit against any obligation to
repurchase Notes pursuant to this provision. Any Offer shall be conducted in
compliance with applicable regulations under the federal securities law,
including Exchange Act Rule 14e-1.

         8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.

         9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

                                      A1-4
<PAGE>   103
         10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

         11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Note Guarantees or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes and Additional Notes, if any, voting as a single
class, and any existing default or compliance with any provision of the
Indenture, the Note Guarantees or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Note Guarantees or the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Note Guarantee with respect to the Notes.

         12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages, if any, on
the Notes; (ii) default in payment when due of principal of or premium, if any,
on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company to comply with Section 4.10, 4.15 or 5.01 of the Indenture; (iv)
failure by the Company for 30 days after notice to the Company by the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes
(including Additional Notes, if any) then outstanding voting as a single class
to comply with certain other agreements in the Indenture, the Notes; (v) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vi) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (vii) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries,
Agreement or the Pledge Agreement shall be held in any judicial proceeding to be
unenforceable or; and (ix) except as permitted by the Indenture, any Note
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor or any Person acting on its behalf shall deny or disaffirm its
obligations under such Guarantor's Note Guarantee. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the

                                      A1-5
<PAGE>   104
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.

         13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes, the Note
Guarantees or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.

         15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the A/B Exchange
Registration Rights Agreement dated as of February 20, 2001, between the Company
and the parties named on the signature pages thereof (the "Registration Rights
Agreement").

         18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

WCI Communities, Inc.
24301 Walden Center Drive
Suite 300
Bonita Springs, Florida  34134
Attention:  Vivien N. Hastings, Esq.

                                      A1-6
<PAGE>   105
                                 ASSIGNMENT FORM

           To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                              ----------------------------------
                                                  (Insert assignee's legal name)

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

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

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

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

--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)

and irrevocably appoint
                       ---------------------------------------------------------
to transfer this Note on the books of the Company.  The agent may substitute
another to act for him.

Date:
      --------------------------

                                   Your Signature:
                                                  ------------------------------
                    (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:
                     ------------------------------------

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A1-7
<PAGE>   106
                       OPTION OF HOLDER TO ELECT PURCHASE

           If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:

                / / Section 4.10     / / Section 4.15

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:

                                            $
                                            --------------------
Date:
      --------------------------

                               Your Signature:
                                               ---------------------------------
                               (Sign exactly as your name appears on the face of
                               this Note)

                               Tax Identification No.:
                                                     ---------------------------

Signature Guarantee*:
                      ------------------------------------

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A1-8
<PAGE>   107
             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:

<TABLE>
<S>                    <C>                     <C>                    <C>                     <C>
                                                                      Principal Amount
                       Amount of decrease in   Amount of increase in  [at maturity] of        Signature of
                       Principal Amount        Principal Amount       this Global Note        authorized officer of
                       [at maturity] of        [at maturity] of       following such decrease Trustee or Note
Date of Exchange       this Global Note        this Global Note       (or increase)           Custodian
</TABLE>

* This schedule should be included only if the Note is issued in global form.

                                      A1-9
<PAGE>   108
                                   EXHIBIT A2

                  [Face of Regulation S Temporary Global Note]
_______________________________________________________________________________

CUSIP/CINS __________

        10 5/8% [Series A] [Series B] Senior Subordinated Notes due 2011

No. ___                                                              $__________

                              WCI COMMUNITIES, INC.

promises to pay to
                   ____________________________________________________________

or registered assigns,

the principal sum of
                     __________________________________________________________

Dollars on _______________, 2011.

Interest Payment Dates:  ____________, and ____________

Record Dates:  ____________, and ____________

                                     WCI COMMUNITIES, INC.

                                     By:
                                         ______________________________________
                                         Name:
                                         Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

Dated: _______________, ____

THE BANK OF NEW YORK,
  as Trustee

By: __________________________________
           Authorized Signatory
_______________________________________________________________________________

                                      A2-1
<PAGE>   109
                  [Back of Regulation S Temporary Global Note]
        10 5/8% [Series A] [Series B] Senior Subordinated Notes due 2011

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR (AS DEFINED IN RULE 501 (a) (1), (2), (3) or (7) UNDER THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN ONE YEAR AFTER THE ORIGINAL
ISSUANCE OF

                                      A2-2
<PAGE>   110
THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT."

         Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

         1. INTEREST. WCI Communities, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 10
5/8% per annum from February 15, 2001 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually in arrears on February 15 and August 15 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be August 15, 2001. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

         2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the February 1 or August
1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

         3. AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
or any of its Subsidiaries may act in any such capacity.

                                      A2-3
<PAGE>   111
         4. INDENTURE. The Company issued the Notes under an Indenture dated as
of February 20, 2001 ("Indenture") between the Company, the Guarantors listed on
the signature page therein (the "Guarantors") and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
Sections 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $350.0 million
in aggregate principal amount.

         5.       OPTIONAL REDEMPTION.

         (a) Except as set forth in clause (b) of this paragraph 5, the Company
shall not have the option to redeem the Notes pursuant to this paragraph 5 prior
to February 15, 2006. Thereafter, the Company shall have the option to redeem
the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on February 15 of the
years indicated below:

<TABLE>
<CAPTION>
        Year                                            Percentage
        ----                                            ----------
        <S>                                             <C>
        2006........................................... 105.313%
        2007........................................... 103.542%
        2008........................................... 101.771%
        2009 and thereafter............................ 100.000%
</TABLE>

         (b) Notwithstanding the provisions of clause (a) of this paragraph 5,
at any time prior to February 15, 2004, the Company may redeem up to an
aggregate of 35% of the principal amount of Notes with the net cash proceeds of
one or more Equity Offerings of the Company or its parent, Watermark
Communities, Inc. at a redemption price equal to 110.625% of the aggregate
principal amount thereof plus accrued and unpaid Liquidated Damages thereon, if
any; provided that at least 65% in aggregate principal amount of the Notes
issued remain outstanding immediately after the occurrence of such redemption
and that such redemption occurs within 90 days of the date of the closing of
such Equity Offering.

         6.       MANDATORY REDEMPTION.

         Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Notes.

         7.       REPURCHASE AT OPTION OF HOLDER.

         (a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.

         (b) If the Company's Consolidated Tangible Net Worth declines below
$125.0 million (the "Minimum Tangible Net Worth") at the end of any fiscal
quarter, the Company must deliver an Officers' Certificate to the Trustee within
55 days after the end of that fiscal quarter (110 days after the end of any

A2-4
<PAGE>   112
fiscal year) to notify the Trustee. If, on the last day of each of any two
consecutive fiscal quarters (the last day of the second fiscal quarter being
referred to as a "Deficiency Date"), the Company's Consolidated Tangible Net
Worth is less than the Minimum Tangible Net Worth of the Company, then the
Company shall make an offer (an "Offer") to all Holders of Notes to purchase 10%
of the aggregate principal amount of the Notes originally issued (the "Offer
Amount") at a purchase price equal to 100% of the principal amount of the Notes,
plus accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase; provided, however, that no such Offer shall be required if, after the
Deficiency Date but prior to the date the Company is required to make the Offer,
capital in cash or Cash Equivalents is contributed for Equity Interests of the
Company other than Disqualified Stock to the Company or its Restricted
Subsidiaries sufficient to increase the Company's Consolidated Tangible Net
Worth after giving effect to such contribution to an amount equal to or above
the Minimum Tangible Net Worth.

         The Company shall make the Offer no later than 65 days after each
Deficiency Date (120 days if such Deficiency Date is the last day of the
Company's fiscal year). The Offer is required to remain open for a period of 20
business days following its commencement (unless required to remain open for a
longer period by applicable law). The Company shall purchase the Offer Amount of
the Notes on a designated date no later than five business days after the
termination of the Offer, or if less than the Offer Amount of Notes shall have
been tendered, all Notes then tendered. The Company shall not be obligated to
purchase any Notes unless Holders of Notes of at least 10% of the Offer Amount
shall have tendered and not subsequently withdrawn their Notes for repurchase.

         If the aggregate principal amount of Notes tendered exceeds the Offer
Amount, the Company shall purchase the Notes tendered to it pro rata among the
Notes tendered (with such adjustments as may be appropriate so that only Notes
in denominations of $1,000 and integral multiples thereof shall be purchased).
The Company shall comply with all applicable federal and state securities laws
in connection with each Offer.

         In no event will the failure of the Company's Consolidated Tangible Net
Worth to equal or exceed the Minimum Tangible Net Worth at the end of any fiscal
quarter be counted toward the making of more than one Offer. The Company may
reduce the principal amount of Notes to be purchased pursuant to the Offer by
subtracting 100% of the principal amount (excluding premium) of the Notes
acquired, redeemed or called for redemption by the Company prior to the purchase
(otherwise than under this provision). The Company, however, may not credit
Notes that have been previously used as a credit against any obligation to
repurchase Notes pursuant to this provision. Any Offer shall be conducted in
compliance with applicable regulations under the federal securities law,
including Exchange Act Rule 14e-1.

         8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.

         9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company

                                      A2-5
<PAGE>   113
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

         10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

         11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Note Guarantees or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes and Additional Notes, if any, voting as a single
class, and any existing default or compliance with any provision of the
Indenture, the Note Guarantees or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Note Guarantees or the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Note Guarantee with respect to the Notes.

         12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages, if any, on
the Notes; (ii) default in payment when due of principal of or premium, if any,
on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company to comply with Section 4.10, 4.15 or 5.01 of the Indenture; (iv)
failure by the Company for 30 days after notice to the Company by the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes
(including Additional Notes, if any) then outstanding voting as a single class
to comply with certain other agreements in the Indenture, the Notes; (v) default
under certain other agreements relating to Indebtedness of the Company which
default results in the acceleration of such Indebtedness prior to its express
maturity; (vi) certain final judgments for the payment of money that remain
undischarged for a period of 60 days; (vii) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries,
Agreement or the Pledge Agreement shall be held in any judicial proceeding to be
unenforceable or; and (ix) except as permitted by the Indenture, any Note
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor or any Person acting on its behalf shall deny or disaffirm its
obligations under such Guarantor's Note Guarantee. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing

                                      A2-6
<PAGE>   114
Default or Event of Default in the payment of interest on, or the principal of,
the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.

         13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.

         15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the A/B Exchange
Registration Rights Agreement dated as of February 20, 2001, between the Company
and the parties named on the signature pages thereof (the "Registration Rights
Agreement").

         18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

WCI Communities, Inc.
24301 Walden Center Drive
Suite 300
Bonita Springs, Florida  34134
Attention:  Vivien N. Hastings, Esq.

                                      A2-7
<PAGE>   115
                                 ASSIGNMENT FORM

           To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                              ----------------------------------
                                                  (Insert assignee's legal name)

--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)

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

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

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

--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------------------------
to transfer this Note on the books of the Company.  The agent may substitute
another to act for him.

Date:
      --------------------------

                                 Your Signature:
                                               ---------------------------------
                                 (Sign exactly as your name appears on the face
                                 of this Note)

Signature Guarantee*:
                      ------------------------------------

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A2-8
<PAGE>   116
                       OPTION OF HOLDER TO ELECT PURCHASE

           If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:

                     / / Section 4.10       / / Section 4.15

           If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:

                                            $
                                             --------------------------
Date:
      --------------------------

                                   Your Signature:
                                                   -----------------------------
                                   (Sign exactly as your name appears on the
                                   face of this Note)

                                   Tax Identification No.:
                                                           ---------------------

Signature Guarantee*:
                      ------------------------------------

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A2-9
<PAGE>   117
           SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

         The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:

<TABLE>
<S>                    <C>                     <C>                    <C>                      <C>
                                                                      Principal Amount
                       Amount of decrease in   Amount of increase in  [at maturity] of this    Signature of
                       Principal Amount        Principal Amount       Global Note              authorized officer of
                       [at maturity] of        [at maturity] of       following such decrease  Trustee or Note
Date of Exchange       this Global Note        this Global Note       (or increase)            Custodian
</TABLE>

                                     A2-10

<PAGE>   118

                                    EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

WCI Communities, Inc.
24301 Walden Center Drive
Suite 300
Bonita Springs, Florida  34134
Attention:  Vivien N. Hastings, Esq.

[Registrar address block]

            Re: 10 5/8% Senior Subordinated Notes due 2011

         Reference is hereby made to the Indenture, dated as of February 20,
2001 (the "Indenture"), between WCI Communities, Inc., as issuer (the
"Company"), the Guarantors listed on the signature page therein and The Bank of
New York, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.

         ___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

         1.  / /  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

         2.  / /  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE
OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of

                                      B-1
<PAGE>   119
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and/, (iii)
the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.

         3.  / /  CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

                  (a)      / / such Transfer is being effected pursuant to and
         in accordance with Rule 144 under the Securities Act;

                  or

                  (b)      / / such Transfer is being effected to the Company or
         a subsidiary thereof;

                  or

                  (c)      / / such Transfer is being effected pursuant to an
         effective registration statement under thE Securities Act and in
         compliance with the prospectus delivery requirements of the Securities
         Act;

                  or

                  (d)      / / such Transfer is being effected to an
         Institutional Accredited Investor and pursuant to AN exemption from the
         registration requirements of the Securities Act other than Rule 144A,
         Rule 144 or Rule 904, and the Transferor hereby further certifies that
         it has not engaged in any general solicitation within the meaning of
         Regulation D under the Securities Act and the Transfer complies with
         the transfer restrictions applicable to beneficial interests in a
         Restricted Global Note or Restricted Definitive Notes and the
         requirements of the exemption claimed, which certification is supported
         by (1) a certificate executed by the Transferee in the form of Exhibit
         D to the Indenture and (2) an Opinion of Counsel provided by the
         Transferor or the Transferee (a copy of which the Transferor has
         attached to this certification), to the effect that such Transfer is in
         compliance with the Securities Act. Upon consummation of the proposed
         transfer in accordance with the terms of the Indenture, the transferred
         beneficial interest or Definitive Note will be subject to the
         restrictions on transfer enumerated in the Private Placement Legend
         printed on the IAI Global Note and/or the Definitive Notes and in the
         Indenture and the Securities Act.

         4.    / /  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

         (a)  / /  CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer
is being effected pursuant to and iN accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the

                                      B-2
<PAGE>   120
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

         (b)  / /  CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.

         (c)  / /  CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                           ------------------------------------
                                                [Insert Name of Transferor]

                                        By:
                                           ------------------------------------
                                          Name:
                                          Title:
Dated:
       ----------------------

                                      B-3
<PAGE>   121
                       ANNEX A TO CERTIFICATE OF TRANSFER

1.       The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

         (a)   / /      a beneficial interest in the:

                  (i)   / /    144A Global Note (CUSIP            ), or
                                                       -----------

                  (ii)  / /    Regulation S Global Note (CUSIP             ), or
                                                               ------------

                  (iii) / /    IAI Global Note (CUSIP             ); or
                                                      ------------

         (b)   / /      a Restricted Definitive Note.

2.       After the Transfer the Transferee will hold:

[CHECK ONE]
         (a)   / /      a beneficial interest in the:

                  (i)   / /    144A Global Note (CUSIP             ), or
                                                       ------------

                  (ii)  / /    Regulation S Global Note (CUSIP             ), or
                                                               ------------

                  (iii) / /    IAI Global Note (CUSIP              ); or
                                                      -------------

                  (iv)  / /    Unrestricted Global Note (CUSIP             ); or
                                                               ------------

         (b)   / /      a Restricted Definitive Note; or

         (c)   / /      an Unrestricted Definitive Note,

         in accordance with the terms of the Indenture.

                                      B-4
<PAGE>   122
                                    EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

WCI Communities, Inc.
24301 Walden Center Drive
Suite 300
Bonita Springs, Florida  34134
Attention:  Vivien N. Hastings, Esq.

[Registrar address block]

         Re: 10 5/8% Senior Subordinated Notes due 2011

(CUSIP ____________)

         Reference is hereby made to the Indenture, dated as of February 20,
2001 (the "Indenture"), between WCI Communities, Inc., as issuer (the
"Company"), The Guarantors listed on the signature page therein and The Bank of
New York, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.

         __________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:

         1.       EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

         (a)  / /  CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

         (b)  / /  CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

         (c)  / /  CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial

                                      C-1
<PAGE>   123
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

         (d)  / /  CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

         2.       EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

         (a)  / /  CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.

         (b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
 / /  144A Global Note,  / /  Regulation S Global Note,  / /  IAI Global Note
with an equal principal amount, the OwnER hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                        ---------------------------------------
                                              [Insert Name of Transferor]

                                     By:
                                        ---------------------------------------
                                       Name:
                                       Title:
Dated:
       ---------------------

                                      C-2
<PAGE>   124
                                    EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

WCI Communities, Inc.
24301 Walden Center Drive
Suite 300
Bonita Springs, Florida  34134
Attention:  Vivien N. Hastings, Esq.

[Registrar address block]

         Re: 10 5/8% Senior Subordinated Notes due 2011

(CUSIP ____________)

         Reference is hereby made to the Indenture, dated as of February 20,
2001 (the "Indenture"), between WCI Communities, Inc., as issuer (the
"Company"), The Guarantors listed on the signature page therein and The Bank of
New York, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.

         In connection with our proposed purchase of $____________ aggregate
principal amount of:

         (a)   / /     a beneficial interest in a Global Note, or

         (b)   / /     a Definitive Note,

         we confirm that:

         1.       We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").

         2.       We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

                                      D-1
<PAGE>   125
         3.       We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.

         4.       We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.

         5.       We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.

         You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                        ---------------------------------------
                                          [Insert Name of Accredited Investor]

                                     By:
                                        ---------------------------------------
                                      Name:
                                      Title:
Dated:
       ---------------------

                                      D-2
<PAGE>   126
                                    EXHIBIT E

                          FORM OF NOTATION OF GUARANTEE

         For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of February 20, 2001 (the "Indenture")
among WCI Communities, Inc., the Guarantors listed on Schedule I thereto and The
Bank of New York, as trustee (the "Trustee"), (a) the due and punctual payment
of the principal of, premium and Liquidated Damages, if any, and interest on the
Notes (as defined in the Indenture), whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal and premium, and, to the extent permitted by law, interest, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and
the Indenture are expressly set forth in Article 11 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Note
Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee, on behalf
of such Holder, to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Trustee attorney-in-fact of such Holder for such purpose; provided, however,
that the Indebtedness evidenced by this Note Guarantee shall cease to be so
subordinated and subject in right of payment upon any defeasance of this Note in
accordance with the provisions of the Indenture.

                                   BAY COLONY-GATEWAY, INC.

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

                                   FINANCIAL RESOURCES GROUP, INC.

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

                                   FIRST FIDELITY TITLE, INC.

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

                                     E-1
<PAGE>   127
                                   EXHIBIT E

                                   By:
                                        Name:
                                        Title:

                                   FLORIDA LIFESTYLE MANAGEMENT COMPANY

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

                                   LIVINGSTON NAPLES, INC.

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

                                   LIVINGSTON ROAD, INC.

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

                                   PANTHER DEVELOPMENTS, LLC

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

                                     E-2
<PAGE>   128
                                   EXHIBIT E

                                   SUN CITY CENTER GOLF PROPERTIES, INC.

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

                                   SUN CITY CENTER REALTY, INC.

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

                                   WATERMARK REALTY, INC.

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

                                   WI ULTRACORP OF FLORIDA, INC.

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

                                   THE COLONY AT PELICAN LANDING GOLF CLUB, INC.

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

                                     E-3
<PAGE>   129
                                   EXHIBIT E

                                   COMMUNITIES AMENITIES, INC.

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

                                   COMMUNITIES HOME BUILDERS, INC.

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

                                   GATEWAY COMMUNICATIONS SERVICES, INC.

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

                                   JYC HOLDINGS, INC.

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

                                   MARBELLA AT PELICAN BAY, INC.

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

                                     E-4
<PAGE>   130
                                   EXHIBIT E

                                   PELICAN LANDING GOLF RESORT VENTURES, INC.

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

                                   SARASOTA TOWER, INC.

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

                                   TARPON COVE YACHT & RACQUET CLUB, INC.

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

                                   TIBURON GOLF VENTURES, INC.

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

                                   WATERMARK POOLS, INC.

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

                                     E-5
<PAGE>   131
                                   EXHIBIT E

                                   WATERMARK REALTY REFERRAL, INC.

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

                                   WCI COMMUNITIES PROPERTY MANAGEMENT, INC.

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

                                   WCI GOLF GROUP, INC.

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

                                   WCI REALTY, INC.

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

                                     E-6
<PAGE>   132
                                   EXHIBIT E

                                   BAY COLONY REALTY ASSOCIATES, INC.

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

                                   BAY COLONY OF NAPLES, INC.

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

                                   CORAL RIDGE COMMUNITIES, INC.

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

                                   CORAL RIDGE PROPERTIES, INC.

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

                                   CORAL RIDGE REALTY, INC.

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

                                     E-7
<PAGE>   133
                                   EXHIBIT E

                                   CORAL RIDGE REALTY SALES, INC.

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

                                   FLORIDA DESIGN COMMUNITIES, INC.

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

                                   FLORIDA NATIONAL PROPERTIES, INC.

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

                                   GATEWAY COMMUNITIES, INC.

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

                                     E-8
<PAGE>   134
                                   EXHIBIT E

                                   GATEWAY REALTY SALES, INC.

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

                                   HERON BAY, INC.

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

                                   HERON BAY GOLF COURSE PROPERTIES, INC.

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

                                   PELICAN BAY PROPERTIES, INC.

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

                                   PELICAN LANDING COMMUNITIES, INC.

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

                                     E-9
<PAGE>   135
                                   EXHIBIT E

                                   PELICAN LANDING PROPERTIES, INC.

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

                                   PELICAN MARSH PROPERTIES, INC.

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

                                   TARPON COVE REALTY, INC.

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

                                   WCI HOMES, INC.

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

                                     E-10
<PAGE>   136
                                   EXHIBIT E

                                   COMMUNITIES FINANCE COMPANY, LLC

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

                                      E-11
<PAGE>   137
                                    EXHIBIT F

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

         SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of ____________________ (or its permitted successor), a [Delaware]
corporation (the "Company"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and The Bank of New York, as trustee under the
indenture referred to below (the "Trustee").

                               W I T N E S S E T H

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of February 20, 2001 providing
for the issuance of an aggregate principal amount of up to $350,000,000 of 10
5/8% Senior Subordinated Notes due 2011 (the "Notes");

         WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

         1.       CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

         2.       AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:

                  (a) Along with all Guarantors named in the Indenture, to
         jointly and severally Guarantee to each Holder of a Note authenticated
         and delivered by the Trustee and to the Trustee and its successors and
         assigns, the Notes or the obligations of the Company hereunder or
         thereunder, that:

                           (i) the principal of and interest on the Notes will
                  be promptly paid in full when due, whether at maturity, by
                  acceleration, redemption or otherwise, and interest on the
                  overdue principal of and interest on the Notes, if any, if
                  lawful, and all other obligations of the Company to the
                  Holders or the Trustee hereunder or thereunder will be
                  promptly paid in full or performed, all in accordance with the
                  terms hereof and thereof; and

                           (ii) in case of any extension of time of payment or
                  renewal of any Notes or any of such other obligations, that
                  same will be promptly paid in full when due or performed in
                  accordance with the terms of the extension or renewal, whether
                  at stated maturity, by acceleration or otherwise. Failing
                  payment when due of any amount so guaranteed or any
                  performance so guaranteed for whatever reason, the Guarantors
                  shall be jointly and severally obligated to pay the same
                  immediately.

                                      F-1
<PAGE>   138
                  (b) The obligations hereunder shall be unconditional,
         irrespective of the validity, regularity or enforceability of the Notes
         or the Indenture, the absence of any action to enforce the same, any
         waiver or consent by any Holder of the Notes with respect to any
         provisions hereof or thereof, the recovery of any judgment against the
         Company, any action to enforce the same or any other circumstance which
         might otherwise constitute a legal or equitable discharge or defense of
         a guarantor.

                  (c) The following is hereby waived: diligence, presentment,
         demand of payment, filing of claims with a court in the event of
         insolvency or bankruptcy of the Company, any right to require a
         proceeding first against the Company, protest, notice and all demands
         whatsoever.

                  (d) This Note Guarantee shall not be discharged except by
         complete performance of the obligations contained in the Notes and the
         Indenture, and the Guaranteeing Subsidiary accepts all obligations of a
         Guarantor under the Indenture.

                  (e) If any Holder or the Trustee is required by any court or
         otherwise to return to the Company, the Guarantors, or any Custodian,
         Trustee, liquidator or other similar official acting in relation to
         either the Company or the Guarantors, any amount paid by either to the
         Trustee or such Holder, this Note Guarantee, to the extent theretofore
         discharged, shall be reinstated in full force and effect.

                  (f) The Guaranteeing Subsidiary shall not be entitled to any
         right of subrogation in relation to the Holders in respect of any
         obligations guaranteed hereby until payment in full of all obligations
         guaranteed hereby.

                  (g) As between the Guarantors, on the one hand, and the
         Holders and the Trustee, on the other hand, (x) the maturity of the
         obligations guaranteed hereby may be accelerated as provided in Article
         6 of the Indenture for the purposes of this Note Guarantee,
         notwithstanding any stay, injunction or other prohibition preventing
         such acceleration in respect of the obligations guaranteed hereby, and
         (y) in the event of any declaration of acceleration of such obligations
         as provided in Article 6 of the Indenture, such obligations (whether or
         not due and payable) shall forthwith become due and payable by the
         Guarantors for the purpose of this Note Guarantee.

                  (h) The Guarantors shall have the right to seek contribution
         from any non-paying Guarantor so long as the exercise of such right
         does not impair the rights of the Holders under the Guarantee.

                  (i) Pursuant to Section 11.02 of the Indenture, after giving
         effect to any maximum amount and any other contingent and fixed
         liabilities that are relevant under any applicable Bankruptcy or
         fraudulent conveyance laws, and after giving effect to any collections
         from, rights to receive contribution from or payments made by or on
         behalf of any other Guarantor in respect of the obligations of such
         other Guarantor under Article 11 of the Indenture, this new Note
         Guarantee shall be limited to the maximum amount permissible such that
         the obligations of such Guarantor under this Note Guarantee will not
         constitute a fraudulent transfer or conveyance.

         3.       EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Note Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee.

                                      F-2
<PAGE>   139
         4.       GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
                  TERMS.

         (a)      The Guaranteeing Subsidiary may not consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:

                  (i) subject to Sections 11.04 and 11.05 of the Indenture, the
         Person formed by or surviving any such consolidation or merger (if
         other than a Guarantor or the Company) unconditionally assumes all the
         obligations of such Guarantor, pursuant to a supplemental indenture in
         form and substance reasonably satisfactory to the Trustee, under the
         Notes, the Indenture and the Note Guarantee on the terms set forth
         herein or therein; and

                  (ii) immediately after giving effect to such transaction, no
         Default or Event of Default exists.

         (b)      In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the Indenture to be
performed by the Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Note Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Note Guarantees had been issued at the date of
the execution hereof.

         (c)      Except as set forth in Articles 4 and 5 and Section 11.05 of
Article 11 of the Indenture, and notwithstanding clauses (a) and (b) above,
nothing contained in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.

         5.       RELEASES.

         (a)      In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all to the capital stock of any Guarantor, in each case
to a Person that is not (either before or after giving effect to such
transaction) a Restricted Subsidiary of the Company, then such Guarantor (in the
event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Note Guarantee; provided that the net proceeds of
such sale or other disposition are applied in accordance with the applicable
provisions of the Indenture, including without limitation Section 4.10 of the
Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of the
Indenture, including without limitation Section 4.10 of the Indenture, the
Trustee shall execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Note Guarantee.

                                      F-3
<PAGE>   140
         (b)     Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in Article 11 of the Indenture.

         6.      NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Note
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.

         7.      NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

         8.      COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

         9.      EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

         10.     THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.

                                      F-4
<PAGE>   141
         IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

Dated:  _______________, ____

                                        [GUARANTEEING SUBSIDIARY]

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

                                        WCI COMMUNITIES, INC.

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

                                   BAY COLONY-GATEWAY, INC.

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

                                   FINANCIAL RESOURCES GROUP, INC.

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

                                   FIRST FIDELITY TITLE, INC.

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

                                    F-5
<PAGE>   142
                                   FLORIDA LIFESTYLE MANAGEMENT COMPANY

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

                                   LIVINGSTON NAPLES, INC.

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

                                   LIVINGSTON ROAD, INC.

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

                                   PANTHER DEVELOPMENTS, LLC

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

                                   SUN CITY CENTER GOLF PROPERTIES, INC.

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

                                     F-6
<PAGE>   143
                                   SUN CITY CENTER REALTY, INC.

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

                                   WATERMARK REALTY, INC.

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

                                   WI ULTRACORP OF FLORIDA, INC.

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

                                   THE COLONY AT PELICAN LANDING GOLF CLUB, INC.

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

                                   COMMUNITIES AMENITIES, INC.

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

                                    F-7
<PAGE>   144
                                   COMMUNITIES HOME BUILDERS, INC.

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

                                   GATEWAY COMMUNICATIONS SERVICES, INC.

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

                                   JYC HOLDINGS, INC.

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

                                   MARBELLA AT PELICAN BAY, INC.

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

                                   PELICAN LANDING GOLF RESORT VENTURES, INC.

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

                                    F-8
<PAGE>   145
                                   SARASOTA TOWER, INC.

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

                                   TARPON COVE YACHT & RACQUET CLUB, INC.

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

                                   TIBURON GOLF VENTURES, INC.

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

                                   WATERMARK POOLS, INC.

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

                                    F-9
<PAGE>   146
                                   WATERMARK REALTY REFERRAL, INC.

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

                                   WCI COMMUNITIES PROPERTY MANAGEMENT, INC.

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

                                   WCI GOLF GROUP, INC.

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

                                   WCI REALTY, INC.

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

                                   BAY COLONY REALTY ASSOCIATES, INC.

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

                                    F-10
<PAGE>   147
                                   BAY COLONY OF NAPLES, INC.

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

                                   CORAL RIDGE COMMUNITIES, INC.

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

                                   CORAL RIDGE PROPERTIES, INC.

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

                                   CORAL RIDGE REALTY, INC.

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

                                    F-11
<PAGE>   148
                                   CORAL RIDGE REALTY SALES, INC.

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

                                   FLORIDA DESIGN COMMUNITIES, INC.

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

                                   FLORIDA NATIONAL PROPERTIES, INC.

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

                                   GATEWAY COMMUNITIES, INC.

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

                                    F-12
<PAGE>   149
                                   GATEWAY REALTY SALES, INC.

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

                                   HERON BAY, INC.

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

                                   HERON BAY GOLF COURSE PROPERTIES, INC.

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

                                   PELICAN BAY PROPERTIES, INC.

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

                                    F-13
<PAGE>   150
                                   PELICAN LANDING COMMUNITIES, INC.

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

                                   PELICAN LANDING PROPERTIES, INC.

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

                                   PELICAN MARSH PROPERTIES, INC.

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

                                   TARPON COVE REALTY, INC.

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

                                    F-14
<PAGE>   151
                                   WCI HOMES, INC.

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

                                   COMMUNITIES FINANCE COMPANY, LLC

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

                                        THE BANK OF NEW YORK,
                                          as Trustee

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

                                      F-15
<PAGE>   152
SCHEDULE I

                             SCHEDULE OF GUARANTORS

         The following schedule lists each Guarantor under the Indenture as of
the Issue Date:

     Bay Colony-Gateway, Inc.
     Financial Resources Group, Inc.
     First Fidelity Title, Inc.
     Florida Lifestyle Management Company
     Livingston Naples, Inc.
     Livingston Road, Inc.
     Panther Developments, LLC
     Sun City Center Golf Properties, Inc.
     Sun City Center Realty, Inc.
     Watermark Realty, Inc.
     WI Ultracorp of Florida, Inc.
     The Colony at Pelican Landing Golf Club, Inc.
     Communities Amenities, Inc.
     Communities Home Builders, Inc.
     Gateway Communications Services, Inc.
     JYC Holdings, Inc.
     Marbella at Pelican Bay, Inc.
     Pelican Landing Golf Resort Ventures, Inc.
     Sarasota Tower, Inc.
     Tarpon Cove Yacht & Racquet Club, Inc.
     Tiburon Golf Ventures, Inc.
     Watermark Pools, Inc.
     Watermark Realty Referral, Inc.
     WCI Communities Property Management, Inc.
     WCI Golf Group, Inc.
     WCI Realty, Inc.
     Bay Colony Realty Associates, Inc.
     Bay Colony of Naples, Inc.
     Coral Ridge Communities, Inc.
     Coral Ridge Properties, Inc.
     Coral Ridge Realty, Inc.
     Coral Ridge Realty Sales, Inc.
     Florida Design Communities, Inc. (fka WCI Lifestyles Realty, Inc.)
     Florida National Properties, Inc.
     Gateway Communities, Inc.
     Gateway Realty Sales, Inc.
     Heron Bay, Inc.
     Heron Bay Golf Course Properties, Inc.
     Pelican Bay Properties, Inc.
     Pelican Landing Communities, Inc.
     Pelican Landing Properties, Inc.
     Pelican Marsh Properties, Inc.
     Tarpon Cove Realty, Inc.
     WCI Homes, Inc.
     Communities Finance Company, LLC

                                      F-16<PAGE>   1
                                                                     Exhibit 4.3

                                                    UBS Warburg/WCI Reg Rts Agmt

                                                                  EXECUTION COPY

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

                                  A/B EXCHANGE

                          REGISTRATION RIGHTS AGREEMENT

                          DATED AS OF FEBRUARY 20, 2001

                                  BY AND AMONG

                              WCI COMMUNITIES, INC.

           EACH OF THE GUARANTORS LISTED ON THE SIGNATURE PAGE HEREIN

                                       AND

                                 UBS WARBURG LLC

                            BEAR, STEARNS & CO. INC.

                             FLEET SECURITIES, INC.

--------------------------------------------------------------------------------
<PAGE>   2
         This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of February 20, 2001, by and among WCI Communities, Inc., a
Delaware corporation (the "COMPANY"), each of the subsidiary guarantors listed
on signature page herein (the "GUARANTORS"), and UBS Warburg LLC, Bear, Stearns
& Co. Inc. and Fleet Securities, Inc. (the "INITIAL PURCHASERS"), each of whom
has agreed to purchase the Company's 10 5/8% Series A Senior Subordinated Notes
due 2011 (the "SERIES A NOTES") pursuant to the Purchase Agreement (as defined
below).

         This Agreement is made pursuant to the Purchase Agreement, dated
February 14, 2001 (the "PURCHASE AGREEMENT"), by and among the Company, the
Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers
to purchase the Series A Notes, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 8 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them the Indenture,
dated February 20, 2001, between the Company, the Guarantors and The Bank of New
York, as Trustee, relating to the Series A Notes and the Series B Notes (the
"INDENTURE").

         The parties hereby agree as follows:

1        DEFINITIONS

         As used in this Agreement, the following capitalized terms shall have
the following meanings:

         ACT:  The Securities Act of 1933, as amended.

         AFFILIATE: As defined in Rule 144 of the Act.

         BROKER-DEALER: Any broker or dealer registered under the Exchange Act.

         CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.

         CLOSING DATE: The date hereof.

         COMMISSION: The Securities and Exchange Commission.

         CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes tendered
(and not withdrawn) by Holders thereof pursuant to the Exchange Offer.

         CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
<PAGE>   3
         EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.

         EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

         EXCHANGE OFFER: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Series A Notes that are tendered (and not withdrawn) by such Holders in
connection with such exchange and issuance.

         EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

         EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act and pursuant to Regulation S
under the Act.

         FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.

         HOLDERS: As defined in Section 2 hereof.

         PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

         RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.

         REGISTRATION DEFAULT: As defined in Section 5 hereof.

         REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

         REGULATION S: Regulation S promulgated under the Act.

         RULE 144: Rule 144 promulgated under the Act.

         SERIES B NOTES: The Company's 10 5/8% Series B Senior Notes due 2011 to
be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.

         SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.

         SUSPENSION NOTICE: As defined in Section 6(d) hereof.

                                       2
<PAGE>   4
         TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.

         TRANSFER RESTRICTED SECURITIES: Each (A) Series A Note, until the
earliest to occur of (i) the date on which such Series A Note is exchanged in
the Exchange Offer for a Series B Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (ii) the date on which such Series A Note has been
disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued Series B Notes), or (iii) the date on which
such Series A Note is distributed to the public pursuant to Rule 144 under the
Act and each (B) Series B Note held by a Broker Dealer until the date on which
such Series B Note is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including the delivery of the Prospectus contained therein).

2        HOLDERS

         A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.

3        REGISTERED EXCHANGE OFFER

         (a) Unless the Exchange Offer shall not be permitted by applicable
federal law or applicable interpretation of the Staff and the Commission (after
the procedures set forth in Section 6(a)(i) below have been complied with), the
Company and the Guarantors shall (i) cause the Exchange Offer Registration
Statement to be filed with the Commission on or prior to 75 days after the
Closing Date (such 75th day being the "FILING DEADLINE"), (ii) use their
reasonable best efforts to cause such Exchange Offer Registration Statement to
become effective on or prior to 150 days after the Closing Date (such 150th day
being the "EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A)
file all pre-effective amendments to such Exchange Offer Registration Statement
as may be necessary in order to cause it to become effective, (B) file, if
applicable or necessary, a post-effective amendment to such Exchange Offer
Registration Statement pursuant to Rule 430A under the Act and (C) cause all
necessary filings, if any, in connection with the registration and qualification
of the Series B Notes to be made under the Blue Sky laws of such jurisdictions
as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting (i) registration of the Series B Notes to be offered in exchange
for the Series A Notes that are Transfer Restricted Securities and (ii) resales
of Series B Notes by Broker-Dealers that tendered into the Exchange Offer Series
A Notes that such Broker-Dealer acquired for its own account as a result of
market making activities or other trading activities (other than Series A Notes
acquired directly from the Company or any of its Affiliates) as contemplated by
Section 3(c) below.

         (b) The Company and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no

                                       3
<PAGE>   5
event shall such period be less than 20 Business Days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Series B Notes shall be
included in the Exchange Offer Registration Statement. Unless the Exchange Offer
would not be permitted by applicable law or Commission policy, the Company and
the Guarantors shall use its their respective reasonable best efforts to cause
the Exchange Offer to be Consummated on or prior to 40 business days after the
Exchange Offer Registration Statement has become effective (such 40th day being
the "CONSUMMATION DEADLINE").

         (c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement or as otherwise required by the Commission. See the
Shearman & Sterling no-action letter (available July 2, 1993).

Because such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer, the Company and
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Series B Notes by Broker-Dealers, the Company and the Guarantors agree to use
their respective reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Section 6(a) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto. Notwithstanding the foregoing, the
Company shall not be obligated to keep the Exchange Offer Registration Statement
continuously effective to the extent set forth above if the Company determines
in its reasonable judgment that the continued effectiveness and usability of the
Exchange Offer Registration Statement would interfere with any existing or
prospective financing, acquisition, corporate reorganization or other material
business situation, transaction or negotiation involving the Company or any of
its subsidiaries (a "BUSINESS REASON"); provided, however, that the failure to
keep the Exchange Offer Registration Statement effective and usable for a
Business Reason shall last no longer than 15 consecutive days and shall in no
event occur during the first 14 days after the Exchange Offer Registration
Statement becomes effective. The Company and the Guarantors shall provide
sufficient copies of the latest version of such

                                       4
<PAGE>   6
Prospectus to such Broker-Dealers, promptly upon written request, and in no
event later than one day after such request, at any time during such period.

4        SHELF REGISTRATION

         (a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law or applicable interpretation of the Staff of the Commission
(after the Company and the Guarantors have complied with the procedures set
forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted
Securities shall notify the Company prior to the 30th Business Day following the
Consummation Deadline that (A) such Holder was prohibited by law or Commission
policy from participating in the Exchange Offer or (B) such Holder may not
resell the Series B Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the Prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder, then the Company and the Guarantors shall:

     (x) cause to be filed, on or prior to 75 days after the earlier of (i) the
date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a)(ii) above (such
earlier date, the "FILING DEADLINE"), a shelf registration statement pursuant to
Rule 415 under the Act (which may be an amendment to the Exchange Offer
Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to all
Transfer Restricted Securities, and

     (y) shall use their respective reasonable best efforts to cause such Shelf
Registration Statement to become effective on or prior to 150 days after the
obligation to file the Shelf Registration Statement arose (such 150th day the
"EFFECTIVENESS DEADLINE").

         If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law (i.e.,
clause (a)(i) above), then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above;
provided that, in such event, the Company shall remain obligated to meet the
Effectiveness Deadline set forth in clause (y).

To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective reasonable best efforts to keep any
Shelf Registration Statement required by this Section 4(a) continuously
effective, supplemented, amended and current as required by and subject to the
provisions of Sections 6(b) and (c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of at least two
years (as extended pursuant to Section 6(c)(i)) following the Closing Date, or
such shorter period as will terminate when all Transfer Restricted Securities
covered by such Shelf Registration Statement have been sold pursuant thereto or
any change in law that would permit the earlier free transferability of the
Transfer Restricted Securities; provided that the Company may issue any notice
suspending the use of the Shelf Registration required under applicable
securities laws to be

                                       5
<PAGE>   7
issued; and provided, further, the Company shall not be obligated to keep the
Shelf Registration Statement continuously effective if the Company determines,
in its reasonable judgment, that there is a Business Reason, provided that the
failure to keep the Shelf Registration Statement effective and usable for offers
and sales of Notes due to a Business Reason pursuant to this proviso shall last
no longer than 60 days in any 12-month period.

         (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.

5        LIQUIDATED DAMAGES

         If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within five Business
Days by a post-effective amendment to such Registration Statement that cures
such failure and that is itself declared effective within two Business Days
(each such event referred to in clauses (i) through (iv), a "REGISTRATION
DEFAULT"), then the Company and the Guarantors hereby jointly and severally
agree to pay to each Holder of Transfer Restricted Securities affected thereby
liquidated damages in an amount equal to $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues for the first 90-day
period immediately following the occurrence of such Registration Default. The
amount of the liquidated damages shall increase by an additional $.05 per week
per $1,000 in principal amount of Transfer Restricted Securities with respect to
each subsequent 90-day period until all Registration Defaults have been cured,
up to a maximum amount of liquidated damages of $.25 per week per $1,000 in
principal amount of Transfer Restricted Securities; provided that no Holder who
is not entitled to the benefits of a Shelf Registration Statement shall be
entitled to receive liquidated damages by reason of a Registration Default that
pertains to a Shelf Registration Statement and no Holder of Notes constituting
an unsold allotment from the original sale of the Notes by the Company to the
Initial Purchasers shall be entitled to liquidated damages by reason of a
Registration Default that pertains to an Exchange Offer. Notwithstanding
anything to the contrary set forth herein, (1) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange
Offer Registration Statement (and/or, if

                                       6
<PAGE>   8
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon
the filing of a post-effective amendment to the Registration Statement or an
additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.

         All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.

6        REGISTRATION PROCEDURES

         (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective reasonable
best efforts to effect such exchange and to permit the resale of Series B Notes
by Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:

                  (i) As a condition to its participation in the Exchange Offer,
         each Holder of Transfer Restricted Securities (including, without
         limitation, any Holder who is a Broker Dealer) shall furnish, upon the
         request of the Company, prior to the Consummation of the Exchange
         Offer, a written representation to the Company and the Guarantors
         (which may be contained in the letter of transmittal contemplated by
         the Exchange Offer Registration Statement) to the effect that (A) it is
         not an Affiliate of the Company, (B) it is not engaged in, and does not
         intend to engage in, and has no arrangement or understanding with any
         person to participate in, a distribution of the Series B Notes to be
         issued in the Exchange Offer and (C) it is acquiring the Series B Notes
         in its ordinary course of business. As a condition to its participation
         in the Exchange Offer each Holder using the Exchange Offer to
         participate in a distribution of the Series B Notes shall acknowledge
         and agree that, if the resales are of Series B Notes obtained by such
         Holder in exchange for Series A Notes acquired directly from the
         Company or an Affiliate thereof, it (1) could not, under Commission
         policy as in effect on the date of this Agreement, rely on the position
         of the Commission enunciated in Morgan Stanley and Co., Inc. (available
         June 5, 1991) and Exxon Capital Holdings Corporation (available May 13,
         1988), as interpreted in the Commission's letter to Shearman & Sterling
         dated July 2, 1993, and similar no-action letters (including, if
         applicable, any no-action letter obtained pursuant to clause (i)
         above), and (2) must comply with the registration and

                                       7
<PAGE>   9
         prospectus delivery requirements of the Act in connection with a
         secondary resale transaction and that such a secondary resale
         transaction must be covered by an effective registration statement
         containing the selling security holder information required by Item 507
         or 508, as applicable, of Regulation S-K.

                  (ii) Prior to effectiveness of the Exchange Offer Registration
         Statement, the Company and the Guarantors shall provide a supplemental
         letter to the Commission (A) stating that the Company and the
         Guarantors are registering the Exchange Offer in reliance on the
         position of the Commission enunciated in Exxon Capital Holdings
         Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
         (available June 5, 1991) as interpreted in the Commission's letter to
         Shearman & Sterling dated July 2, 1993 and (B) including a
         representation that neither the Company nor any Guarantor has entered
         into any arrangement or understanding with any Person to distribute the
         Series B Notes to be received in the Exchange Offer and that, to the
         best of the Company's and each Guarantor's information and belief, each
         Holder participating in the Exchange Offer is acquiring the Series B
         Notes in its ordinary course of business and has no arrangement or
         understanding with any Person to participate in the distribution of the
         Series B Notes received in the Exchange Offer.

         (b) Shelf Registration Statement.

                  (i) In connection with the Shelf Registration Statement, the
         Company and the Guarantors shall comply with all the provisions of
         Section 6(c) below and use their respective reasonable best efforts to
         effect such registration to permit the sale of the Transfer Restricted
         Securities being sold in accordance with the intended method or methods
         of distribution thereof (as indicated in the information furnished to
         the Company pursuant to Section 4(b) hereof), and pursuant thereto the
         Company and the Guarantors will prepare and file with the Commission a
         Registration Statement relating to the registration on any appropriate
         form under the Act, which form shall be available for the sale of the
         Transfer Restricted Securities in accordance with the intended method
         or methods of distribution thereof within the time periods and
         otherwise in accordance with the provisions hereof, and

                  (ii) issue, upon the request of any Holder or purchaser of
         Series A Notes covered by any Shelf Registration Statement contemplated
         by this Agreement, Series B Notes having an aggregate principal amount
         equal to the aggregate principal amount of Series A Notes sold pursuant
         to the Shelf Registration Statement and surrendered to the Company for
         cancellation; the Company shall register Series B Notes on the Shelf
         Registration Statement for this purpose and issue the Series B Notes to
         the purchaser(s) of securities subject to the Shelf Registration
         Statement in the names as such purchaser(s) shall designate.

         (c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantors shall:

                                       8
<PAGE>   10
                  (i) use their respective reasonable best efforts to keep such
         Registration Statement continuously effective and provide all requisite
         financial statements for the period specified in Section 3 or 4 of this
         Agreement, as applicable. Upon the occurrence of any event that would
         cause any such Registration Statement or the Prospectus contained
         therein (A) to contain an untrue statement of material fact or omit to
         state any material fact necessary to make the statements therein not
         misleading or (B) not to be effective and usable for resale of Transfer
         Restricted Securities during the period required by this Agreement, the
         Company and the Guarantors shall file promptly an appropriate amendment
         to such Registration Statement curing such defect, and, if Commission
         review is required, use their respective reasonable best efforts to
         cause such amendment to be declared effective as soon as practicable.

                  (ii) prepare and file with the Commission such amendments and
         post-effective amendments to the applicable Registration Statement as
         may be necessary to keep such Registration Statement effective for the
         applicable period set forth in Section 3 or 4 hereof, as the case may
         be; cause the Prospectus to be supplemented by any required Prospectus
         supplement, and as so supplemented to be filed pursuant to Rule 424
         under the Act, and to comply fully with Rules 424, 430A and 462, as
         applicable, under the Act in a timely manner; and comply with the
         provisions of the Act with respect to the disposition of all securities
         covered by such Registration Statement during the applicable period in
         accordance with the intended method or methods of distribution by the
         sellers thereof set forth in such Registration Statement or supplement
         to the Prospectus;

                  (iii) advise each Holder promptly and, if requested by such
         Holder, confirm such advice in writing, (A) when the Prospectus or any
         Prospectus supplement or post-effective amendment has been filed, and,
         with respect to any applicable Registration Statement or any
         post-effective amendment thereto, when the same has become effective,
         (B) of any request by the Commission for amendments to the Registration
         Statement or amendments or supplements to the Prospectus or for
         additional information relating thereto, (C) of the issuance by the
         Commission of any stop order suspending the effectiveness of the
         Registration Statement under the Act or of the suspension by any state
         securities commission of the qualification of the Transfer Restricted
         Securities for offering or sale in any jurisdiction, or the initiation
         of any proceeding for any of the preceding purposes, (D) of the
         existence of any fact or the happening of any event that makes any
         statement of a material fact made in the Registration Statement, the
         Prospectus, any amendment or supplement thereto or any document
         incorporated by reference therein untrue, or that requires the making
         of any additions to or changes in the Registration Statement in order
         to make the statements therein not misleading, or that requires the
         making of any additions to or changes in the Prospectus in order to
         make the statements therein, in the light of the circumstances under
         which they were made, not misleading. If at any time the Commission
         shall issue any stop order suspending the effectiveness of the
         Registration Statement, or any state securities commission or other
         regulatory authority shall issue an order suspending the

                                       9
<PAGE>   11
         qualification or exemption from qualification of the Transfer
         Restricted Securities under state securities or Blue Sky laws, the
         Company and the Guarantors shall use their respective reasonable best
         efforts to obtain the withdrawal or lifting of such order at the
         earliest practicable time;

                  (iv) subject to Section 6(c)(i), if any fact or event
         contemplated by Section 6(c)(iii)(D) above shall exist or have
         occurred, prepare a supplement or post-effective amendment to the
         Registration Statement or related Prospectus or any document
         incorporated therein by reference or file any other required document
         so that, as thereafter delivered to the purchasers of Transfer
         Restricted Securities, the Prospectus will not contain an untrue
         statement of a material fact or omit to state any material fact
         necessary to make the statements therein, in the light of the
         circumstances under which they were made, not misleading;

                  (v) furnish to each Initial Purchaser in connection with such
         exchange or sale, if any, before filing with the Commission, copies of
         any Registration Statement or any Prospectus included therein or any
         amendments or supplements to any such Registration Statement or
         Prospectus (including all documents incorporated by reference after the
         initial filing of such Registration Statement);

                  (vi) In the case of a Shelf Registration Statement, make
         available, at reasonable times, for inspection by each Holder and any
         attorney or accountant retained by such Holders, all financial and
         other records, pertinent corporate documents of the Company and the
         Guarantors and cause the Company's and the Guarantors' officers,
         directors and employees to supply all information reasonably requested
         by any such Holder, attorney or accountant in connection with such
         Registration Statement or any post-effective amendment thereto
         subsequent to the filing thereof and prior to its effectiveness
         provided, however, that such persons shall first agree in writing with
         the Company that any information that is reasonably and in good faith
         designated by the Company in writing as confidential at the time of
         delivery of such information shall be kept confidential by such
         Persons, unless (i) disclosure of such information is required by court
         or administrative order or is necessary to respond to inquiries of
         regulatory authorities, (ii) disclosure of such information is required
         by law (including any disclosure requirements pursuant to federal
         securities laws in connection with the filing of such Registration
         Statement or the use of any Prospectus), (iii) such information becomes
         generally available to the public other than as a result of a
         disclosure or failure to safeguard such information by such person or
         (iv) such information becomes available to such person from a source
         other than the Company and its subsidiaries and such source is not
         known, after due inquiry, by the relevant Holder to be bound by a
         confidentiality agreement; provided, further, that the foregoing
         investigation shall be coordinated on behalf of the Holders by one
         representative designated by and on behalf of such Holders and any such
         confidential information shall be available from such representative to
         such Holders so long as any Holder agrees to be bound by such
         confidentiality agreement;

                                       10
<PAGE>   12
                  (vii) if requested by any Holders in connection with such
         exchange or sale, promptly include in any Registration Statement or
         Prospectus, pursuant to a supplement or post-effective amendment if
         necessary, such information as such Holders may reasonably request to
         have included therein relating to the "Plan of Distribution" of the
         Transfer Restricted Securities; and make all required filings of such
         Prospectus supplement or post-effective amendment as soon as
         practicable after the Company is notified of the matters to be included
         in such Prospectus supplement or post-effective amendment;

                  (viii) furnish to each Holder in connection with such exchange
         or sale, without charge, at least one copy of the Registration
         Statement, as first filed with the Commission, and of each amendment
         thereto, including all documents incorporated by reference therein and
         all exhibits (including exhibits incorporated therein by reference);

                  (ix) deliver to each Holder without charge, as many copies of
         the Prospectus (including each preliminary prospectus) and any
         amendment or supplement thereto as such Persons reasonably may request;
         the Company and the Guarantors hereby consent to the use (in accordance
         with law) of the Prospectus and any amendment or supplement thereto by
         each selling Holder in connection with the offering and the sale of the
         Transfer Restricted Securities covered by the Prospectus or any
         amendment or supplement thereto;

                  (x) in connection with a Shelf Registration Statement, upon
         the request of Holders of a majority of the aggregate principal amount
         of the Transfer Restricted Securities outstanding, enter into such
         agreements (including underwriting agreements) and make such
         representations and warranties and take all such other actions in
         connection therewith in order to expedite or facilitate the disposition
         of the Transfer Restricted Securities pursuant to any Shelf
         Registration Statement contemplated by this Agreement as may be
         reasonably requested by any Holder in connection with any sale or
         resale pursuant to any Shelf Registration Statement. In such
         connection, the Company and the Guarantors shall:

                           (A) upon request of any Holder, furnish (or in the
                  case of paragraphs (2) and (3), use its reasonable best
                  efforts to cause to be furnished) to each Holder, upon
                  Consummation of the Exchange Offer or upon the effectiveness
                  of the Shelf Registration Statement, as the case may be:

                                    (1) a certificate, dated such date, signed
                           on behalf of the Company and each Guarantor by (x)
                           the President or any Vice President and (y) a
                           principal financial or accounting officer of the
                           Company and such Guarantor, confirming, as of the
                           date thereof, the matters set forth in Sections
                           8(a)-(d) of the Purchase Agreement and such other
                           similar matters as such Holders may reasonably
                           request;

                                       11
<PAGE>   13
                                    (2) an opinion, dated the date of
                           Consummation of the Exchange Offer or the date of
                           effectiveness of the Shelf Registration Statement, as
                           the case may be, of counsel for the Company and the
                           Guarantors covering matters customarily covered in
                           opinions requested in similar sales of securities of
                           underwritten offerings;

                                    (3) a customary comfort letter, dated the
                           date of Consummation of the Exchange Offer, or as of
                           the date of effectiveness of the Shelf Registration
                           Statement, as the case may be, from the Company's
                           independent accountants, in the customary form and
                           covering matters of the type customarily covered in
                           comfort letters to underwriters in connection with
                           similar underwritten offerings; and

                           (B) deliver such other documents and certificates as
                  may be reasonably requested by the selling Holders to evidence
                  compliance with the matters covered in clause (A) above and
                  with any customary conditions contained in the any agreement
                  entered into by the Company and the Guarantors pursuant to
                  this clause (xi);

                  (xi) prior to any public offering of Transfer Restricted
         Securities, cooperate with the selling Holders and their counsel in
         connection with the registration and qualification of the Transfer
         Restricted Securities under the securities or Blue Sky laws of such
         jurisdictions as the selling Holders may request and do any and all
         other acts or things reasonably necessary or advisable to enable the
         disposition in such jurisdictions of the Transfer Restricted Securities
         covered by the applicable Registration Statement; provided, however,
         that neither the Company nor any Guarantor shall be required to
         register or qualify as a foreign corporation where it is not now so
         qualified or to take any action that would subject it to the service of
         process in suits or to taxation, other than as to matters and
         transactions relating to the Registration Statement, in any
         jurisdiction where it is not now so subject;

                  (xii) in connection with any sale of Transfer Restricted
         Securities that will result in such securities no longer being Transfer
         Restricted Securities, cooperate with the Holders to facilitate the
         timely preparation and delivery of certificates representing Transfer
         Restricted Securities to be sold and not bearing any restrictive
         legends; and to register such Transfer Restricted Securities in such
         denominations and such names as the selling Holders may request at
         least three Business Days prior to such sale of Transfer Restricted
         Securities;

                  (xiii) use their respective reasonable best efforts to cause
         the disposition of the Transfer Restricted Securities covered by the
         Registration Statement to be registered with or approved by such other
         governmental agencies or authorities as may be necessary to enable the
         seller or sellers thereof to consummate the disposition of such
         Transfer Restricted Securities, subject to the proviso contained in
         clause (xi) above;

                                       12
<PAGE>   14
                  (xiv) provide a CUSIP number for all Transfer Restricted
         Securities not later than the effective date of a Registration
         Statement covering such Transfer Restricted Securities and provide the
         Trustee under the Indenture with printed certificates for the Transfer
         Restricted Securities which are in a form eligible for deposit with the
         Depository Trust Company;

                  (xv) otherwise use their respective reasonable best efforts to
         comply with all applicable rules and regulations of the Commission, and
         make generally available to its security holders with regard to any
         applicable Registration Statement, as soon as practicable, a
         consolidated earnings statement meeting the requirements of Rule 158
         (which need not be audited) covering a twelve-month period beginning
         after the effective date of the Registration Statement (as such term is
         defined in paragraph (c) of Rule 158 under the Act);

                  (xvi) cause the Indenture to be qualified under the TIA not
         later than the effective date of the first Registration Statement
         required by this Agreement and, in connection therewith, cooperate with
         the Trustee and the Holders to effect such changes to the Indenture as
         may be required for such Indenture to be so qualified in accordance
         with the terms of the TIA; and execute and use its reasonable best
         efforts to cause the Trustee to execute, all documents that may be
         required to effect such changes and all other forms and documents
         required to be filed with the Commission to enable such Indenture to be
         so qualified in a timely manner; and

                  (xvii) to the extent not publicly available, provide promptly
         to each Holder, upon request, each document filed with the Commission
         pursuant to the requirements of Section 13 or Section 15(d) of the
         Exchange Act.

         (d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.

                                       13
<PAGE>   15
7        REGISTRATION EXPENSES

         (a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company, the Guarantors and the Holders of
Transfer Restricted Securities; (v) all application and filing fees in
connection with listing the Series B Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).

         The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

         (b) In connection with any Shelf Registration Statement required by
this Agreement, the Company and the Guarantors will reimburse the Initial
Purchasers and the Holders of Transfer Restricted Securities who are selling or
reselling Series A Notes or Series B Notes pursuant to the "Plan of
Distribution" contained in the Shelf Registration Statement for the reasonable
fees and disbursements, which fees shall not exceed $10,000, of not more than
one counsel, who shall be Latham & Watkins, unless another firm shall be chosen
by the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Shelf Registration Statement is being
prepared.

8        INDEMNIFICATION

         (a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments, (including without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus (or any amendment or supplement
thereto) provided by the Company to any Holder or any prospective purchaser of
Series B Notes or registered Series A Notes, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Company
by any of the Holders.

                                       14
<PAGE>   16
         (b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, or the Guarantors to the same extent as the foregoing indemnity
from the Company and the Guarantors set forth in section (a) above, but only
with reference to information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any Registration Statement. In
no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.

         (c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to one separate firm of
local counsel in each such jurisdiction) for all indemnified parties and all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by a majority of the Holders, in the case of the
parties indemnified pursuant to Section 8(a), and by the Company and Guarantors,
in the case of parties indemnified pursuant to Section 8(b). The indemnifying
party shall indemnify and hold harmless the indemnified party from and against
any and all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days

                                       15
<PAGE>   17
after the indemnifying party shall have received a written request from the
indemnified party for reimbursement for the reasonable fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.

         (d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors, on the one hand,
and of the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the Company and the Guarantors, on the one hand, and of the Holder, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or such Guarantor, on the one hand, or by the Holder, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
judgments referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.

         The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any

                                       16
<PAGE>   18
amount in excess of the amount by which the total received by such Holder with
respect to the sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(c) are several in proportion to the respective principal amount of
Transfer Restricted Securities held by each Holder hereunder and not joint.

9        RULE 144A AND RULE 144

         The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to use reasonable efforts to make available, upon request of
any Holder, to such Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities designated by such Holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A, and (ii)
is subject to Section 13 or 15 (d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.

10       MISCELLANEOUS

         (a) Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and/or the Guarantors to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
Company's and the Guarantor's obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.

         (b) No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's and the
Guarantors' securities under any agreement in effect on the date hereof. Neither
the Company nor any Guarantor has entered or will enter into any agreement with
respect to any of their securities which will grant to any Person piggy-back
registration rights with respect to any Registration Statement.

         (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may

                                       17
<PAGE>   19
not be given unless (i) in the case of Section 5 hereof and this Section
10(c)(i), the Company has obtained the written consent of Holders of all
outstanding Transfer Restricted Securities and (ii) in the case of all other
provisions hereof, the Company has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Company or its
Affiliates). Notwithstanding the foregoing, a waiver or consent to departure
from the provisions hereof that relates exclusively to the rights of Holders
whose Transfer Restricted Securities are being tendered pursuant to the Exchange
Offer, and that does not affect directly or indirectly the rights of other
Holders whose Transfer Restricted Securities are not being tendered pursuant to
such Exchange Offer, may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities subject to such
Exchange Offer.

         (d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.

         (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

                  (i) if to a Holder, at the address set forth on the records of
         the Registrar under the Indenture, with a copy to the Registrar under
         the Indenture; and

                  (ii) if to the Company or the Guarantors:

                           WCI Communities, Inc.
                           24301 Walden Center Drive
                           Suite 300
                           Bonita Springs, Florida 34134
                           Telecopier No.:  (941) 498-8277
                           Attention:  Vivien Hastings, Esq.

                           With a copy to:

                           Simpson Thacher & Bartlett
                           425 Lexington Avenue
                           New York, New York 10017
                           Telecopier No.:  (212) 455-2502
                           Attention:  John Tehan, Esq.

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.

                                       18
<PAGE>   20
         Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

         (f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided, that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.

         (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (i) Governing Law. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

         (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

         (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                                       19
<PAGE>   21
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                         Very truly yours,

                         WCI COMMUNITIES, INC.

                         By:   /s/   James P. Dietz
                            ----------------------------------------------------

                              Name: James P. Dietz
                              Title:   Senior Vice President and Chief
                                       Financial Officer

                         BAY COLONY-GATEWAY, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Senior Vice President and Chief
                                      Financial Officer

                         FINANCIAL RESOURCES GROUP, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:    James P. Dietz
                              Title:  Senior Vice President and Treasurer

                         FIRST FIDELITY TITLE, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Senior Vice President and Treasurer

                                      S-1
<PAGE>   22
                         FLORIDA LIFESTYLE MANAGEMENT COMPANY

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Senior Vice President and Treasurer

                         LIVINGSTON NAPLES, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President and Treasurer

                         LIVINGSTON ROAD, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President and Treasurer

                         PANTHER DEVELOPMENTS, LLC

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President and Treasurer

                         SUN CITY CENTER GOLF PROPERTIES, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President and Treasurer

                                      S-2
<PAGE>   23
                         SUN CITY CENTER REALTY, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Senior Vice President and Treasurer

                         WATERMARK REALTY, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Senior Vice President and Treasurer

                         WI ULTRACORP OF FLORIDA, INC.

                         By:   /s/   Christopher J. Hanlon
                         -------------------------------------------------------
                              Name: Christopher J. Hanlon
                              Title:  Vice President

                         THE COLONY AT PELICAN LANDING GOLF CLUB, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         COMMUNITIES AMENITIES, INC.

                         By:  James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                                      S-3
<PAGE>   24
                         COMMUNITIES HOME BUILDERS, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         GATEWAY COMMUNICATIONS SERVICES, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         JYC HOLDINGS, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President and Treasurer

                         MARBELLA AT PELICAN BAY, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         PELICAN LANDING GOLF RESORT VENTURES, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                                      S-4
<PAGE>   25
                         SARASOTA TOWER, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         TARPON COVE YACHT & RACQUET CLUB, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         TIBURON GOLF VENTURES, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         WATERMARK POOLS, INC.

                         By:   /s/   Thomas McCall
                         -------------------------------------------------------
                              Name:   Thomas McCall
                              Title:  Secretary

                         WATERMARK REALTY REFERRAL, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Senior Vice President and Treasurer

                                      S-5
<PAGE>   26
                         WCI COMMUNITIES PROPERTY MANAGEMENT, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         WCI GOLF GROUP, INC.

                         By:   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         WCI REALTY, INC.

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                         BAY COLONY REALTY ASSOCIATES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         BAY COLONY OF NAPLES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                                      S-6
<PAGE>   27
                         CORAL RIDGE COMMUNITIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         CORAL RIDGE PROPERTIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         CORAL RIDGE REALTY, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         CORAL RIDGE REALTY SALES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         FLORIDA DESIGN COMMUNITIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                                      S-7
<PAGE>   28
                         FLORIDA NATIONAL PROPERTIES, INC.

                         By:   /s/   Steven C. Adelman
                         -------------------------------------------------------
                              Name:   Steven C. Adelman
                              Title:  Treasurer

                         GATEWAY COMMUNITIES, INC.

                         By:   /s/   Steven C. Adelman
                         -------------------------------------------------------
                              Name:   Steven C. Adelman
                              Title:  Treasurer

                         GATEWAY REALTY SALES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien. N. Hastings
                              Title:  Secretary

                         HERON BAY, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         HERON BAY GOLF COURSE PROPERTIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                                      S-8
<PAGE>   29
                         PELICAN BAY PROPERTIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         PELICAN LANDING COMMUNITIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         PELICAN LANDING PROPERTIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         PELICAN MARSH PROPERTIES, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                         TARPON COVE REALTY, INC.

                         By:   /s/   Vivien N. Hastings
                         -------------------------------------------------------
                              Name:   Vivien N. Hastings
                              Title:  Secretary

                                      S-9
<PAGE>   30
                         WCI HOMES, INC.

                         By:   /s/   Richard Vandermeer
                         -------------------------------------------------------
                              Name:   Richard Vandermeer
                              Title:  Vice President

                         COMMUNITIES FINANCE COMPANY, LLC

                         By:   /s/   James P. Dietz
                         -------------------------------------------------------
                              Name:   James P. Dietz
                              Title:  Vice President

                                      S-10
<PAGE>   31
UBS WARBURG LLC

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

BEAR, STEARNS & CO. INC.

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

FLEET SECURITIES, INC.

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

                                      S-11
<PAGE>   32
                                    EXHIBIT A

                               NOTICE OF FILING OF

                    A/B EXCHANGE OFFER REGISTRATION STATEMENT

To:      UBS WARBURG LLC
         299 Park Avenue
         New York, New York  10171
         Attention:
         Fax: (212) [821-6136]

From:    WCI Communities, Inc.
         10 5/8% Senior Subordinated Notes due 2011

Date: ___, 200_

         For your information only (NO ACTION REQUIRED):

         Today, ______, 200_, we filed [an A/B Exchange Registration Statement/a
Shelf Registration Statement] with the Securities and Exchange Commission. We
currently expect this registration statement to be declared effective within __
business days of the date hereof.

                                      A-1

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